Teleflora Sues From You Flowers

CHR

CHR

Design matters
Nov 28, 2002
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Late last week, Teleflora filed a lawsuit against From You Flowers in federal court for breach of contract.

It appears that FU has jumped off the TF ship and moved its order volume to Bloomnet. Both FU's main site and their FloristExpress.net (Proflowers' 'florist delivered' partner) now sport 1-800-Flowers products like Fields of Europe the the Birthday Flower Cake.

Why the move? Most likely, it was to do with rebate dollars. When Blooms Today moved its volume to Bloomnet, they were offered a rumored $10/order to make the change.

Perhaps there was also an issue with the new TF product catalog. FU's sites feature mostly 'under $50' items and I don't believe TF has a dozen rose arrangement in that range. I'm seeing '1 Dozen Medium Roses' 'florist delivered' on FU's sites now for just $39.95. (Is that a Bloomnet product?)

Whisper numbers of order volume around 500,000 per year have been bandied about for FU.

Can't view the details of the lawsuit without a login to the federal court website, but I expect more info to leak out as the suit progresses.

At least florists can't say that TF supports ProFlowers anymore. ;)
 
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Well this is going to save me a lot of rejects so I am happy but as the market continues to contract as it pertains to wire orders its a matter of time before one of those 3 wire services fails!
 
And with this change, Teleflora's dropping order volume may not be enough to keep the filler fools happy and florists to may begin to jump ship...

Interesting that the two "old guard" services are losing more volume than the new kid on the block is, in fact 800Flowers should be gaining considering their growing stable of order gatherers...

Maybe...just maybe.... as they continue to lose high volume order vendors, Teleflora will one day choose to partner with local florists in a positive manner for both concerns.... ooops... I forgot... too late already...
 
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They likely hope to make the rebate money back through new member dues (regular fillers for FU via TF who want to keep the incomings and join Bloomnet), receiving fees and higher membership fees due to increased incomings. (IIRC BMT charges shops based on a fill-to-send ratio. The higher the fill volume, the higher the fees.

New members will also likely send more via BMT to offset the fill-to-send ratio so TF will further lose order volume.

But Steve, you are right, the rebate could end up costing 1-800 dearly.
 
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All 3 of you (Cathy, Steve and Adam) are likely right...

That said... from the florists I have talked to in the last 6 months, most say they are dropping BMT before one or both of the other two stable jockey's. Many based on order volume and cost per, so it is likely BMT is trying to up their volume to keep filler fools happy, and in this game, the only way to do that is with rebate dollars. (last I knew, TF did not pay rebates to BMT, but I could be wrong)

It could end up costing 800 more than they make especially if they run into coverage issues, pay the $10 to get the order and then lose 7%+fees to Teleflora since the 20% would be a wash back to the order originator.

This will be one to watch through the coming holiday stretch... one can only hope florists smarten up and refuse any and all company orders.
 
Very interesting...I know from experience that bloomnet had been waivering on their volume...I had to drop once my volume became too low to justify the service, I had them simply for filling volume didn't purchase any other services from them...

I really don't know that florists in general are chasing the volume gravy train, many of them that do have all three already and will jsut see their orders shift from one service to another...it may just keep them from getting rid of 800, their weakest link for now...small florists are really beginning to see the light and have already pared down to one and made a choice and even many from there are starting to question the need for the one...

It will be an interesting watch to see what it does or doesn't do for the big players involved...it likely won't do anything for the florists at all and won't do anything signifigant enough for us to even watch that level...
 
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CHR said:
................Whisper numbers of order volume around 500,000 per year have been bandied about for FU.
Can't view the details of the lawsuit without a login to the federal court website, but I expect more info to leak out as the suit progresses. At least florists can't say that TF supports ProFlowers anymore. ;)
Click to expand...

I've been told be a "real reliable" sourced that the numbers are 1.1 MILLION in volume and the amount of up front cash was "staggering"..............................plus all the other stuff, rebates, etc. and the lawsuit will reveal certain "branding rights".

My personal opinion for what it's worth is within 6 - 8 months they will be the new owners or major partner.
 
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Sorry, I forgot to post this. I think what has Tele panties wrapped real tight is that BN is doing a week long "phone blitz" next week (all hands on deck) because From You has identified stores they want to handle their orders and I suppose a "cost" agreement was worked out to get those stores over to the BN. This was supposed to happen Feb 01 but feel apart a week ago....................
 
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bootcampguy said:
Sorry, I forgot to post this. I think what has Tele panties wrapped real tight is that BN is doing a week long "phone blitz" next week (all hands on deck) because From You has identified stores they want to handle their orders and I suppose a "cost" agreement was worked out to get those stores over to the BN. This was supposed to happen Feb 01 but feel apart a week ago....................
Click to expand...

I'm very glad to say that I don't think I am on that call list....
 
bootcampguy said:
Sorry, I forgot to post this. I think what has Tele panties wrapped real tight is that BN is doing a week long "phone blitz" next week (all hands on deck) because From You has identified stores they want to handle their orders and I suppose a "cost" agreement was worked out to get those stores over to the BN. This was supposed to happen Feb 01 but feel apart a week ago....................
Click to expand...
Maybe... we have seen this happen in years past... butt... this time of year all 3 majors will be doing the same thing trying to get coverage for Valentines, Easter (non-issue) and Mothers Day...

Yoou're likely right though too with regard to FU...
 
Well for Teleflora to be sueing them their losing FU must have been a real game changer for them and for 800 to be paying that kind of money I think that it might be them pushing all their chips to the center of the table and hoping like hell that this is a positive game changer for themselves. I felt for a long time that one of the big 3 was going in near future but maybe they both could go by the way side.

When I had 3 shops we did belong to 800 with the third store primarily to get the extra volumn we needed to limit our waste we also belong to the other 2 wire services. Bloomnet was awful the orders that came through were plentiful but they were so undervalued that we were rejecting 2 out of every 3 and they were far from happy with us. When I closed that store 2 years ago we dropped bloomnet at that time but I do not think things have changed since we left. There were very little sales going on between florist the vast majority of orders came from 800. If people follow FU to them good luck and god bless them as they will need it.
 
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Thanks for sharing this story!

One thing I find amazing (not unbelievable) is that all the attention placed on paying out the biggest bonuses.

I certainly understand it because companies are in business to make money. But what about the longevity of the business model?

Without a STRONG emphasis on customer satisfaction and concentrating on BRAND protection (meaning the quality and value of what actually gets delivered) they are all just milking the same cow.

Sooner or later the milk will dry up, because whats been going to market are STALE, VALUELESS filled orders.

Milking the industry for all it's worth is what we're witnessing.
 
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Rob, that is the thing about companies soley on something to make money....They ride the wave for as long as it crests and then take their profit onto the next money making thing, whether it is widgets, convenience stores, gas stations, whatever fits the next tidal wave of money...

We all open shops with a dream, we all have passion for what we do, we all connect to our customers and our shops with emotions and for many making money is more of a bonus rather than a must...silly as that may seem...and for this reason we over think the effects of our decisions on our customers and it paralyzes us with fear of losing just one of those precious people...We cater to the small amount of fans we have and hold on so tight to them that gaining new customers is sometimes difficult, we lose sight of our "brand" because we are so busy trying to be everything to the select few that love us, that we neglect to figure out who we really are...we want to be perfect in every which way which makes us fall short of what should be our main focus, our business brand and model....

All of these things are wonderful in a way..They are what makes us great for the select few that realize it...these are some of our strongest assets in the business landscape, but because we get afraid of changing what seems to be working for us right now we don't make the necessary changes until it becomes a critical situation and sometimes the situation needs a trauma team rather than triage...I think this is where we are at now, we have watched the changes happen to our industry over the last 10 years and have failed to make changes because for the most part things were still working, now we are in a critical situatuation and everyone is scrambling to make a brand, get technology, get with marketing programs, learn how to advertise in the new landscape and still try to stay committed and devoted to every customer on the list all while being mostly the only person to do all of this...and it is exasperating to say the least...something must fall bey the wayside and usually it is the hardest and most important on the list because it is the weakest developed parts of our businesses...and for many it is stilleasier to just accept the easy orders because it will keep them doing what they love to do for the moment while they try to pull it all together and make the other stuf work, meanwhile the business is bleeding internally and failing daily unnoticed until it is forced to close....
 
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Im sorry, Helen...May be depressing but for so many true...do you disagree??
 
So take a refreshing walk in the brisk cold air...it will clear your sinuses and make you feel great...
 
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steve said:
Well for Teleflora to be sueing them their losing FU must have been a real game changer for them and for 800 to be paying that kind of money I think that it might be them pushing all their chips to the center of the table by the way side.
Click to expand...

I'll take it a step beyond, since we are speculating.

FTD and BN are both publically trded. TF is - for practical purposes -- a sole owner. Inherently, a publicly traded company spreads the risk among multiple owners. So...

What I think is going on is a squeeze play to see if BN can put TF out of business, or force a sale or merger.

But what do I know!

Bill
 
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