COSTCO and Wire Services

[kt4ye]

No, this is NOT a posting about how Costco has joined forces with TFTD800.


Instead, it's kind of a think piece about one way to run a successful member-oriented mega-business.


If we look at the performance of big time retailers like WalMart, Target, etc., we learn that their profitability is tied directly to the sale of products. Even if they are well run, and don't make too many mistakes, they can still have problems in a tight economy because they may have to lower their prices to near-break-even (or below) in order to move their products.


And riding a “roller coaster” whose path is dictated by situations outside the retailers control is a ride that is generally not conducive to corporate stability.


So what's new? That's what everybody in retail has to do. Right?


Not Costco.


In contrast with their retail competitors, Costco habitually prices their products just a hair above break even.


They make almost all of their profits by selling MEMBERSHIPS! And, unlike the profits that come from SALES that will roller coaster up and down with the seasons and the economy, membership revenues are mostly non-cyclical.


Costco's business model – and their actions – are dedicated to making their members deliriously happy! And happy members re-apply year after year with little effort on behalf of management. And THAT means that management can concentrate much more of their efforts at running a smoothly functioning business, rather than spending large amounts of time, money and effort in constantly recruiting new members as old ones go away.


What about Costco's suppliers? Well, they have the responsibility of supplying products that work reliably, perform as advertised and are properly supported in the event the member needs support. Oh. Yes. The suppliers get paid a fair price for the products they supply.


And Costco passes on those fair prices with just a tiny markup.


Does anybody see a similarity between Costco's model and what COULD be the model for a successful wire service?


What if a Wire Service had members that were wildly enthusiastic? How many sales reps would the WS need? How much time and effort would they NOT be wasting on member recruitment and retention? How much MORE might they be able to charge members if the members felt they were getting their money's worth?


Why would the members be wildly enthusiastic and willing to pay HIGHER MEMBERSHIP FEES? They would be enthusiastic IF they receive products (that is, ORDERS) that are properly priced, easy to make using readily available flowers and easy to deliver. That means that adequate money is made available for both the product AND the delivery. That means that appropriate price adjustments would be made to deal with dramatic seasonal variations in flower cost. That means that orders would not be sent to members that are not coded for them. That means that when products contain items that are only seasonally available, they will be REMOVED from the website when the season is over. And that means that photographs seen by the customers will not MISREPRESENT the size, content or “look.” of the product. Finally, it means that products must be properly designed so that they will be deliverable without damage.


I'm sure that there are other actions that a World Class wire service could do. But these would accomplish most of what is needed.


I wonder... Who will that World Class Wire Service be?

Bill

 

[BOSS]

My short answer would be that Teleflora has the best chance of "becoming" the be all end all World Class Wire Service...

Whether they can, only depends on them.

 

[NicoleAtTF]

Bill-
I think this is a really interesting way to look at the wire service model. I'm going to share this around. I can tell you now there will be some push back on the following points, so if we can clarify these points, we'll make a stronger impact:

1) "They would be enthusiastic IF they receive products (that is, ORDERS) that are properly priced, easy to make using readily available flowers and easy to deliver." - The argument here will be that with as many members as we have and their geographic variations, we price as fairly as we can in our current model - doing surveys of wholesale prices nationwide and coming to an average price for each stem we use in the designs that are created. Similar argument will be made about delivery pricing, as the current delivery prices are an average of delivery costs for shops nationwide based on a shop survey.

2) "That means that orders would not be sent to members that are not coded for them." I believe on this one, I'll be assured "we already do this." So how can this be stated in a way that clarifies your issue on this?

3) Your two points about seasonality, "That means that appropriate price adjustments would be made to deal with dramatic seasonal variations in flower cost. That means that when products contain items that are only seasonally available, they will be REMOVED from the website when the season is over." I think these will cause some serious thought but will also present challenges because of the differences in seasonality among our varied members. Someone in San Diego can surely get something in season at different times of year than someone in Maine. How can we more effectively address this, in your mind?

4) "And that means that photographs seen by the customers will not MISREPRESENT the size, content or “look.” of the product." What measures do you recommend on this? Should there be a yardstick next to every bouquet photo? Based on customer sales principles, I can pretty firmly say that they won't stop Photoshopping flowers, considering anytime you capture a bouquet on camera it's not an exact representation of the in-person look, anyway, and the fact that to compete in the market place and still bring in order, Teleflora's photography will have to match the quality of competitors photography... I'd love to come up with ideas on how we can be more 'realistic' however!

5) "Finally, it means that products must be properly designed so that they will be deliverable without damage." I'm guessing your referring to products like the Mother's Day vase with the butterfly? We do pretty significant testing on the 'deliverability' of a product, though sometimes things get such high consumer scores that we go with a product that's harder to deliver without damage. I think they'd be willing to take this point to heart, however.

This is a great discussion and I hope we can work out ways to better explain some of the changes you'd like to see to support a model like this! If we produce very polished arguments, we'll definitely cause some serious thought around here (though I can never promise action, of course). Thanks, Bill!!

 

[spentflowers]

No, this is NOT a posting about how Costco has joined forces with TFTD800.


Instead, it's kind of a think piece about one way to run a successful member-oriented mega-business.


If we look at the performance of big time retailers like WalMart, Target, etc., we learn that their profitability is tied directly to the sale of products. Even if they are well run, and don't make too many mistakes, they can still have problems in a tight economy because they may have to lower their prices to near-break-even (or below) in order to move their products.


And riding a “roller coaster” whose path is dictated by situations outside the retailers control is a ride that is generally not conducive to corporate stability.


So what's new? That's what everybody in retail has to do. Right?


Not Costco.


In contrast with their retail competitors, Costco habitually prices their products just a hair above break even.


They make almost all of their profits by selling MEMBERSHIPS! And, unlike the profits that come from SALES that will roller coaster up and down with the seasons and the economy, membership revenues are mostly non-cyclical.


Costco's business model – and their actions – are dedicated to making their members deliriously happy! And happy members re-apply year after year with little effort on behalf of management. And THAT means that management can concentrate much more of their efforts at running a smoothly functioning business, rather than spending large amounts of time, money and effort in constantly recruiting new members as old ones go away.


What about Costco's suppliers? Well, they have the responsibility of supplying products that work reliably, perform as advertised and are properly supported in the event the member needs support. Oh. Yes. The suppliers get paid a fair price for the products they supply.


And Costco passes on those fair prices with just a tiny markup.


Does anybody see a similarity between Costco's model and what COULD be the model for a successful wire service?


What if a Wire Service had members that were wildly enthusiastic? How many sales reps would the WS need? How much time and effort would they NOT be wasting on member recruitment and retention? How much MORE might they be able to charge members if the members felt they were getting their money's worth?


Why would the members be wildly enthusiastic and willing to pay HIGHER MEMBERSHIP FEES? They would be enthusiastic IF they receive products (that is, ORDERS) that are properly priced, easy to make using readily available flowers and easy to deliver. That means that adequate money is made available for both the product AND the delivery. That means that appropriate price adjustments would be made to deal with dramatic seasonal variations in flower cost. That means that orders would not be sent to members that are not coded for them. That means that when products contain items that are only seasonally available, they will be REMOVED from the website when the season is over. And that means that photographs seen by the customers will not MISREPRESENT the size, content or “look.” of the product. Finally, it means that products must be properly designed so that they will be deliverable without damage.


I'm sure that there are other actions that a World Class wire service could do. But these would accomplish most of what is needed.


I wonder... Who will that World Class Wire Service be?

Bill

Bill,

While you make some interesting points here let me help you with a couple of facts. In my prior career I sold to Costco/SAM's Club and yes, the old Price Club with several food products. Your claim the vendor sells their product at a fair price isn't necessarily a comfortable price. AND the vendor must pay for all of the food demoes you freely sample at a very high price. Each demo costs on the average of $150 per demo per store. When you introduce a product into the mix they insist on 3-4 demoes per store per month. AND !!! They charge the vendor the RETAIL PRICE for their product, disallowing them to send in samples. They also have to pay for all paper products used to demo their samples and can't send those sampling items into the warehouse. The Big box warehouses also own their own demo company which in of itself is a profit maker. Now multiply this by several stores times $150 each at 3-4 times per month and it's quite a hefty price to market their product to the customer base.

Also, SAM's Club and Costco charge the vendor a 2% spoilage fee and if you'd like to get paid in a reasonable amount of time ( 30 days) you will deduct a 2% off of your bill. And no, it's not easy to re-build that 4% back into your price. The buyers already know what your product costs in the open marketplace.

So why do vendors pay this hefty price ? It's not necessarily for high profits as it is to move product through their warehouse and help lower manufacturing costs. Profit margins are very low and often times if the manufacturer wasn't super careful when their first bid this item they stand to lose substantial dollars.

 

[kt4ye]

Bill,

While you make some interesting points here let me help you with a couple of facts. In my prior career I sold to Costco/SAM's Club and yes, the old Price Club with several food products. Your claim the vendor sells their product at a fair price isn't necessarily a comfortable price. AND the vendor must pay for all of the food demoes you freely sample at a very high price. Each demo costs on the average of $150 per demo per store. When you introduce a product into the mix they insist on 3-4 demoes per store per month. AND !!! They charge the vendor the RETAIL PRICE for their product, disallowing them to send in samples. They also have to pay for all paper products used to demo their samples and can't send those sampling items into the warehouse. The Big box warehouses also own their own demo company which in of itself is a profit maker. Now multiply this by several stores times $150 each at 3-4 times per month and it's quite a hefty price to market their product to the customer base.

Also, SAM's Club and Costco charge the vendor a 2% spoilage fee and if you'd like to get paid in a reasonable amount of time ( 30 days) you will deduct a 2% off of your bill. And no, it's not easy to re-build that 4% back into your price. The buyers already know what your product costs in the open marketplace.

So why do vendors pay this hefty price ? It's not necessarily for high profits as it is to move product through their warehouse and help lower manufacturing costs. Profit margins are very low and often times if the manufacturer wasn't super careful when their first bid this item they stand to lose substantial dollars.

Thanks for your thoughtful comments. I agree with all you say.

The vendors have a choice. Sell through Costco or not. If they want the incremental business, they must deal with the details.

My point had to do with what is good for Costco and the members; not necessarily with what makes the suppliers "happy."

The analogy in WS parlance would be to coddle the OGs at the expense of satisfying the REAL FLORIST members AND sacrificing the reputation of the WS.

 

[BloomingFlorida]

My short answer would be that Teleflora has the best chance of "becoming" the be all end all World Class Wire Service...

Whether they can, only depends on them.

But are those ridiculous keepsake containers a way to lead an industry? I hate those over-priced, undersold, useless things. Colanders? Baseballs? Yuk!uke:

 

[kt4ye]

Thanks, Nicole, for the reply. I'll <snip> a bit and intersperse comments.

<snip>if we can clarify these points, we'll make a stronger impact:

1) "They would be enthusiastic IF they receive products (that is, ORDERS) that are properly priced, easy to make using readily available flowers and easy to deliver." - The argument here will be that with as many members as we have and their geographic variations, we price as fairly as we can in our current model - doing surveys of wholesale prices nationwide and coming to an average price for each stem we use in the designs that are created. Similar argument will be made about delivery pricing, as the current delivery prices are an average of delivery costs for shops nationwide based on a shop survey.

There are two issues here. The first is "average" vs "mean." If you take the total number of shops, add up the delivery fees and divide by the number of shops, you get an average delivery charge. If each shop serves roughly the same population base (this implies roughly the same amount of business) then this is a good way of establishing a delivery charge.

But I suggest that most of TF's business comes from municipal areas where delivery charges are MUCH higher. So an appropriate method for establishing a delivery charge would be to weight the delivery charges in proportion to the amount of business in the area to establish a "mean" delivery charge to deliver most of the orders. Yes I know... that's a lot of WORK! Doing something right often is!

The second point: You may recall I put together a FC poll of what COURIERS charge to deliver (for profit) flowers. The most common answer was about $10 to $12. Please recall that TF's $7 delivery charge nets out at $5 and change. If a COURIER needs $10 to profitably deliver a bouquet, what makes TF think that a florist can do it profitably at HALF that price?

2) "That means that orders would not be sent to members that are not coded for them." I believe on this one, I'll be assured "we already do this." So how can this be stated in a way that clarifies your issue on this?

Three examples. a) Our shop is not coded for fruit nor for gourmet. But once every week or two we get an order for one or the other.
b) We WERE coded for most of the MDAY specials and sold them out. We are still getting orders for them because TF still has them on their site. At the very least, TF should call first! c) "Not coded for" also means MINIMUM order value. It's a PITA to get orders for TF's "el cheapo" $29.95 orders when our coded Minimum is $30 PLUS our coded delivery charge.

3) Your two points about seasonality, "That means that appropriate price adjustments would be made to deal with dramatic seasonal variations in flower cost.

At major holidays -- like Valentine's -- the wholesale cost of ALL items, including carnations, daisies, greenery, etc. "spikes" upward. But EVERY Valentine's we will get several TF orders for "standard" products at "standard" prices. ALSO, at major holidays, we -- like many other shops -- hire contract drivers to deliver. My out-of-pocket cost per delivery is $10. TF gives me $5.

That means that when products contain items that are only seasonally available, they will be REMOVED from the website when the season is over."

See my comment about Mother's Day items still on the TF website.

<snip> Someone in San Diego can surely get something in season at different times of year than someone in Maine. How can we more effectively address this, in your mind?

This was probably true 20 or 30 years ago when many florists had their own greenhouses or purchased from a local grower. Those days are gone. Today's products mostly come from overseas and seasonality is determined more by tradition than necessity. Today, if something IS available in San Diego, it is also available next-day in Penobscot.

It's the inverse that causes problems. An example: A TF customer chooses an arrangement with traditionally FALL flowers and wants it delivered in MAY. For all practical purposes, Bronze Mums and Rust Daisies are unavailable anywhere! And THAT means TF has both an unhappy member and an unhappy customer.

4) "And that means that photographs seen by the customers will not MISREPRESENT the size, content or “look.” of the product." What measures do you recommend on this? Should there be a yardstick next to every bouquet photo?

We are forevermore getting comments about TF items being "too small" when we deliver them. The Bear Hug is a great example.

Back when smoking was part of American culture, ad folks often incorporated a pack of cigarettes in product photos to provide a sense of scale. That's a NO NO now. (Thank goodness) But what about a cellphone? Or other modern "props" like a laptop, GPS, calculator, wristwatch, coin pusrse, set of keys etc.

Based on customer sales principles, I can pretty firmly say that they won't stop Photoshopping flowers, <snip> Teleflora's photography will have to match the quality of competitors photography... I'd love to come up with ideas on how we can be more 'realistic' however!

I'm not suggesting that TF skimp on photography nor eliminate Photoshopping. THAT is not the problem.

TF's photography actually MISREPRESENTS many of its products. I'm going to give a specific example here, so please obtain a copy of Teleflora's 2008-2009 web bouquet catalog, go to page 3 and look at "birthday fireworks - deluxe." Please note that it contains a balloon and this helps the customer determine -- roughly -- how big the arrangement is. THIS IS GOOD. The product is described as an "all around arrangement." Below the photo is the "recipe."


The recipe is the basis for the cost -- and ultimately the price -- of the product. TF's member florist is expected to adhere to this recipe. Please look at the picture while I point out the placement of some of the most recognizable flowers:

• 1 stem (two blooms) asiatic lilies. One at lower right; one upper left.
• 1 stem (1 bloom) red carnation. Bottom center
• 1 stem (typically 4 - 5 blooms) white daisy center and left of center
• 1 stem (TYPICALLY 4 -6 BLOOMS) Red minature carnations center and right
• 2 stems (2 blooms) yellow rose One at center; other at center upper right

There are others, but this will suffice.

Here is the problem: The customer is told by TF that this is a all-around arrangement. But how can that be, if ALL of the flowers in the recipe are visible on one side?

If the member florist makes the product per the recipe, but makes it single-sided, it will look like the picture, but the customer WILL complain because they ordered an all-around arrangement to sit in the center of the birthday table.

If the member florist makes an all-around arrangement using the recipe, the customer WILL complain because it will look skimpy in comparison with the picture.

Many florists -- taking PRIDE IN THEIR WORK AND IN THEIR REPUTATION -- will ADD FLOWERS so that the product looks like the picture. They will lose money when they do this.

Does this help explain why many florists complain that TF underprices their arrangements?

Nicole, browse through these workbooks. You will find that every all-around arrangement is done in the same fashion.

And that's just plain dishonest.

5) "Finally, it means that products must be properly designed so that they will be deliverable without damage." I'm guessing your referring to products like the Mother's Day vase with the butterfly?

Yep. that and many others. But this post is growing too long!

We do pretty significant testing on the 'deliverability' of a product, though sometimes things get such high consumer scores that we go with a product that's harder to deliver without damage. I think they'd be willing to take this point to heart, however.

This is a great discussion and I hope we can work out ways to better explain some of the changes you'd like to see to support a model like this! If we produce very polished arguments, we'll definitely cause some serious thought around here (though I can never promise action, of course). Thanks, Bill!!

Thanks again, Nicole for taking the time to think about these issues and to reply. :thumbsupI agree with Mark that TF has the best "shot" at becoming THE World Class wire service. But it won't get there by being "just like" FTD and 1-800.

All the best,

Bill

 

[concord]

Bill, You are the most patient man in the world to explain these problems point by point and I agree completely with everything you have stated. I am not as patient as you, thus my recent letter of resignation to TF. If they ever take all your suggestions to heart I would sign up again ! Thanks for being such a great spokesperson for our industry.

 

[Mikey the Flower Guy]

Bill, I think you are "forgetting" that florists, do what florists DO, and most of the time, "on-demand"....the products that we carry are perishable, the talent to USE that product correctly is unequalled, and the "suppliers" have NO INTEREST in PAYING YOU, to showcase THEIR products, PLUS, you're dealing with a "visual" public, that wnats AND needs to see everything, under one roof.
The Costco "invention" discovered that, ONCE floor space reaches a certain proportion, the costs per square foot declines steadily, whereby each sales associate can handle x amount of square feet, thus the new mega stores, some in excess of 200,000 sq.feet, and the "construction overheads" are formulated from the expected usage by customers, per square foot, PER HOUR.
Costco made it "very special" during their Price Club era, to "allow" you to be a club member, and consumers, as usual, did the same stupid dance, all over again.
People, right now, are bitterly complaining, about waiting in lines to get a flu shot, they're pointing fingers, they're angry, and DON'T want to take it any more, YET, have NO problems waiting in line for stupid concert tickets, sometimes 2 and 3 days, OUTSIDE, or waiting in lineups at Costco's and their ilk.
Can WE "expect" similar "philosophies" in OUR business??....NOT a chance, the wire services are in bed with OG's, and couldn't really care less about THEIR members, and unfortunately, I find NO REASON, to get excited over ANYTHING that a wire service could POSSIBLY do FOR ME...anymore

 

[Chezbloom]

I finally joined Costco yesterday. One of the first things I saw was a pallet of 1800flowrs gift cards 2 for something like $75 for a $100 deal. I slapped my forhead and feel over on my face.

 

[conchandler]

Wow, Bill, that was great, just reading this. Kudos on getting those points across on delivery fees, misrepresented photos and getting HQ orders for which you are not coded. It frustrates the H out of me that as florists we each respect each others' minimums and delivery fees, but the very service that set this all up does NOT. Now, if we can only get a tiered membership fee based on the number of orders we receive, that would be great.

 

[kt4ye]

<snip>Now, if we can only get a tiered membership fee based on the number of orders we receive, that would be great.

Thank you for the kudos. A few more and I get a free t shirt,:cat:

Hmmm... interesting idea. :idear: Costco covers that kinda thing with different levels o membership. The premium memberships cost more, but they have cashbacks based on purchases.

Perhaps a basic low monthly cost WS membership might have a different discount schedule from a more expensive premium membership? The member could pick its level based on how many orders it expects to send and receive. Once a year you could either upgrade or downsize.

Good thinking.

Bill

 

[BOSS]

Should be, "Send one, Get one" on orders... that would even things out. Maybe we can negotiate for that.

The theory of having more members covering a zip than necessary is causing part of the imbalance in the system, making it non-essential to most.

 

[spentflowers]

BloomNet offers the tiered membership fee based upon how many incoming orders you received. However, once suckered into their W/S web they hit you with incremental fees which, when added up, makes then almost as expensive as Teleflora and FTD. Sort of a lost leader scheme. Sad part is, a high percentage of those incoming orders are often lower then your in-store minimum and don't come with delivery monies. So the tiered pricing looks great but ya gotta read the "mice print" to know all of the facts.

 

[kt4ye]

Spentflowers...

Yep. Unless the tiered concept is administered fairly, the end result will be the same: UNHAPPY MEMBERS.

And that's what this is all about. What would a WS have to do in order to have wildly enthusiastic members?

 

[BOSS]

What would a WS have to do in order to have wildly enthusiastic members?

Eliminate Order Gathering, cease being the middleman, provide high quality, high margin containers, credit card services that are cost effective...

I'm just say'n!

 

[kt4ye]

Eliminate Order Gathering, cease being the middleman, provide high quality, high margin containers, credit card services that are cost effective...

I'm just say'n!

For the first time, I find myself in some disagreement with you.

Let's suppose, for the sake of argument, that every order you received from an OG was error-free and at full value with no discounts whatsoever. Other than an injured pride because the customer did not contact you directly, would you STILL want to Eliminate Order Gathering?

I would not. That's because the OG would be providing me an order at a MUCH LOWER COST than if I were to go out and get it myself.

Of course, the scenario above is not realistic. Instead, OGs WILL take a "cut" from every order they send me. So will TF. So how much is "reasonable?"

For me, a reasonable discount would about the same as it would cost me in marketing dollars to get that same order. That price might be 5%. It might even be 20% I don't think it would be 27% which is the minimum that I am paying today via TF.

But the difference is that I only PAY that 27% when I get an order. With my own marketing, I have to pay that 27% up front and then hope like H that I get an order.

I kinda like the TF containers, because they come with a buit-in marketing campaign. Besides, after the holiday, I get'em for a reduced price. Just bought 2 cases of the Diamond's and Roses for about $4 each. I sell 'em for $22.99.

Maybe I could get a little better CC rate from a 3d party. But every time someone comes by and I tell them that 95% of my CC are internet punch-in, the sales person tends to turn slightly green and starts coughing a lot.

Mark, does this mean that you won't respect me in the morning? :wallhead:

All the best,

Bill

 

[BOSS]

For the first time, I find myself in some disagreement with you.


Mark, does this mean that you won't respect me in the morning? :wallhead:

All the best,

Bill

Not at all Bill, it get's easier as time goes by...

Yes, in a perfect world, with proper discounting I too could argue (and likely would) that gatherers are not that bad. Say if their orders came in at a modest 10% {product} discount, included a real delivery charge of no less than $8.95 (not discounted) and 50% of the "Service Tax", then I too might actually argue on their behalf. But that's not going to happen.

What IS happening, and IS going to continue to happen is more and more consumers are going to eventually go direct C2Florist. We'll see and even greater change in this direction with the next generation, those "kids" in their late teens to mid-20's today. They want service, and are willing to pay for it, they want quality and they know how to use the web to it's fullest.

Talking with FTD and Teleflora recently confirmed for me, that they too are seeing the same declines in order volume we are. Talking to a couple OG's reveals the same thing. Yes florists too are seeing declines, but at holidays, the declines I'm seeing in incoming wires are more than offset by direct sales from NEW customers.

It's the filler fools who are perpetuating the current system, prolonging the demise of order gathering and allowing the practice to continue. The wires too are at fault, but that's another story. If there was no place for a gathered order to go, they would not be gathered and the consumer would find their way directly to a local florist.<period

I love ya Bill! And always will... I'm actually surprised this is the first time you've not seen eye to eye with me... most folks think I'm a radical and have disagreed with me hundreds of times...better be careful or you'll get lumped into the radical florist camp.

 

[Dazeal]

No established WS will work on such margins because their monthly overhead won't allow for it. TFTD1800 are built on a real estate model and have high monthly payments. They have built them self up to this. The only way you could do this and offer the service at a good price is start a new one based on the net. But GL getting a network. GL getting florists to agree to that.

My only analogy that comes to mind is Blockbuster and Netflix. I bet Blockbuster would love to have the monthly payments Netflix has. Blockbuster is built on a real estate model. I wonder if Blockbuster said OH @@@@ or these guys are nothing, when Netflix came out a few years back. I know what blockbuster is saying now Oh @@@@! How does Blockbuster change their business model without competing directly against it by adopting Netflix's model? FTD and 1800 are pretty smart because they have been able to come up with new types of revenue. TF is screwed with consumers figure out.. wait.. this is a middleman and I am not getting my full 100%. This is a rip off, I'll just call direct is what they are learngg every day. I'd love to see how TF plans to battle this.

- All these old school models are going to get destroyed by a new generation of thinking and online models, I just hope that someone from our industry comes up with something before the over lords (TFTD1800PF) do.

 

[Doug Munro]

If only it were that simple

Quite frankly this thread is a very simple overview of what is in reality a unique very complicated business.

Just some small examples of what makes the floral industry a tougher animal to tame

- The fulfillers have no set level of skill, they run the gambit from disastrous to great.

- There are no standards nationwide for inventory stocked within a shop or pricing of products.

- The wire services deal with a wide range of owners with business skill that range from non existent to incredible.

- A wire services worth is most often judged by a member shop by how many orders they receive, so the wire service is in fact forced into a situation where they must constantly "generate" orders or risk losing members. This in turn results in a wire service mentality of "orders at any cost. Unfortunately this very process alienates the wire service customer who generally feels that the wire service is underselling orders or stealing orders that they should rightfully have generated themselves.

- Many retail flower shops have an unrealistic attitude of what they should expect from a wire service. The fact is wire services are not here to "save" anyone's business but rather as one more business opportunity amongst many for a retailer.

The bottom line in our industry is that a good chunk of it is still living in the past, in years gone by before cheap long distance, the internet, Proflowers, etc. Those days are gone and never coming back.

As for the Costco model, its a great one. But I will ask this question

Costco sells 2 dozen 50cm roses for $17.99 (In Canada) virtually year round

How many of you are ready to climb aboard with that concept?