Willingness to fill incoming orders

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BOSS said:
Interesting discussion....

Here according to MAS *accepted* in-comings are down 25% for the first 12 days of December...mostly due to low dollar amounts and or that I carry no WS containers.

I see every incoming before it prints...and I have noticed a dramatic drop in orders from FTD.com and 800F....of course it's still drop ship time, so the numbers for the next 12 days will tell a tale too.

We're giving out OFN'S to anyone that asks, and anyone that want's to simply send "something" and not spend $50.00....

In-coming orders will continue to decline as I have said many times in the past. Consumers are smart, and many florists are fed up with the "system", myself included. The economy of 2009 will dictate that many consumers will not have the extra cash to send anything, flowers included. I'd bet that Hallmark will see a rise in card sales, and the USPS will see an increase in mail as folks transition to the cheapest way to send a thought...

The failure of the auto bailout will increase pressure on the economy, the market will decline today and things will continue to go down hill, including flower sales. Don't take this as me "doom and glooming" it, it's reality. I'm very optimistic that I will be here in the end... no problem...

Many florists can not survive without in-coming orders, and those that can't survive on their local business alone, will be the first to go...!
Click to expand...


I may be one of those....I may be able to just hang on, but I am starting to not be sure...TF is not paying for itself anymore...800 flowers is not the moneymaker it once was with more shops signing on and lower volumes anyway....My local business is down....with everything down and the fact that prior to this I was still not grown to the point of capacity, I am not 100% sure I can weather this storm....I still have 16 payments on dove pos...800 flowers I can drop anytim no strings attached to them....

I will be getting a settlement in a few months, I could pay off the dove, go back to FSN or get a strider website and go with IFA and then drop 800 and TF, that may give me time....I can also try to call them up and pead for discounts and such....I just don't know what my plan of attack will be..yet.
 
First The Disclaimers:

I'm not a florist so anything I say is based on observation not experience. Anything I say is just opinion and in no way would I ever suggest that it applies equally to every single shop. I know that there are plenty of you out there who can contradict everything I say and using your experience and shops as examples. I'm not saying you're wrong! I'm just saying that your shop might be different - and I mean that as a compliment.


Then The "Credentials": (Such as they are!)

I talk to different shops all over North America all of the time - some have sales of more than $3,000,000 annually while others do less than $100,000. Some have no wire services and some have every service I have ever heard of! It is a great way to get an overall sense of what is happening.

When it comes to wire services I have no agenda. All I care about is seeing shops stay in business! Call it enlightened self-interest - my employees and I depend on retail shops to make a living and we want to see as many survive and thrive as possible.


Finally The Point:

Right now I think everybody is a little bit scared (rightfully!) and a lot of shop owners are re-evaluating almost everything. The last few years have been tough for most shops, it's tougher right now and it's probably going to get worse. It is a very good time to do some serious thinking.

When it comes to wire services and incoming wires there are two main directions we see florists taking. Some shops see their retail business declining, get worried, and decide they need to stay busy by filling more incoming wires.

In my experience many shops had a local retail business that was more profitable than they realized subsidizing a wire fulfillment business that was less profitable than they realized - they were using the profits from the local retail business to offset the losses from belonging to wire services and filling those orders. If this was a problem a year ago it's a much bigger problem now. I'm not sure that taking more incoming wires is going to help most shops. Those of you who can make a dollar filling anything please remember that not everyone can run as efficiently than you do - for example many florists (smaller ones in particular) have to buy off the truck and/or pay higher prices to smaller, more remote wholesalers.

What scares me the most is the shops who are turning to wire services as their salvation - shops that are joining multiple services in the hopes of just getting their hands on as many orders as they can. I truly believe this will lead more shops to their ruin than anything else. Belonging to multiple services was always (for most shops) a risky proposition - even when they had relatively healthy retail businesses to help them out. To join multiple services now - when the retail side is in decline, there are fewer orders in the ws system and the services are raising their fees (one has been talked about so far and they will all do it between now and Valentines as usual) - is like driving your boat right into a perfect storm - in my opinion. There is a lot of debate on whether filling is profitable but given the high (and steadily increasing) fixed costs involved with belong to traditional wire services I think most people would agree that multiple memberships are problematic for most florists.

The other thing we see are shops really taking a hard look at their wire service commitments. Many shops are realizing that they can get along just fine without any wire services. I know that's hard for many of you to believe but it's true! Outgoing wires are profitable for many shops and it makes sense for those shops to belong to a traditional wire service - especially if they have been around a long time and have good reciprocal relationships with other established florists. Many other shops are realizing that they are better off with one of the "alternative" wire services like bbrooks, Flower Shop Network, ClearRoot, Blossoms, etc.

The one overall pattern that has been obvious in my time dealing with florists is this: More wire services equals less profit, less happiness and more stress. It's not true in every single case but the pattern is unmistakable. I'm not sure whether shops get in trouble because they join multiple services or join multiple services because they are in trouble. It's probably a little of both.

As I mentioned I think the next while is going to be very tough for all of us. A lot of shops are going to close - I'm guessing 2,000 - 3,000 in the next eighteen months. That is a tragedy because in pretty much every case you are talking about people who loved this business and loved flowers and loved the independence of self-employment losing their dream and their livelihood. It really is heart breaking.

But there is also a sliver lining for those who survive. If your shop can make it you should be looking at a much better competitive landscape. There will be less competition, especially from less professional shops that didn't really understand the business and often had a negative effect on pricing for their local markets. You will also be running a leaner, meaner operation with lower expenses and better margins. Everybody knows the line "If I can make it there, I'll make it anywhere" and it applies here in a slightly different context - if you can make it now you'll make it anytime.

I truly believe that if you can survive the next eighteen months you will be in an outstanding position to make money as things start to turn around. But please - don't count on wire services and incoming orders to get you through.

Good luck to everyone.
 
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We are watching evey incoming order close and rejecting any that are not profitable. I am currently filling for FTD.COM something I did not due for a long while but if they do slip a junk order by us and we get burnt they will be shut off for good.

On another note our main shops incoming wire is down 33 percent for first 11 days one of our branch shops is down 16 percent the other is up 40 percent but this is the only shop that handles Bloomnet and they seem to be pumping out orders. Our main shop is actually up 19 percent for first 11 days in total sales volume and I am shocked. one branch is running dead even and one brach is down dbl digits and tha tis a store that if not sold will be closed after valentines day.
 
an outstanding post, by a man that see's things for what they are, and is "untainted" by the embellished emotions.
Mark...you did miss one kinda shop owner, the kind that has become so poisioned to all the new aspects, and changes, that their primary goal is to "wish" for the past to re-emerge.......
Even the strongest shops, are getting very concerned with a future that holds no clear promise of re-emergence to anything that resembles what we "remember" (an oxymoron).
Shops that have not modernized, and have NOT kept tight reins on money outgoing, will be shops that are done.
Other shops, that DO struggle through, will have a dim overview of the things that they "might" have done, to struggle a little less.
Either way, business WILL NOT be as usual, coming out the other end, and there ARE those of us, that are pretty much ready to hang it up, as soon as we can, and THAT will have the greatest impact on our industry....the "glue" so to speak.
There ARE some great young "kids" in this industry, BUT, way too few, to have in the florist industry, to help reshape it's future.
I AM an pragmatic optimist......I see things for what they are, much like yourself, and what I see, is NOT where I want to be.
 
I'll be WS free by the end of December. TF was supposed to cut me off in September but the letter they received in July was not received until after September 1st. Yes, you read that right. Any hoo, the cancellation as been finalized and I'll be out soon.
So in the mean time-I've been receiving orders and filling them to at least break even and recoup some of my charges. I feel like I'm a share cropper who owns the plantation.
Am I willing to fill an order for even a couple of bucks?
Yes and no.
I can't make money delivering anything with a total of under $30 including delivery,so I do have a minimum.
What I have found myself doing is really analyzing the $36 and up orders though, and fill them If they are plants and/or I have the flowers in the cooler. I do reject FU and WB, not just because they are scum, but because their orders are usually under my minimum. I had to reject a $65 total the other day for a large gladiola standing spray. I would have had to order the flowers and I knew I couldn't sell the extra pastel glads that week.
What is really getting under my skin this month is the orders I am receiving from Fellow florists. Example, last week I received an order for a $62 dollar codified centerpiece for a total of $46 delivery included. I got on the sending florist's website and found the same centerpeice offered at $62 not including delivery. We went back and forth inquiring through dove and I ended up rejecting the order. OK, WT*? Why on Earth would he expect me to fill an order for less than he will. We are in the same city and use the same wholesalers. It pist me off. I've also seen my two competitors advertising codified products for "delivery only" and not fufilling them for local customers. I think it is going to bite them in the end. They are seeing the money now, but the locals are starting to catch on. I sent a letter to the local paper explaining tactfully the WS OG game. The editor at the paper is publishing it under the consumer awareness section. Who knows, maybe there will be some fall out.
To get through this upcoming year, I am pushing local, local, local, events, weddings and funerals. Lots of networking and signage.
Wish me luck.
 
TOTO hit the nail on the head about the economy....

Barney Frank, Maxine Waters and Christopher Dodd should be indicted for their reckless behavior. My business was doing great until the Dems took over Congress....now it's all gone to hell...

On the subject at hand: OGs make me sick....I got one today from giftbaskets.com....geez. Maybe I should just start my own OG site....it'd be a lot easier than what I'm doing.
 
I am not a member of the big 2 but worked in a store that was tf and we didn't fill certain OG orders, not on principle but because when they called orders in, they'd try to pulll tricks later like claiming it wasn't delivered so they wouldn't have to pay.

I am a member of a smaller wire service and if by some chance I got a known OG order I don't think I'd want to fill it on principle but if I was having a slow day I might forget. I'm just being hone$t.

As of this moment it's a non-issue for me anyway. It's hard right now for everyone though, I understand why someone would.

Oh and I know my pal bloomz started it but blaming George Bush or the entire Democratic party is not really productive IMO.
 
Well I guess the floral business is not the only thing us florist can not agree on because in my view my business was doing great until George W got elected the first time and its been a rough ride since. I made a fair amount of money on the stock market under Clinton have had less then average return under Bush and that was before the whole house of cards collapsed. Regardless of which party passed a bill its the responsiblity of the party in the Whitehouse and there cabinet to have their fingers on the pulse and to propose changes before the crap hits the fan not after. There have been good Deomocratic presidents as well as good Republican Presidents. George W was not one of them In two years if we do not see some good change then the voters will be voting out a lot of democrates and thank god we have a system that allows us the people to make changes.
 
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It's just that getting into political discussions around here is like a bunch of dogs barking at each other and not one person changing anyone's mind.
:)
 
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steve said:
Well I guess the floral business is not the only thing us florist can not agree on because in my view my business was doing great until George W got elected the first time and its been a rough ride since. I made a fair amount of money on the stock market under Clinton have had less then average return under Bush and that was before the whole house of cards collapsed. George W was not one of them
Click to expand...

Steve please stop confusing Toto and Fox with statements like 2+2=4

It makes smoke come out of their ears.
 
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Brilliant objective observations!

Mark Anderson said:
In my experience many shops had a local retail business that was more profitable than they realized subsidizing a wire fulfillment business that was less profitable than they realized - they were using the profits from the local retail business to offset the losses from belonging to wire services and filling those orders. If this was a problem a year ago it's a much bigger problem now. I'm not sure that taking more incoming wires is going to help most shops. Those of you who can make a dollar filling anything please remember that not everyone can run as efficiently than you do - for example many florists (smaller ones in particular) have to buy off the truck and/or pay higher prices to smaller, more remote wholesalers.

What scares me the most is the shops who are turning to wire services as their salvation - shops that are joining multiple services in the hopes of just getting their hands on as many orders as they can. I truly believe this will lead more shops to their ruin than anything else. Belonging to multiple services was always (for most shops) a risky proposition - even when they had relatively healthy retail businesses to help them out. To join multiple services now - when the retail side is in decline, there are fewer orders in the ws system and the services are raising their fees (one has been talked about so far and they will all do it between now and Valentines as usual) - is like driving your boat right into a perfect storm - in my opinion. There is a lot of debate on whether filling is profitable but given the high (and steadily increasing) fixed costs involved with belong to traditional wire services I think most people would agree that multiple memberships are problematic for most florists.
Click to expand...

Your entire post was BRILLIANT Mark, especially since you are looking at the plight of Florists from the outside, which allows your observations to be objective.

I took the liberty of highlighting the excerpts pertaining to the economic reality of florists using the profits from their 100% sales to offset the losses incurred with their wire service affiliations, albeit never really uncovered by them, nor their accountants.

No florist can ever make a profit, if the total incoming wire order's acquistion charges amounts to 50%, once they add in the annual costs associated with their wire service affiliation.

That breaks down to the usual 20% sending commission, 7% clearinghouse fee, 2% Reverse the order transmission charge, for a total on the surface order discount of (-29%). The additional cost of those orders at another (-21%) discount is a variable, and all depending upon the individual shop's wire service costs to include dues, fees, and any other anciallary WS charges they are getting hit with.

It's only when THE SQUEEZE IS ON that, folks start to look at the finite details of all of their expenses, both fixed and variable, to determine where they need to cut, or even eliminate.

As you also pointed out, running to a WS or MULTIPLE WS's thinking that will fix the problem, will only put them deeper into debt.
 
OK - then...BLOOMZIE and you all:

Would you fill THIS order: (picture attached)

TEL Peppermint Pretty:
We have received at least 3 of these orders for a total order value of $30.00 each, over the past 2 days. All refused so far.

Here's the breakdown INCLUDING labor & retail markup on hard goods:
Dynasty Posy Vase (or sim.) - $2.50
3 Peppermint Carns - 5.25
2 OR 3 st. White Cush Poms - 6.00 (went with 3 here)
Douglas & berries - 4.00
#3 Red Satin bow with Candy Cane - 1.25

Totals $20.00 "retail" plus your delivery = $30.00

Question is now: if you mass-produce 12 (or more) of these things, this cuts down your labor. Any designer with even a year of experience could do 12 of these in 1 hour.
If you use a delivery pool, delivery cost substantially lowered. If you do the delivery yourself locally, can you still make money on the order? This time of year, chances are you have more orders to the same area, therefor reducing your delivery cost per order.

Now factor out the w/s commission, etc. That's roughly $8.10. So, basically, are you willing to deliver this for nearly free?

Can YOUR SHOP make $ on these?

What other reason would you consider as valid, to fill this order.

- Herb
 

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I'm not feeling well so brain could perhaps not be functioning properly but Herb - in your example is their not profit in your flower (& labor which I didn't see) markup that needs to be counted?
 
PhillyPhlorist said:
Would you fill THIS order: (picture attached)

TEL Peppermint Pretty:
We have received at least 3 of these orders for a total order value of $30.00 each, over the past 2 days. All refused so far.

Here's the breakdown INCLUDING labor & retail markup on hard goods:
Dynasty Posy Vase (or sim.) - $2.50
3 Peppermint Carns - 5.25
2 OR 3 st. White Cush Poms - 6.00 (went with 3 here)
Douglas & berries - 4.00
#3 Red Satin bow with Candy Cane - 1.25

Totals $20.00 "retail" plus your delivery = $30.00

Question is now: if you mass-produce 12 (or more) of these things, this cuts down your labor. Any designer with even a year of experience could do 12 of these in 1 hour.
If you use a delivery pool, delivery cost substantially lowered. If you do the delivery yourself locally, can you still make money on the order? This time of year, chances are you have more orders to the same area, therefor reducing your delivery cost per order.

Now factor out the ws commission, etc. That's roughly $8.10. So, basically, are you willing to deliver this for nearly free?

Can YOUR SHOP make $ on these?

What other reason would you consider as valid, to fill this order.

- Herb
Click to expand...

Assuming it is in my delivery area (within 20 min from a likely previous stop) OR in my delivery pool, Yes I would fill it. I also know I have these flowers in my cooler AND I know that I only have 12 more days before Xmas move these flowers, berries, greens, ribbon.

I look at it from more of a COGS approach and I always want to be about 25%:
Dynasty Posy Vase (or sim.) - $1.25
3 Peppermint Carns - $1
2 OR 3 st. White Cush Poms - 1.25
Douglas & berries - 1.50
#3 Red Satin bow with Candy Cane - .40
totals $5.40

$30 minus $10 delivery (I have determined $10 is my avg cost per delivery) - is $20. I am at 27% cogs, but that's close enough for me. Instead of making one we make 6, and use them until Mon or so. Plus... like Herb if it's a "pool" I know my delivery cost is much less than $10... so there is my profit.

The deal breaker is same day delivery. If I have missed the delivery pool or the address is 30 min away and we having nothing that way and it has to go today, I would refuse or ask if it could go tomorrow.

Any designer can make this in 5 minutes. Use the $1 per min labor rule and add it to your cogs... it's very close to a break even with the wire service fees, but if your not adding another truck, a designer is NOT on OT and product is moving out of your cooler, I would do it.
 
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TOTO said:
That breaks down to the usual 20% sending commission, 7% clearinghouse fee, 2% Reverse the order transmission charge, for a total on the surface order discount of (-29%). The additional cost of those orders at another (-21%) discount is a variable, and all depending upon the individual shop's wire service costs to include dues, fees, and any other anciallary WS charges they are getting hit with.
Click to expand...

Aren't you completely ignoring monies made from outgoing?

That has to factor in there somewhere - all the burden can't be put incoming unless a shop has zero outgoing.



I think the premise of this thread for me is - I'm no longer looking at it as not worth rolling the wheels to make a couple bucks - which I have felt for years if I didn't make $10 or so I'd rather not bother.
 
bloomz said:
I think the premise of this thread for me is - I'm no longer looking at it as not worth rolling the wheels to make a couple bucks - which I have felt for years if I didn't make $10 or so I'd rather not bother.
Click to expand...

I think often we get an incoming order that is $100 and hand it off to the designer. We assume it's profitable and she is excited b/c she gets to be creative... the description says mixed bouquet, bright and vibrant - NO XMAS. But guess what my cooler is filled with... RED AND WHITE. She uses pink roses, blue delph, purple iris, yellow gerber, stargazers, dendrobiums and larkspur, and I now have very few "non xmas" flowers left for the weekend.

You see the arrangement on the packing table later and look at your watch. She walked in the back cooler, out front and took 20 minutes collecting the flowers & making this arr. Run the numbers the same way, less your WS commission and that little $30 arr could have been equally profitable while using the flowers that you have the MOST of.
 
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PhillyPhlorist said:
Now factor out the w/s commission, etc. That's roughly $8.10. So, basically, are you willing to deliver this for nearly free?
Click to expand...

Herb you forgot the incoming tax of 1.25 on the order. Now your at 9.35.
The filling florist gets 20.65
 
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