Change of Wire Service Commission Structure
- Thread starter cherrie
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Joe,
The commission rates are determined by the supply and demand of / for orders.
Because there are so many florists who want incoming orders, there is a high price to be paid for those orders. (20% + 7% + fees)
But then ... you already knew that.
The commission rates are determined by the supply and demand of / for orders.
Because there are so many florists who want incoming orders, there is a high price to be paid for those orders. (20% + 7% + fees)
But then ... you already knew that.
Joe Mioux
Well-Known Member
And this comment has nothing to do with your supply and demand comments.
joe
So how do we really know who the OG's are?
We know the big ones. I thought I was through with FU flowers when an order sneaked in on Sunday. Remembering a thoughtful remark I read on this delightful site, I promptly called and told them if they ever sent me any more orders, I would not fill them or reject them or resend them. Let's see if that works.
The concept of the difference in commission structures is to make it too small of a profit margin to work for the OGs. The sad fact is that my outgoing wire business has greatly reduced and my incoming increased.
I realize that TF and FTD would never go for it, because they cater to the OGs, and they are the OGs. Maybe Teleflora. I still have hope. Even though I found a $215.00 reciprocity (sp) fee on my statement today.
The real fact of today's commerce (at least in the urban areas) is that much of the flower buying is done on the internet. Getting a customer into your real shop shouldn't be the only goal. The goal is to catch them on the internet. This is what the OGs and wire services have done. We need to get away from using the wire services web sites. They all look the same, even the customized ones. Your website can showcase your work and let the world pick which florist best suites their taste in floral design. You can show your talents to the world. My advertising budget goes almost entirely into my site. I am constantly revamping it, doing my own direct email campaigns, and trying to find ways for best optimization. I really appreciate the great tips I pick up on this site.
I quit FTD today. I'm on a path.......
We know the big ones. I thought I was through with FU flowers when an order sneaked in on Sunday. Remembering a thoughtful remark I read on this delightful site, I promptly called and told them if they ever sent me any more orders, I would not fill them or reject them or resend them. Let's see if that works.
The concept of the difference in commission structures is to make it too small of a profit margin to work for the OGs. The sad fact is that my outgoing wire business has greatly reduced and my incoming increased.
I realize that TF and FTD would never go for it, because they cater to the OGs, and they are the OGs. Maybe Teleflora. I still have hope. Even though I found a $215.00 reciprocity (sp) fee on my statement today.
The real fact of today's commerce (at least in the urban areas) is that much of the flower buying is done on the internet. Getting a customer into your real shop shouldn't be the only goal. The goal is to catch them on the internet. This is what the OGs and wire services have done. We need to get away from using the wire services web sites. They all look the same, even the customized ones. Your website can showcase your work and let the world pick which florist best suites their taste in floral design. You can show your talents to the world. My advertising budget goes almost entirely into my site. I am constantly revamping it, doing my own direct email campaigns, and trying to find ways for best optimization. I really appreciate the great tips I pick up on this site.
I quit FTD today. I'm on a path.......
Joe Mioux
Well-Known Member
The commission rates have not been changed since I when? pre 1970?
the commission rates are not S&D when you have 2 or 3 companies dicating and controlling the commission schedules.prices, i,e tf, ftd, and 800.
Ryan, i am beginning to appreciate your sense of humor and the things that entertain you.
joe
RC in Dayton and Cincinnati
New Member
goldfish,
Your scenario, although sounds reasonable, has a flaw. I know this by experience. Large florists, even without order gathering, send far more orders than they can possibly receive. As an example, back in the early 90s, before order gathering, we were the number one receiver of incoming wire orders for the state of Ohio, yet we were still sending out close to 10 orders for every one we received. In other words, outgoing orders tend to be sent by large florists then spread around like peanut butter giving small florists more than they can possibly send.
The desperate demand has been going on long before the days of rebates or order gathering.
To an extent florists do this already.
RC
CHERYL BAKIN
New Member
I think R.C.'s comments are along the lines of "critical mass".
The larger the florist, the greater the ability to:
buy more containers, buy more advertising, buy more flowers at usually cheaper prices because of volume discounting, be open more hours, supply greater number of arrangements, etc, etc.
Orders tend to be generated from larger florists because they spend the $$ from the beginning to attract the business from the beginning.
Orders tend to come into the larger florists (both wire ins and local) because of the very same reasons -- they spend the $$ from the beginning to attract the business. Reputation about size & work in the industry begats more business.
Years ago, everyone had to have Also served by listings, display ads in the directories, Parade and Coupon & TV guide ads to the consumers and so on. You were nothing if you did not do these, both for local and out of town people.
Today, most of the Larger florist do not have Directory ads -- but they have re-directed these same advertising $$ to the Web or other direct mail campaigns. -- with search engine optmization, emails to consumers, and staying on the wire service send & receive lists. Their re-distribution of their advertising $$ still keeps them at the high & large "critical mass" level.
(Sort of like a large snowball rolling down a long hill -- picking up speed and mass as it rolls along, and changing direction as it hits a bump in the road).
History:
The 80/20 commission split goes back to at least the late 1950's or early 1960's. The rate, I believe, was set by the FTD folks, and then copied by all the other wire services. FTD, was at that time, the oldest, the biggest & best in the business. What FTD florists did was the gospel. And there were good reasons for it at the time. The 20% commission to the sending florist was seen as a fair pay for the work that it took the florist to assist the consumer with his choices, and probably bill him for the order ( & carry the credit), and also to deal with the consumer problems, if any arose.
FTD clearinghouse kept 7% for it's trouble -- most of which went directly back into Florist Consumer Advertising, and other related Membership services, such as education.
When the "tug of war" started between the wire services,
Some "wise Guy" came up with the Rebate idea -- and then all hell broke loose.....forever changing the way that we do business in the floral world.
People swung their orders between the wire services like a monkey on a grapevine -- just to play the $$ game because the money thrown about to attract those orders was so high!!
"Sending only" shops were first seen as necessary thing to serve the armed forces personnel. Then someone else asked....and the barn door opened to let anyone open up a "sending only" operation. And it will never be the same!!
Today, the enviroment has changed as it relates to orders, but the fee/commission structure has not....infact, it has gotten worse.
Additional fees that annoy us have repeatedly been added on because so genius thinks that we will NOT notice a 1.00/order charge as opposed to an increase in membership dues of, say 25%. It's become a shell game....take from my left hand and move it to my left sleeve, and then over to my right hand.....and back again.
Now, if you want to belong to a wire service, the fees have gotten very high...so high that most smaller florists cannot afford to belong. And most smaller florists never bother to evaluate whether or not they really should belong to one or more or any wire service. (This in spite of repeated postings of spread sheets, & help to figure out the math).
Reality for most smaller florists just is "HUH??" If they put up a month's rent, and buy a few $$ in stock and materials, they are a "florist". There are not national standards, not tests, no licenses you must have!!
Case in point -- today, we had a smaller florist call us directly for a plant delivery to a funeral home. Was appalled to find that our delivery charge is $7.95. (Hers was $2.00). More importantly, We would not do a 10" peace lily for $30.00, including delivery!! This was what she sold & promised to her customer -- and was adamant about not calling her customer back and asking for more money. We couldn't help her, and I don't know of anyone who could around here.
So, today, we had another consumer who will not be happy because his order did not get filled.
My point is that if this smaller florist is so not knowledgeable about pricing in larger cities today, and even what delivery charges are, should she even be in business, and is she actually doing more harm than good?
Will he/she ever approach reaching that "critical mass" point????
We can all Whine and moan and complain until the cows come home, but until or unless someone had a better plan or another, better idea or way for us to do business, then the wire services, as we know them today, are what we have to work with.....this is our TOOL.
We need to use this tool for all that it is worth. When the tool stops being useful, we need to kick it to the curb, and move on.
Let's all be part of the solution, and not continue to be part of the problem.....
We all need to: Promote our individual shops each & every day.
Do the best possible work that we can on every order.
Work every day to convince the consumer that we are
the best solution.
Advertise!!
Offer The Best product and the MOST Reasonable price.
Remember that our "target" is the web-serfing under 30
year old, who shops on the basis of price, then
service, then quality.
Just my 2 cents......
Regards,
Cheryl
ps. my apologies for such a long post -- long day & long winded
The larger the florist, the greater the ability to:
buy more containers, buy more advertising, buy more flowers at usually cheaper prices because of volume discounting, be open more hours, supply greater number of arrangements, etc, etc.
Orders tend to be generated from larger florists because they spend the $$ from the beginning to attract the business from the beginning.
Orders tend to come into the larger florists (both wire ins and local) because of the very same reasons -- they spend the $$ from the beginning to attract the business. Reputation about size & work in the industry begats more business.
Years ago, everyone had to have Also served by listings, display ads in the directories, Parade and Coupon & TV guide ads to the consumers and so on. You were nothing if you did not do these, both for local and out of town people.
Today, most of the Larger florist do not have Directory ads -- but they have re-directed these same advertising $$ to the Web or other direct mail campaigns. -- with search engine optmization, emails to consumers, and staying on the wire service send & receive lists. Their re-distribution of their advertising $$ still keeps them at the high & large "critical mass" level.
(Sort of like a large snowball rolling down a long hill -- picking up speed and mass as it rolls along, and changing direction as it hits a bump in the road).
History:
The 80/20 commission split goes back to at least the late 1950's or early 1960's. The rate, I believe, was set by the FTD folks, and then copied by all the other wire services. FTD, was at that time, the oldest, the biggest & best in the business. What FTD florists did was the gospel. And there were good reasons for it at the time. The 20% commission to the sending florist was seen as a fair pay for the work that it took the florist to assist the consumer with his choices, and probably bill him for the order ( & carry the credit), and also to deal with the consumer problems, if any arose.
FTD clearinghouse kept 7% for it's trouble -- most of which went directly back into Florist Consumer Advertising, and other related Membership services, such as education.
When the "tug of war" started between the wire services,
Some "wise Guy" came up with the Rebate idea -- and then all hell broke loose.....forever changing the way that we do business in the floral world.
People swung their orders between the wire services like a monkey on a grapevine -- just to play the $$ game because the money thrown about to attract those orders was so high!!
"Sending only" shops were first seen as necessary thing to serve the armed forces personnel. Then someone else asked....and the barn door opened to let anyone open up a "sending only" operation. And it will never be the same!!
Today, the enviroment has changed as it relates to orders, but the fee/commission structure has not....infact, it has gotten worse.
Additional fees that annoy us have repeatedly been added on because so genius thinks that we will NOT notice a 1.00/order charge as opposed to an increase in membership dues of, say 25%. It's become a shell game....take from my left hand and move it to my left sleeve, and then over to my right hand.....and back again.
Now, if you want to belong to a wire service, the fees have gotten very high...so high that most smaller florists cannot afford to belong. And most smaller florists never bother to evaluate whether or not they really should belong to one or more or any wire service. (This in spite of repeated postings of spread sheets, & help to figure out the math).
Reality for most smaller florists just is "HUH??" If they put up a month's rent, and buy a few $$ in stock and materials, they are a "florist". There are not national standards, not tests, no licenses you must have!!
Case in point -- today, we had a smaller florist call us directly for a plant delivery to a funeral home. Was appalled to find that our delivery charge is $7.95. (Hers was $2.00). More importantly, We would not do a 10" peace lily for $30.00, including delivery!! This was what she sold & promised to her customer -- and was adamant about not calling her customer back and asking for more money. We couldn't help her, and I don't know of anyone who could around here.
So, today, we had another consumer who will not be happy because his order did not get filled.
My point is that if this smaller florist is so not knowledgeable about pricing in larger cities today, and even what delivery charges are, should she even be in business, and is she actually doing more harm than good?
Will he/she ever approach reaching that "critical mass" point????
We can all Whine and moan and complain until the cows come home, but until or unless someone had a better plan or another, better idea or way for us to do business, then the wire services, as we know them today, are what we have to work with.....this is our TOOL.
We need to use this tool for all that it is worth. When the tool stops being useful, we need to kick it to the curb, and move on.
Let's all be part of the solution, and not continue to be part of the problem.....
We all need to: Promote our individual shops each & every day.
Do the best possible work that we can on every order.
Work every day to convince the consumer that we are
the best solution.
Advertise!!
Offer The Best product and the MOST Reasonable price.
Remember that our "target" is the web-serfing under 30
year old, who shops on the basis of price, then
service, then quality.
Just my 2 cents......
Regards,
Cheryl
ps. my apologies for such a long post -- long day & long winded
Mikey the Flower Guy
It's a GREAT DAY to live, and love!
- Nov 10, 2002
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Did you forget to include the 7%?
If incoming equals outgoing you're still out the 7% plus membership fees. :handball:
Unless you make that up in Service Charges or consider it partially balanced by rebates.
Wait never mind - the rebate is usually more than the 7% so I think my math was flawed.
I still want to send more than I fell tho, thank you.
Changing commissions and eliminating rebates, stranger stuff has happened, but it's still a pipe dream...
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