Are WS-free florists really more profitable?

[Tom Carlson]

About EXCESS CAPACITY vs BREAK EVEN POINT

Oh, I see Joe,

Accept incoming wire orders during the slow summer months, but reject during all holidays.

I like that plan!

This is not staying within the guide lines Joe wants for discussion of his thread, but I sincerely believe it is impossible to discuss it with Joe's guidelines. So . . . . .

If design labor for a period is covered at the break even point by filling 100% local orders, can't discounted orders be profitable because the labor has already been paid?

The problem is that the break even point is always changing. One really has to look at a period of time, like 1 week, 1 month or 1 year, not 1 order.

We had a fast funeral order a couple weeks ago [I wrote about it on www.fairviewblog.com] that amounted to $1250 and the labor that it took to complete it was less than 3 hours. My labor cost for that day would have been the same without that $1250 sale.

If discounted orders come in and can get filled with labor that has already been covered by local orders, then it is a benefit to get incoming wire orders.

On the contrary, there are days when local orders don't come anywhere near covering the labor factor. Anything would be better than nothing whenthe expense is going to be there anyway. Hence the need to study labor to sales ratios over a period of 1 week, 1 month or 1 year. One certainly cannot look at it on an order-by-order basis.

Said another way:
When sales decline, labor does not decline proportionately at the same time.

When sales increase, employees step up to the plate and labor does not increase propotionately, just like the day I had that $1250 funeral order.

I think that the whole mess comes about because the Wire Services have allowed "Sending Only Members" who feed on rebates. When it was just commissions, the OGs were not around. Either the rebates brought in the OGs or changes in technologies made it easy for them to operate.

Wouldn't the whole WS issue go away if there were no "Sending Only Members"? Now I need to get back to work on getting more sales in the door.

Tom Carlson

 

[bloomz]

So, in review (although I hardly know why I bother)...


So Mr. Bloomz, you catagorically state in post #78453 that you, "with half a brain", fill every order and get 100% of the value of it, but then, in post #78494, you contradict yourself TOTALLY and say you "fill 100% and receive 73% for it".

Huh? Maybe it time to start using that other half of your brain...

So you were attempting to say PAID at 100%? Then why did you say FILLED at 100%? In my half brain there's a big difference.

Here's yer quote:

You want numbers?? Every order that we filled was at 100% of retail value...can you say the same?

Normally if I make a mistake in "semantics" I would correct it rather than go for the throat of the person who took it literally, but hey, that's just me.....

Please don't expect me to read that mind 12 - it's all over the map, and I think an exercise in futility.

Now, do you have anything to contribute to this thread or were you just looking for another place to inflate your ego and call us all stupid - again?

opinions vary

all blessings

 

[Bigted]

Time for my two cents. Even the numbers Cathy gave are conservative. I don't care to debate each one here, so let's say the numbers are ok. The bottom line is that you can make money from filling orders if you are careful--very careful.

The point I'd really like to make is that you need to decide who you are going to fill orders for--and who you won't. Pick out the two or three worst offenders in your area and refuse to fill for them. Reject--period. Eventually they won't bother. That is the only way you will ever discourage the slimiest of tactics. Then hopefully, the worst will die and quit stealing your orders. If florist as a group cannot stop the worst offenders, we need to stop wasting our time babbling about it.

 

[TOTO]

Re: Really Great Thread!

As always, we have mixed opinions over the issue of FILLING HIGHLY DISCOUNTED WS SALES, albeit FLORIST to FLORIST or including the OGs, non-local phonies, and WS websites.

We have NO PROBLEM filling orders for other REAL FLORISTS like ourselves for the obvious reasons.

Whatever your opinions, this discussion enables all of to rethink our positions and take a hard look at our numbers.

Regarding COST ACCOUNTING: If I had a ROBOT or a MACHINE which was manufacturing widgets, and all of my costs were recovered after the first 1,000 widgets and I was able to earn my 60% gross profit margin (the widget company requirement), then COST ACOUNTING makes since.

And, any widgets made after that would enable the widget company to work on much lower margins of profit since, all of their costs and gross profit margins had initially been met.

However, wee florists are neither ROBOTS nor do we have machines which can work non stop and for three shifts.

That's why I've never bought into this idea of throwing everything into one pot (100%,80%,73%,71%,60%,55% sale), mix it up, and use the cost averaging to work towards a final net profit on the whole cauldron of mock soup.

Regarding LABOR as a FIXED COST: Back in the HEY DAY, I was able to afford that assumption since SALES were constant too. However, that theory is no longer feasible in this variable market which required me to use more part time flex time help in all categories.

And so, when WEE BEE SLOW, we either send those folks home or tell them not to come in.

Of course, that requires us (the owners) to work harder and longer, but at least we're working for us and not some other middleman who wants to use us as THEIR SUB CONTRACTED VENDOR at chump change from their dollar along with their expectation of FREE DELIVERY $ERVICE from our end.

In the end, every order or request we entertain must be able to stand on its own and produce a reasonable net profit.

When there is TOO LITTLE or NO NET PROFIT when put to the test, we would rather walk away from it than SPIN OUR WHEELS for NAUGHT just to keep the help busy, turn over inventory and run our trucks OUT OF GAS!

Finally, I still see NO FUTURE by enabling a third party OG middleman in receiving 100% of their customer's KUDOS and ACCOLADES for all of the work we've done at our end and for CHUMP CHANGE from their dollar.

If we were to allow ourselves to be a party to that FRAUD by allowing it to continue, we would be an accessory to the CRIME, before, during, and after the facts.

 

[Joe Mioux]

Randy, that is mismanagement. if you have consistent over capacity, then you need to eliminate the excess labor.

Joe

Oh, I see Joe,

Accept incoming wire orders during the slow summer months, but reject during all holidays.

I like that plan!

Randy, just to be clear, I meant no disrespect. My point was, that if a flower shop has more labor than it needs, the owner needs to eliminate the excess labor in order to better manage the business.

Joe

 

[Joe Mioux]

Are wire service free flower shops really more profitable?

I want to hear factual evidence, not just emotionally rhetoric.

I do not want to hear, about OG's stealing our customers, that is competition.

I want to see evidence based on increased net profit. If you are more comfortable using percentages rather than gross numbers pleae do so.
Joe

Yesterday and today discussion got a bit off-track, I am guilty and so are some of you.

My apologies

Now, I really want to see and read, how WS-free flower shops are more profitable.

So far, this thread has devolved into the same old WS arguments.


So far, in this thread the only thing I learned is that if you business' GS is made up of 30Pct WS, you are in trouble.

Ten percent or less of WS as a pct of GS sales seems reasonable to maintain a WS.

Any comments?

 

[CHERYL BAKIN]

Gentlemen:
Some "fuzzy" accounting going on here:
Labor - unless you are paying all your help (designers, delivery people, toillet cleaners, etc) on a guaranteed, weekly or monthly wage, LABOR is not a Fixed Cost! It is a Variable cost. It varies from week to week, month to month, pay period to pay period depending upon the number of hours worked per week. If there is no work, send people home and CUT YOUR VARIABLE COST!!

Cost of goods: You buy product to fill orders, based upon what you already have on the books, or what you are anticipating getting (future orders). We al know that this is a guessing game, and that we all make very educated and intelligent (?) estimates. (Not counting the snow storm that hit the Northeast on Valentines Day this year!!!). When the sales FORECAST is not good, we do not buy. When the Sales forcast is rosey, we BUY.
So, The cost of goods will VARY WITH THE NUMBER OF ORDERS YOU ARE FILLING, as well as the product you are purchasing. This is a VARIABLE COST, NOT A FIXED COST!

Rent: Generally a fixed cost, subject to lease terms

Utilities: (phone/electric/DSL line): generally viewed as a fixed cost; Can become a variable cost (such as in Joe's Greenhouses, subject to temperature & climate changes)

Wire Service Expenses: Are both FIXED & VARIABLE Costs.
The FIXED costs are: the membership fees, the Dove/mercury Fees; cost of a website hosting;
The VARIABLE Costs are: Advertising costs; credit card clearing costs; costs to purchase containers (you may or may not do this); other items that you purchase from the wire service that are ADD-ons, not necessary to be a member; order transmission fees for sending & receiving are a fixed cost per usit, but will VARY monthly depending upon how many orders are sent or received.


This thread has turned into a Huge accunting discussion when I don't believe that is what Joe was after. Correct me if I am wrong, but the initial question centered around whether or not the wire service free florist was more profitable or not.

Many terms have been bandied about....

The real discussion, for me at least, should always be:
1. Can I somehow lower my FIXED COSTS while still continuing to grow my business?? For instance, can I lower my rent or utility costs? Could I alter my hours of operation without affecting my business sales volume??

2. Can I control or lower my VARIABLE COSTS while still continuing to grow my business?? For instance, can I cut my cost of product? Can I make sure that my designers are not "stuffing"? Can I avoid/eliminate unnecessary wire service expenses? Can I reduce my payroll?
3. What steps will help me get # 1 & # 2 above accomplished??
4. What can I do to INCREASE my Gross Sales Volume? If I increase it thru incoming Wire orders, how will that affect CASH FLOW, and other associated costs?

My Opinion: (for what it is worth):
New florists today (those in business for 5 years or less, approximately) probably do not need to be part of a wire service.

The internet today is much stronger that it was 5 years ago, and will continue to get even stronger. The internet has given new florists an alternative to being a wire service member that many of us old timers did not have. It has caused many of us to re-think how we operate.

However, Those of us who have built a strong local customer base are EXPECTED to supply certain SERVICES to customers. These include being able to handle getting an order placed in another city. (Especially true for our corporate customers).

To provide this service, I must do it efficiently and effectively. (hence I belong to one wire service today). (Keepinga rein on my costs!!)

My Time and that of my employees is worth Cold Hard Cash!! It is not cost effective for me to make repeated phone calls to get an out of town order placed. (I remember & lived with the world before mercury/Dove et al.) Tracking the orders placed by phone call can then become a cumbersome process, fraught with credit card charge-backs and other problems that I choose not to have to handle. NO THANKS!!!

Can you operate without a wire service? Yes, I think you can.

As the size of your business grows, however, the COSTS of participating/ or not participating begins to change, depending upon what direction you decide to take your business.

If you want to only be local, then you can forever be "wire service Free". If you want to have & service customers all over the world, as we do, then being a part of a wire service is a necessity in the world we live in today....that world will certainly be different in 1 or 2 or 5 years!

If you choose to participate in a wire service, Which wire service you choose as that necessity is driven by factors, including personal philosopy and preference. ( and keep counting your fingers as you shake their hands!!)


Just my 2 cents..............
Sincerely,

Cheryl

 

[bloomz]

Good post with 2 inputs from my perspective.

Gentlemen:
Some "fuzzy" accounting going on here:
Labor - unless you are paying all your help (designers, delivery people, toillet cleaners, etc) on a guaranteed, weekly or monthly wage, LABOR is not a Fixed Cost! It is a Variable cost. It varies from week to week, month to month, pay period to pay period depending upon the number of hours worked per week. If there is no work, send people home and CUT YOUR VARIABLE COST!!

Cost of goods: You buy product to fill orders, based upon what you already have on the books, or what you are anticipating getting (future orders). We al know that this is a guessing game, and that we all make very educated and intelligent (?) estimates. (Not counting the snow storm that hit the Northeast on Valentines Day this year!!!). When the sales FORECAST is not good, we do not buy. When the Sales forcast is rosey, we BUY.
So, The cost of goods will VARY WITH THE NUMBER OF ORDERS YOU ARE FILLING, as well as the product you are purchasing. This is a VARIABLE COST, NOT A FIXED COST!

Cheryl

My labor is a fixed cost. I am not at all liberal or comfortable with sending people home. They are devoted employees who rely on their hours to make ends meet. We just did a sales analysis by hour today and decided to close at 5 instead of 6 - that last hour isn't worth over 5K in payroll for the year. My employees grumbled and asked where they could make up those hours - they need the $.

Cost of good sold is close to fixed as well. We do throw some flowers away each week cuz we won't keep anything for next week's work, and fully restock every Monday, with addins as needed. We have a fairly big cooler that just looks pathetic unless their are at least 15-20 buckets and 12-15 arrangements in it at all times. Except at major holidays - we buy from wet trucks that service us so we get no real discounts for quantity from them.

Just an additional fyi and sorry for the topic hijack.

I'm thinking "more profitable" is a relative term.

 

[CHERYL BAKIN]

Jon:
Always good to chat with you. I understand how you consider your Labor costs to be fixed. In most flower shops, this is not the case...only the Owners Salary or Draw is a fixed cost. (Can I come work for you??)

If you are a family operation, where everyone that works there is part of the family, and they are all on Salary (Weekly or monthly), then yes, your cost would be fixed. Variable Labor Cost would be the extra Delivery drivers at holidays, the Extra sales help or the extra free-lance designer that you bring in to hlep for a few days.

You just determined today that your Labor costs need to be variable....and that you cannot afford an extra $5K in payroll per year. So you cut your hours by 1 hour/day, per employee. And the choices are????? Not to do it, and next year that cost grows to $6K or $7K......

These are tough choices, and people are not happy when faced with the choice of losing an hour / day in pay. (As you have just found out).

My offer to your employees would be that if we can increase SALES by $$ XXXX, then and only then will they get the $$$ back, in the form of incentives, bonus pay, or some other reward.

Cost of goods should also vary....do you, very week, stock your cooler with exactly the same product, both in variety and quantity? YOu may have 15 to 20 buckets in there, and 15 to 20 arrangements. I would be surprised if they are always the same stuff. hence, the cost of goods varies.......

Or, maybe you are just a much better person than I am at estimating your needs from week to week, hence you are able to place many Standing orders for products , at a Fixed price....then your costs of goods could become a Fixed cost.

Just a thought...... (This is my most accountants do not have a clue about our business!) Good evening!

Cheryl

 

[Joe Mioux]

Gentlemen:
Some "fuzzy" accounting going on here:
Labor - unless you are paying all your help (designers, delivery people, toillet cleaners, etc) on a guaranteed, weekly or monthly wage, LABOR is not a Fixed Cost! It is a Variable cost. It varies from week to week, month to month, pay period to pay period depending upon the number of hours worked per week. If there is no work, send people home and CUT YOUR VARIABLE COST!!

Cost of goods: You buy product to fill orders, based upon what you already have on the books, or what you are anticipating getting (future orders). We al know that this is a guessing game, and that we all make very educated and intelligent (?) estimates. (Not counting the snow storm that hit the Northeast on Valentines Day this year!!!). When the sales FORECAST is not good, we do not buy. When the Sales forcast is rosey, we BUY.
So, The cost of goods will VARY WITH THE NUMBER OF ORDERS YOU ARE FILLING, as well as the product you are purchasing. This is a VARIABLE COST, NOT A FIXED COST!

Rent: Generally a fixed cost, subject to lease terms

Utilities: (phone/electric/DSL line): generally viewed as a fixed cost; Can become a variable cost (such as in Joe's Greenhouses, subject to temperature & climate changes)

Wire Service Expenses: Are both FIXED & VARIABLE Costs.
The FIXED costs are: the membership fees, the Dove/mercury Fees; cost of a website hosting;
The VARIABLE Costs are: Advertising costs; credit card clearing costs; costs to purchase containers (you may or may not do this); other items that you purchase from the wire service that are ADD-ons, not necessary to be a member; order transmission fees for sending & receiving are a fixed cost per usit, but will VARY monthly depending upon how many orders are sent or received.


This thread has turned into a Huge accunting discussion when I don't believe that is what Joe was after. Correct me if I am wrong, but the initial question centered around whether or not the wire service free florist was more profitable or not.

Many terms have been bandied about....

The real discussion, for me at least, should always be:
1. Can I somehow lower my FIXED COSTS while still continuing to grow my business?? For instance, can I lower my rent or utility costs? Could I alter my hours of operation without affecting my business sales volume??

2. Can I control or lower my VARIABLE COSTS while still continuing to grow my business?? For instance, can I cut my cost of product? Can I make sure that my designers are not "stuffing"? Can I avoid/eliminate unnecessary wire service expenses? Can I reduce my payroll?
3. What steps will help me get # 1 & # 2 above accomplished??
4. What can I do to INCREASE my Gross Sales Volume? If I increase it thru incoming Wire orders, how will that affect CASH FLOW, and other associated costs?

My Opinion: (for what it is worth):
New florists today (those in business for 5 years or less, approximately) probably do not need to be part of a wire service.

The internet today is much stronger that it was 5 years ago, and will continue to get even stronger. The internet has given new florists an alternative to being a wire service member that many of us old timers did not have. It has caused many of us to re-think how we operate.

However, Those of us who have built a strong local customer base are EXPECTED to supply certain SERVICES to customers. These include being able to handle getting an order placed in another city. (Especially true for our corporate customers).

To provide this service, I must do it efficiently and effectively. (hence I belong to one wire service today). (Keepinga rein on my costs!!)

My Time and that of my employees is worth Cold Hard Cash!! It is not cost effective for me to make repeated phone calls to get an out of town order placed. (I remember & lived with the world before mercury/Dove et al.) Tracking the orders placed by phone call can then become a cumbersome process, fraught with credit card charge-backs and other problems that I choose not to have to handle. NO THANKS!!!

Can you operate without a wire service? Yes, I think you can.

As the size of your business grows, however, the COSTS of participating/ or not participating begins to change, depending upon what direction you decide to take your business.

If you want to only be local, then you can forever be "wire service Free". If you want to have & service customers all over the world, as we do, then being a part of a wire service is a necessity in the world we live in today....that world will certainly be different in 1 or 2 or 5 years!

If you choose to participate in a wire service, Which wire service you choose as that necessity is driven by factors, including personal philosopy and preference. ( and keep counting your fingers as you shake their hands!!)


Just my 2 cents..............
Sincerely,

Cheryl

this is such a good post!

 

[Mikey the Flower Guy]

Finally, I still see NO FUTURE by enabling a third party OG middleman in receiving 100% of their customer's KUDOS and ACCOLADES for all of the work we've done at our end and for CHUMP CHANGE from their dollar.

If we were to allow ourselves to be a party to that FRAUD by allowing it to continue, we would be an accessory to the CRIME, before, during, and after the facts.

Toto, you're off track...this is NOT what's being discussed....

 

[Mikey the Flower Guy]

boys and girls....

take the wire services OUT of your preliminary cost averaging analysis, configure your spread sheet to document YOUR OWN instore sales, expenses, and cost of goods sold...find your averages...each stores are different.
THEN insert the dilution factor of accepting incoming orders at the base rate ( the true rate of somewhere between 60-63.5%), and see if the "diluted" rate keeps your shop at above net margin levels.
Decide at the beginning if you will enter your "commision" and "service charge (if you have one)" as a 'sale" , or as a cost of goods sold, and then determine whether you SEND more orders, or receive more orders.
IF you send more orders, and receive a regular rebate, set that completely aside....it goes straight to profit.
Does your rebate and service charges cover your clearinghouse costs/expenses, memberships fees, incoming order charges, and QA, averaged over 12 months.......IF your answer is no, drop the wire service.
We have this "inherent" belief that we MUST fill incoming orders, even IF they "cost" us money, and THAT is where this thread currently "resides".
Almost all of us agree that we cannot fill orders, that literally cost us money, meaning we MUST take money out of a profitable sale, to "augment" a shortfall sale, which is the "model" that destroys most existing shops, big & small, old and new!!
HOWEVER, turning DOWN an incoming order, that is marginal at best, and acceptable only during "slow times" is what's got us into this debate in the first place....it's the little virus with no seemingly inherent cure, that could easily end the florist to florist order as we now know it!!
Why even challenge the regime as we know it....the "old timers" will die off sometime, and the newcomers will do, whatever it is that they will do...they will/ already HAVE learned how to do business WITHOUT wire services!!
A WHOLE bunch of florists HATE wire services.....a whole bunch ALWAYS HAVE....BUT, a whole bunch more, have built very solid businesses AROUND offering those expensive "tools" that wire services provide, and ARE NOT about to change the way they do business, just to suit those shops/owners that can do without!
This discussion will NEVER END......NOBODY will "profit" from this thread

 

[carol]

Good post with 2 inputs from my perspective.
My labor is a fixed cost. I am not at all liberal or comfortable with sending people home. They are devoted employees who rely on their hours to make ends meet. We just did a sales analysis by hour today and decided to close at 5 instead of 6 - that last hour isn't worth over 5K in payroll for the year. My employees grumbled and asked where they could make up those hours - they need the $.

Cost of good sold is close to fixed as well. We do throw some flowers away each week cuz we won't keep anything for next week's work, and fully restock every Monday, with addins as needed. We have a fairly big cooler that just looks pathetic unless their are at least 15-20 buckets and 12-15 arrangements in it at all times. Except at major holidays - we buy from wet trucks that service us so we get no real discounts for quantity from them.

Just an additional fyi and sorry for the topic hijack.

I'm thinking "more profitable" is a relative term.

Hi Jon
I saw a florist use posters to fill up one window on his large showcase cooler.. so it looked full but with less fresh product.. He only did it for the slow times but it worked well.. just make sure the posters/pictures or whatever you use to fill that empty window-door is good looking.

 

[TOTO]

Actually, it is part of this equation!

Toto, you're off track...this is NOT what's being discussed....

As to the original question regarding a focus on PROFITS, a florist has to take the 800 floral and DOT.CON OG anomaly into question.

Pre SKIMMER days (1984) the entire WS world was a fair and equitable balance of trade between two real florists.

All things being equal, the earned 20% commissions coupled with a florist's $ervice charge coupled with lower WS dues and fees coupled with NO FTO or reverse the transmission fees on the backs of the filler, was always enough FAT to offset the incoming discounted filler orders.

The entire structure is now broken primarily due to the interception by OGs as they get in between the consumers and the florists, skim off all of the fat, and expect the filling florist to DOO ALL DAT DOO for naught.

And so, the losses of those sending revenues simply add to the losses incurred on the filling side, thus LESS PROFITS.

Joe is correct with his strategy of a LIMITED EXPOSURE at the filling side by suggesting that, a florist can absorb those losses at no more than a 10% filling ratio. He also suggest that Florists with exposures of 30% or more in filling discounted incoming are high risks candidates.

I've personally observed shops which were put out of business as their incoming grew to 70% as their customers base dropped to 30%, and then DISAPPEARED all together.

In their cases, and in their admissions after the cumulative damage had already been done, each of them became the victim of a slow cancer as the incoming grew at the expense of their own customers. Facts were that, they became so busy filling the discounted orders, especially on the major floral holidays, that they were forced to put their own telephone lines ON HOLD.

In turn, their customers and unable to get the $ervice they needed, simply called another florist or an 800 number.

Then, on one mystical day, their incoming from their old partner just stopped and within 90 days, THEY BEE GONE!

 

[CHERYL BAKIN]

Fellas:
Joe asked for cold hard numbers if you are wire service free. I am down to 1 wire service, so I thought that I would supply some details that are in black & white: As you read this, please remember that we DO NOT participate in any TF national advertising, DO NOT have any also served by listings, and buy very few, if any holiday containers. We view belonging to a wire service as a tool -- just like using a pencil, a knife or a computer. When my pencil breaks, I will switch to a new pencil!)

Here Goes:
TF membership cost( 1 store) $ 149.95 per month
TF Dove, including tax 84.75
TF quality program 20.00
TOTAL FIXED COSTS: $ 254.70 per month

Based upon a shop sending of 25 orders per month, this costs $10.19 per order sent.

(I have rounded below to make the example more understandable & easier to follow)

In order to "cover" the Fixed cost of wire service membership, my average order needs to be just over $50.00/ order sent. Then my 20% commission covers the above costs. ($50. x 20% = $10.)

Covering my Fixed costs of a wire service membership means that I need to send 25 orders per month (25 orders x the 20% commission received @ average order of $50.00 sent= $250.00).

So, 25 order per month is what I need to "break even" on the outgoing side of the wire service game.

This is, of course, before rebates, for sending and other special promotions.
..........
If you are receiving, you are also charged a receiving fee of $1.25 per order received, and thus adding to your cost of obtaining that "incoming order".
(in addition to the 27% that you are giving up to get the order).
..............
If you CALL out an order & eliminate the Dove/mercury, your cost is lowered, by $84.70 per month. However, you are still incurring costs on the back end of the order in the form of: increased cost of employee time to call other the order, bookkeeping time for reconcillation, etc.

Then,
When order volume picks up substantially during the holiday,(incoming or outgoing), all those phone calls mean extra staff, extra phone lines, etc. Costs that are not always easy to turn off in slower times!!

Any $8.00 per hour employee, for example, costs you today in wages & benefits (FICA, unemployment, FEd UC, WC, etc) approximately $11.25 per hour. And you usually would not have an employee just work 1 hour per day -- you would have them work 4 or 5 or 8.... there by increasing your costs over the $254.70/ month shown above.

(An $8.00 per hour, 20 hour/ week employee costs you approximately $225/week to employ, after all costs are considered. )

My point in this post is not to bash a wire service model or a non-wire service model. It is simply to get everyone to do the analysis of both models thoroughly, which is what I think Joe's initial post was directed toward.

Those of us that are established have different costs & structures that those of a newer florist.

We all have different markets that we choose to service.

None are right ....none are wrong.....they are just different!!

We just all need to look at all the facts & numbers and what works for OUR individual businesses.

We deal with emotions every day. Sometimes, our own emotions get in the way of smart business decisions.

Hope this helps!
Cheryl

 

[Rosebud06]

How on earth did you triple your income?
What did you do?
I have not been open a year yet and have so much to learn.

 

[12BucksFor2Dozon]

...In their cases, and in their admissions after the cumulative damage had already been done, each of them became the victim of a slow cancer as the incoming grew at the expense of their own customers. Facts were that, they became so busy filling the discounted orders, especially on the major floral holidays, that they were forced to put their own telephone lines ON HOLD.

In turn, their customers and unable to get the $ervice they needed, simply called another florist or an 800 number.

Then, on one mystical day, their incoming from their old partner just stopped and within 90 days, THEY BEE GONE!

As usual, TOTO does a great job of explaining, in much clearer terms, why I, in many previous posts, say that just because something is making you some money TODAY, does not automatically mean that it is something that is in the best interests of your business. There are at least several other factors to consider, primary in my mind at least, is that you are filling orders gathered from your local customers for people who don't even live in your state and/or country, and more than likely being forced to under-fill to keep profits maintainable.

I just cannot, for the life of me, figure out why you would shovel most of the profit of an everyday order to some stranger in another land who is ILLEGALLY using YOUR local YP, all with the blessing of your mothership WS, to skim most of the real profit from the order. Why do you think FTD and TF don't open fill stations all over the country and fill themselves...

BECAUSE THEY KNOW THE COST OF FILLING AND MAINTAING A SHOP IS A BAD BUSINESS, AND KNOW THEY HAVE A HOST OF WELL-MEANING DUPES TO PAY FOR THE PLEASURE OF THEIR PROFIT-TAKING.

 

[Rosebud06]

I personally think we need to make our own nationwide phone book with all of us in it and call each other, give customers credit card # and get all of the money for each order for all our hard work rather than these WS folks getting all our money for doing NOTHING.
I just got my FTD statement for last month and am totally discussed!!!!!!!
It is not fair and I think we need to put our foot down and figure out a way to "stick it" back to them and do our own thing!!!!!!!!!!!!
ugggggggggggghhhhhhhh.........I am so mad
Donna

 

[felicityflowers]

How on earth did you triple your income?
What did you do?
I have not been open a year yet and have so much to learn.

It may be off topic but here is what worked for us...

Market to your local customers, get your face out in the public, and always make sure that you are on the top of the customers mind. When they think flowers they should be thinking of your shop!!

Get a website, it doesn't have to be anything grand, just something that says we deliver to x, y and z and throw some great images of your work up with your address and phone number, both local and toll free. More and more consumers are calling the florist direct by searching online for a "local florist in your town, your state" if you don't have a website that says WE ARE HERE...how will that customer find you?

Find local businesses to partner up with. We supply flowers to every realtor, church, restaurant, bank, salon, architect, wedding reception location and school in our area. Those were the first accounts that I fought to get and it has been the best investment of my time. They employ so many people that once you are their preferred florist...the everyday business from their clients, customers and employees starts rolling in.

We don't do newspaper/radio ads because we are too small and they don't work for us. We got a great deal on a months worth of ads from a local paper and we didn't get one response...not ONE. We rely on word of mouth and local advertisements such as fliers, etc to build our business. Saying that you are number one is one thing...proving it is another!

Drop me a PM or phone call (my phone number is listed in my signature) and I would be happy to talk about anytime it in more depth.

Keep Rockin! It does take some time but if you work hard and produce great designs people will notice and it will pay off.

 

[CHR]

Ding! Ding! Ding! We have a winner!

Fellas:
Joe asked for cold hard numbers if you are wire service free. I am down to 1 wire service, so I thought that I would supply some details that are in black & white: As you read this, please remember that we DO NOT participate in any TF national advertising, DO NOT have any also served by listings, and buy very few, if any holiday containers. We view belonging to a wire service as a tool -- just like using a pencil, a knife or a computer. When my pencil breaks, I will switch to a new pencil!)

Here Goes:
TF membership cost( 1 store) $ 149.95 per month
TF Dove, including tax 84.75
TF quality program 20.00
TOTAL FIXED COSTS: $ 254.70 per month

Based upon a shop sending of 25 orders per month, this costs $10.19 per order sent.

(I have rounded below to make the example more understandable & easier to follow)

In order to "cover" the Fixed cost of wire service membership, my average order needs to be just over $50.00/ order sent. Then my 20% commission covers the above costs. ($50. x 20% = $10.)

Covering my Fixed costs of a wire service membership means that I need to send 25 orders per month (25 orders x the 20% commission received @ average order of $50.00 sent= $250.00).

So, 25 order per month is what I need to "break even" on the outgoing side of the wire service game.

This is, of course, before rebates, for sending and other special promotions.
..........
If you are receiving, you are also charged a receiving fee of $1.25 per order received, and thus adding to your cost of obtaining that "incoming order".
(in addition to the 27% that you are giving up to get the order).
..............
If you CALL out an order & eliminate the Dove/mercury, your cost is lowered, by $84.70 per month. However, you are still incurring costs on the back end of the order in the form of: increased cost of employee time to call other the order, bookkeeping time for reconcillation, etc.

Then,
When order volume picks up substantially during the holiday,(incoming or outgoing), all those phone calls mean extra staff, extra phone lines, etc. Costs that are not always easy to turn off in slower times!!

Any $8.00 per hour employee, for example, costs you today in wages & benefits (FICA, unemployment, FEd UC, WC, etc) approximately $11.25 per hour. And you usually would not have an employee just work 1 hour per day -- you would have them work 4 or 5 or 8.... there by increasing your costs over the $254.70/ month shown above.

(An $8.00 per hour, 20 hour/ week employee costs you approximately $225/week to employ, after all costs are considered. )

My point in this post is not to bash a wire service model or a non-wire service model. It is simply to get everyone to do the analysis of both models thoroughly, which is what I think Joe's initial post was directed toward.

Those of us that are established have different costs & structures that those of a newer florist.

We all have different markets that we choose to service.

None are right ....none are wrong.....they are just different!!

We just all need to look at all the facts & numbers and what works for OUR individual businesses.

We deal with emotions every day. Sometimes, our own emotions get in the way of smart business decisions.

Hope this helps!
Cheryl

Emphasis mine. We could all argue the fine details of the numbers but Cheryl is advocating taking the sane approach, understanding how WSs works (or do not work) for a business. Her last two posts in this thread have been outstanding. Bravo!