PRICING

Setting prices has always been a difficult process. We don't believe in charging what the market will bear but we do believe in charging a fair price without gouging our customers.

Many people see conifers for sale at the big chain store at very low prices. These are conifers that are easy to produce and very fast growing. They are usually seedling grown or cutting grown by a very big grower who produces outrageous quantities for cheap prices.

I have visited Oregon nurseries where so-called dwarf mugo pines were being mass produced. They were seedlings of Pinus mugo v. pumilio. Sheared plants were produced and sold in #1 and #3 containers. They all looked identical in shape due to shearing but each block of 5,000 plants exhibited a myriad of different shades of green. The seedlings cost about $.13 apiece and were saleable in #1 containers in two years.

They could be cheaply sold to the retailer who would then market them to his customers as dwarf mugo pines. A name that is NOT true.

Since the customer thinks he is getting a dwarf conifer cheap, he cannot understand why all dwarf conifers are not as cheap.

The spruce called dwarf Alberta spruce is a very popular selection also sold by the large chain stores. It is marketed as a dwarf spruce and offered at a cheap price in #1 containers. In the Northwest a large rooted cutting of Picea glauca 'Conica' can be grown to a saleable #1 container size in just two years. It will be tall and thin instead of short and squat, but most people look for height when buying anyway. Such a plant can be grown cheaply, sold to the retailer cheaply, and marketed as a dwarf plant for a cheap price.

Although it is not dwarf, it is nicely compact and if not fertilized too much, it can be held check to some extent. Eventually it will get up to ten feet (3 meters) tall. It is also very susceptible to red spider during the summer and sun scald on the south side during a cold winter, especially with late winter snow cover and bright noon sun.

True dwarf conifers are very difficult to find. Even upscale garden centers will often market plants as dwarf that are not dwarf. For example, Picea pungens 'R.H. Montgomery' is not a dwarf plant, neither is Picea pungens 'Glauca Globosa' ("R.H. Montgomery' without a terminal shoot). Picea omorika 'Nana' grows as much as 3 feet (1 meter) per year in the northwest. Pinus strobus 'Nana' will be 6 feet (2 meters) wide and high within ten years of its being planted.

The true dwarfs are too expensive for most garden centers to market or they are just not available from wholesale suppliers (who want to grow plants they can sell in 2-3 years max).

Specialty nurseries fill the niche as suppliers of truly dwarf and miniature conifers. But to find a customer base is a problem. Since an educated customer base in any one geographic area is a rarity, most of these nurseries either stay very small and part time or they look to selling by mail to expand their base.

We decided from day one to be primarily a mail order business. Since 1979 we have only missed one year of selling conifers. That was the year (1986) we moved to Oregon. Even then we had customers who placed orders and were willing to wait two years for shipment.

When we set prices, the only prices guidelines we had were other nursery catalogs. Using Spingarn, Bergman, Kellerman, and the Smiths as examples we worked out a price schedule based upon our expenses and their charges. In most cases we were about 50% of the Bergman and Kellerman prices. Even now most of our prices are below what they were charging in 1974-1976.

There are a number of things that drive the pricing of our products. The trick is to balance these things in order to have a profitable operation without overcharging customers. Deliberate overcharging is a sin, accidental overcharging does happen to everyone from time to time. If a profit is not made on the product, then why stay in business? After all, everyone needs to be fairly paid when providing a product or service to another individual.

Expenses

Expenses do not just include the cost of growing a plant to a saleable size. Expenses also include the costs involved in new plant development.

We propagate most of our plants by grafting. This is a relatively expensive way to produce plants. Unfortunately it is the only way for most of the plants we offer for sale.

We have the expense of a large, heated greenhouse since grafts require more space than cuttings.

We have the expense of the understock which we either buy already potted or we pot ourselves. We then have to care for it until it is large enough for our purposes.

We have the expense of grafting itself, a time consuming process since grafting involves cleaning the understock, cleaning the scion, and putting the two together.

Then we have the expense of discarding the grafts that were unsuccessful. In 25 years of grafting plants for Coenosium Gardens we have had overall losses ranging from 70% in a bad year to 8% in our best year ever. Usually the losses occurred in years of moving when the facilities were temporary and left a lot to be desired.

We used to sell new grafts but since losses are inevitable with that product, we eventually decided to sell only 1 year grafts and older. Now we prefer to sell #1 (1 gallon) material since the plants are a nice size for the buyer and the survivability rate is very high. Of course selling older plants has greatly increased our costs.

When developing a new product, we have to absorb all of these costs until we build up an inventory that is large enough to offer the new plant for sale. Five or more years can easily be spent developing a new plant in this way.

Availability

When a new plant is offered for the first time, it will be in very short supply. To recover costs and hold down demand, the price will be high when it is first listed. Each year the price is reduced, resulting in an increased demand matching our increasing availability.

Rarity

When a conifer is very rare, it will have an intrinsic value related to that rarity. Thus it will have a high price. As it becomes more common the price is reduced. These are the premium conifers that are few and far between for all of us. When we are able to offer such an item the price will be high. It allows us to make additional profit to offset areas where we have losses.

Sometimes this rarity is due to difficulties in propagation. For example, we grafted almost 100 Pinus contorta 'Frisian Gold' before we were able to produce it with about a 60% success rate. That is during a good year. This will always be a rare plant and have a high price for that reason.

Deadbeats

A deadbeat customer is one who does not pay his bill. If a nursery is not careful, having a few of these each year will soon wipe out any profit and necessitate higher prices. Dianne is very efficient at working with our customers and when we get burned by someone, we never sell to that person again. That way we do not have to consider this item in our pricing. In fact, we have a core of customers who buy from us on a regular basis and have never been a problem. In return, we try to take good care of them. Many have become friends and some have been buying since our first year in business, 1979.

Time

We have plants we have to grow for three years just to produce a small #1 container plant. Keeping a plant that long on the nursery increases its value and makes us charge a higher price for it.

When we offer a new plant on our list for the first time, we may have been developing that plant for anywhere from 4 to 10 years before offering it for sale. If it is a plant Bob discovered and offered, it will have been grown and evaluated for 5-10 years before it is sold. Picea abies 'Gold Drift' was not offered for sale until we had grown and propagated it for 12 years. We wanted to be sure it was reliable.

If it is a plant we have gotten from another collector, I have to grow it until it is large enough to provide propagation material. Then we have to be able to propagate sufficient numbers to offer it to our customers. If we have to few, we have to disappoint too many people and this hurts our reputation.

Competition

We believe in letting the competition worry about us. In fact, most of our competitors are our friends and we freely exchange material with many of them. We tend not to worry what they charge for their products and set our prices according to our own standards.

Unfair competition sometimes evidences itself when a wholesaler sells to retail customers at the same price as his regular customers. We do not adjust our prices to try and compete. That is self defeating. Eventually such a problem does go away because the wholesaler is not only losing money on those deals, he also angers some of his wholesale customers by underselling them in what should be just their market.

Dead Plants and Surplus Inventory

Plants die for no apparent reason and the money invested in them goes away with them. This is especially true with many of the firs. They just do not like containers.

If plants do not sell, they continue to grow and either must be up potted or destroyed, especially since we do not do fire sales at below cost. The investment then either becomes greater because of the up potting or it is lost if the plant is destroyed.

We do not believe in fire sales of product because it sends a wrong signal. Many people wait and buy plants only under these conditions and it becomes a regular event at some garden centers. As more and more customers wait for such a sale, less product is sold at profitable margins and the business will start to suffer from cash flow problems. The smarter garden centers will either hold product over or sell it at a reduced price to a reseller. That way customers won't wait for the price to come down.

Some plants just don't grow nicely for a number of reasons at the nursery. When they do not shape up, we cannot ship them and they will find their way to our compost pile.

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Counter Started April, 2004