Are WS-free florists really more profitable?

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And

Joe Mioux said:
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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If your numbers are correct then should have no concerns about wire services. By sending out 80 orders last month, your rebate alone covered the cost of membership. Since you have a balance between inwires and outwires the 20% commision is offsetting and if you charge a wire service fee to your customer you are making money.
 
I'm going to make a statement not completely based on fact since I haven't seen everybody's wire service statements and don't know how much the typical florist pays in dues and all other fees associated with wire services.

At least 98% of all florists would be better off with NO wire service membership. If there are 20,000 florists in N America that would equate to 400 florists that do OK being a member. The rest are getting the short end of the stick.

Nobody, with maybe the exception of a few large Order Gatherers have any business being a member of more than one service.
 
sfox said:
If your numbers are correct then should have no concerns about wire services. By sending out 80 orders last month, your rebate alone covered the cost of membership. Since you have a balance between inwires and outwires the 20% commision is offsetting and if you charge a wire service fee to your customer you are making money.
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Except I am too stupid not to get rid of one of my TF memberships.

FTD membership is has been terminated.

For: Feb 2007, my TF statement shows. Membship $149.94 times 2, Dove Network Fees, a WHOPPING $163.77!, Quality Assurance $20 times 2,

Find a florist $19.99 DR and $19.99 CR.

Webhosting $140.80.

Membership Directory & Dove Advertising $32.

This doesn't count the Co-op advertsing that I didn't catch and was automatically renewed. and Flowers & and other publications. Also, I bot that Crazy for Daisies container, and the Mothers Day water can. That is all being billed on this months statement.

Right now I owe TF $2343.34.

Joe

I don't have my FTD statements because I "made" money with that WS this month and I am expecting my check.
 
Couple of questions for you joe.

Teleflora products do you have problems selling them for their specific holidays?

Do you sell them yourself or do you rely upon the incoming orders to sell them?

Since you have more then one location have you developed your own products?

If so are those products profitablity more than the TF products?

Thanks
 
Eric S said:
Couple of questions for you joe.

Teleflora products do you have problems selling them for their specific holidays?
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I only buy one maybe two items for holidays.

Mothers' Day is the watering can.

Christmas is the Kincaid product, I can't buy enough of them as people collect them. We sell them empty.

Easter one item. I think the Crazy For Daisy containter is Easter this year. Doesn't really matter, it is a pretty good looking "overpriced" vase that will sell at Easter as well as through out the Spring and if need be early Summer.

Vday, thanksgiving, fathers day, generally no WS product offered

Sec day, depends what the product is.

I generally buy the minimum amount and split them betweeen two stores which means each store must sell at least 12 WS product each. I also split among other flower shops as well sometimes, thus reducing the burden of having to get rid of them.

Eric S said:
Do you sell them yourself or do you rely upon the incoming orders to sell them?
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A combination of both, but actually most go out as local direct orders. Customers actually ask for the "this year's special". They bring in the TF coupons, or the Parade ad.

Eric S said:
Since you have more then one location have you developed your own products?
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Oh yea, being in the greenhouse has some real advantages for Mother's Day, Sec Day, Easter and Christmas, etc.

Valentine's day most definitely. We have 4 or 5 of our own recipe type arrangements, Baskets, Spring Garden Vase, larger vase arrangements, glass blocks, etc. I love those Spring Garden vases, I can do $35-50 flower arrangements in those things in less than 5 minutes. That is not an exaggeration.

I overbought on Red vases for Vday, so Mday will feature a red garden vase with red roses..


Eric S said:
If so are those products profitablity more than the TF products?
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If I sell all the WS vases, the profit isn't too bad. Not every non-ws product that I sell in my shop has the same percentage of profit either, so it is kind of hard to say.

Here is an example: That Kincaid Cottage thing always sells well, even empty.

I think we sell the empty container for $30 and my cost is something around $9. However, my angels that are very popular sells with an average mark-up of 2.5 times. Both are profitable and the best part, only sales labor, no design time.

Yesterday was silk flower arranging day. The silk department might not be as profitable as the WS container department. Consider that most of that raw unarranged product is inventoried for fairly long periods of time -- my money is tied up with no ROI -- until we use the silk flowers, arrange them, add labor to them, and then inventory the final product out on the shelves -- again no ROI -- until the item is sold.

If your shop is like mine, we never sell every spring arrangement before the end of the season and then we store those arrangements downstairs until the next year. I have to ask myself "how profitable is that"? Not very.


Continuing with the silk issues. I have really gotten pretty good at keeping this inventory to a minimum. In the old days, we used to inventory 3-4 times as much silks as we do today. One flower shop once told me that she had $40,000 in total inventory, with about $10K in silks. In my mind, that is too much and not profitable.

Fresh profitabilty v ws profitabilty ? If I had to pick one over the other such as a Crazy For Daisies vase (cost guessing $7.49) vs a 9 inch Spring Garden vase (cost guessing under $2) , The Spring Garden vase will be more profitable. The Crazy for daisies is a light green translucent ginger jar with the glass swirled and daisies painted on it.

I do buy TF's combo packs of non holiday product and mark it up the same way we mark up non TF product, so these items as a percentage offer the same or similar profitabilty.

Actually, I guess I just answered your question with this last sentence.

A light bulb just went off in my head!

We generally mark-up these items 2.5 to 3 times which is the same percentage mark up we use for other Non ws items. So profitabilty as a percent of GS is/will be about the same, assuming we sell out of the product.


Eric S said:
Thanks
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You welcome.

Eric, I attempted to answer your questions as honestly and sincerely as possible.

Joe
 
Joe:
You mentioned above that you have 2 stores. Could you get rid of 1 TF membership, and run all the wire business thru 1 store?

Do you have the POS technology to do that now. (transfer orders between stores)?

From your post above, this could save yopu some big $$$$$. I would also drop all the advertising....unless it something that you MUST have.

Hope this helps!
Cheryl
 
Cheryl -

That's a good question. An OG can run multiple websites on one membership but a B&M is supposed to pay for each and every physical location. There's an inherent unfairness there with respect to selling points.

But if Joe wants to keep membership for the incomings at his second store, that's a different issue.
 
Joe, being at home without access to records, I cannot give you numbers. We are WS free except for IFA, having completed our resignation from FTD last year.

When I first opened my shop, 2/07/2000, I tried to become a member of every wire service that I could find. At that time, I could not pay the required fees to join FTD, but I considered that WS to be the most prestigious. I had endless heartache with TF, but that is another thread.

After stumbling onto FloristBoard, I began reading about being WS free. Of course, every florist that I knew complained about WS, but noone was taking any steps to be free of them. Several posters on that board talked about getting rid of the WS. TOTO in particular was very persuasive in his arguments. At one of our local association meetings, the speaker broke down some actual incoming WS orders that our shop had received. He demonstrated that we had lost, LOST, money on every order, most especially on the ones with WS containers. I sat down and took a long, hard look at things, and began the process of removing us from the WS. We had both TF and FTD by that time. A couple of times I even agreed to free membership in one or the other of these 2 WS. Finally, I realized that the agony was simply being prolonged as we were being nickled and dimed.

After taking a closer look at our situation, I began to wean the shop from WS by not participating in their ads. The purchase of WS containers was eliminated. (OK, I did purchase some FTD containers for $1 each after some holidays.) At first I tried to locate containers which were similar to the WS containers, but finally realized that it was an unneeded move because more and more customers were choosing our own designs in less expensive, but still good quality, containers.

In all of the years that we were members of the WS, we only received rebates maybe twice. We were receiving many more incoming than outgoing. We were taking every order that the WS sent and not even asking for more money. That tells you something. The number of those incomings decreased everytime I tried to straighten out a problem with the WS and everytime we asked for more $$$ to fill an order. That told me something.

Now to actually answer your question. I can tell you that our shop, a small one in a fast growing bedroom community to the 2nd largest city in the state, is in better financial shape than ever before. That continues. Without any numbers to back this up, I can tell you that for the past year, it has not been necessary to transfer funds from my personal account to carry the shop. We are now the only florist in this community because the other one which had been here for many years went out of business.

We tried websites with both TF and FTD, but they were a complete waste of $$$$$ for us. We have our own site, and I am striving to have only our own designs on the site. I'm learning, learning from this forum about this.

We also never had any WS POS. I am very grateful that we were not tied to the WS with that. We did have Mercury and Dove, and the paper trail was nice, but we have that with IFA now.

We have actually seen no noticeable difference in the number of deliveries that we do each day in terms of before WS and after WS. Our walk-in business has increased this past year. I attribute both of these facts to the marketing that we've started. The former WS fees ably fund this. In fact, I have hired a Marketing Manager (not totally funded from those fees, but from our increase in disposable funds).

You are facing a difficult decision, I know, because the WS were so different at one time from what they are now. It is not easy to let go of the known and move into the unknown. IMHO, you are one of the smartest and most determined posters on this board, and I admire you a great deal.

The removal of WS from our shop has been very good for us. We've not had them to "depend on," and so we've had to look more carefully at how we take care of ourselves. We've made mistakes and learned from them. I am certainly not saying that we'll never have another WS, but it would take some major changes in the WS or in our situation in order for us to make that move.
 
CHERYL BAKIN said:
Joe:
You mentioned above that you have 2 stores. Could you get rid of 1 TF membership, and run all the wire business thru 1 store?

Do you have the POS technology to do that now. (transfer orders between stores)?

From your post above, this could save yopu some big $$$$$. I would also drop all the advertising....unless it something that you MUST have.

Hope this helps!
Cheryl
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Yep, I could run both stores with one membership. Visual Ticket, my POS, allows for seemless order transfers. All Dove order goes through my office computer, every terminal is networked.

CHR said:
Cheryl -

That's a good question. An OG can run multiple websites on one membership but a B&M is supposed to pay for each and every physical location. There's an inherent unfairness there with respect to selling points.

But if Joe wants to keep membership for the incomings at his second store, that's a different issue.
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Up until now, I have maintained both memberships allowing for a competitive advantage for incoming business. However, the fixed fees are offsetting that competitive advantage.

If I dropped one membership, then I would only have one physical location listed in the directory. As I said earlier this is a diminishing advantage.....

Actually, I will keep membership at the branch and discontinue at the main store.

For outgoings it won't make a difference, but my competition at branch location is WS affiliated

Joe
 
Connie, believe me. I am not married to multiple WS's

I have thought alot about this issue and keep coming back to Managerial (Cost) Accounting practices.

Yes, on certain sales you can discount them and still contribute positively to your net profit.

As long as you cover all of your variable costs and a portion of your fixed costs with these types of sales, you will make more Net Profit at the end of the month or year.

We beat that discussion pretty well last summer, but Cost Accounting is absolutely essential in determining whether your WS affiliation is helping or hurting your Net Profit.

I am here at the shop, and want to get going, I will be back on later this evening.

Joe
 
Joe:
Not sure if this still is the case with TF, but at one time, you could have a main shop # and a Secondary shop listing that was much less in $$. Would be worth a call to your TF rep. YOu could also do "Also served by" listings for the shop that you dropped. Again, much less cost than a second full membership with its $$ attachments.

Also, I would ask to have some of the QA, et all fees rebated to you for the second shop. Again, worth a phone call to your rep.

It sounds, from your above post, that you have answered your own question. One one the shops that you own needs to be wire service free. The other needs to maintain a wire service.

Good luck!
Cheryl
 
Cost SHIFTING?

Still lots of discussion going on regarding the issue of whether or not anyone can glean a profit on the highly discounted filling side of the WS order spectrum.

My spreadsheet has always come up with that nasty old cell result of (-10%)

And that was back in the day when we were a member of seven.

As always, the variable comes under CREATIVE FINANCING 101 where ya get to enter in funny stuff like COST SHIFTING and then, those results seem to get better.

If all things were equal and we were all talking REAL FLORIST to REAL FLORIST and your ratio of INCOMING to OUTGOING became a WASH, I too would have to agree.

And, the only reason I would agree would be because, it's TIT for TAT as YOU DOO FORE MEE and I DOO FORE YOU!

The PROBLEM in today's WS world is due to the inception of the 800 FLORAL and DOT.CON order gatherers (aka; SKIMMERS) who intercept the CONSUMER to REAL FLORIST network orders. They have tilted the scales in their favor and the old formula no longer works because of the inequity in a balance of trade. And so, the system no longer works as it is UNFAIR and UNBALANCED!

Since it is THEY who glean the 20% sending commissions, the $ervice charges, and the rebates as well as the 7% clearing house fees (their dot.cons) along with the FREE ORDER TRANSMISSION and FREE DELIVERY on your part features, those are the folks that live in NET PROFIT FAT CITY!

Now, if you still choose to use your EARNED 20% COMMISSIONS and move that over to the negative side of your spreadsheet to show a profit of the losses you incurred on filling those orders, no one can stop you.

After all, it's YOUR SPREADSHEET and it used to be your profits too, until you MOVED EM to your liability side.

And, the answer to the question of: " Are WS FREE shops more profitable? " In the end, the answer is always YES since, they have eliminated having to fill highly discounted orders, thereby saving themselves the COGS, COL, and COD, on orders they were only really netting 55% to 60% from.

Those folks (and don't take my word for it) find out that, not only do they save the annual dues and fees, which can be anywhere from $3K to $5K, they use less labor, less products, and less gas, for an additional savings.

But, the best part is that, they can now focus on THEIR CUSTOMER'S NEEDS along with THEIR CUSTOMER'S 100% SALES, while DOO-ING IT 100% OF THE TIME.

As one dear REAL FLORIST friend of mine just found out for himself when he realized that, He could fill just ONE of his own customer's 100% sales on VD DAY at $100 (product coupled with his $24.95 SPECIAL MESSENGER DELIVERY $ERVICE CHARGE, and glean the same net profit that it used to take him 20 DOT.CON orders to muster.

His other HAPPY THOUGHTS were that, this was the first VD DAY where both him and his wife DID NOT have to work till 3:00 AM in the mornings of Feb 13th and Feb 14th just to FILL ALL THEIR DOT.CON JUNK.

They were both OUTTA THERE by 8:00 PM each night and they both wound up with MO MONEY in their wallets.

Since they are in a BIG CITY, the SNOW/ICE storm of the North East and Mid North West did not effect them like many of the rest of us, and they were truly lucky.

Now, COST SHIFTING is also a major problem in the Health Care industry. Those that can PAY WITH INSURANCE DOO and the bills for those that can't pay, are subsidized by those that can pay, either by higher fees or by higher co-pays or by HIGHER COUNTY TAXES as is, in my case.

BIG LIES are perpetrated in both industries. When you hear the socialists complain about those PO folks who have no health care insurance, we never hear the part about; they get FULL TREATMENT through any emergency room in our country and they can't be denied.

And, in many cases, they use our Hospital ERs as their clinics for NON EMERGENCY health care services they should've visited a Doctor for.
 
Toto, I just have to ask...for someone who rail on and on and on about the evil of the WSs, you sure seemed awful worried about your TF rebate check on another thread...

It just confuses me, I guess, that someone who would spend so much time, posting in bold type no less, railing against the WS in post after post, would still be part of "the game".

I guess what's good for the goose isn't so good for the gander in this case, huh?
 
What's MINE is MINE!

12BucksFor2Dozon said:
Toto, I just have to ask...for someone who rail on and on and on about the evil of the WSs, you sure seemed awful worried about your TF rebate check on another thread... It just confuses me, I guess, that someone who would spend so much time, posting in bold type no less, railing against the WS in post after post, would still be part of "the game". I guess what's good for the goose isn't so good for the gander in this case, huh?
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It's the ISSUE, not the money!

As I stated earlier, it was chump change but, IT WAS MY FREEKEN CHUMP CHANGE!

Had the situation been reversed and my check to them arrived AFTER the 25th, we all know how that would've went down, EY?

Also, I am not really RAILING on DA WSs! I'm just pointing out the INEQUITY of the SYSTEM as they choose to play it out today.

The old system USED TO WORK, but that was when it was between TWO REAL FLORISTS both DOO-ING DA DO!

It's the 800 FLORAL and DOT.CON OGs (aka:SKIMMERS) which have brought it to it's present state of disfunction as it is UNFAIR and UNEQUITABLE.
 
CHERYL BAKIN said:
Joe:
Not sure if this still is the case with TF, but at one time, you could have a main shop # and a Secondary shop listing that was much less in $$. Would be worth a call to your TF rep. YOu could also do "Also served by" listings for the shop that you dropped. Again, much less cost than a second full membership with its $$ attachments.

Also, I would ask to have some of the QA, et all fees rebated to you for the second shop. Again, worth a phone call to your rep.

It sounds, from your above post, that you have answered your own question. One one the shops that you own needs to be wire service free. The other needs to maintain a wire service.

Good luck!
Cheryl
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cheryl, I have already discussed WS memberhips and branch memberships years ago with TF. TF wants one membership for each facility if you want to be listed as serving the cities your businesses have addresses in. Otherwise, one membership will have a listing as served by and the other store's listing is "an also served by listing".

Yea, I am headed in the direction of one TF WS membership.




TOTO said:
Still lots of discussion going on regarding the issue of whether or not anyone can glean a profit on the highly discounted filling side of the WS order spectrum.

My spreadsheet has always come up with that nasty old cell result of (-10%)

And that was back in the day when we were a member of seven.

As always, the variable comes under CREATIVE FINANCING 101 where ya get to enter in funny stuff like COST SHIFTING and then, those results seem to get better.
Click to expand...


Toto, when I bring up terms like Cost Accounting, it is a type of accounting that is used to manager your business and make prudent business decissions based on my actual sales and costs figures. It would be stupid to lie about those numbers since I would be lying to myself and thus make an even dumber business decission based on fraudulant figures.

TOTO said:
If all things were equal and we were all talking REAL FLORIST to REAL FLORIST and your ratio of INCOMING to OUTGOING became a WASH, I too would have to agree.
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Mine do pretty much match up and that includes FTD. Last month I received 61 TF incoming and 15 FTD incoming and sent 80 TF outs and 0 FTD outs.



TOTO said:
[Now, if you still choose to use your EARNED 20% COMMISSIONS and move that over to the negative side of your spreadsheet to show a profit of the losses you incurred on filling those orders, no one can stop you.
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I don't really undestand this comment. I look at Incoming Revenue and don't really care where it comes from. Re: WS though you have to take your outgoing 20 pct earned and your 73 pct incoming and attribute them to Income and not to expenses. The 20 pct definitely needs to be broken out from other inventory sales in order to accurately reflect your COGS as a pct of GRoss Sales.



TOTO said:
[And, the answer to the question of: " Are WS FREE shops more profitable? " In the end, the answer is always YES since, they have eliminated having to fill highly discounted orders, thereby saving themselves the COGS, COL, and COD, on orders they were only really netting 55% to 60% from.
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Can you provide real world examples? Also, you still are send out orders aren't you? How do you account for that income. I suppose a florist could only send and refuse all incoming, but it isn't really practical.


TOTO said:
[Those folks (and don't take my word for it) find out that, not only do they save the annual dues and fees, which can be anywhere from $3K to $5K, they use less labor, less products, and less gas, for an additional savings.
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However, in Jan, my rebate check was, I think, $206. Membership fees were somewhat offset.


TOTO said:
[His other HAPPY THOUGHTS were that, this was the first VD DAY where both him and his wife DID NOT have to work till 3:00 AM in the mornings of Feb 13th and Feb 14th just to FILL ALL THEIR DOT.CON JUNK.

They were both OUTTA THERE by 8:00 PM each night and they both wound up with MO MONEY in their wallets.
Click to expand...


Earlier I said we received 75 incoming between two stores that averages out to about 2 additional order per day. I know of no florist that is so efficient or overworked that they couldn't handle an average of two extra orders per day.

Joe
 
Joe Mioux said:
Toto, when I bring up terms like Cost Accounting, it is a type of accounting that is used to manager your business and make prudent business decissions based on my actual sales and costs figures. It would be stupid to lie about those numbers since I would be lying to myself and thus make an even dumber business decission based on fraudulant figures.
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My emphasis.

Pretty simple concept, actually...but Cost or Management Accounting does vary a bit from Financial Accounting that most people(?) are used to. With some business training however, it's not really that hard...

If the Additional Revenues from accepting an order are greater than the Additional Variable Costs, the difference can go to pay for Fixed Costs. This difference is called the Contribution Margin.

If it's one cent, one dollar, or ten dollars...you are better off accepting the order than rejecting it if the Contribution Margin is positive. PERIOD.

Further, this accusation of "Creative Financing" really rubs me.

Why would you go out of your way to "cook the books"?

Why would you go out of your way to make a WS order look better than it should?

And as Joe said...why would we lie to ourselves?

SHEESH...sometimes I just don't get it...!

Prestonway, B.Comm (1984)
 
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I have been careful not to chime in too quickly in this thread (not that anything I say is *that* important) because often I find myself "shooting from the hip" and saying things that are, although heartfelt, perhaps not super-businessy logically sound.

So I have waited, and I have read, and have carefully come to this conclusion...are WS-free florist more really more profitable...THAN WHAT?. Your question, Joe, is totally impossible to answer, because entirely too many variables have "dependencies" (that a software term but it fits perfectly in this case) built in, with WS membership being only one small part of a large picture.

Plus, even if the answer somehow could be proven YES (and that would require some sort of A-B test, where identical shops in near identical markets would run for a year, and then detailed P/L examined), it still would hardly matter...wouldn't it be more profitable to run your business from, say, your garage? I'm sure it would, but for many of us that would not be a viable option...in other words, just because something adds to the bottom line does not automatically mean you should do it.

So anyway, my answer to your question is "who knows??"...several newer business owners here on FC (myself, Eric, and good ole Dazeal) say unconditionally that, when you factor EVERYTHING into the mix, that being WS free has been far more profitable then being with the WS, while other, more established florist could not do without it.

You want numbers?? Every order that we filled was at 100% of retail value...can you say the same?
 
12BucksFor2Dozon said:
You want numbers?? Every order that we filled was at 100% of retail value...can you say the same?
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I can.

And I think I would bet money that Joe can too.

Anyone who has half a brain and cares about their business can.

Will any dummies who can't please raise your hand so we can identify you?
 
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