Can you make money with wire services?

[SiberiaAIFD]

Hi all- I'm in a catch 22. I have FTD and Teleflora. I know they are both expensive, and I'm trying to wade through financials to understand if, at the end of the day, am I losing money or making money after the arragt is made and delivered. Math is not my strong suit. The problem is, we receive more FTD orders than Teleflora, but we send TEl as first choice, so = at the end of the month the FTd check pays the Teleflora bill. So am I stuck with both ? Switched my POS from ftd to teleflora and my website too. Still owe Teleflora $$$ so if i cancel membership i would owe full balance ASAP. I've poured over my Cogs and I'm in line on that for fresh flowers. I work for my parents and I'm feeling pressure to make this shop successful (duh) or risk putting my rents in the poor house. There are 6 shops in town and 1 just closed. The economy is poor. Anyone have any suggestions? I'm racking my brains here....and thanksgiving sucks ass as a holiday anymore.
any and all comments suggestions are appreciated. I've been in the business for about 14 years, and have been running the family shop for 4. We bought it from original owner 4 years ago. He inheirited from his parents so of course he had low overhead because he also owned the building. we own everything now. thanks!

 

[Rhonda]

There are a great many posts and threads discussing this problem. Suffice it to say, if you need to have a wire service, choose the one that works for you best.
I personally was an FTD shop since 1974 and was in and out of Teleflora during that time also, depending on how many Teleflora shops they decided to sign up in our very small delivery area. Teleflora's mindset is "sign up every place that sells flowers" no matter how small the area. They would have too many, I'd leave until they weeded themselves out again.
I do not buy their containers anymore UNLESS it is one I specifically want - such as a hurricane at Christmas.
I choose not to fill for order gatherers and will even question headquarters orders as to the sending shop code numbers and names (as I don't have Dove this time around).
I terminated FTD after 30 + years because they have slowly and somewhat quickly lately, forgot the florists that made them what they are today. The person delivering their orders is my small shop. They now compete against me with their websites (oh so very many of them) and love to "cloak" orders from gatherers they highly support even encourage.
It IS a dog eat dog world and I chose to not be the bone for FTD to chew on. And I probably will soon also be without Teleflora as they are not suiting my needs. I can refer customers to "Real Florists" utilizing the internet, old directories, calling shops I have dealt with for the past 30 + years and utilize my credit card to fulfill my customer's requests.
This is my humble opinion and I'm sure someone can direct you to more threads concerning choices you must make.

 

[lori042499]

There is a tread here that gives an excel spread sheet to figure your profitablilty with WS. I am not sure who it was and I do not know how to link threads here even if I found it. It was given freely so I can send it to you by email. PM me if you want it sent.

 

[Tracy D'Amico]

There is a tread here that gives an excel spread sheet to figure your profitablilty with WS. I am not sure who it was and I do not know how to link threads here even if I found it. It was given freely so I can send it to you by email. PM me if you want it sent.

HERE is the wire service profitibality calculator that Cathy posted a while ago.

Your post has a lot of questions wrapped up in there - for the WS issue:
Unless you've negotiated a deal with one or both services, I personally don't think you need two. Knowing what percentage of your business is WS incoming helps greatly for you to decide what you need. We aim for a low percentage of total sales, and dropped FTD last year to help with that. Our TF incoming sales dropped by 50% this year because we dropped all but two ASB listings. Our overall sales are up, so we're making up for that loss by gaining local customers. Good news I think.

For the economy, are you marketing your business? We send out comp petite vases to some local businesses, to good customers, to missing customers - we're starting to do this weekly. Just a few sprigs, in a teeny vase, with a coupon to come in for a small freebie. Sent out three this weekend, and a neighbor of the recipient came in to buy flowers because she saw us, and the thrilled recipient. It echoes, ripples onward, these small gestures.

There is a lot of info here, search out the marketing thread, there is so much there to help grow and build your business.

tracy

 

[goldfish]

Hi all- I'm in a catch 22. I have FTD and Teleflora. I know they are both expensive, and I'm trying to wade through financials to understand if, at the end of the day, am I losing money or making money after the arragt is made and delivered.

It's not difficult to calculate, if all you need is a "ball-park figure." All you need to think about is cash flow. Calculate a positive and negative cash-flow, separately, as shown in the following example.

Let's say you had $1,000 incoming orders and $300 outgoing orders (it doesn't matter how it divides into FTD and TF; just add them up).

Until you receive a check from FTD/TF, the only "positive" cash flow comes from outgoing orders: in this example, $300. It's "positive" because you already got this money in your bank. Ignore all those commissions you'd have to pay later; it will included in the WS statement and you don't need to consider them in this analysis at all.

--- Positive $300 from the sale of outgoing orders.

Now, "negative" cash flow... It's more complicated. You've spent money to fill for the $1,000 incoming orders. There are two components, COGS and delivery. If your COGS% is 35% (flowers, containers, accessories), you've spent $350 to make the arrangements. You've also spent money to deliver these orders (gas, driver's fee, etc); let's assume it's $140 ($7 x 20 deliveries). So the total negative is $350+$140=$490.

--- Negative $490 to make and deliver $1,000 wire-ins.

Now you've got $300 positive and $490 negative. So overall, your cash-flow in this example is negative $190.

If you received a check from your WS of more than $190, you made money. If it was less than $190, you lost money.

 

[bloomz]

Here's a simpler way to figure it all out.

If you don't buy containers and other stuff from them.

If you have to write them a check - you made money.

If they send you a check, you lost money.

Bassackwards ain't it?

 

[NCPat48]

Okay, give you my way. Forget overhead (fixed costs) they will be there whether you have a WS or not. Forget outgoing, you don't need a WS to do that and receive 20% from most florists. Don't look at just 1 month, but a period of time. A month will give you a break even point. Forget the containers, that's a choice you make, not a cost you are forced with, so now down to the basics.

-Incoming Order
-0% Sending
Credit Card Prog
-Rebate

Sum That = $

Now subtract

-Membership Fees
-Directory Ad
-Clearinghouse
-20% to Sending Florist
-Technologies (Dove, Website)
-Other (Any forced fees)
- YOUR COG

Result If it's positive, you made money, if not, you lost


Now granted there are lots of variables that some consider, can I reduce an employee if I eliminate a WS? What is the trade off. But this is the bare bones way of seeing whether or not you make money on incoming. You will always make money on outgoing.

 

[lady0003]

wire services

I think you totally lose money on EVERY order. Last month the teleflora rep told me he would e mail me a breakdown to show profit and loss. ( all the reps I have had for the last 10 years agree with me, you lose money) I never received it. wonder why??? If you come out and ask either teleflora or f.t.d. to show you the profit on an incoming order, they will tell you the truth. You are losing money, they know it and they will tell you. You have to ask. Ask both of your reps to mail or e mail you a chart showing you where and how much money you are making(losing). Again, if we can give an incoming wire order what amount to at least a 50% discount, why wouldnt we allow our loyal customers the same discount???? The answer, we would all be out of business.