JUst noticed on my Feb. statement that FTD is now cahrging 9% clearhouse fee. How long has this been going on???? - Does everyone get charged 9% now??? - do other wire services charge 9% ????
FTD 9% clearing house fee!!
- Thread starter tomfromcrossroads
- Start date
Flowermomma
Well-Known Member
It's not new - they have had a few incarnations of the 9% fee, usually for shops that belong to other wire services. IIRC they specifically targeted BloomNet shops for a while. It is a special fee, most people get the standard 7%.
Probably someone here can give a better outline of the applicable conditions.
Probably someone here can give a better outline of the applicable conditions.
BOSS
FlowerChat Administrator
Mikey the Flower Guy
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BOSS
FlowerChat Administrator
So then, if you're in multiple wire services, the FTD discount expense is roughly 40%....
Silly florists:hammer:
bootcampguy
Well-Known Member
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lori042499
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That is just like the TF reciprocity fee for multi ws shops...That one is a killer...and bloomnet charges the extra percent on the orders originating from 800-flowers...They all have a game to play...and we willingly keep hitting the ball back into their court for reserve...
BOSS
FlowerChat Administrator
BOSS<<<< just shakes head...
You're soooooo right Lori.... florists just keep asking to get slapped. It seems that many really like it... sadistic florists~!
Currently the number is around 38% that is given up in every wire order, I wonder what the magic number is. Will florists tolerate 40%, probably... 45%...maybe. I'd bet there's even a huge number of sadists that would give up 50%, all the while thinking they are still making money.
Silly florists~!
lori042499
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Mark, it is simply because florists have no idea that the number is that high and no idea how to figure it and no time to take to figure it out....so many of us are trying desperately to make ends meet, do it all ourselves, juggle work and family and still have just a few minutes to ourselves that sitting down and figuring all the details of the numbers is just out of the question especially if you are paying all the bills at sometime...it wasn't until the real danger of cutting into my already strapped personal money that made me really start figuring the numbers and what an eye opener for me when broken doen how much my local business was supp;ying my wire biz and how much I was taking away from my local marketing to support someone elses marketing that I realized what a disfunctional abusive relationship it really was...and that is a fact of what it is...and most florists live with stockholm syndrom because of it...that is why the relief is so great when you make the decision to leave and you are still standing despite the fears you had of living without them...it is quite amazing when you do get the courage needed to leave and stand on your own two feet...this is a very real fear, just as real as the fears that exist for quitting a vice, leaving a spouse, walking out or disowning troubled family members, etc...there is a whole host of emotional side effects and a process to go through for some it is harder depending on their will, and emotional bearing on both businesses...strange way to think about business but true for so many.... and very very real situation, I am currently in therapy to get a handle on how engrained into my life my emotions are and am learning alot about the creative process and how it interrups business thinking...I will share alot of that in another post when I ahve time to post it..I think it will help alot of people...
Sabrinas
Active Member
This is why we are leaving...too much is too much. But so many florist are like junkies adn just can not imagine not having the wire service adn still surviving. I ran the numbers and we were loosing money hand over fist and still trying to convince my shop owner to make the change was like pulling teeth - she insisted that there were bennefits that my math did not cover and that we could not afford to loose. It took a lot of talking and looking at the black and white numbers to convince her that there was no longer ANY bennefit to being a member of a Wire service. It used to be we made money when our outgoing balanced with our incoming - no more since the wire services now solicit our outgoing away from us and many customers use the internet to find a local florist in the area they are sending to. It used to be that it was good advertising to deliver flowers to someone who may never have heard of you, now with how unrealistic the pictures are (they are photoshoped and look like they should be all arround, but are priced as only the flowers shown - yet customers expect a full arrangement). Since these arg rarely look like what the customer expects for what they pay - especially if the order comes through an OG. I no longer find any bennefit for the florist with wire services, especially since many florists will do the 80/20 courtesy split.
I did the math on one month with TF - here is how it came out:
Teleflora statement income outgo cog profit Incoming Orders65 $ 3,976.50 $ 2,860.23 $ 2,783.55 $ 76.68 National Marketing5 $ 229.75 $ 167.75 $ 160.83 $ 6.93 eflorist28 $ 1,794.05 $ 104.57 $ 1,255.84 $ 433.65 Orders sent40 $ 2,557.10 $ 511.42 $ 2,045.68 $ 511.42 rebate28 $ 84.00 $ 84.00 Profit $ 1,112.67 Membership fee $ 149.95 $ (149.95)Tf TechnologiesWeb Hosting $ 86.60 $ (86.60)Dove Network $ 157.45 $ (157.45)Dove pos $ 146.14 $ (146.14)Advertising $ 198.85 $ (198.85)Dove Note $ 251.22 Other servicesSAF $ 28.50 TF network $ 20.00 $ (20.00) $ 3,623.40 $ 3,188.96 PROFFIT $ 353.68 This considers that cost of goods sold will cover all things such as labor, actual wholesale cost of goods and supplies etc. - which puts this well below industry standard and assumes all things are perfect -which they rarely are) meaning, no over stuffing, no extra labor, no problems like breakage, incorrct deliver info or double delivery trips, no complaints, and that we recieved the correct amount for the order in the first place (not shorted on delivery - common on TF orders). etc. so realistically there is no profit what-so-ever after handling over $8,000 in orders...kind of ridiculous don't you think?
I did the math on one month with TF - here is how it came out:
Teleflora statement income outgo cog profit Incoming Orders65 $ 3,976.50 $ 2,860.23 $ 2,783.55 $ 76.68 National Marketing5 $ 229.75 $ 167.75 $ 160.83 $ 6.93 eflorist28 $ 1,794.05 $ 104.57 $ 1,255.84 $ 433.65 Orders sent40 $ 2,557.10 $ 511.42 $ 2,045.68 $ 511.42 rebate28 $ 84.00 $ 84.00 Profit $ 1,112.67 Membership fee $ 149.95 $ (149.95)Tf TechnologiesWeb Hosting $ 86.60 $ (86.60)Dove Network $ 157.45 $ (157.45)Dove pos $ 146.14 $ (146.14)Advertising $ 198.85 $ (198.85)Dove Note $ 251.22 Other servicesSAF $ 28.50 TF network $ 20.00 $ (20.00) $ 3,623.40 $ 3,188.96 PROFFIT $ 353.68 This considers that cost of goods sold will cover all things such as labor, actual wholesale cost of goods and supplies etc. - which puts this well below industry standard and assumes all things are perfect -which they rarely are) meaning, no over stuffing, no extra labor, no problems like breakage, incorrct deliver info or double delivery trips, no complaints, and that we recieved the correct amount for the order in the first place (not shorted on delivery - common on TF orders). etc. so realistically there is no profit what-so-ever after handling over $8,000 in orders...kind of ridiculous don't you think?
BOSS
FlowerChat Administrator
You lost me with your number format... but I will say, some things like the SAF membership are not Teleflora charges and can not be included when analyzing a wire service statement. TF simply collects the money for SAF, they make nothing on it. Likewise, you'll have web expenses, although they do charge more for an inferior product.
bootcampguy
Well-Known Member
Thanks for sharing your numbers, you're right we have to be transparent with one another to make it through this time. I agree with almost all that you said, but would like to challenge you in one area. If you're just filling orders and reviewing you're statement, then you should quit. But your owner is right, there can be value in the WS. You have to market those incoming wires (less than $1 each) you can pull up to 35% or better over to your side. I know of one store pulling over almost 50%. In every wire order there are at least 2 accounts or as many as 5 accounts. Then when they order, they re-order from you and then you make money the first time they order, rather than spending $65 - $85 for a new account. Lastest numbers show that number will jump to the high line of $100 by the end of 2011. So, I ask you the same thing that I ask all people who want to dump the discounted orders in the river:
1) How will your continue to fill your marketing funnell?
2) Do you really think you can attract new customers to fill that void? (average is 30% for referral)
3) How much money are you willing to spend to fill that void?
I've spoken to several stores in the past few months that we're WS free, have gone back because of #3. The money spend to get the new customers became greater than the ws fees. With the average retention rate of 65 - 70% for florists, that means you ahve to fill that each year along with the WS drops. In my opinion, where else can you be invited to spend dinner with a new customer for 7 nights, they talk about you every night, they read their card many times that week, they know who you are. Then when you call, they already know you, you just spent a week with them. Then if marketed right, they will turn over their ENTIRE address book to you. Thus, the profit is after the order. Just say'in.............
1) How will your continue to fill your marketing funnell?
2) Do you really think you can attract new customers to fill that void? (average is 30% for referral)
3) How much money are you willing to spend to fill that void?
I've spoken to several stores in the past few months that we're WS free, have gone back because of #3. The money spend to get the new customers became greater than the ws fees. With the average retention rate of 65 - 70% for florists, that means you ahve to fill that each year along with the WS drops. In my opinion, where else can you be invited to spend dinner with a new customer for 7 nights, they talk about you every night, they read their card many times that week, they know who you are. Then when you call, they already know you, you just spent a week with them. Then if marketed right, they will turn over their ENTIRE address book to you. Thus, the profit is after the order. Just say'in.............
Sabrinas
Active Member
Sorry, i tried to paste the excel spreadsheet and it looked right until I hit post, I will post as a photo.
Since we have all our stuff through them, I listed all parts of the statememnt that seemed relevent, I listed website expenses since I also listed website orders - eflorist orders - since that is an expense related to those orders. I did not include the SAF fees - the numbers still show that the wire service does not pay for it self. $8000 dollars worth of orders were touched by us for a profit of $354 - that is not good business in my opinion.
HOpe you can read this
BOSS
FlowerChat Administrator
Sabrinas
Active Member
We have a very solid customer base and we market our website heavily - which is how we gain most new customers. Also we have started doing a lot of social media lately. I don't see that we gain very many customers from the tf orders we fill, and we network with other florists so we still fill orders for other florists we are just switching to doing on our CC rather then with a WS. MANY of the florists in my local area have left the WS's and I have only heard them say they wish they had done it sooner (a big part of getting my owner to switch). Daily I find florists that have left the WS's but have not yet heard of someone going back....
Rick, You are the king of marketing and I have no doubt that you make the wire services work. However, many of us were not seeing that many orders coming in anyway and certainly not ones that we could fill at a profit or would even want our names on. The issue for me was having my good name tarnished when the OG steals the local order by advertising as a Florist in Concord. They skim, they add service fee's, all the while posing as a local florist. I know this for a fact because I sent test orders through them and got the order back via a TF order for less then I paid. So were I to continue filling for them, or the wire services that enable them, I look like the the florist that over charges and under delivers. There is no amount of marketing that will fix that in the minds of the sender or the recipient. Additionally, I do not have a ton of employees so marketing to wire order recipients is not likely to happen in my 60 hour work week.
BOSS
FlowerChat Administrator
BOSS's Quote of the day!
Yep... enabling the deceptive practices of order gatherers and wire services is counterproductive to the long term viability of the industry.<period
bootcampguy
Well-Known Member
Helen, I AGREE with all that you said, except the marketing issue. If you have 5 - 7 marketing plans in place with or without WS and spend 15 minutes a day (my drivers do most of our marketing) then you will never want for orders or profits, except more of them.
My issue is the customer. Hundreds of millions of dollars worth of orders are placed with WS and OG each years. If a customer has a bad experience, (non-del, crappy look, etc.) then we have a 30% chance they will never order flowers again. If they have 3 bad experiences, then that number goes as high as 70 - 80%. When that happens, WE ALL LOOSE, longterm........Yes, we've not enabled, but we've lost yet another customer in this "shrinking pool" of customers..............
My issue is the customer. Hundreds of millions of dollars worth of orders are placed with WS and OG each years. If a customer has a bad experience, (non-del, crappy look, etc.) then we have a 30% chance they will never order flowers again. If they have 3 bad experiences, then that number goes as high as 70 - 80%. When that happens, WE ALL LOOSE, longterm........Yes, we've not enabled, but we've lost yet another customer in this "shrinking pool" of customers..............