Searching can be fun........if'n you can wade through the swamp to get to good land.
Having Fun with Just Flowers.
- Thread starter Joe Mioux
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BOSS
FlowerChat Administrator
BOSS
FlowerChat Administrator
Naw Heather, I don't want to tear you or anyone up over this silly @@@@. It's really not worth the time to argue about it, I do it, just to educate the newbies, and to piss Jon off.
And you better be careful, your claim of filling 30 a week to justify being a member sounds like me. And if florists held to that number, the coverage would decline by about 50% as most shops probably don't get that many a month.
Just for the record:
$50.00 order...less...
$10.00 Delivery
$15.00 COG
$15.00 WS Discount
$10.00 Labor
$ 5.00 Contribution to overhead, including WS membership/communications
-$5.00 Balance... you're in the hole...
I knew who ever answered that query would use roses as their base, but that's not a good example. While I and most florists sell a lot of roses, the bulk of our designs are other flower types...
BTW, the same breakdown applies to those designs... even planters...
So now, if someone can refute the above scenario, go ahead and tear me up, cuz I have another breakdown, including sales AND design labor, packaging AND delivery, and that -$5.00 is more like -$10.00
:wallhead:
And you better be careful, your claim of filling 30 a week to justify being a member sounds like me. And if florists held to that number, the coverage would decline by about 50% as most shops probably don't get that many a month.
Just for the record:
$50.00 order...less...
$10.00 Delivery
$15.00 COG
$15.00 WS Discount
$10.00 Labor
$ 5.00 Contribution to overhead, including WS membership/communications
-$5.00 Balance... you're in the hole...
I knew who ever answered that query would use roses as their base, but that's not a good example. While I and most florists sell a lot of roses, the bulk of our designs are other flower types...
BTW, the same breakdown applies to those designs... even planters...
So now, if someone can refute the above scenario, go ahead and tear me up, cuz I have another breakdown, including sales AND design labor, packaging AND delivery, and that -$5.00 is more like -$10.00
:wallhead:
If you are going to add all your business' fixed costs to all your WS orders, you might as well include your home's mortgage payment, your personal car payment, your personal credit cards expenses as well because it makes just as much sense to include those as your business' fixed costs.
my point is when accepting additional business that you wouldn't get normally, you look at the contribution margin those additional sales add to your gross revenue which in turn fixed expenses on a per unit basis.
whether you sell one flower arrangement a day or 100 a day, your fixed costs remain.
joe
btw; We should be careful about throwing numbers like 20 WS orders per week, 30 per week etc.
remember my break even analysis thread? i needed something like 126 orders for the year to break even. .....
your break even point for WS orders/week or year is contingent on your WS fixed expenses. I don't pay what many of you pay in WS fees and vice versa.
joe
remember my break even analysis thread? i needed something like 126 orders for the year to break even. .....
your break even point for WS orders/week or year is contingent on your WS fixed expenses. I don't pay what many of you pay in WS fees and vice versa.
joe
Okay.. no.. that is not true in my case - I would have to hire more help. It would take away from MY customers to appease the customers of OG's.
How is that? I have a husband.. he works for Warren Buffet (at least a company owned by Warren) He pays all the bills at home?? (what few we have) BTW - We are debt free at home no Credit cards, no car payments, no mortgage! So that is moot.. We live by DAVE RAMSEY! So seems to me - I'm not so bad at money management.
I don't understand that thought at all - could you explain further so that perhaps I can understand why you say that?
My business and my personal are seperate? Not filling og's works for me -
Mikey the Flower Guy
It's a GREAT DAY to live, and love!
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Joe...this "path" is unnecessary.....I'm "thinking" that maybe, we should be chatting with the shops that have VERY defined delivery areas NOT serviced by "other" shops.....
Again....the point is moot, if your are IN a metro area, with little exposure to long distance/rural deliveries...those shops can step aside!
We get a ton of rural delivery requests from out of the area shops, AND the "odd (oxymoron)" OG that we refuse, but, MORE importantly, BECAUSE we service those areas, we've gotten a large increase in our customer database, after each holiday "cycle" and interestingly enough, many of those customers have become direct clients...so, in a way, "filling" for those out of town sources, HAS INDEED benefited OUR bottom, with existing overheads.
Don't git yer pants in a tizzy IF you're IN a big city...congestion AND long distance, is a whole nuther discussion...
Luc is a good candidate, Joe's one...Mikey's another......any more??
BOSS
FlowerChat Administrator
With my min at $40, and refusing the lowball orders and bs recipes that are unprofitable, my avg wire is about$65. Setting a higher minimum with proper monitoring can get your avg even higher. We all must definitely monitor and CAN orders that would make us no profit.
Mikey, i should have been more clear....
Yes businesses need to cover all their costs with sales, with one caveat.
If a business can accept some additional business, that would not otherwise exist, then that business should look at covering 100 pct of the variable costs, and then evaluate how much extra revenue money is left for partially covering the fixed costs.
adding fixed costs to WS business that represents 10 pct of total sales isn't necessary. As long as some of those fixed costs are covered, the business will be more profitable.
I know I know..... been through this all before, but maybe if I keep trying to explain this stuff in a different manner it will click with people.
now, if WS business represents a significant part of the business and that business can not survive without the WS business then some if not all fixed costs should be considered in the profit analysis.
The irony is that most WS-free shops are the ones that say you have to add all costs. Well if they can survive without ws business then they probably could accept some WS business and not charge Fixed Costs to each WS orders.
joe
now back to work.... really really big funeral today.
NPFloral
New Member
Ummm... no. I can't "accept some ws business" It's not just the discounted orders... it's ALL THE FEES ASSOCIATED with belonging to my biggest competition's club. I mean really literally HUNDREDS of dollars a MONTH even if I would only do "some" w/s orders. If I forgo those fees when calculating profits, I have to make up those fees SOMEWHERE. That means digging into my profits from the 100% sales and giving it to (I know I'm sounding redundant here) MY BIGGEST COMPETITION so they have more money to compete against me. :ar15 TFTD1-800
you are missing my point....
substitute lawn fertilizer for WS business.
you don't have to take full markup on some sales if you cover 100 pct variable costs and some fixed costs.
as an example: say you have a customer that wants you to buy fertilizer from you, a product you don't normally sell. If your current product markup is 2.5 times on all your products, you don't have to sell the fertilizer at 2.5 times markup.
As long as you cover the cost of the fertilizer and then add say 10 pct markup you are spreading out your fixed costs over a broader product range. that extra 10 pct helps pay your fc,i.e utilities, insurance, rent etc.
I just picked fertilzer because it was the first thing that came to my mind with this thread.
Now to continue with your WS fees... by all means you have to account for those fees as part of the WS business.
cover your CogS, and membership costs and then see what is left over.
joe
NPFloral
New Member
I understand your point. My point is... using your scenario...
if my mark-up is 2.5 then...well.... my mark up is 2.5
Why would I sell it for less, or lose profit, on a special order for a product that I don't even carry? If anything... I would charge more because it is a special order and the supplier would probably charge me more on a single item order.
Even using your scenario and relate it to my point, you still compromise your profits by "spreading out the fixed costs" over into the profits of your 100% orders.
Regardless of the counting of beans, the WS is a losing game. You LOSE profits, you LOSE sales to them via their websites, the crappy designs that you have to put YOUR name on, and not to mention their drop-ship sh*t that you don't even get a cut of.
Tim - North Port Floral
if my mark-up is 2.5 then...well.... my mark up is 2.5
Why would I sell it for less, or lose profit, on a special order for a product that I don't even carry? If anything... I would charge more because it is a special order and the supplier would probably charge me more on a single item order.
Even using your scenario and relate it to my point, you still compromise your profits by "spreading out the fixed costs" over into the profits of your 100% orders.
Regardless of the counting of beans, the WS is a losing game. You LOSE profits, you LOSE sales to them via their websites, the crappy designs that you have to put YOUR name on, and not to mention their drop-ship sh*t that you don't even get a cut of.
Tim - North Port Floral
ok, one more time....
if you can make a $1100 sale of fertilizer which costs you $1000 you have an extra $100 in your hand that can be used to pay for rent.
if you don't make the sale you don't have the $100, but you still have to pay the rent.
BOSS
FlowerChat Administrator
Does the fertilizer "association" take 30% of the sale, and does the $1000 include the fuel to deliver the fertilizer (or to go get it) and does it also include the labor for the guy to unload it and then load it again?
Mark, i think you are diverting my example.....
My point is if you can cover your input costs plus add any revenue over those costs, any additional sale that you would not receive in the course of daily business improves your Net Profit.
NPFloral
New Member
But you STILL compromise your profits by spreading out the fixed costs of that sale thereby increasing your overall fixed costs.
As I said... you can count beans all day. I'm not in biz to make a little profit, I'm in biz to make as much profit with as little cost as possible and the w/s and it's associated costs hinder that concept.
Tim - North Port Floral
duanermb
New Member
I guess my rant for the week is on minimums.
The only defense I have seen of late of the wire services, is that on a big order you can make money, and we suspend, turn off, refuse, ask for more, take the phone off the hook for the rest, which I would think is about 50% of the business they get.
I would love to be part of a reasonable wire service if it made any sense what so ever to do so. What is a customer on this site to do if they want to send those $30.00 flowers somewhere. There are sites everywhere with low $ value products to compete with the drop shippers, customers want to buy it and send it somewhere else, but it seems that the most successful WS florists have high minimums that cause a HUGE CRACK in the system.
So it can't be defended that the current WS model is a good idea at all. Those low orders spool around until some sucker florist takes them and then goes out of business or, you know who is going to fill those orders? The Supermarkets. They may not be delivering yet, but just wait for it! They already have the biggest share of the walk in business. What's to stop them from starting to deliver. Anyone can get flowers delivered for $5-$10, so why not them? Who then will be the "preferred filler" of the WS?
It just makes the Bloomex and ProFlowers model look more and more inviting for both the wire services and the consumers. "Retail Florists are expensive" Yup.
Are the florists cutting their own throats? Time for a serious change, and though we are not a WS florist, this affects us too. Many believe that TFTD etc are the voice of the business. This need to change in a hurry if we are to survive.
1. Drop the minimums
2. Drop the excessive sending fees
3. Drop the wire services
This is a bit of a rant, and I don't mean to single out Heather at all. I am still waiting for good reason for the minimum, other than it's because the WS fees are so big and the 20% reduction to the order by the sending florist is too much, so we can't afford anything else. I have been dancing around this question for a few weeks on various posts already, so please enlighten me!!!
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