a little reality

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Guys like me are not trying to create another WS. We are trying to eliminate the whole concept of having one. It makes no sense to me to try and create any form of a "alliance" just to help the consumer find a florist. The easiest way to find one is right in their neighborhood.

You and I do agree about going after our local market Grif and I am the dominant player in my market. But fact is that america is getting more wired every single day people can buy 24/7 on the internet its amazeing when I look at my daily report of hits and see how many not only happen in non business hours but in many case during the middle of the night. My delivery area has a population of just over 100,000 people (7cities/towns). We must conform our business to the way the consumer wants to do business not to the way we think they should do business. As for a study I do not think you need one just look were the growth in this industry is and has been for last couple of years. You got the big box stores and you got the internet driven order gatherers. We have a war on two fronts we can not survive by addressing only one front.
 
Herb, I understand, but you are NOT an average flower shop

Carol and I started this thread talking about an AVERAGE flower shop. Based on the last numbers I saw, that means a shop doing $250,000 in sales or less. Based on some very simple averages, if that AVERAGE flower shop has 20% of that sales figure in wire ins and wire outs and a 1 to 1 ratio, that AVERAGE flower shop has about $25,000 in outgoing business and $25,000 in incoming business. If the average outgoing or incoming order is $40-50, then that shop is doing about 40-50 out per month and the same incoming per month.

Now I realize that not everyone fits this exact mold, but there are a very large portion of florists in this country that are doing less than $250,000 in sales. Herb, you are obviously NOT in the category of the average sized florist. And there is obviously others on this board that are not in that category also. However, for florists that are in the average size or smaller category are going to find it much easier to leave the WS. The only thing that seems to bother many is the loss of sales dollars from incoming orders. If you have structured your company in order to handle larger volumns of incoming wire orders, then I'm sure it looks like a insurmountable hurdle to overcome and leaving even a couple of the WS looks difficult.

Again, I'm not talking about these exceptions. I'm talking about average shops. To use Rob as an example again, he has indicated that many or most florists in Florida have high negitive ratios because of the demographics of the state. It is not impossible to overcome. He just proved it.

The more florists that finally figure out that is not the sales number that controls their shop, but the profit number that demands respect, the easier for them to undersatnd why many can't afford not to leave. In other words, people like myself, have learned that as a company I can actually make more profit by being smaller rather than have larger sales figures and paying out large sales commissions. Some of you have posted that florists that are only sending out 40-50 orders a month shouldn't need a WS. Well, it really doesn't matter whether they are sending out 40, 50, 60 or 70 orders a month. That is the AVERAGE flower shop today. Day by day and month by month, many of these average size flower shops are leaving the WS strictly because of the cost. Even when approached for a SPECIAL program with reduced monthly dues for x months, it is all the other costs that come as part of the package that finally sets off the alarms. They realize there is an easier way. And as they leave, your rates go higher to replace the lost revenue to the WS and more leave. Many florist do not figure out the true cost savings until after they have left because they never knew the true cost to belong to the WS.

There is a portion of florists in both the US and Canada whose business has grown to such a size that they have to have a sophisicated POS systems with all the whistles and bells. The truely need seamless order transmission and indepth record keeping. I understand that. The only problem is much of this equipment is proprietary and they just can't pick up their system and go someplace else. They are truely between a rock and a hard place. These systems don't seem to have any way to talk to each other and many will say the WS planned it that way. Maybe they did. I wish I had a simple solution to that, but I don't. The real problem I see on the horizon, however, is many of these florists are going to HAVE TO FIND a solution because as florists continue to leave the WS, coverage will become a problem and with increasing gas prices also serve florists are to be far less in number. Hence, all the seamless technology in the world isn't going to make your life any easier if there is no one at the other end to receive your order.
 
ONE thing that florists are going to have to understand is that there will be NO KNIGHT IN SHINING ARMOUR coming in at the last minute to save them. No WS is going to change their marketing direction or no company is going to come to the rescue with some "magic machine" that will work with everyone’s current equipment. The cold hard truth is it is them or you for survival and you might want to pick up the pace a little in your time schedules. If your are going to take 6 months to solve the problem with lack of business with the funeral home, lord only knows what it will take for a florist to get everything in order before dropping a WS. Time is money, as the saying goes. YOUR MONEY!
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I'm working hard to prove you wrong Griff. And the people in the floral industry who have signed a NDA and my customers also disagree with you. The problem is there is no real innovative idea out there to compete against the big boys. And when I say innovative, I mean it. In fact if you think you know what it is and it has even a smidge of something to do with any thing else out there, you are wrong. And "work with everyone’s equipment"? No computer needed, well, not the conventional way people think of what a computer is. My idea won't compete with WS from the florists perspective, but it will for the online consumer wanting to order flowers. Ad not only consumers 2000 miles away, but will be popular with your customers 2 miles away.

Steve is exactly right. Consumers aren't driven by prices when they buy flowers online, it's convenience. That is from a insider report I got my hands on from Proflowers and research from my own online business, epicflowers.com. Steve is a wise man, because he knows that without the brand recognition, you will die online

Boss is also right, imo. People in general, and it is REALLY sad, don't care so much about the quality. Americans buy flowers in general to do the trick. Say sorry, HB, Anniversary, etc. And then.. flowers die, consumers accept and expect this. Yeah I know, I hate it, but it seems true.

I like Rob's post and agree that we need to pay more attention to our locals. I'm just saying that there are a lot of locals sending money out of my area via the internet and a lot of money from the retail florist is going bye bye because of this, and I am trying hard to change that. :)

I love these mature and growing conversations of debate. I remember posting something like this on the "other" florist board and it turned into an emotional, non-productive yelling match. Thank god for the people who built this forum and moderate it :) *not kissing ass here, I am really giddy every morning to check the forum - I am such a nerd*
 
The size of shop or potential size of shop has a lot to do with the size of the population that shops serves. And the problems that are faced in order to survive are not the same. A florist in a small town with 4,000 people is almost 100 percent dependent on the local business. The wires in's / outs for this shop will be mininum and frankly they probably have little or no need for a wire service. They also pay rents that are far less then a shop that serves a population base of 30,000 or more and due to there small size they have a small payroll. Now a shop in a large population base not only has higher rent they must do more dollar volume in order to have enough gross profit dollar to pay that rent and the added employees it takes to produce the required ordered dollars.

My point is there is no one solution that will fit all florist. And lastly the one thing I know to be true is anything that stays the same will die the law of diminision returns will eventually bankrupt you. You must have growth over the long run to survive.
 
Internet as the hot button

Steve, if you don't mind, I'll respond to your comments about the internet first and then come back later and comment on relative size of florists.

So many are putting such emphasis on the internet and I truely undertand their joy over this medium. However, it wasn't that many years ago that florists were just as overjoyed about yellow page advertising. The more money you had to spend, the bigger the ad you bought. It wasn't long before companies outside the floral industry started advertising under FLORISTS in those yellow pages and they weren't even florists. First it was the grocery stores and then OG's. There was never a test to determine if you were a florist. You paid your money and you got listed. Then the OG's continued to buy larger and larger ads and florists bought smaller because of cost. Multiply yellow page books were published and most florists took small ads in all the books and to consolidate costs the yellow book people printed their books to cover larger and larger areas and more and more florists were all lumped together along with the grocery stores and OG's who were now taking out full page ads. In other words, the individual florists got buried!

And the internet is following the same path. You don't have to be a florist to advertise as a florist. Instead of bigger ads, you just pay more to go to the top of the list or invest in pop-ups to divert the consumer. The advantage is going to the non-florist again in this market. Even if you are a real florist and your REALLY understand everything that you have to do to keep your website towards the top of the pile, the internet has converted your flower arrangements to a commodity. I know, no one wants to here that word, but that's what is happening. The real florist shows their arrangement on their website for $39.95 and the outsider shows a very similiar picture for $34.95. Who is the consumer going to believe is the real florist. In fact many of those OG's are florists! The consumer buys the price.

The marketing concept that drives this whole thing is control the order at any cost and feed the order to any florist that will fill it. Continue to market to the customer that you have just obtained and if the florists can't handle this discounted business anymore, replace the florists. When there is not enough florists left, then open your own work or "fullfillment" centers. If you can not find enough business people who are willing take the risk of owning and running their own work center, buy old established flower shops that have multiple locations. They will contract all delivery out and yet the vehicles will all be uniform in appearance just like FED Ground. While this is all happening, all the florists will find less and less business for themselves. Can't raise your prices because these large operations have turned your product and services into a commodity. This is not just a dream or nightmare. This is happening right now and the florists are financing it!

I'm sorry, but the internet is NOT the answer. It isn't going to matter if you consolidate into a national florist website of you have the slickest independent website the world has ever seen. Big money is moving in and the internet is just part of their plan. Once the work centers are in place, the florist's advantage of same day service is gone. These large companies will be delivering flowers and alternative gifts from these workcenters and they will become regional warehouses.

Think I'm wrong? Show me! Now let's see how long it takes to bury these comments.
 
my 2 cents.....

last year some time, I told everyone here, that a boardie member, ALREADY HAD a fully functional order transfer system built, functioning, and completely INDEPENDENT of any wire service involvement, and MAYBE, in time, could integrate this system into perhaps the current POS platforms...and guess what, there "appeared" to be NO INTEREST!!
It's SUCH any easy system, that small to medium florist shops, that DON'T currently have fully bundled POS systems, and STILL sit down to a terminal to transfer orders (such as MERC or DUCK), HIS solution would cost something like 30 or 40 bucks a month...PERIOD!!
ALL WE had to do was provide enough END POINTS, and a vaild CC, and a 15/mth membership...I don't think anyone cared at that point, SO,
IF anyone has any interest in such a system, cheap, effective, and easy to use, let me know...we'll start a new thread.
We need 400 users to launch this creature......
 
I am not sure what you mean by buring these remarks ? As far as the internet is concern I will stand by what I said yesterday its the ease of use and the convience of buying 24/7. and some sort of brand recognition must be part of it for it to work.

You are correct that there is movement towards fulfilment centers by companies such as 1-800 flowers. Whcih means that how well we buy becomes another issue. It will be hard to compete when buying from a local wholesaler.

So Grif your long term plan is to go it alone, to not reconize that the internet exist, and buy everything locally because Joe the wholesaler is a good guy. oh and of course hope that no one drops one of those fulfillment centers in your market area. I do marvel at your ability with numbers but in this particular area I think you are in a denial.
 
Griff I really appreciate your posts and feel your passion and frustration in this industry.

You had talked about a survey in you shop and how you asked customers about their internet buying habits. I think you can't come to a honest conclusion by asking customers who shop in a retail shop vs. people who buy flowers online. It's a whole different taget market. It's kind of like taking poll at McDonalds and asking them, do you like Burger King or McDonalds. Maybe I missed something and I am totally off mark, but that is how I read it. If I am off mark, ignore me :)

Griff your last post was very very interesting to read. I loved reading it really.

Griff you said, "I'm sorry, but the internet is NOT the answer." And to that I will say to you, in the highest respect, that you don't know the power of the internet and are so far inside the box with pessimisms, you might be too far gone. BUT in your last post, you said a lot of true things that I do agree with. Steve says it best, brand recognition. I have the coolest idea that the big guys will steal, like Blockbuster did Netflix online renting idea, but Steve knows as well as everyone here, if you don't spend a lot of money on brand recognition, you will fail. That is why I am still gathering investors.
 
OK Mikey, I'll take you first.

Forget about trying to sell the average florist a POS system. It doesn't matter if you did have a special system that incorporates a POS and can send to anyone as long as they are in the system. Besides, from what I understand, there are already a couple of those out there.

Think more like Merc direct or Dove. Think about what they have in common.

And yes, the second part of the puzzle is END POINTS as you referred to them. What IS enough end points for anyones system? Like the chicken or the egg, what comes first? A new sending system in the hands for 400 florists with only 400 end points or 20,000 end points with standard, unmodified off the self computers and fax machines?
 
OK Steve, your next

The internet can be a tool, but I say again, it is not the answer to the florists problems.

For one thing, I haven't seen anyone that can show that the business generated off the internet is new buyers. It is merely redistribution of the current consumer base. Some florists will tell you that it eliminates the florist to florist dsicounts of traditional wire service business on some orders. Well, that may be true for some but not all. For example, if a florist in Florida sends you a wire order for $50 and a couple of months later the same customer in Florida finds your website and orders direct many florists will think they just saved 27%. However, we all know that if you paid $50 a month to a national website of which you are a part, then this first order for the month and even the next 4 $50 orders generated actually works out to 25% discount on all those orders. For florists in the larger cities, they may not have trouble making sufficient numbers every month to cover the spread. However, there will be alot of florists tha won't make the numbers every month and will actually be paying more for these orders than they did before. Add to the cost of connection to that national brand and a couple independent directories every month and well you have to get even more orders every month through these internet listings just to get back to the the original 25-27%.

There already is a 1-800 work center within 35 miles of my town. No one should think that only 1-800 is the only one that is going to do this. FTD is next. I figure they are going to negotiate special deals with some of the larger FTD florists as work centers and warehouses and contact design work and delivery. Another perfect reason to keep those FTDPOS systems. I'm not knocking it. I'm just saying don't be too surprised when it starts to show up.

The only plan I have had is not to financially subsidize the WS anymore and try to make it as financially difficult as possible for them to fullfill their marketing plan. I don't try to create revolutions anymore. It does not seem to matter to most florists these days. Many are aware of what is going on, but don't seem to realize how serious it really is. By controlling as many customers as possible that are ordering through the internet, they are actually contolling you future or the lack of it.
 
OK, here is the last one.

Steve was talking about the differences of larger and smaller florists and how they think. There is some real merit to that, but here is something for all to think about.

What is the major difference between a single florist in a town of say 10,000 poplulation and 10 florists in a town of 200,000? No it is not a math test. Just a couple of simple observations. Which florist do you think probably has a tougher time these days - 1florist in 1 town or 10 florists in the same town.?
 
What is the major difference between a single florist in a town of say 10,000 poplulation and 10 florists in a town of 200,000? No it is not a math test. Just a couple of simple observations. Which florist do you think probably has a tougher time these days - 1florist in 1 town or 10 florists in the same town.?

Well first of all I would love to have a ratio of 10,000 people to one shop and in the case you describe above apparently that shop would be alone in that town of 10,000 although you do not say if there are other large towns or cities ajoining this town with more shops. A single shop with no competition in a town of 10,000 would do very well. As for the larger population I stated yesterday that I serve around 100,000 people covering 7 cities/towns. But if you went from the farthest edge to the opposit edge of this area it would be less then 15 miles. anotherwords it is tightly compact area. We have 19 florist in this area and I own 3 of the 19. Plus 12 major grocery stores with floral depts. I fight locally for market share every single day. and the itnernet plays a role in that fight for market share not only do I receive order from local customers for local deliveries but again I need to capture those out of town orders being sent into my area that in yesteryear would have come from another florist to me.
 
Griff as far as the internet is concern I do not care rather they are new customers or not as long as if they make the decision to buy flowers and if they are sending them into my area that they in fact choose to send them through me. On a local level I produce and distribute 5 newspaper inserts a year each insert is 30,000. That is my primary way of developing new local customers. Plus we advertise in all the local weekly newspapers.
 
You were talking about ratio of 1 florist to 10,000 ....... we are lucky ..... only true flower shop in a town of 4500, neighbouring village of 2,000 and a total of 35,000 who come to our area to shop ..... so a ratio of 1 to 35,000. We have been here for 128 years and have a well established reputation. We do have a couple of outlets which sell plants and cut bouquets at holiday times. We have also had 4 or 5 other florists who have opened and closed within 2 to 4 years, and this has been over the past 15 to 20 years. Luckily and skillfully we have been able to maintain our business and they have not been able to break thru as of yet. We are preparing for the next time however. We aren't blind to competition .... we just make sure that our quality and service is outstanding. We were the only ones to work 24/7, we service the local funeral homes at any time, and we know most of the people so they think of us first. We have even been able to hold up against the mass merchandisers and their lower plant prices. I don't rely on loyalty or keep a blind eye to what is going on around me. Service and quality ... the best advertising ever.... I'm not making a mint but surviving okay and keep rising to the top in the area. And I don't let anyone tell me what is best for me. Got rid of one WS because of cost and won't let the other tell me what to do. Like I said, we are on call when someone needs us and give them the best we can get for the best price possible.
 
Cost Dollars Please..

steve said:
Griff as far as the internet is concern I do not care rather they are new customers or not as long as if they make the decision to buy flowers and if they are sending them into my area that they in fact choose to send them through me. On a local level I produce and distribute 5 newspaper inserts a year each insert is 30,000. That is my primary way of developing new local customers. Plus we advertise in all the local weekly newspapers.
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How much is your monthly advertising budget cost you spend per month?
 
How much is your monthly advertising budget cost you spend per month?

All advertising includeing yellow pages cost me approx $4000.00 a month. Now remember I have 3 stores that contribute to that. I still currently run a dominant ad in the yellow pages but I will start reduceing the size of that next year and reinvest some of that savings into another form of marketing.

The tabloid insserts which are printed in full color two sided and normally show approxmently 16 arrangments cost me $1450.00 per insert to layout print and insert in local newspaper (.048 a insert). I run two defferent inserts in the month of December, one insert for Valentines Day, Easter and Mothers Day. I am not a huge believer in direct mail primarily because it only markets to past customers and it does not farm you new customers. Also as you can see I can hit far more people for $1450.00 then I could ever reach with the same money with direct marketing.

The weekly newspapers frankly do not produce a big return for us I do it frankly to support our local communities and if things were tight that would be the one I would drop.
 
My question concerning small florist versus larger florist was used to discuss Steve's early comments.

Steve said earlier on page 3, "a florist in a small with 4,000 people with 4,000 people is almost 100 percent dependent on the local business. The wire ins/outs for this shop will be minimum & frankly they probably have little or no need for a WS."

I asked what is the difference between a single florist in a population of 10,000 and 10 florists in a town of 200,000. I contend it is only they specific business path they individually chose makes them different. For example, in the town of 200,000, the ratio of people to florists is 20,000 to 1 which only makes them slightly larger than the one florist in one town comparison. However, some of those florists in that larger town view the ratio differently. They see themselves in a population pool of 200,000 people which they feel provides them greater opportunities. I think that is a valid evaluation on their part. However, it is the choices they make and the direction they go to confront these local markets that makes us different. It does not matter whether your expenses are more in a larger town because of higher rent or more employees. It is all relative. It is just as difficult for a florist in a smaller town to pay rent or payroll for two employees as a florist who pays higher rent or has 6 or 7 employees. And as for the need for a WS, I'm sure that a small town florist looked at the WS as a means to get more orders in and the larger florist looked at a WS for both ins and outs.

My point to all of this discussion is that some, like Steve, feel that there is not solution for all the florists because of their size and different business needs. I disagree and here's why.

Our industry is comprised of a very large number of small and medium sized flower shops. I contend and can prove with numbers that for the vast numbers of these flower shops, it is easier and less stressful for them to be operating without a WS. Even Steve says that a florists that sends out a small number of orders per month shouldn't belong. The only question is how small is small.

If these florists do drop their WS, large coverage problems develop overnight. Among other things, order gatherers have a major problem - lack of coverage and higher cost of operation. Remember, OG's are merely an extension of the WS. Without the 20-80 commissions, rebates and sending systems, OG's could not exist. If OG's no longer exist because of coverage problems, customers would again deal with florist directly, either through the internet or with the help of local florist to florist orders. If Steve is right and 5 years from now all consumers will be ordering over the internet, all florists will be better off because of no OG's. If I'm right and there will be people using the internet and still usint the local florist to transmit their orders for them, then florists will still be better off.

As I said, it is merely a choice of paths that make our businesses different. Chose one path and the problems may solve themselves. Choice the wrong path and the problems could engulf you.
 
Questions

Do you think that with the advent of LFCs, incoming orders to local florist will decrease? I think that will happen.
Will the local florist think (I hope he thinks!) then, low or no incoming orders will mean no need for the WS for outgoing orders? or will he work as a LFC?

Will it be some time before this happens? Will florists figure out what is best for them before this happens? How many local florists will fail because of this?

Judy
 
Its not all relative Griff only way it can be ralative is if all the shops do the same dollar volume but that is not going to happen. Fact is florist in a town were they have competition must be more agreesive in their marketing in order to survive then a florist in a town with no competition. In a small town in Vermont you might be able to rent space for $6.00 a square ft and be fairly visible in My area currently a cheap rent would be 12 to 15 per sq foot and you would not be in a high traffice area. I know one shop that is paying over $30.00 a sq ft and is sinking.

Here is the facts for decades florist depended on the brand name of FTD and what ever marketing that was done for the most part was done by FTD. And they did not need a lot of money to start up their business hell most had no idea what a business plan was. Today the florist business is no longer a sleepy business. you must have money to spend on marketing you must have a fairly modern facility, and the wire services are our competitors along with the order gatherers and yes the grocery stores.
 
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