To successfully determine retail prices for Christmas trees, retailers must know their customers, understand their needs, and set their tree prices and services at a level that will match them. In addition, retailers must know how many trees they will need to sell at those prices to cover operating expenses and generate a worthwhile profit.
We have noticed that retailers can usually get a higher price for the same tree the farther South and West they are located from the Los Angeles area, and less the farther North and East. We see a spread of anywhere between 100 and 300 percent markup by retailers throughout California and Nevada as we visit them during their selling Season. Retailers that dress up their trees, keep them fresh, display them nicely, and work hard selling them, generally command a higher markup.
Being a unique product of nature, a delivery of #1 trees will vary in densities, tapers, colors, shapes, layering’s, heights, etc. A seasoned retailer will bring out more desirable qualities in some and sell at a premium price, and may mark others down that don’t seem as desirable as the rest. If damage is present, retailers normally make necessary repairs and/or sell at a discount.
Since growers and wholesalers don’t set retail prices for their customers, it would not make sense for them to request credit on a tree that they marked down without the grower or wholesaler also getting paid extra for a tree that they marked up.
Some things to consider when determining retail prices:
- Are Big Box retailers selling trees at or below their cost as loss leaders near you? If so, don’t try to compete price wise. Your success will depend on quality and service instead.
- What did your competitor’s sell their trees for during the prior Season?
- Do you want to sell based on price or on service and quality? It is hard for a customer to put a price on great service, high quality products, and a cherished, yearly family outing in a festive atmosphere.
- How many trees will need to be sold at your desired markup to cover operating costs and also make your efforts worthwhile? Is that quantity and/or markup realistic?
- Are you trying to develop a loyal, long term customer base? Make sure to have adequate stock so you don’t send potential customers to your competitor. Selling out early is nice if you are satisfied with your sales.
- Make sure that your merchandising and pricing strategy makes your trees look more attractive than the alternative artificial tree.
Oregon Farmers See Christmas Tree Shortage
As the 2017 Christmas tree season approaches farmers are beginning to see that the over abundance of Christmas trees is no longer on issue. In fact, it is quite opposite. Farms are now seeing a shortage in trees faster than they had thought. Here is an interesting article discussing the Christmas tree shortage in the upcoming years.
Modern Christmas Tree Retailing
Before the days of plantation grown trees, farmers worked with and harvested their trees from wild forested stands for the most part.
The retailers had to rely on their own skills and ingenuity to spruce them up into nice looking trees, attractively merchandise and market them, and then work hard to sell them.
Today’s trees are pretty magnificent comparatively speaking. Consequently, many of us will never need or acquire much of the knowledge and skills that these treasured old time retailers relied on. It is unrealistic for retailers to think that today’s growers can manufacture a tree to a specific set of standards at will, however. It is still a tree that is unique and governed by genetic characteristics and environmental conditions that cannot be overcome. It’s quality, shape, desirability, grade, and value are considered personal preferences that vary from consumer to consumer, for the most part.
It is still and always will be up to the retailers to know how and commit to making them look their best. Retailers will always need to rely on their own sales skills and strategies to sell their trees. As a general rule, it is not reasonable to expect trees to sell themselves, or acceptable to blame a grower if they don’t sell.
- Limbs can get twisted during the baling process. Spend a few moments studying the tree, and help it unfold back to it’s original shape.
- Shake it good to remove any debris or dropped needles.
- Inspect it’s overall shape. A selective clip here or there may help finish the tree to your satisfaction.
- Insert a branch to fill an unwanted opening. (plugging)
- Add a coat of flock to a drying or undesirable tree.
- Repair a broken top or branch.
- Reduce price if necessary.
Most of our great customers have been with us for 30 years, some 40, and a few over 50. These “Old Timers” built this great industry that we now enjoy with nothing but their own ingenuity and grit. They are treasure troves of hard earned knowledge and wisdom. We don’t need for them to tell us how they do it. No one was was there to tell them how to do it. Just do it and become your own treasure trove of knowledge and wisdom that others will one day find remarkable!
“The Tracks”-Southern California Christmas Tree Industry
Trains played a huge roll in getting the Southern California Christmas tree industry started. Without a doubt, Bishop and Mathews knew how to use the trains to their advantage! In fact, “The Tracks”, were the best place to be to get a fresh cut Christmas tree. They were auctioned right out of the boxcar to the highest bidder.
Ron Bishop wrote this great article in Christmas Tree Lookout about the beginnings of the Southern California Christmas tree industry. He tells us in this article what life was like being part of the up and growing Christmas tree industry. Ron lived it first hand and wrote this article based on his own personal experience and knowledge.
2015 Christmas Tree Season highlights
Other than a few minor weather issues, and tighter supplies of trees, our growers and retailers had praise for the 2015 Season in general. Truck availability was better than it has been for the last several years. Most of our retailers reported good sales. Noble fir continues to be the most popular tree. Nordmann fir popularity is still growing, and Douglas fir is holding it’s own.
By finally getting a higher dollar amount for their trees, our growers were able to put more money in to them increasing their overall quality. They again struggled to find adequate labor. This occasionally impacted their abilities to harvest and process their trees fast enough to keep up with the trucks as they rolled in, and completely fill your orders. In their efforts to attain profitability, various sizes, species, and grades suddenly disappeared from price lists. Some growers have lost hundreds if not thousands of seedlings to drier than normal weather. This affects their inventories, and will continue to do so for years ahead. We were able to outsource to get orders filled to a pretty good degree, but still noticed an undesirable increase in last minute surprise substitutions and/or out of stocks for some of our orders.
Looking ahead, growers are expecting a further tightening of supplies, and also more price increases. Noble fir seed is currently in short supply, which will keep inventories tight for the next 8 to 10 years. Many of the growers in the Pacific Northwest have gone out of business. It appears that a good portion of their growing ground is being replaced with hazelnuts.
Fortunately, we have long standing, solid relationships with some of the finest growers in the Pacific Northwest. More importantly, we are also lucky to have a customer base that consists of some of the finest retailers in California, many of which have been purchasing trees from us for 30 to 50 years. This enables us to consistently provide our growers with similar orders every year, for the most most part. The farms can then forecast our needs, plant ahead, and continually supply us with the trees that you need. A big benefit of all this is a common level of trust and respect that is gained. This allows all parties to pull together as a team, and work towards the common goal of customer satisfaction.