Being fair on incoming wire orders...

[TupperGuy]

Hi Floral Chatters...

I've been in business for quite a while and currently have TF, Bloomnet, and Floral Source as wire services. I've always been for the customer making sure they get the value on every incoming order that I receive, especially thinking that could be a potential new customer for the store. But the more I think about it and looking at my statements from the wire service, If I get an incoming order total for $50 and take off my $8.95 delivery, I normally make the arrangement up for about $41.00. When looking at my BN statement, I only receive $36.50 for the order! We get lots of incoming wire orders and I feel that i'm actually loosing money not only on the arrangement, but the fees associated with every order.

I know that each shop is different, but can anyone give me some insite on what they are doing at their shops to be fair to the customer? I use to work at a shop that took 25% of the incoming price and made the arrangement for that total. Is that reasonable and fair? Any suggestions would be appreciated.

~Finally at my wits end!
Ed )

 

[secretgarden]

Ed, I think you will receive a lot of responses to this one. This is a hot topic. In my opinion you should fill to the $41.00 that is your total - your delivery. When you signed the contract you agreed to fill to value, the money they take off is what the florist earned or the TF, Bloomnet, ect. takes for commission. That $ should not enter the picture, that is what you would receive if you sent that order to another florist. You need to protect your name and your reputation. If you start discounting the orders how likely are you to get that customer in the future if they do not see the value in the arrangement. In this day and age you can pretty much expect the receiver to email a picture to the sender as a thank you, if it is not to value that is going to open the door to a complaint, possible canceled order, and even the company you work with cracking the whip.

This is why we left the wire services, we could no longer afford to loose on every order we were filling. This is just one florist opinion, I am sure many more will chime in as well.

 

[Rhonda]

I agree with Lori, you signed a contract with whichever wire service to "fill to full value" minus your normal delivery charge. Next question is if you take a florist to florist direct order on a credit card do you give the sending florist 20% and then only fill to 80%?? I send direct by credit card giving the florist the entire amount 100% along with their delivery charge (but I charge my customer a service charge to send that I keep)

 

[Flowermomma]

I agree with Lori, you signed a contract with whichever wire service to "fill to full value" minus your normal delivery charge. Next question is if you take a florist to florist direct order on a credit card do you give the sending florist 20% and then only fill to 80%?? I send direct by credit card giving the florist the entire amount 100% along with their delivery charge (but I charge my customer a service charge to send that I keep)

thats what i do too. 100% of the value to the florist i call some offer 10% rebate some don't.. and I charge a service charge in the store that I keep.

 

[anytimeflowers]

I think the only way to be fair to the customer is to give them what they paid for. Period.

If you cannot find a way to not lose money, then my best suggestion is to read the many many threads associated with this very subject and gather the info you are seeking, it's all there.

 

[secretgarden]

Me too Rhonda. I never trust to fill at 100% if they only receive 80% so I always send the full amount. Then I charge my customer our service fee.

 

[sandytf]

Well, just for starters, WHY are you a member of THREE wires services? The fees alone must be killing you.

 

[jamie]

Ed,
The thing you are not considering is the incoming order has most likely been assessed a $14.95 service fee, so your $50 order is actually costing the sender about $65.00 plus sales tax. It's not a good value at the $41.00 which is "fair" according to your wire service terms, it is a flat ripoff at $36.50.

You lose money on every order that comes in at $50.00 or below. There is no honest way to make any profit on those orders.

Every Wire Service has a fee structure that has to be considered into the cost of each arrangement they send to you. I have never been in Doomnet or Floral Scorch, but I am currently a proud member of Teleflora (according to my TF website). Let me illustrate how their fee structure affects your bottom line:

If you do not do ANY extra advertising or listings:

membership fees are 149.99
dove fees are 99.99
quality control 20.00
optional sending fee 19.95
FSG marketing kit 14.99 (whatever the hell that is)

Total minimum fees 304.92

If you do not send all your orders through TF then you are also paying a reciprocity fee which is about $80.00 for every $1000.00 that gets sent to you. (my reciprocity for April was $87.04)

You need to look at how many orders you fill per month (April I filled a whopping 28 orders) Let's say that you fill 50 orders for teleflora in a non-holiday month. You are being charged $6.10 per order for membership fees plus $1.75 per order for dove fee ($7.85)

I also noticed that you had a 9 inch ad in the Feb-Mar directory. I think that costs $70 per month. There is another $1.40 per order
I only saw you listed in Woodbury, but if you have any other towns listed then that is $10 more per month per town

sooo without reciprocity you are paying $9.25 is FEES for every order that comes in through Teleflora.

$50.00 order comes in over dove:
50*.73=$36.50 this is how much you are due after the sender takes his 20% plus the 7% that the clearing house takes. The 7% helps to pay for the telegraph service that is used "wire" your order across the great divide.

36.50-9.25=$27.25 This is how much is due to you after you consider the cost of your FEES.
27.25-13.54=$13.71 $13.54 is, IMO, a decent target Cost of Goods Sold (on $41.05). This is what you should spend on flowers, containers and supplies to actually make the product.

$13.71 is how much money you have left (if you are on CoGS target) to pay for delivery and pay for someone to make the arrangement plus put a little (or take out a little) from your pocket.

Do you send all orders through TF?! if not go ahead and take out about $150 per month in reciprocity ($3.00 per order for our example)
BTW all wire services charge reciprocity, so you are paying it to 2 of the 3 that you are in. You may be paying it to all 3 if you have not asked to have it removed from your "sending" wire service.

$10.71 on a $50.00 order @ 50 orders per month is how much you have to pay for delivery and design labor. How much is your delivery fee again?

but wait there's more!!
lets say you do 28 orders per month (like I did): 304.92/28= $10.89 per order in FEES, your 9 inch listing now costs $2.50 per order your dove fee is the same @ $1.75 you now pay $15.14 per order in FEES to TF. the good news is your reciprocity dropped because you did less volume, but oops it's based on percentage so it still costs $3.00 per order

$50.00*.73=$36.50 subtract $18.14 for fees and reciprocity =$18.36 minus CoGS ($13.54) and you have............$4.82 to pay someone to put this arrangement together and deliver it

$4.82 then pay for design and delivery. What's left is all profit baby!

 

[ezbloomers]

$50.00 order comes in over dove:
50*.73=$36.50 this is how much you are due after the sender takes his 20% plus the 7% that the clearing house takes. The 7% helps to pay for the telegraph service that is used "wire" your order across the great divide.

36.50-9.25=$27.25 This is how much is due to you after you consider the cost of your FEES.
27.25-13.54=$13.71 $13.54 is, IMO, a decent target Cost of Goods Sold (on $41.05). This is what you should spend on flowers, containers and supplies to actually make the product.

$13.71 is how much money you have left (if you are on CoGS target) to pay for delivery and pay for someone to make the arrangement plus put a little (or take out a little) from your pocket.

Same $50.00 Via EZBloomers.com:
Consumer pays $50.00 plus tax
Florist gets $50.00 + tax and pays EZBloomers.com $5.50 leaving $44.50.
btw if the order was $100.00 you still only pay $5.50.

 

[BOSS]

know that each shop is different, but can anyone give me some insite on what they are doing at their shops to be fair to the customer?

Ed, It HAS to be about the CONsumer...

I **was** an FTD TOP MEMBER... saw the light... what we do, is give the cinsumer YOUR phone number and have them call you...

That said... we are looking at changing the industry and working to make the filling side as equitable as the sending... https://www.facebook.com/floristsforchange

Join us won't you...

 

[lori042499]

Ed, I don't want to be hard on you, because everyone needs to start somehwhere on seeing the light, but I have a couple of questions before I give my opinion..

The way I read your statement is that you signed onto wire services not knowing that a percentage was taken out of each order. Is this correct?
Why do you have 3 wire services? Do you send out a ton of orders?
It says you have benn in buisness a while, How long is a while and were you in the industry before owning your shop?

 

[FANCIES]

Jamie, was wondering are you quiting TF? I thought you did a great job explaining how the $'s go AWAY! So what are you going to do next at far as the wire services go? When Kenneth Royer wrote his book on Retailing Flowers Profitably, he said there is no reason to belong to more than one wire service. Even though I ended up joining 2 of them, I always had that in the back of my mind. Now, as of this coming fall, I will only have one and that will be just for alittle longer. With all the discussions here and all the good advice that is given there really is no reason to continue on with the wire services. It is a lose lose proposition. What seemed like a good idea at the time turned totally sour! The wire services got GREEDY! Bottom line. To sum it up, it is the opinion of many of the members here, quit the wire services, have your own independent website, advertise and promote your shop every which way you can and use a credit card to call out your orders or use Flower Shop Network or EZBloomers. How's that for a summary everyone! lol! PS I just took a Vallium as I am having dental work done at 7 am so I am begging to be forgiven if I have offended anyone

 

[jamie]

yes, I am out of both by September 1.

I read Royer's article too, and I think he was being kind to the WS industry. Or perhaps he sends so many orders that he sees the service for what it should be. A convenience service to streamline sending orders out of your delivery areas. Not a revenue generator from incoming orders.

FTD's fee structure is even worse than TF, and Bloomstoday tries to send through TF to my shop all the time, so I see the level of crap they try to get you to deliver. I can't imagine that Floral Source is any different. There is very little profit on any incoming wire order, and they are, many times, much more of a hassle to deal with.

Add that to the fact that you are sending out a tiny, cheap, ugly arrangement to someone in your market, and you will see that the true cost is much more than any successful business would be willing to pay.

 

[TupperGuy]

Thank you to everyone who responded to my post. I can see it makes more sense to just do away with the wire services, but I don't think i'm ready to take the leap. I fear (as most of you probably did before deciding to deal with the florist direct), that I will start to see a decline in business. We fill alot of incoming BN orders, not as many TF orders as I had hoped, especially with 2 store locations.

I also try to keep a positive attitude that these orders that I fill will lead to new customers and future business. But, will it really?

Anyway, thanks again for all your input. Hopefully soon, I will be joining the ranks of fellow florist with no wire services. I may just take the plunge and get rid of Doomnet and Floral Scortch, but I still have financing with TF for the new Dove POS system I had to purchase for the new store location. Ugghh! What was I thinking when I decided to open a 2nd location??? I must be crazy!

 

[TupperGuy]

I knew going in that there were percentages taken out, but i was always told i'd be getting lots of orders. And, I know in business sometimes you need to spend it to make it, and i'm ok with that to a point.

Even though I only have 3 wire services, i only send through TF, not any of the other services.

I have been in the business quite some time, since 1990's, but have owned for about 15 years now.

 

[master J]

I'm banging my head against the wall right now!!!

 

[roysecityfloristand gifts]

Thank you to everyone who responded to my post. I can see it makes more sense to just do away with the wire services, but I don't think i'm ready to take the leap. I fear (as most of you probably did before deciding to deal with the florist direct), that I will start to see a decline in business. We fill alot of incoming BN orders, not as many TF orders as I had hoped, especially with 2 store locations.

I also try to keep a positive attitude that these orders that I fill will lead to new customers and future business. But, will it really?

Anyway, thanks again for all your input. Hopefully soon, I will be joining the ranks of fellow florist with no wire services. I may just take the plunge and get rid of Doomnet and Floral Scortch, but I still have financing with TF for the new Dove POS system I had to purchase for the new store location. Ugghh! What was I thinking when I decided to open a 2nd location??? I must be crazy!

Tupperguy, Not to hurt your feelings but your words are the exact words we have heard before from folks reeled in by the WS's with the promises of riches. I genuinely feel for you that you have to stay with TF because of a POS. My advise with TF would be to cut as many of the extras as you can.
Staying with a WS filling undervalued orders will not benefit you. Hope you seriously consider getting out of all but TF (which you can't).

Wishing you all the best. Most all of us have been where you are.

 

[RWK]

Ed ( TupperGuy ), I am going to ask a couple of questions. On an average day would you say that orders coming into your shop......more of them come from your own website, walkin, phone, or wire in - If your overwhelming amount is wire-in.......then you should consolidate into the one wire service that you get the majority of orders from. That way you minimize the fees you pay tpo the wire services and maximize the amount of dollars coming into the business. Yes, they are discounted dollars, but dollars none-the-less.

However, if the majority of your incoming orders are NOT from the wire services, then I would drop all but Teleflora. Then I would raise my incoming minimums. Also, I would really examine containers and the other stuff that comes with the wire services and pare those down as well. If you do feel the need to buy holiday specific containers......then keep this top of mind. THERE IS NO RULE OR ANYTHING THAT SAYS THAT A WIRE CONTAINER MUST BE USED ONLY AS PICTURED IN THE GUIDES UNLESS IT IS AN INCOMING WIRE ORDER. So, make up your own design, market that one, showcase that one, and sell out before the wire service sends you a codified order......then you have the luxury of saying " Sorry, You will have to send a second choice as I am sold out of that special. "

With the traditional wire model.......the emphasis is on sending.....so it might be unfair....but if you are going to play their game, then take advantage of their rules......by setting your incoming minimums high enough......so that they will not send you all the low priced crappies.

 

[jamie]

Do not codify containers. If you like a containern then buy it and sell it to your customers, but you cannot afford to sell the codified arrangments. They are a money loser for you at full price, much less at a 27% discount.

 

[Doug Munro]

When will it end

Just lying in bed and reading some if the threads, this one caught my eye. Every time this question comes up It amazes me.

Every member who joins a wire service is explained what "fill to value" means and when joining agrees to do so.

Senders members place their trust in fulfilling shops to actually adhere to the agreement and terms they entered into.

IMHO any fulfilling shop that accepts an order and then proceeds to fill with less value is simply dishonest and taking advantage of the senders misplaced trust.

The best thing for our industry is that fulfillers like this simply leave the wire services, that wag they are free to steal from their own customers rather from the sending florists.