I’m working on an essay about how to run your home like a business to maximize your purchasing power when I realized my actions today provide a great didactic example of how I work in my day-to-day life.
Earlier, I did something that I’ve wanted to do since my childhood. I’m not sure why it took me so long but after I woke up, got dressed, grabbed a cup of coffee, and sat down to the iMac at the counter, it was on my mind. A few hours, and a lot of research, later, everything is now finalized; another victory in the six-month Project May Day. To pull it off required becoming a wholesale florist but that is now done.
The thing is, the average retail price for long-stem Ecuadorian roses can be as high as $8 to $10 per stem in a traditional floral shop, and $4.17 from an online company such as FTD. That means having 200 roses delivered each month would cost more than $20,000 per year if you paid retail, or $10,000 a year if you used an online florist unless you got into lower quality, liquidation roses that are your garden variety buy-at-the-grocery-store blooms. That doesn’t include any vases, arranging, or garnishments. At 10% compounded, by the time I am Warren Buffett’s age, such an expenditure would mean $14 million to $30 million in lost wealth. That is far too high an opportunity cost, despite my love of roses. (Remember, always look at your opportunity cost. What are you giving up to spend money today? Is it worth it to you? There is no right or wrong answer; it is all personal values and preferences.)
There had to be a better solution so this afternoon, I spent an hour working with a business-to-business floral distributor, who set me up with wholesale pricing based upon an agreement to have a standing monthly purchase. The total cost savings resulted in my cost per stem falling to roughly $0.89. Compared to your local premium floral shop, I’m paying less than 10¢ on the dollar. The same 200 roses per month would now cost only $2,136 annually. That is only $178 per month; the same as a decent dinner at Ruth’s Chris or Smith & Wollensky. I’m not limited to roses, obviously. There are more than 3,000 varieties of flowers including rare tropical blooms, flowers from the Orient, and hard-to-fine breeds of everything from lilies to freesia.
In a few days, the first shipment arrives (I receive free FedEx shipping as part of the deal). I’m beyond thrilled. It will now be a routine monthly ritual for the incoming flowers to be bunched, separated, arranged, distributed to my offices and home, and the remainder given away to the women in my family (grandmothers, sisters, etc.)
How to Save Money on the Things You Want
There are a few common sense ways to save money:
- If you have a limited liability company or own your own businesses, find a way to become a wholesale distributor.
- Always take advantage of trade discounts for early invoice payment.
- Consider using points programs such as the American Express Platinum Card, which allow you to get free gift cards and merchandise based upon total volume.
- Don’t be afraid to negotiate with vendors. If you are willing to make standing, regular orders, you can often get very good deals.
- Group, sort, and bulk your orders if possible. Volume discounts are always a possibility with most retailers and wholesalers.
The Bigger Question Is … What Took Me So Long? And Why Are You Waiting for the Things You Want?
As I triumphantly signed off on the first purchase, I began wondering.
This begs the questions: What have you always wanted to do but haven’t? If you haven’t, why are you waiting? Why not do it right now? What is stopping you?
There is a school of management philosophy that talks about “getting stuff done”. The basic recipe is that you just do it. Figure out what will be best for your life in the long-run, then close your mouth, put down your pen, walk out the front door, and do it. It’s one of my favorite techniques for achieving things that have been on my list for too long. Your assignment for the day: Find something positive you need to do in your life and just do it. Right now.
P.S. I didn’t point out the useful business benefit of having a wholesale floral account. Think about how holiday ‘thank you’ notes and packages for clients, customers, and vendors; the ability to send very nice gifts, at very low prices, can help strengthen existing bonds that make us more money elsewhere. You can be certain we will find a way to monetize this. It’s how we work.