Optional thoughts on keeping good sender business without WS and OG.

[domineaux]

I've been analyzing and turning numbers for several days. Just thought I'd put this out for others to think about and hopefully respond with some viable options.

When we dropped off WS several of the sender florists we liked doing business with made it clear they could not continue to send to us. They indicated the rebates from the WS added enough additional revenue from sending orders they had no choice except to stay and send through WS.

Our WS fees were appx $340 to $360 permonth.
This did not include the commisions we paid to WS (7%) and sending florist (20%) or the $1.50 for each online order processed through the WS online order system.

We quit WS the end of last month.

The rebate to the sender, if it is high as $10 per order is basically being paid out of the exorbitant fees ($340-$360 per month we paid in).

Voila! looks like we are shut out. - not quite, we are about to find out.

We are going to call all the florist senders that we want to continue to work with next week and do the following. We are going to offer to pay 30% commission directly to them. They use credit card and deduct the 30% upon giving us the order. This way the sender is getting paid their commission on the spot, and we get our money as well.

I realize this is not a "standard way of thinking", but we don't plan to offer anything like this to OG. Just B & M shops. I'm not saying this has got to become the "standard process for doing business". Our industry is so gone over to the OG and WS we need to fight back with creative alternatives.
Sure I think this is expensive, yet when you take away the WS fees and quit getting all the OG orders I think that is good gain.

The WS fees to us or $340 per month minimum every month. We were paying 27% in commissions on top of that.
So, now if we pay 30% commission straight to the sender florist. We are only paying 3% more for the order than we would normally pay to the WS. This may not be as attractive to sender florist, because it might require a phone call or an email order confirmation. Yet, if B & M florists are willing to work together over time this might actually work to our benefit.
Divide the $340 of fees we paid to WS by the 3% additional percentage in commission is not significant for most of us.
It is clear that in order to offset the $340 mandatory WS fees you would have to receive $11,333.33 in orders. ($340/.03)
Remember now, we are talking about incoming orders only.

We definitely want quality business. This might be a good approach to improved relations, florist to florist, generate more business without subsidzing the OG and filling the pockets of the WS.

This way we don't have make an effort to draw the line in the sand with the WS, OG or sending florists.
We pay enough commission to attract those sender florists that are getting the rebates.
We always reviewed every order we received from WS and we turned down approximately 1/2 of them.
This doesn't mean anything different. We still have the prerogative to accept or reject orders.
I'm thinking this puts us in a much better position, because it will build rapport between B & M florists that we need badly... and solidarity, which is pretty well non-existent.

The WS are working us 10 ways against the middle. The TF has been running ads opposed to Boxed flowers and yet is in bed with the ProFlowers ExpressFlorist.
Seriously, the WS are cashing out and leaving the bodies everywhere.

Do I think paying 30% is too much, probably is. Many shops need the extra revenue and they are going to take advantage or the perks. I don't blame them a bit.

The big money to the WS is not their little tweaky 7% commissions on our incoming orders, but those exorbitant fees for services they charge on a monthly basis.

I may not have covered all the bases with this posting, but I think it's a pretty good start. I know I do not have a corner on good ideas, nor do I hope this comes across that way. I am very interested to read some ideas and options from other FC members.

 

[OB1]

Congratulations, and best of luck to you with your new formula.
At a quick glance, it sounds like a fair deal to me on the surface.
If I could figure out a way to service my overseas orders, I would drop my wire service in heartbeat.
We send a very few out of town orders for North America, mostly with credit cards, so my concern is with the overseas orders, for which I have not yet found an alternative. We send alot of overseas orders, so it is an important consideration for me.
Belonging to a wire service just to offer the overseas service, is crazy expensive, but I do not know of any reliable alternative.
I think it is time for me to calculate exactly how much each overseas order has cost us over the years.
On the other hand, given that the bulk of our orders are for delivery overseas, is it wise to forfeit the only secure way of transmitting an order to, say Saudi Arabia? or Russia?, or Pakistan? or India, or Germany, or South Africa? or some other country with a different currancy and a language that I don't speak? And the risk to my credit card, and all the associated costs of doing business overseas including Visa's inflated exchange rates, interest rates through the roof, and the risk of credit card faud, or identity theft?
Isn't this the only remaining reason why we join an internatinal flower delivery service like TF or FTD?
I rarely fulfill incoming orders, and never purchase the wire service containers, and don't advertise in the book.
The overseas orders are the only reason I remain a member.
So, thanks for the kick in the ass. I will continue to think on this.
JP

 

[RWK]

Unfortunately, overseas and international floral orders are perhaps the one viable reason to belong to a wire service. I've been in shops that sent overseas regularly.........and shops that may have an onternational order once or twice a year.

I know I am not fluent in all world languages, nor do I know all currency exchanges, local customs, etc. So, that is perhaps the one viable reason for belonging to a wire service.

 

[KABERS]

30% seems like a lot but I get what you're saying. I would hope those shops appreciate the business you send their way too. I will be out of ftd May 1st., hopefully this won't be an issue because i'm also fsn.

 

[BOSS]

Why not just go 100% consumer direct and let everyone make 100%. That coupled with not filling gathered orders would kill both the wire services and Order Gatherers, and on top of that I would get paid $100 for doing $100 and so would you.

 

[domineaux]

BOSS- 100% - that's not going to happen.

The Sender florists can't walk away from appx 30% on every send order. It is too much apart of their profit structure.
I say pay up, and turn down orders you know aren't profitable to your business. You are doing it now, for a small % differential (3% TF)
Also, I'm not saying you do a 30% deal across the board. I would think you'd want about 3-5 orders a month from the sender florist to give that discount.
However, if you have enjoyed good business from some of those sender florists that are getting rebates from the WS I'd say it's worth it to pass off a 30% discount to them.
In our case it is a fact. If we don't do something to capture that business it is gone to us. We are no longer a member of the respective WS.

About the international stuff. We accept CC. As far as I know each of the big four is all over the world.
We got an order from China last Thursday and the buyer used a MC.
Should I care about exchange rates in such transactions... nope.
I had a valid CC information entered it into the machine, and voila it was good.
The language thing is very simple. If the buyer is looking at an English stie ... they speak english.

You can find plenty of English speaking B & M florists all over the world. You can also check them out on the internet.

So, I'd suggest those worried about international business you should do some investigating and make some calls.

Who cares if you send or receive international orders, if all your profit goes into the WS and OG pockets.
Think about the process. The WS is paying through the nose for OG orders and rebating higher volume senders.

THe WS makes their money from the little B & M shops that are effectively paying them big fees for incoming orders.
The WS is only interested to keep enough orders in the queues to send orders to the B & M shops.
The WS spreads those orders around at their own will, unless your shop is specified by a sender.
The WS has to have orders to keep their huge number of members paying up all those exorbitant fees each month.
Follow the money trail and you see the 7% the WS charges is probably the only sensible part of the entire WS arrangement.

I'm not telling anyone to quit WS business.

I posted this to read what other members have to say, especially regarding solutions and options.

 

[anytimeflowers]

This past week, I got an order on my site from Sweden. Friday had a call from a guy in Egypt, found the site online and then called with a credit card. It is my understanding that the big four take care of the exchange rate, but perhaps I am wrong. I participate in FSN, and they charge 16.99 for an international order instead of the usual 3.99, so I just charge that to my customer.

I would not go for more than 20%, though, simply because almost all of my daily deliveries go on a pool service, and those are very real dollars that I can't play with, that is one of the main reasons that I dropped Bloomnet. I can and do buy large quantities of flowers, and I do share buys with another florist so I'm able to play the volume discount game on product, but there is no play at all in delivery fee. Your premise is very good but I wouldn't be able to do it. Hope that's what you're looking for.

 

[domineaux]

Whenever we receive an order we always consider the delivery fee first.
If an order comes in for $90 we subtract the delivery fee from the total order amount first.
Then we deduct the commissions due others.
Then like everyone else we accepted the order for what we thought was enough profit.
The big problem, we didn't know how many orders would come in during the month to prorate the "WS fees (appx. $340 per month) across ithe month's total orders".
During the past year, even on Valentine's and Mother's day months we did not breakeven on Incoming WS orders.

I am saying you have to look at how you review orders to accept them or not.
FSN hasn't done much for us in our area.
I think principally because we don't have their website.
We only get a couple orders a month at most.
We do send through FSN, and we will probably make extra efforts to do more with them now that we have dropped the WS.

You speak of 20% as far as you can go, but if you are on WS the fees + WS commisions far and away offset an additional 3% you might pay for incoming orders.
I suggest if you have any respect for what I've discussed so far you might want to go back in the thread and make sure you understand precisely what I've mentioned.

From your positng it would appear you aren't using any WS, except maybe FSN.

The international thing is probably a sticky point for many florists.
Principally, because it is a grey area for decision making.
What to do, when you don't understand the process well enough is always a big hurdle.

It is always best to consider pros and cons for things like this, never ignoring any part of the sum of issues.

My purpose for this posting was to find ways to keep profitable incoming business, which we effectively have lost because we not longer participate WS.
Straight talk... we have lost that business unless we provide some attractive alternative for those "Florist senders".
Are they being greedy, maybe yes, maybe no, but the point is that is the way of it.
Either we find a way or we've lost their business.
All of them have been nice enough to tell us specifically they can't do 20% commissions the rebates are significant to their profits.
We don't have much choice, either we find a way to beat the WS rebate obstacle or we've lost those florist senders.

Thank you very much for your response.

 

[BOSS]

if you have enjoyed good business from some of those sender florists that are getting rebates from the WS I'd say it's worth it to pass off a 30% discount to them.

Then that begs the question, why not offer the 30% to local customers? If you're willing to give it away to long distance customers, why not the ones who really support you.

100% direct will happen~! Maybe not this year, or next but it is coming and will continue to grow. It has nothing to do with local florists. Consumers are getting smarter and doing things differently.

 

[domineaux]

Then that begs the question, why not offer the 30% to local customers? If you're willing to give it away to long distance customers, why not the ones who really support you.

Why not? No reason why not. I'd just think it would be more appropriate to only do this with loyal senders. I don't know what the WS uses as criteria for qualifying for rebates, but that might be a good guidleline as well.
The reason the WS pay the rebate/ransom is they want more orders and there is nothing like money as an incentive. The rebates is not a customer reward program per se. It is a performance bonus on send orders.

100% direct will happen~! Maybe not this year, or next but it is coming and will continue to grow. It has nothing to do with local florists. Consumers are getting smarter and doing things differently.

As much as I'd like to believe that.. After I read 1800 added over 1/2 million new customers last year in these economic times I'd say either customers know and don't care, or don't know.

Whatever we do it is all uphill, but at least without WS I'm not fighting my way uphill with a $340 per month backpack.

 

[BOSS]

As much as I'd like to believe that.. After I read 1800 added over 1/2 million new customers last year in these economic times I'd say either customers know and don't care, or don't know.

One has to wonder... if they continue to claim that they added 500,000 new customers last year, and the year before, and the year before, and FTD claims similar numbers... what's the problem???

They have a significant *burn rate* where they get a consumer once, then have to gain a new one to replace the previous one... my bet is that their repeat customer count is very low compared to one time shoppers. Considering this, one could assume that CONsumers are wising up, and moving back to traditional retail.

Once burned, twice shy...

 

[domineaux]

The problem we face... too little too late.

In our case, we are going to try to find new or alternative ways to do business.

We ain't waiting for the fat lady to sing.

 

[Mikey the Flower Guy]

Back to the overseas "issue"......I HAVE found many alternative ways to creatively send out orders, yet, overseas STILL is a bone of contention, and IF you're a shop that does regular volumes over the seas, the WS, is STILL the MOST viable option, and is still in the MOST protected system of order transfer.
I TOO, disagree, that the time of 100% order is upon us.....however, that said, I TOO agree, that the average "conned" sumer has been burned enough in many cases, to return to traditional retail, and I've had SEVERAL customers re-establish accounts, that were primarily for out of area sending!
There is NO QUESTION, that WS fees are way too high, for what they provide in viable tools, and for those shops that are foolish enough, to believe that joining a WS for incoming order, actually DESERVE to pay the exorbitant fees, if they are THAT desperate, for incoming!!
WIRE SERVICE marketing skills ARE far superior to anything that a stand alone shop can offer, HOWEVER, a group like FlowerChat would have NO PROBLEM marketing head on, except that IF we cannot agree, that paid membership is worth it, how on earth are we gonna convince shops OUTSIDE our current membership, that a large group scale effort, cannot be effective if it's NOT collective!!
Listen, EVEN FaceBook wants, and WILL start charging each and every member for access this coming summer, like it or not!
I DREAM of the day, when FlowerChat has ENOUGH market horsepower to effect change in favour of our industry, has enough commitment from it's current AND future members to stabilize our plans, and has ENOUGH respect, for itself, and it's members, to ALL ROW, in the same direction!
I'm pretty sure, I'm on the verge of getting booted from my current WS, I'm engaging them like never before, and getting the impression, they DO NOT appreciate it, nor, will they tolerate it.
ALL my new outgoings, will contain messages, that are somewhat colourful!!

 

[CHR]

If you're interested in dealing with quality florists with orders sold by style and color, rather than by-the-pictures, you might want to look into BBrooks. The volume isn't high, but the order quality really is. We've been a member for almost 2 years and have had just 1 complaint on an outgoing order - and it was based on style, not value. The other florists happily replaced the same day.

The BBrooks staff is thorough and professional and a delight to work with.

They do offer international sending, although the minimum is around $100 or so. We've received fantastic feedback from the few international orders sent via BBrooks.

I've also had good luck sending internationally direct via florists' own sites. Don't forget that Interflora Europe (Fleurop) is still owned by local florists and each country has its own site. The prices ordering direct are much, much lower than going through a US broker company like FTD.

 

[HydrangeaBleu]

I can 2nd Kathy's remarks about BBrooks. I've been a member for about 1-1/2 years and they are terrific to work with. They speak our language and excel at customer service. Monthly fees are $50. Split is 72% incoming, 16% outgoing. I'll be down to just them in a couple of months (finally getting rid of Floral Source - which seems to be nothing but OG's and I refuse orders more than fill from them).

Anne

 

[OB1]

We recieve lots of orders from B Brooks for delivery to the Ottawa area, but I am not a member.
I understand their restrictions, and that is no problem for us, because we do not stock the flowers they list as being un-acceptable.
However, my understanding is that they are members of teleflora, and that they can transmit their orders through any TF member, and that all their orders are transmitted via teleflora for payment, so I am unsure as to the actual split that takes place.
I have often wondered about becoming a member, but because I get the orders anyway, why should I pay any exta fees?
Are they just another high end order gatherer?
Please educate me.
Thanks.
JP

 

[conchandler]

We recieve lots of orders from B Brooks for delivery to the Ottawa area, but I am not a member.
I understand their restrictions, and that is no problem for us, because we do not stock the flowers they list as being un-acceptable.
However, my understanding is that they are members of teleflora, and that they can transmit their orders through any TF member, and that all their orders are transmitted via teleflora for payment, so I am unsure as to the actual split that takes place.
I have often wondered about becoming a member, but because I get the orders anyway, why should I pay any exta fees?
Are they just another high end order gatherer?
Please educate me.
Thanks.
JP

If you're already getting lots of their orders, you might want to think about it. They truly are working with some of the best florists through their own network. Real person customer service, and they pay quickly. The split applies to the price of the arrangement only. You set your delivery fee and get 100% of that. I like their model a whole lot better than the other WS, but we just didn't receive enough orders to stay with them.

 

[anytimeflowers]

Whenever we receive an order we always consider the delivery fee first.
If an order comes in for $90 we subtract the delivery fee from the total order amount first.
Then we deduct the commissions due others.
Then like everyone else we accepted the order for what we thought was enough profit.
The big problem, we didn't know how many orders would come in during the month to prorate the "WS fees (appx. $340 per month) across ithe month's total orders".
During the past year, even on Valentine's and Mother's day months we did not breakeven on Incoming WS orders.

I am saying you have to look at how you review orders to accept them or not.
FSN hasn't done much for us in our area.
I think principally because we don't have their website.
We only get a couple orders a month at most.
We do send through FSN, and we will probably make extra efforts to do more with them now that we have dropped the WS.

You speak of 20% as far as you can go, but if you are on WS the fees + WS commisions far and away offset an additional 3% you might pay for incoming orders.
I suggest if you have any respect for what I've discussed so far you might want to go back in the thread and make sure you understand precisely what I've mentioned.

Okay, I did as you suggested, and added much-needed sleep to the mixture. I still understand it the same. Perhaps the difference in our thinking is that I have had so little to do with wire services that they have never had much impact on my immediate business, which is primarily local.

I just don't see encouraging more order gatherers to pop out of the woodwork is the way to go. Really. The reality is that as long as florists continue to fill those orders, the og will continue to gather them. It's free money. You're suggesting that this would effectively cut out the WS fees, and of course it would. Your thinking is solid as far as it goes.

If I am going to encourage solidarity in florists, however, it isn't going to be by encouraging them to continue in behavior that is helping to sour the consumer on our product, it's going to be some sort of model like Boss and Mikey talk about.

I belonged to Bloomnet for two years, and realized they were costing me far more than I was willing to give. Not in just dollars, but in value to my local customers who are my bread and butter. And when I say local customer, I don't mean the reciever. They are not my customers, I can't say that I get much reciprocal business from someone who recieves flowers, unless it is funeral work. I mean in my availability and my design, which really was starting to look a little less than what I expect from myself.

BloomsToday and Kremps are just two of MANY B&M florists who have discovered the magical money-making ride to be had in order-gathering. To suggest to them that they can make more money by doing it this way is fine. But it does not really put any more money in your pocket, it just keeps you busy. Your straight talk sounds valid, although in my thinking, you have an extra percentage that you may have forgotten, and that is the roughly 3% fee you will pay for the credit card processing.

That is why I said I would not give a sending florist more than 20%. I have no intentions of encouraging order-gathering, and disagree that those customers are lost without them. Then again, because I have very little experience with WS, I don't say that I know it's true.

I do very much respect your posts, you clearly are searching for options that will keep our industry viable, which is what we all are doing.

I am seeing a trend toward local business, though. I have a lot of people come in to have an order sent out of town by me instead of going on the internet because they want to support me. I don't know of course what your business model is, and I think that is the key issue here. Those who are relying on out-of-town senders for volume have to keep order-gatherers alive in order to keep themselves alive.

Keep it local is starting to have some impact on the consumer, they are starting to understand that they are ultimately limiting their choices and I think the tide is turning. I would not want to stem that tide.

You asked for opinions and I gave mine. I simply can't support this idea. Perhaps since I don't even grapple with this issue, I should not have replied. I still want to see an all-florist network of some sort without furthur damaging our image to the public.

 

[domineaux]

You asked for opinions and I gave mine. I simply can't support this idea. Perhaps since I don't even grapple with this issue, I should not have replied. I still want to see an all-florist network of some sort without furthur damaging our image to the public. ​

Are you kidding your response is very good.​

I do think one thing to emphasize. I was definitely NOT talking about participating with OG senders.​

My entire emphasis is to participate with B & M Florist shops that are currently unable to leave WS, because the receive too much in rebates to walk away from them.

Your straight talk sounds valid, although in my thinking, you have an extra percentage that you may have forgotten, and that is the roughly 3% fee you will pay for the credit card processing.

I didn't mention CC fees, because we pay CC fees on CC transactions regardless of wheter we use WS processing. You pay more to WS of course, but using other services you can save on those fees.

 

[RWK]

Back to the overseas "issue"......I HAVE found many alternative ways to creatively send out orders, yet, overseas STILL is a bone of contention, and IF you're a shop that does regular volumes over the seas, the WS, is STILL the MOST viable option, and is still in the MOST protected system of order transfer. (Thank you Mikey - that's my contention too. )
I TOO, disagree, that the time of 100% order is upon us.....however, that said, I TOO agree, that the average "conned" sumer has been burned enough in many cases, to return to traditional retail, and I've had SEVERAL customers re-establish accounts, that were primarily for out of area sending!
There is NO QUESTION, that WS fees are way too high, for what they provide in viable tools, and for those shops that are foolish enough, to believe that joining a WS for incoming order, actually DESERVE to pay the exorbitant fees, if they are THAT desperate, for incoming!! ( again here we agree ) SERVICE marketing skills ARE far superior to anything that a stand alone shop can offer, HOWEVER, a group like FlowerChat would have NO PROBLEM marketing head on, except that IF we cannot agree, that paid membership is worth it, how on earth are we gonna convince shops OUTSIDE our current membership, that a large group scale effort, cannot be effective if it's NOT collective!! (As JB would say - BINGO 'migo )
Listen, EVEN FaceBook wants, and WILL start charging each and every member for access this coming summer, like it or not!
I DREAM of the day, when FlowerChat has ENOUGH market horsepower to effect change in favour of our industry, has enough commitment from it's current AND future members to stabilize our plans, and has ENOUGH respect, for itself, and it's members, to ALL ROW, in the same direction!
I'm pretty sure, I'm on the verge of getting booted from my current WS, I'm engaging them like never before, and getting the impression, they DO NOT appreciate it, nor, will they tolerate it.
ALL my new outgoings, will contain messages, that are somewhat colourful!!

If it were not for language, currency, and cultural barriers - I would love to be able to contact a florist anywhere in the world and talk with them directly about what my customer is wanting to send.