Direct Sending Discount Controversy

[Buzz]

I just want to clarify a minor point.

The WS is the clearing house..They take no owneship of orders. The receiving florist is carrying the sending florist.

Yes, that is a good point Joe. The filling florist is carrying the sending florist, not the wire service. I guess my point is.. is that a lot of florists don't realize that when they are filling wire-in's, that they are the one financing the whole transaction and paying the wire service to do so. When the filling florist actually takes the time to crunch the #'s and figure the cost of belonging to the wire service, COGS, labor, etc. only then will the shop understand the true cost of the wire service. To make a long story short. The filling florist has to order flowers ahead of time, (with his own money), pay the wire service to receive discounted orders, pay the designers, drivers, electrical, etc.(all the overhead), and get the deliveries out, and then receive payment a month later.

 

[NPFloral]

On our direct orders, we take a "Service Fee" or "Wire Fee". That's our take. Iwould never ask another florist for a discount on top of it! If the customer wants a $100 arrangement, (plus delivery) they get a $100 arrangement and I get my service charge. Cost to me? Other than a 5 minute phone call, nada.
Works for me.

Tim - North Port Floral

 

[Gilliland]

Here's my take on this.

If the calling florist is in a wire service and they will FAX me a tax exempt form, I will give them a 20% discount with a credit card. No direct billing, a lot of Basement Betty's don,t pay their bills.

If the calling florist does not have a wire service and they FAX me a tax exempt form I give them a 15% discount with a credit card. If they don't want to have the hassel of a wire service as I do, less discount.

If the calling florist does not want to send a tax exempt form, no discount and they pay taxes just like anyone else does.

The FAXing of the tax form ensures me they are a legimate flower business and covers me with the state sales tax people.

Recieving these type orders are good because I make more (80%-85%) for filling them rather than the wire service orders (73%), but I do keep reins on them. One must remember that those credit cards have a processing fee of around 2-3%, that bring down the total collected for the order.

@@@@ Order Gathers don't get the time of day!!!!!!!!!!!!!!

 

[Connie]

We don't like to take discounted orders from other florists, and we never ask for discounts. It's called SKIMMING! Charging the customer $100 but telling the other florist "Oh just make it for $80" is just plain wrong. It's stealing from the customer and you can try and justify it any way you want.

Now, you say, what about the WS? Ok, frankly, what they are doing is also wrong, but they have an agreement with florists to make the exact arrangement for 73% of the money. THEORETICALLY, they are not stealing from the customer but from the filling florist.

The whole 20/80 rebate system needs to go away and be replaced by charging a wireservice fee that the customer can see. This would solve a ton of problems in this industry, including getting rid of some undesirables.

That's what we do. We charge a transmission/relay/service (call it what you will) fee. And I repeat: if a florist sends me a $100 order, he gets a $100 order. We ask the sending florist, "Does the $100 include delivery, or may we add $7 for that delivery." If he says the delivery is included, the recipient gets a $93 arrangement because we take $7 for delivery. It is still a $100 order fulfilled. We do NOT subtract any percentage from the order, but do give a 20% amount to the sending florist if we are asked for it. Because we've given a discount to a florist does not mean that we have discounted the order. The same is true for a local church who always orders a peace lily for a funeral. They get a 20% discount on their statement, but they receive an 8" peace lily the same as if they had paid the full amount.

 

[carol]

Funny how it is the WS Free shops that seem to come down on the side of wanting the 20% commission.. and are pretty adament about it.

:itchy:

 

[Jerry]

Not me

Funny how it is the WS Free shops that seem to come down on the side of wanting the 20% commission.. and are pretty adament about it.

:itchy:

100% in 100% out, with a service fee to the customer. I LOP nothing off.

What a novel idea.

 

[Chezbloom]

I am WS free and do not expect a discount. I also simply charge a relay fee and send the order at full value. I am making a list of florists who do the same so I can build my own database of friendly florists. I'm also thinking of creating a page on my website with a map of the U.S. listing "real" true florists with links to their sites for customers that wan't to send. I think it will help people bypass the OG's who pretend to be local. Its a little bitty step but its something.

 

[Carrington]

Direct sending Discount

You said a mouthful there!

Mark

It may be I've lost something in translation but I'm not sure if that is a criticism of me or a compliment. If it is a criticism and I have upset you by what I said please accept my apologies as I really wouldn't want to annoy anyone or fail in forum etiquette in any way.

One question I do have though is this.

The impact of the services and what they do/don't do etc etc is obviously VERY important in both our countries.

However has anyone got a figure for exactly how important they really are – other than as a clearing house - to the whole USA real florist market?

The reason I ask, is that over here the effect/dominance of the wire services is also seen as a major problem yet, when the magazine analysed the whole sector a few months ago, they actually weren't that important in dollar terms.

Based on sales figures for all the major wire services in the UK, and taking into account the number of florists in or out of WS, we actually calculate that they only generate/service/control at best 25% of ALL sales through REAL florists.

To me this means that REAL florists are actually far more important and successful than perhaps they give themselves credit for.

Therefore I wonder if they have taken on this level of importancesimply because for so long FTD Interflora, Teleflora, etc, by dint of the fact they 'connected' florists, have been the most vocal/active/visible players and therefore have become important by default.

If anyone has any thoughts I'd be fascinated to know,
Kind regards,

 

[12BucksFor2Dozon]

Mark

It may be I've lost something in translation but I'm not sure if that is a criticism of me or a compliment. If it is a criticism and I have upset you by what I said please accept my apologies as I really wouldn't want to annoy anyone or fail in forum etiquette in any way.

It was neither...to me, at least, it was the crux of this entire issue boiled down to a single nugget. I think people forget that many FCers here make a nice income and support 101% the whole WS model, and are loath to change anything related to their profitable income stream.

Within the florist industry, there really is (or should be) a battle between those who want to "stay the course", and those who realize that *any* WS affiliation, no matter how profitable today, can and will only lead to the eventual loss of ALL THE OOA BUSINESS in the future, as the WS brands slowly convert customers to a direct ship mentality.

One question I do have though is this.

The impact of the services and what they do/don't do etc etc is obviously VERY important in both our countries.

However has anyone got a figure for exactly how important they really are – other than as a clearing house - to the whole USA real florist market?

The reason I ask, is that over here the effect/dominance of the wire services is also seen as a major problem yet, when the magazine analysed the whole sector a few months ago, they actually weren't that important in dollar terms.

Based on sales figures for all the major wire services in the UK, and taking into account the number of florists in or out of WS, we actually calculate that they only generate/service/control at best 25% of ALL sales through REAL florists.

To me this means that REAL florists are actually far more important and successful than perhaps they give themselves credit for.
...[/COLOR]

Well, two ways to look at this...1. do you want someone to come in TODAY and take away 25% of your business? And if not, I guess that anything that can "generate/service/control" that much of your business IS something to take seriously.

2. Everyone here on FC has shown, just by reading and participating in the forum, that they are serious about growing and building their businesses...the term "success", however, is loaded...for some, its simply making enough money to pay utilities and payroll, with a little left over for "fun money". For others, however, its a new Hummer, money for kids education etc etc.

If you are someone who is just "playing" in the industry, or have been in it so long that you have a large customer base of OOA orderers that need servicing, the existing WS is a decent, stable way to feel "connected" or to make a nice buck every month. If you are someone who has come to this industry over the past 3-8 years, and are angered by the fact that the WSs allow dOGS and others to advertise in your backyard, skim the order from your local customer, and then ship it to you sans profit, well then you see the WSs as a adversary worth fighting against, no matter what percentage of your business it represents.

BTW, keep posting...it is refreshing to hear views from other parts of this world.

 

[TOTO]

Wanting versus EARNING?

Funny how it is the WS Free shops that seem to come down on the side of wanting the 20% commission.. and are pretty adamant about it.:itchy:

There's the difference Carol and SFOX had pointed this out months ago.

His point was simple! It was the SENDING FLORIST which created that sale to begin with. And, the sending florist was using their advertising money as well as their reputation to garner their customer into their shop.

And so, the sending florist EARNED their 20% commission which should be referred to as a NEW CUSTOMER'S ORDER ACQUISITION CHARGE. Since the FILLING FLORIST has no costs associated to the order's acquisition, they can well afford to discount that F2F sale by the usual 20%.

But, we seem to be talking APPLES and ORANGES again.

For the life of me, I still can't understand why it is BETTER to fill through a WS at net 71% (20% earned commission plus 7% clearing house fee plus 2% reverse the order transmission charges) but not OK to fill a F2F credit card order, thus netting 80% to the filling florist.

Then, and when you factor in the annual costs to you for the membership in that WS, (incoming order acquisition charges), the average for that is another (-10%) which brings those filling florists down to a true net to filler of 61%.

If one's COGS (cost of goods) averages 30% and one's COL (cost of labor) averages 25% and one's (COD) cost of delivery averages 10% and one's office administration costs average 2%, that incoming order's total cost to filler is 67%.

And so, if the filler is only netting 61% and the order is costing them 67%, they have a net loss of (-6%) every time they work through a WS.

Notice that, I have long since thrown out the old WS labor costs of 20% and moved it up to the 2007 reality of 25%. They'll keep ya believing that old amount since, it works better when they create their TOO LOW SRPs to enable THEM to COMPETE with YOU!

In addition, I should probably take a new look at the old 10% cost of delivery, since I had based that on the old average incoming order amount of $50.00 in GROSS WS WAMPUM years ago.

Facts are that, 10% of that $50 looks like $5 but is really $3.50 in real money or half of what it costs a florist to make a delivery in 2007. Probably should now be 20%, thus netting the $7.00 in REAL MONEY for the actual cost.

If that's the case, the filling florist is now at a (-11%) loss for every order they are filling.

Of course, the flip side is on the outbound side with that 20% earned sending commission along with that florist's $ervice charge along with the rebate they glean.

But, and as we all know, the vast majority of florists want to be FILLERS and they have all of the also-served-by directory and CD listings to prove it. OOPS! Let mee see/hear Andy? At $10 per pop per listing, that's another cost added to those incoming order acquisition charges, RIGHT?

Could it be then that, we even have some florists filling orders at fifty cents on the dollar, or at HALF PRICE, but just don't know it? YEAH!

And that's exactly what DA WSs count on! Let's all think of this anomaly as CREATIVE FINANCING 101 coupled with COST SHIFTING with a smack of FLORIST ACCOUNTING IGNORANCE.

But then again, they're all MOVING LOTS OF PRODUCT and KEEPING THEIR HELP BUSY and besides, their delivery truck was going passed there anyway, RIGHT?

And, in the end, their question is always: DANG! We're so busy all of the time. I just don't understand why WE'RE NOT MAKING ANY MONEY?

 

[MANORVILLE]

It was neither...to me, at least, it was the crux of this entire issue boiled down to a single nugget. I think people forget that many FCers here make a nice income and support 101% the whole WS model, and are loath to change anything related to their profitable income stream.

Within the florist industry, there really is (or should be) a battle between those who want to "stay the course", and those who realize that *any* WS affiliation, no matter how profitable today, can and will only lead to the eventual loss of ALL THE OOA BUSINESS in the future, as the WS brands slowly convert customers to a direct ship mentality.



Well, two ways to look at this...1. do you want someone to come in TODAY and take away 25% of your business? And if not, I guess that anything that can "generate/service/control" that much of your business IS something to take seriously.

2. Everyone here on FC has shown, just by reading and participating in the forum, that they are serious about growing and building their businesses...the term "success", however, is loaded...for some, its simply making enough money to pay utilities and payroll, with a little left over for "fun money". For others, however, its a new Hummer, money for kids education etc etc.

If you are someone who is just "playing" in the industry, or have been in it so long that you have a large customer base of OOA orderers that need servicing, the existing WS is a decent, stable way to feel "connected" or to make a nice buck every month. If you are someone who has come to this industry over the past 3-8 years, and are angered by the fact that the WSs allow dOGS and others to advertise in your backyard, skim the order from your local customer, and then ship it to you sans profit, well then you see the WSs as a adversary worth fighting against, no matter what percentage of your business it represents.

BTW, keep posting...it is refreshing to hear views from other parts of this world.

Extremely well said Mark !

BTW I managed to get the Hummer & the Viper GT
Matchbox Haven't figured out how to drive them yet though !

 

[12BucksFor2Dozon]

...
And, in the end, their question is always: DANG! We're so busy all of the time. I just don't understand why WE'RE NOT MAKING ANY MONEY?

Heck TOTO that was some great financial breakdown of the WS shell game...now maybe you can help me figure why my poor wife is working 60-70 hours/week with NO WS AFFILIATION whatsoever, and still NOT MAKING ANY MONEY! :hammer:

 

[Joe Mioux]

His point was simple! It was the SENDING FLORIST which created that sale to begin with. And, the sending florist was using their advertising money as well as their reputation to garner their customer into their shop.

And so, the sending florist EARNED their 20% commission which should be referred to as a NEW CUSTOMER'S ORDER ACQUISITION CHARGE. Since the FILLING FLORIST has no costs associated to the order's acquisition, they can well afford to discount that F2F sale by the usual 20%.

Here is where you have a flaw in your point.....

I doubt that any WS-free flower shop actively markets or advertise to their clients their outgoing order business.

It seems to be me, if you are WS-free, you would direct those advertising and marketing dollars to develop you local market.

Therefore, I disagree, that a 20 pct discount is appropriate for the outgoing sender to ask and receive from a filling florist. Remember, the fillinng florist is actually enhancing the outgoing florist's reputation in the eyes of the customer.

Joe

 

[Tom Carlson]

JUST MY OPINION. I don't have time to read all the postings, but the few I have scanned, it seems like everyone is making a good point from their particular perspective.

DO FLORISTS NEED A WIRE SERVICE ANYMORE? NO, if the WS is going to operate the way they operate today. YES if they go back to square one and look at it as a benefit to the flower consumer. The benefit comes to the florist in that they increase the sales of flowers industry wide and each one gets his small piece of the action.

SHOULD THE SENDING FLORIST GET A DISCOUNT NO
AND THE FILLING FLORIST GET 100%? YES

WILL THIS EVER HAPPEN? NO Not as long as rebates are around. Not as long as everything is weighted in favor of the sending florist.

DOES THE CONSUMER NEED A WS? NO A lot of florists are saying their Website [on line orders] are up. Mine certainly are. The consumer is gravitating to the Internet. That's where they run the potential of a lot of pot holes. That's where we have to be on our toes. Educate the consumer. Don't let him get stung using the Internet on his own. Educate the consumer. Help her/him get past the Order Gatherers. If they want the Direct Shipper, educate her/him on what to expect.

WHY DO SOME FLORISTS ACCEPT WS ORDERS BUT NOT DIRECT ORDERS? No one knows.

IFA has an option for 100/0% along with the 80/20% formula. GUESS WHAT?
Only a couple florists signed up and I think have dropped the 100/0% option because the hassle was not worth their time.

The WS are in a transcion period but I don't think there is a clear pattern of where our industry is going. Teleflora is probably the best place to put your bet.

Got work to do. Tom Carlson

PS Wire Orders are a small part of our business. Why are we so focused on the small percentage when our local business is what needs improvement and growth?

 

[TOTO]

Because the WSs are competing with us!

PS Wire Orders are a small part of our business. Why are we so focused on the small percentage when our local business is what needs improvement and growth?

Always good to hear from you Tom!

What you point out is 100% correct and the only reason any of us bother is because the WSs have morphed into our competitors and insist on competing against us for our own customers with their own 100% sales.

One does the BAIT and SWITCH over to DROP SHIP GIFTS and FARM DIRECT in addition to the CAPTURE and SKIM game and the other just does the CAPTURE and SKIM, both using their DOT.CONS to doo it.

Suffice it to say that, they are all EATING THEIR YOUNG

 

[Chezbloom]

What will the future of WS be in say 5-7 years? Especially if real florists begin to drop them and move on? Will there be OG's advertising all over the internet if no real florists fill their orders?

 

[MANORVILLE]

What will the future of WS be in say 5-7 years? Especially if real florists begin to drop them and move on? Will there be OG's advertising all over the internet if no real florists fill their orders?

Many REAL FLORISTS can survive, although many will unfortunately fall victim to the transition that is before us.
The WS's know that change is coming. They are and have been gearing up for that change, trying to grab as much of the market as possible so that when the day does arrive, they are prepared.
They will all sell out the florists in a heartbeat.

The key to survival is unity. The creation of something to replace what once was good. A new way to do business and promote business and create business !!!

" Deceptive advertising" by the WS & OG's, along with so many others that most would never suspect is eventually going to come back and bite, and bite hard. But without everyone getting together, meaning the big shops and the Mom & Pops, it just " ain't gonna happen ".

( Never really had the time to do anything but work, work & more work.
Then I somehow found FC. Thought it was pretty cool but didn't get back very often. Then something caught my interest and I began to read.
I read, I learned and caught the spirit, I think, of some extremely dedicated and knowledgeable folks from all over the freakin' world.
Then V Day came, screwed up my life and turned me into a crusader once again, and you know, I'm kinda glad.)

The starting point is already in place. People, fighting for the same common goal, in many locations throughout the world. The groundwork is already here, but there are not enough people to take it to the next level.
The people that give the most on FC also have lives and I applaud them for what they do for every REAL FLORIST. Their dedication makes people want to believe that maybe there is a light at the end of the tunnel.

But again, these same people cannot carry the ball alone.

Why the FTC, State Attorney Generals, etc, etc, etc,......have not been hounded by the masses of REAL FLORISTS that want their industry back,
I will never understand.

Again, those that carry the ball on FC have my complete respect for all that they do ! You, and I know who they are !


P.S.
If anyone is curious why I have so much time on my hands these past few days I'll be more than happy to tell ya !
The Manorville Rattlesnake must've rattled a few cages, so our WS volumn
is in the toilet. Fortunately plenty of direct calls so my people are busy,
but I'm just coasting along, researching, making calls & rattling more cages.
Ya gotta be in it to win it they say !

 

[TOTO]

Well then, we agree to DISAGREE!

Here is where you have a flaw in your point.....

I doubt that any WS-free flower shop actively markets or advertise to their clients their outgoing order business.

It seems to be me, if you are WS-free, you would direct those advertising and marketing dollars to develop you local market.

Therefore, I disagree, that a 20 pct discount is appropriate for the outgoing sender to ask and receive from a filling florist. Remember, the filling florist is actually enhancing the outgoing florist's reputation in the eyes of the customer.

Joe

What can I say that I haven't already said Joe?

The REAL FLORISTS I know who have since cut off their old WS BALL and CHAIN, have come to realize that, they have already saved $5K to 6K per year.

In addition, one of our friends and his lovely wife just can't believe HOW EARLY they are now able to leave their shops on a major floral holiday as opposed to the olden days when they had to work untill 3:00 AM in the morning.

Those were the days when, they were all caught up in having to fill the DOT.CON junk orders from their partner.

And both of them agree that, they are MUCH MORE PROFITABLE NOW while working less since, they are able to answer their telephones for THEIR CUSTOMERS and capture every 100% sale PLUS any SPECIAL MESSENGER DELIVERY $ERVICE CHARGES which apply for those LATE/LAST MINUTE callers who are happy to hear them say; " YES, WE CAN, and this is how much it will cost you! "

He figured out that, they make MORE MONEY in their POCKET when filling just ONE of their own CUSTOMER SALES at an average of $100 with that SPECIAL MESSENGER DELIVERY $ERVICE CHARGE than they used to make on filling 20 JUNK DOT.CON ORDERS. He arrived at that reality since he had already found out that, on average, his profit was around $3 per DOT.CON order while his $100 customer order gleaned him $60.00.

Anyway, we must all make our own BUSINESS DECISIONS and use our partner's accordingly rather than allowing them to USE US!

FORE MEE, WEE ARE NOW WS FREE as my letter went into the mail last night.

My newest WS partner's (we rejoined in 2002 when we fired the other one) biggest mistake was when they terminated Greg Coccari, after which, they launched their own DOT.CON and became my newest competitor. Right off the bat, we save $85.85 DOVE $ERVICE FEE and $149.95 MEMBERSHIP FEE per month for an annual savings to mee of $2,829.60 plus the four times a year DIRECTORY FEES of $26.84 for a GRAND TOTAL IN MY WALLET of $2,936.96. You better believe that, I'll take that money and plow it back into advertising ME and MY BRAND for those 100% SALES plus their $ERVICE CHARGES.

And so, www.myifa.org is our new path to F2F REAL FLORIST to REAL FLORIST orders, thus eliminating DA MIDDLEMAN!

With no more WS INCOMING ORDER AQUISTION CHARGES in the form of monthly dues and fees, I will continue to be happy in paying another REAL FLORIST their 20% earned sending commission since, they are ENTITLED to it as it was they who CREATED THAT SALE via THEIR CUSTOMER BASE and so, it was their MONEY used to AQUIRE THAT NEW ORDER for MEE!

 

[bloomz]

PS Wire Orders are a small part of our business. Why are we so focused on the small percentage when our local business is what needs improvement and growth?

Just a quick answer to that last part - even tho they are a small part, they are still having a huge impact on how much of that local business we are getting.

 

[Lady Biker Florist]

We've belonged to either FTD or TF or both for 27 years. Plus some of the other medium to large WS's like Redbook, AFS, and Florafax now and then thrown in there over the last 27 years. The one I joined is small and suits our needs. I will not name it since I am not their cheerleader. They just happen to suit our needs like I said.

But what I am trying to get at is that if a lot more florists who have always belonged to one of the big two quit then the impact would be felt and the more florists' that quit the bigger the impact.

I suppose it's more of a fantasy than anything else to hope that a few thousand florists' would all wake up at once. LOL