codified TF hardgoods

[strippinrose]

No, it's not paid for. I fell for the "you'll be prefered in your city because blah, blah, blah. I'm not a dumb person. I thought about it for a long time and jumped on board when there were alot of freebies. It's just been the last 2 Holidays that have really s#**ed. People just aren't spending money. We'll see what happens with Mother's Day. Easter is never a good wire Holiday. Marginal to say the least. I know for sure that I won't codify for anything anymore, cause it sure couldn't get any worse. Thanks for the advise.

I beg to differ...it sure can get worse and I'm sure it will

 

[yellowroses]

Well, that's a great way to start a Monday. I'm really trying to stay positive here!!! We all know that the economy is bad. I think the strong and smart will survive. Let's all try to be greatful for what we have. Work a little harder to be kind. he responses that I have received from most of you have been so helpful. I've spent more time on Flower Chat this passed week than ever before. It has been a wonderful experience and education. I'm keeping my chin up. The comment made in my original post was regarding codified products, not business in general. I thank all of you who have been such a great support and plan to be checking out FC everyday. Thanks

 

[schornstein]

You can return containers but they charge you a restocking fee and only give you a percentage of your original price - try selling to other shops or exchanging containers, i too am a small shop but i buy the containers with another shop and split, see if you can find someone that will work with you.

 

[goldfish]

My shop is very small. I can't handle 12 of ea. condified product. Valentines Day was less than expected and now I'm stuck with vases. Has anyone ever sent vases back to TF? If so, how were you recieved when you asked for a return? The same thing happened at Christmas. I'm about ready to throw the towel in on wire services. My town is small. I'm the 2nd largest florist here. I am the only one who has the TF POS and TF also processes my credit cards. I recieved several eflorist orders for VDay. I had no wire outs and one wire in. Don't know what to do. Any suggestions?

yellowroses,

If your town is small and the number of wire-out is small, there is little room for error in dealing with wire services.

Instead of relying on your hunch, you may have to do some serious number crunching.

As a general rule of thumb, you would be making ~30 cents (+/- 5 cents) of gross profit for every dollar of incoming orders, BEFORE paying their monthly fee. In other words, contribution margin of incoming orders is ~30% (as opposed to ~60% for local orders).

This calculation assumes that you have excess production capacity, so that you don't need to hire any extra labor to fill incoming orders.

If you are receiving ~30 wire-ins a month and paying $300 monthly fees, here's the break-down.

For a $50 wire-in:
1) your gross profit per order: $50 x 30% = $15
2) monthly fee per order: -$300 / 30 = -$10
From 1) and 2): your net income per order = $15-$10 = $5 or 10% of the order $.

Now for busy holidays like VD and Xmas, the formula needs to be modified.

First, your gross profit will decline slightly, because you can no longer ignore labor expense if you hire temp workers for VD/Xmas. A ball park figure would be 20-25%, depending on how efficient your temp workers might be. In my limited experience, temp workers are very inefficient. In that case, you use the figure 20%.

4) So for a $50 wire-in during VD/Xmas, your gross profit would be ~$10 (20% of $50).

5) On the other hand, monthly fee per order will decrease. Let's say you get twice as many wire-ins in Feb/Dec. Then your fee per order would decrease to: -$300 / 60 = -$5

From 4) and 5) Your net would be $10-$5 = $5, same as during non-holidays.

I'm sure your situation is different, but the logic is the same. You need to calculate the net dollar amount from each incoming order. In this example, I showed that the net is $5, or 10%, assuming the average order is $50.

So because your potential net is $5, if the cost of WS container is $5, you make zero dollar in the end. It's that simple.

Same thing if the container costs you $2.50 and you sell only half of them. Actual cost is $5 in this case, so you make absolutely no profit (after working long hours).

As many said before, if your shop is small, there really is no economic reason to buy WS containers.