Are WS-free florists really more profitable?

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Joe Mioux

Joe Mioux

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Dec 15, 2004
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Are wire service free flower shops really more profitable?

I want to hear factual evidence, not just emotionally rhetoric.

I do not want to hear, about OG's stealing our customers, that is competition.

I want to see evidence based on increased net profit. If you are more comfortable using percentages rather than gross numbers pleae do so.

I don't want this thread turning into a big argument. If I had moderating priveleges in this thread I would hold a tight rein on this thread going awry.

I want to see, hear and understand how WS-free flower shop's operations compare to WS affiliated shops.

Be honest. If you are turning a profit say it, if you are losing money say it (hopefully we can help you turn your business to a net pi).

I really want to know and learn with this thread.

Joe
 
Very well said Joe.
The thread is a great idea and hopefully we can all learn from it.
We're game and support the idea 100%.

Informational value only Not a battleground


ManorMan
 
Joe,
I'll bite :)

I can't compare apples to oranges because I have never been affiliated with any WS. All of my send out orders are done via credit card, direct. I am in a town of 900 people and the area that I serve reaches above 6,000 (closer to 8k but I am being conservative). We have been in business for three years in May. For 06 we were up 400% from our first year(2004). That means that we have more than tripled our business from start up, from scratch, in three years.

I almost had enough capital to start my business and I have less than 1,000 dollars in credit card debt and I will have it paid off in a month. I have no debt besides the credit card even though I expected to be in debt for at least five years.

Now, with all of that said, I am not bringing home a paycheck to speak of yet because I would rather have a nice nest egg sitting in the bank to grow the shop with. There are quite a few things that I want to purchase for the shop such as a new vechicle that I can wrap and use ONLY for floral deliveries.

I am twenty four years old and I plan on being in this business for a long, long time. I have made choices for my business that have made money and during my first year I made some choices that lost money and some of those choices had me playing serious catch up (ex. I bought over 2 grand worth of Christmas decor and then the town tore up the sidewalks during the months of November and December) ...but, it's been worth it so far.

Is that the type of reply you were looking for or did I just give a completely unrelated answer?
 
I can't give you too many valuable numbers as I used the "lump it in this account" accounting method until last year. I can tell you that our gross sales dropped about 26% our first year WS free. We took almost any order while in TF and had the Dove and a hosted website. We played by the rules and treated wire orders as if they were local orders. We didn't purchase much TF advertising or any other do-dads they offered. We always sold all of the containers we purchased. I am offering this to give you an idea of the kind of member we were. We did 37% of our gross sales in wire orders. Now, after you wake up from your faint, we did 36% of that out and 64% in. It's hard to read while you're shaking your head, isn't it? It didn't take long for me to know it wasn't working so I bought the TF Eagle POS computer system. Let me just say that this didn't help. It's kind of like having a baby to save a marriage. Well, when I was beamed back from beyond stoopid, I said, "This is the last time anybody is putting money into this shop." That is when we began the process of dropping TF. We started by taking only those incomings that we could make money on and then by stopping any unnecessary services with no change - still spiraling. Then they raised their costs even more. TF members will know exactly how this goes with ten dollars here and twenty dollars there. Then we dropped them.

After that our sales increased and then decreased. Gross sales have been the same for two years, but we are finally able to start growing it. There is a lot more to this story, but the point is that we are not putting money into a hole any more. That stopped when we went WS free.

I will say that dropping any WS will require measures to counter the reduced volume (reducing labor and purchasing). Our measures had to be extreme, but we are a very small shop that had a reliance on the WS orders. If our WS volume were less, we would not have had the disasters we have had.

One thing I figured out early on was that it was costing us about thirteen dollars for the "opportunity" to market to each customer we delivered a wire order to. That is something that is not ever mentioned when it comes to being WS free. That money can be spent more efficiently in marketing your shop rather than being absorbed by the fees and processes of the WS.

I hope that my answer is pointed in the right direction.

Jason
 
What was your marketing plan for such a small area? I have pretty much the same population. I find it difficult to find my target market. Valentines helped get the word around . Paper ads do not seem to be effective.I am a part of BBB,Area chamber&SAF. Any other suggestions for start -up marketing
 
Ditto To Fairfield.

Our first two years we were 800flowers FTD and Teleflora. Our incoming was at 25% of our gross sales for 2003 and 37% for 2004. The ax came January 2005 after seeing our incoming actual percentage at 55% instead of 73% with TF 60% with FTD instead of 73% and 65% instead of 71% with 800flowers. The trend I discovered with our business was an increase in incoming contributing to our gross sales and no growth at all within our local business.

We marketed with direct mailing with every single possible marketing tool offered by Teleflora and FTD. 800flowers had no marketing materials to offer at the time. With incomings continuing to rise and lower average orders dropping to $55.00 average by December 2004.

Valentines day 2005 was a big success with only accepting 50 orders from 800 flowers and since we had to stop accepting orders for about 4 hours on Valentines Day I figured I lost 50 of my own potential customers since I accepted those orders from 800flowers instead of continuing to answer our phones for those first 4 hours.

Out going orders was a wash with our biggest month in sending in December 2004 with over 100 orders being sent. Our percentage for outgoing orders was at 5% even with our biggest month ever.

2005 gross sales ended down 10% compared to prior year with only 9% incoming contributing to gross sales. A strong marketing campaign using our own made postcards, new website, our own products, and a constant marketing of our brand name took us out of the hole and put us on track by mothers day 2005. Even after having a very successful Valentines Day we struggled until Mothers Day.

Our 2005 summer sales exploded with new products on our website again featuring our own pictures and even more wedding work as we began to include more of our own work on the website and every single piece marketing materials even had our own pictures. From yellow pages to business cards our own arrangements were noticed more by the consumer with most of them saying that they were tired of the FTD look and wanted something different.

2006 well lets just say Awesome. From very successful holidays to increases in weddings and events. Showing the consumer what they are actually ordering is a great marketing tool.

Offering Quality products also contributed to our increase sales and average orders. Replacing Classeys with Freedom Roses, Fresh Lilac Direct from the farms, Same Day Delivery from Miami (flowerbuyer), Hydrangea, Quality Filler (Safora Dark Blue, Queen Anne’s Lace, Solidaster), Greens (Italian Ruscus, Seeded Eucalyptus, Pittosporum),

Take all of this and offer the best kick a** customer service. Listen to the Customer Ask The Customer Follow up With The Customer Treat Your Customers like they are your Best Friend. Email customers pictures of their arrangements. .

The smallest order can turn into your biggest event just remember anything is possible!!!
 
Could someone comment on the benefits you can get from using a credt card? Flier miles/cash back kind of stuff. Could it possibly add up to more than a rebate? It certainly would eliminate incoming.
 
To Bloomzie first, the c/c stuff is just the side benifit, not the main focus. Outgoing orders are just a service for our customers, not the focus either. I've never had to fiqure that out, and I dought anyone else has either, because outgoing is not an issue. I think most florists that have decided to go WS free were more filling areas than outgoing. We did take a family vacation to Hawaii last year, but I use my c/c for everything not just outs.

For Joe, thanks for bringing this subject up so tactfully. For me it was a different business model I was after, then most, I'm sure. I wanted to be a 1 man band from the start. So let me say first, a big thank you to all that are on these forums, flowerbuyer, and to Calculator Bill. I learned early on that the industry was broke up in different segments, big senders(non-florists), big senders(florists), fillers, and just plain old florists(WSfree). And this industry was not in good shape.

After 3 years I knew I was not going to be a big sender, so there was only one way to go to not loose more money, and be a 1 man band. After the 3rd year my P/L showed I lost $1500 just in the WS game.

I'm not a real big numbers type guy, so I can't give you all the detailed numbers you may be looking for. But I am the type that knows how to make money. I've payed my 1 1/2 acres off, (now worth 400k), payed our bills, and lived very comfortably. In about 8 years.

Emotional rhetoric, was never part of my life or my business decisions or posts. Taking charge of all decisions and never letting ANYONE hurt my bottom line. "If your not part of the game, no one can't hurt you."

My only competion in town finally closed, so for the last 5 months, it's been extremally, wildly, good. There is money to be made in this industry, for me I learned where it was for my business type. I've found it is alot easier for a 1 man band to make decisions then a midsize shop.

If anyone with the size shops that have employees, wanted to go WSfree, they would have to do some down sizing. Watch your buying very closely, stay on top of all monies. I've talked to alot of florists that have a great staff now(after many yrs), and do not want to lay anyone off. But also know they are not making the money they should be making or have to make, so they have some hard decisions to make. I"ve shown them where the bleeding is, but it's still a hard decision.

The other thought that has to go into being WS free, is do they go with 20% for their outgoing or 100%. For me it's not worth going after the 20%, because I feel my customers appreciate me watching out for their money.
 
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So far all good answers. Thank you all. Please continue.

Even though I am not getting exactly what I am looking for, all your comments are really beneficial, educational and enlightening.

Felicity, Eric, Jason and Jerry all have different size businesses, and correct me if I am wrong, but you are all fairly new to flower shop ownership.

I have already seen a trend where the WS affiliation of over 30 pct of GS coming from WS is a warning for some shops. That is interesting.

For me, my WS business is just under 10 pct. Maybe that is why, I answer my questions differently from your answers regarding WS profitabilty.

Also, I like the beginnings of the categorizing of flower shops. Large/med/small WS affiliated / WS -free/ Big senders/ big fillers.

I wasn't sure what I was going to read when I came into my shop this morning and to be honest I was a bit apprehensive to open this thread up and read the posts.

You made my little heart go pitter pat...... Great Answers. thank you. Lets keep the positive spirit of this thread continuing for awhile.

Joe
 
Dispute !

Joe Mioux said:
So far all good answers. Thank you all. Please continue.

Even though I am not getting exactly what I am looking for, all your comments are really beneficial, educational and enlightening.

Felicity, Eric, Jason and Jerry all have different size businesses, and correct me if I am wrong, but you are all fairly new to flower shop ownership.

I have already seen a trend where the WS affiliation of over 30 pct of GS coming from WS is a warning for some shops. That is interesting.

For me, my WS business is just under 10 pct. Maybe that is why, I answer my questions differently from your answers regarding WS profitabilty.

Also, I like the beginnings of the categorizing of flower shops. Large/med/small WS affiliated / WS -free/ Big senders/ big fillers.

I wasn't sure what I was going to read when I came into my shop this morning and to be honest I was a bit apprehensive to open this thread up and read the posts.

You made my little heart go pitter pat...... Great Answers. thank you. Lets keep the positive spirit of this thread continuing for awhile.

Joe
Click to expand...


Have to completely and totally disagree with one of your statements Joe.!

......little heart...................Nah.............gotta be a big heart !:)

ManorMan
 
Jerry said:
Emotional rhetoric, was never part of my life or my business decisions or posts. Taking charge of all decisions and never letting ANYONE hurt my bottom line. "If your not part of the game, no one can't hurt you."
My only competion in town finally closed, so for the last 5 months, it's been extremally, wildly, good.
Click to expand...
(emphasis mine)

Please people...read Jerry's comments carefully...personally I think they're brilliant.

For business is a game, it's competitive, and we are all playing as hard as we can within the rules (if there are any). Even if you think you're not part of the game, you are, because your competition is still playing, and it has an impact on YOUR business.

Why did Jerry achieve success? Because his competition (who likely were playing the game), LOST. Why is this good?

Because this is a Net-Sum game...the only way we grow is at someone elses' expense.

OG's growing? At your expense.
Grocery stores increasing flower sales? At your expense.
Not getting any incoming? The OG's have decided to use your competition instead (maybe at your expense...depends on your viewpoint)
You're getting more weddings/funeral work. At your competition's expense.

And personally, I don't care if you're a Big OG, filler, local, or WS free, but for heaven's sake GET IN THE GAME & KNOW THE SCORE!

Do a strategic analysis, because believe me the WS have a detailed strategy for every action they take!

Figure out your internal strengths & weaknesses & external opportunities & threats. Build on your strengths, and everything else should fall into place.

Just look at Jerry. He decided to concentrate on his internal Strengths, which resulted in the elimination of an external Threat (competition).

In other words, figure out what you're good at in comparison to your competition, and let the games begin!
 
Amen! Prestonway.

Along time ago, I attended a seminar titled "Creating your Niche in a Chain Driven World".

It was a brilliant title back in the '90's as is even more important today.

Joe
 
prestonway said:
(emphasis mine)
...

Why did Jerry achieve success? Because his competition (who likely were playing the game), LOST. Why is this good?

Because this is a Net-Sum game...the only way we grow is at someone else's' expense.

...
Click to expand...

This, while sounding good as a sound-bite, is patently not true. Our economy grows at an average of 3-4%/year, so there are always more dollars out there...its NOT really a "zero-sum" game in that respect.

Also, good marketing and word-of-mouth can develop new customers by persuading people who otherwise would have never thought to buy flowers and services to start...this "increases the pie" at the expense of no one in particular.

Now, I will certainly agree that stealing an existing "flowrist" from a competitor is probably easier AND more satisfying, but to say "zero-sum" is simply an overstatement.
 
tis an advantage

Joe Mioux said:
Felicity, Eric, Jason and Jerry all have different size businesses, and correct me if I am wrong, but you are all fairly new to flower shop ownership.


Joe
Click to expand...


Being a start up 10 years ago, I feel was more of an advantage then a disadvantage. I never got tied down to any(WS) boat anchors, so to make my independence back was a breeze.

I've always felt, you either stay small or you go big. The mid-sized shops IMHO are the ones that will have the hardest time in this industry right now.
 
Hi Joe:
While we are not 100 % wire service free, we are down from multiple wire services to just one as of Jan 2006. We tracked out outgoing vs incoming, and found that most of our customers did not want a specific wire service item...they just wanted the ability for us to be able to handle their order going to another city.

After much analysis on my part, we decided that we could not afford more than 1 wire service, and cut it to just one.

That being said, we DO accept credit card orders from WS free florists, at 100% full value, and fill & treat their customer just as they were one of our own. We expect a WS free florist to have charged in his service charge the cost of getting the order to us, and what he deems to be a fair "commission" for doing so.

We no longer participate in any wire service advertising for any of the holidays, and buy very few if any wire service containers. We have determined it that it is in our best interests to source out mor generic "unbranded" containers because our customers want the value of their order to go to flowers ...instead of fancy containers. Our sourcing often takes us to Syndicate Sales, Brody, Indiana Glass, Accent, Hills (for baskets) and some local pottery places that make us great stuff!

We are a medium sized shop, in a major metropolitan city. We have pretty hefty competition from all over the tri-state area (which overs about 60 sq miles).

We are neither a big sender nor a big filler. We Belong to a wire service simply to offer the CONVENIENCE of sending flwoers around the world with out hassle to our customers. I personally still belong to a wire service because of the EASE of sending/receiving (We do not have time to make repeated calls to shops to get a cc order placed; and because the wire service will still intercede between shops if there is a dispute and attempt to get it settled. Maybe that's not a good enough reason for some, but it works for me.

We Direct our advertising toward our website, local church bulletin ad, our own direct mail to our own customers, and local brides thru shows and mailings, and our affiliations with our other similar business partners. We select other afvertising opportunities as they present themselves....such as radio....if the price is very good.

We have attempted networking opportunities thru BNI and other similar groups and found that this did not work for us on any larger or consistent basis.

We are always looking at business ideas, looking for ways to work better & smarter, and attempting to be creative.

We also talk and brainstorm to other types of businesses, both large & small, and attempt to problem-solve with each other.

Hope this helps!

Regards,
Cheryl
 
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Joe:
Wire service sales represent about 10 of our business -- and dropping daily, as more people wise up, use the internet & call us directly!

When I bought this business 20 years ago, wire services represented over 35% of our business.

As we have strived to grow the business, our focus is on our local businesses, and our partners/referrals that we work with locally. They feed us, we feed them. One hand helps the other & we all benefit.

One of the other reasons that I forgot to mention in the previous post is that we have a good many international companies that we service. We remain with 1 wire service so that we have access to the international relay. I do speak a little German and Spanish & French, but not fluently....and not Arabic, etc.....Again, it's seasier for me to transfer those orders to international retrans, and let them do it for me!

Hope this helps!
Cheryl
 
Like I said, I am sub 10 pct as well. Last month we sent out over 80 orders and received about the around 75.

I can't imagine doing that type of volume, anyother way other than with a WS.

Don't get me wrong, I still need to eliminate another WS membeship, which will happen and continue looking for ways at reducing the costs of membership.

Does anyone else out there find their WS membership profitable?

What about WS-free shops, any anecdotes relating to how your business's Net Profit Improved with less Gross Sales after terminating your WS affiliation?

Joe
 
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