Gosh, I wish I know a shop that fit that description after about 2001.
FTD Fire Sale
- Thread starter BBJ (Big Bad John)
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BOSS
FlowerChat Administrator
Yes Doug, I consume... but I must not be the typical shopper, I HATE shopping. I know what I want, and I know where to get it.
Case in point, I could buy a Craftsman table saw for a couple hundred dollars, but I bought a Rigid Professional model, because I know it will last me the rest of my life. I could have saved over $1000.00, but then I would not have gotten the quality that I did.
So I guess my answer would be, no, I'm not a bargain shopper.
Christmas... we do not exchange "gifts" that not what the holiday is truly about.
I AGREE!
It's just that we disagree on the best manner to do that. My opinion is to eliminate the parasites, while others feel they would rather "try" to compete with them. I would never compete with a cock roach for my dinner, I'd squash him flat.
Don't get me wrong, my current MerchantCircle coupon is buy 12 roses vased, and get another 12 included FREE... we're selling 3-4 a day... so I do discount. I just don't do it at a holiday, and do it only to slap my local competition about a bit...
I'm probably not the best example for the industry. Like I said a while back, we have chosen to not worry about the low end, and are concentrating on the high end sales. We make no apologies for our prices, and can back them up with quality and a promise of customer satisfaction.
Yes, this is leading me down the path of lower gross volume, but the other side of that coin is a higher NET. So far in the month of May, we're down about 18% gross, but up 6% NET over last May. I much prefer doing less and making more.
Mikey the Flower Guy
It's a GREAT DAY to live, and love!
- Nov 10, 2002
- 9,206
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Hate to say this Boss, but it's the wrong road to follow!
The plan you are using is what I call ....the A & P plan. A & P was the super market pioneer. It was, at one time in our history, the largest super market operator by sales. It chose profit over sales. Today A& P is no longer a leader of anything.
But that is not to say that the A & P idea of making more profit while giving up sales doesn't work. It does, but only in the beginning.
First, in order to make more profit, it assumes that you have a sizable amount of existing sales.
So at the beginning, the plan will work beautifully. You can cut staff, and control expenses and watch the bottom line grow.
But operating at the high end of the pricing tier, means that over time, you will lose customers and that means lower profits. Now those lower sales can be countered by increasing advertising, but again that means lower profits. So a spiral begins.
The majority of florist shops, even in the good times, were never high gross sales operations. This means that they have little or no wiggle room when it comes to giving up sales for profit.
I like Mikeys idea of more sales. It means that you may have to work harder but even if the profit percentage is lower, the dollar amount that profit represents is higher.
BOSS
FlowerChat Administrator
sfox, I concur...except....
You have to base the argument on the prospective market where the business resides, the other local competition and the future goals of the business in question.
Add into that equation, the planned end point of current ownership, mine is 2016.
Let me ask you a question: If you could eliminate a portion of your customer base/work load (meaning your working less) and maintain or grow your bottom line, increasing your take home NET, why wouldn't you?
Just because A&P could not make it work because of low end competition, does not mean someone else can't. They are still building Rolls Royces you know.
BTW... my gross is OK by me...
You have to base the argument on the prospective market where the business resides, the other local competition and the future goals of the business in question.
Add into that equation, the planned end point of current ownership, mine is 2016.
Let me ask you a question: If you could eliminate a portion of your customer base/work load (meaning your working less) and maintain or grow your bottom line, increasing your take home NET, why wouldn't you?
Just because A&P could not make it work because of low end competition, does not mean someone else can't. They are still building Rolls Royces you know.
BTW... my gross is OK by me...
dhamil6490
Active Member
BBJ - thanks for clarifying my position. Your point is right on target. I was beginning to think I was the only one who held this view. Don 't get me wrong - I'm not opposed to advertising or having sale items. Doing it at major holidays just doesn't make sense to me for a flower shop.
BOSS
FlowerChat Administrator
Part of the problem is: Florists are letting someone ELSE discount THEIR (the florists) product, in a competitive online battle that if it were not for the wire serves, we would not even be in.
We saw it this year from FTD more so than any other. I can not tell you how many customers mentioned the FTD commercials for the "Luxury Line" and that FTD was selling most of their MD designs for under $30.00. That ad model made US look expensive!
We saw it this year from FTD more so than any other. I can not tell you how many customers mentioned the FTD commercials for the "Luxury Line" and that FTD was selling most of their MD designs for under $30.00. That ad model made US look expensive!
steve
Well-Known Member
Long term I think your plan will fail boss mainly because you are not cultivating new customers at the rate you need to by strictly being high end.We know that 20 percent on average of our customers either die or move away yearly over time your base may be pretty thin. You like to check out in 2016 I would think your program could have a negative affect on the value of your business.
Doug Munro
Well-Known Member
The times are a changing.....
Goldfish,
I agree with you completely on this one. The days of operating a retail flower shop ( or most any business) on low volume and high margins have gone the way of the dodo bird.
At one time consumers viewed flowers as something for a special occasion and knew that they were "pricey". However all of this has changed with the introduction of grocery chains and mass marketeers.
As an example Costco in our region sells 24- 50cm roses for $17.99, in affect making this particular product virtually an everyday commodity
Sure as as industry we can stand our ground and argue that we provide specialty services however..... both Costco and Proflowers now do weddings. The fact of it is that in both cases their prepackaged weddings have become big business. Again the consumer has spoken!
We have seen a number of "standards" in our industry fall victim to the mass marketeers over the years, two great examples are Easter Lilies and Poinsettias. At one time a florist could count on moving a substantial number of these at the appropriate holidays. Now for all intents and purposes the big boys own the vast majority of these sales.
Goldfish,
I agree with you completely on this one. The days of operating a retail flower shop ( or most any business) on low volume and high margins have gone the way of the dodo bird.
At one time consumers viewed flowers as something for a special occasion and knew that they were "pricey". However all of this has changed with the introduction of grocery chains and mass marketeers.
As an example Costco in our region sells 24- 50cm roses for $17.99, in affect making this particular product virtually an everyday commodity
Sure as as industry we can stand our ground and argue that we provide specialty services however..... both Costco and Proflowers now do weddings. The fact of it is that in both cases their prepackaged weddings have become big business. Again the consumer has spoken!
We have seen a number of "standards" in our industry fall victim to the mass marketeers over the years, two great examples are Easter Lilies and Poinsettias. At one time a florist could count on moving a substantial number of these at the appropriate holidays. Now for all intents and purposes the big boys own the vast majority of these sales.
Doug Munro
Well-Known Member
If your not growing you dying....
Planning on maintaining a business long term without customer growth is a recipe for disaster.
First and foremost, customer bases shrink through attrition, they die, they move, they change loyalties. Just a fact of life and one a business must account for. Lets say we place this attrition at 10% annually, simple math says that you need to find 10% more customers every year just to stay even, for 5% growth you need to find 15% (10% to replace attrition + 5% for your growth), and so on and so forth.
Secondly, attempting to maintain a business long term within current sales assumes that all things remain the same, particularly costs. What happens when increases occur on rent, taxes, utilities or labour?
Sure, generally in the first year a business can trim some fat , but at some point the knife hits the bone and there's no more cost cutting. What then? Raise prices to your remaining customers, that will almost certainly speed up the rate of attrition.
Third, while your business is stagnant, chances are your competitors is not. The minute they "smell blood in the water" chances are if they are astute they ramp up their marketing and become more aggressive with the intention of putting you out of your misery.
Last but not least, letting a business die on the vine is a terrible exit strategy. More sound one is to continue to grow it so that it has some resale value and you can walk away or retire with something for your efforts.
Planning on maintaining a business long term without customer growth is a recipe for disaster.
First and foremost, customer bases shrink through attrition, they die, they move, they change loyalties. Just a fact of life and one a business must account for. Lets say we place this attrition at 10% annually, simple math says that you need to find 10% more customers every year just to stay even, for 5% growth you need to find 15% (10% to replace attrition + 5% for your growth), and so on and so forth.
Secondly, attempting to maintain a business long term within current sales assumes that all things remain the same, particularly costs. What happens when increases occur on rent, taxes, utilities or labour?
Sure, generally in the first year a business can trim some fat , but at some point the knife hits the bone and there's no more cost cutting. What then? Raise prices to your remaining customers, that will almost certainly speed up the rate of attrition.
Third, while your business is stagnant, chances are your competitors is not. The minute they "smell blood in the water" chances are if they are astute they ramp up their marketing and become more aggressive with the intention of putting you out of your misery.
Last but not least, letting a business die on the vine is a terrible exit strategy. More sound one is to continue to grow it so that it has some resale value and you can walk away or retire with something for your efforts.
steve
Well-Known Member
There is an old saying Anything that stays the same die's basicly its the law of dimmination returns
TOTO
New Member
Gonna run the DISCOUNTING passed my SUPPLIERS!
Since we're evaluating the question of offering DISCOUNTS, especially during our HOLIDAY PEAK PERIODS, I'm gonna run that strategy passed my suppliers.
If they, along with their FARMS and BROKERS, all AGREE to offering MEE a 20% DISCOUNT on some of their perishable items, which will then, enable MEE to offer those to our customers, WE HAVE A WINNER!
After all, WE'RE ALL IN THIS TOGETHER, RIGHT? (up and until our suppliers and coat tailers in the floral industry, are asked to share in the pain of course) At that point, US WEE BEES have always been on our own, AS USUAL! All the others have always TALKED THE TALK while failing to WALK THE WALK in OUR FLORIST SHOES.
As to the WS's, BOX DROP SHIPPERS, dOG's, OG's, and non-local phony middleman order brokers, they are all in a war amongst themselves now, over JUST WHO can capture the consumer's 100% sale along with their 100% $ervice charges FIRST. And, they are all using DISCOUNTS and COUPONS to DOO IT! Couple that with the WHO HAS THE LOWEST SRP ON THE FOOD CHAIN, and they have all managed to TAKE DOWN this industry to its lowest possible uncommon denominator.
Florists have a choice! Join in the DISCOUNT fray and become PART OF THEIR PROBLEM, thus loosing more money even faster, especially when filling the JUNK orders for their COMPETITOR PARTNERS!
Or, working to educate DA PUBLIC when it comes to all of these PHONY MIDDLEMAN ORDER BROKERS and the SKIMMING ERRORS OF THOSE WAYS.
In every telephone conversation with every new customer, I always THANK THEM for USING A REAL FLORIST, rather than going through a MIDDLEMAN ORDER BROKER.
Then, they begin to tell me of their MIDDLEMAN HORROR STORY or DEAD JUNK IN A BOX last bad experience, which is what prompted them to SEEK OUT and FIND, a REAL FLORIST this time around, and for every time hereafter.
It's a growing phenomena thanks to the Internet, and one in which, I plan to take full advantage of.
OMG! REAL FLORISTS, who actually give the full 100% VALUE in products and $ervices to their own customers, coupled with Quality of Product, Professional Design Ability, and Impeccable delivery $ervice.
Which is another reason why, all these SKIMMER MIDDLEMEN are forced to DISCOUNT and offer coupons, since that's the only way they can get any of those orders from the FLORAL ORDER VIRGINS. Usually only works the first time around though, since WHAT THEY SEE is NEVER WHAT THEY GET, especially after having asked the age old question of; Was it good for you?
WHO, of any of us, EVER KNEW?
lol
Since we're evaluating the question of offering DISCOUNTS, especially during our HOLIDAY PEAK PERIODS, I'm gonna run that strategy passed my suppliers.
If they, along with their FARMS and BROKERS, all AGREE to offering MEE a 20% DISCOUNT on some of their perishable items, which will then, enable MEE to offer those to our customers, WE HAVE A WINNER!
After all, WE'RE ALL IN THIS TOGETHER, RIGHT? (up and until our suppliers and coat tailers in the floral industry, are asked to share in the pain of course) At that point, US WEE BEES have always been on our own, AS USUAL! All the others have always TALKED THE TALK while failing to WALK THE WALK in OUR FLORIST SHOES.
As to the WS's, BOX DROP SHIPPERS, dOG's, OG's, and non-local phony middleman order brokers, they are all in a war amongst themselves now, over JUST WHO can capture the consumer's 100% sale along with their 100% $ervice charges FIRST. And, they are all using DISCOUNTS and COUPONS to DOO IT! Couple that with the WHO HAS THE LOWEST SRP ON THE FOOD CHAIN, and they have all managed to TAKE DOWN this industry to its lowest possible uncommon denominator.
Florists have a choice! Join in the DISCOUNT fray and become PART OF THEIR PROBLEM, thus loosing more money even faster, especially when filling the JUNK orders for their COMPETITOR PARTNERS!
Or, working to educate DA PUBLIC when it comes to all of these PHONY MIDDLEMAN ORDER BROKERS and the SKIMMING ERRORS OF THOSE WAYS.
In every telephone conversation with every new customer, I always THANK THEM for USING A REAL FLORIST, rather than going through a MIDDLEMAN ORDER BROKER.
Then, they begin to tell me of their MIDDLEMAN HORROR STORY or DEAD JUNK IN A BOX last bad experience, which is what prompted them to SEEK OUT and FIND, a REAL FLORIST this time around, and for every time hereafter.
It's a growing phenomena thanks to the Internet, and one in which, I plan to take full advantage of.
OMG! REAL FLORISTS, who actually give the full 100% VALUE in products and $ervices to their own customers, coupled with Quality of Product, Professional Design Ability, and Impeccable delivery $ervice.
Which is another reason why, all these SKIMMER MIDDLEMEN are forced to DISCOUNT and offer coupons, since that's the only way they can get any of those orders from the FLORAL ORDER VIRGINS. Usually only works the first time around though, since WHAT THEY SEE is NEVER WHAT THEY GET, especially after having asked the age old question of; Was it good for you?
WHO, of any of us, EVER KNEW?
lol
BOSS
FlowerChat Administrator
Interesting that from my comment you all have me with one foot in the grave already...
I never said I would not grow. I believe you can grow, even if you are focusing on the top tier rather than the middle...
I think we all have one foot there already.............IT'S THE OTHER ONE YOU HAVE TO WATCH OUT FOR!!
steve
Well-Known Member
Boss I think in my opion you will be walking on much thinner ice with a narrowly focus strategy based on the upper tier. That upper tier is even a smaller wedge of the pie then it was 18 months ago due to the economy.
BOSS
FlowerChat Administrator
I would agree Steve, the pie is divided up much differently than it was a year ago even. However, in some areas, there are still some local economies that are doing OK.
Midland just got (today) a new project, estimated cost of facility $600,000,000.00 that will create 8-900 NEW jobs in the nations first polymer battery factory. Read it here. That's huge for a city of 45,000...
We've always had the local rep of being expensive, and has not seemed to hurt sales, we've been here 62 years... focusing on high end does not mean that the rest will go away, some will of course, but not all.
Doug Munro
Well-Known Member
Toto,
I love an argument that totally ignores most of the facts, the reality is that the consumer has spoken. At one point the number I heard for order count for FTD.com sat around 4.1 million orders a year, Proflowers basically a start up company less than a decade ago sold for over 600 million in 2007 .
Yet the plan is for you to educate your customers one at a time, all I can say is I hope you have a lot of customers and years left. The fact is that a large percentage of consumers have already made the move to on line buying from these companies and ones like them. Sure they drop the ball once in a while, sure they on occasion ship inferior product, and sure at times they piss off customers. But doesn't that also describe a good portion of "real florists".
Your local grocery stores sells product that in many cases was grown at the sames farms as the product that you sell is. Unfortunately in most cases it is probably fresher as it didn't pass through a wholesaler and they sell it for less.
I am all for educating the consumer, but don't think for a moment that the vast majority of consumers will pay 2-3 times the price for a product that is available at their local grocery store and that they can pick up when they buy milk simple because you are "educating "them.
I know that in recent months everyone likes to point out all the drops in sales and the loss of revenue that the big boys are experiencing and read into this a change in consumer buying habits. The fact is that everyones sales are down, the big boys numbers are just"bigger" by default.
This is simply a case that the market environment has changed and we can either change with it or have it roll right over us.
Mikey the Flower Guy
It's a GREAT DAY to live, and love!
- Nov 10, 2002
- 9,206
- 3,792
- 113
- 72
- State / Prov
- Ontario
I don't think that there was any insinuation of your early demise, but, Doug's description resembles an acrobat on parallel bars one higher than the other.
Grower Direct is a model that superseded all the OG's, all the .coms, and all the evil order snatchers by a fair margin, and Doug's "blasphemy" is years of trial and error, in building the floral "culture" in THEIR marketplaces.
Regionalized shops, like yours, AND mine, live on location lifespans, and unfettered family "values", which customers become familiar with, and shop with us out of habit, or virtues, and what Doug's arguement IS, when YOUR time comes (2016) WHO'S gonna run YOUR flagship, IF it ISN'T progressive, AND profitable on growing numbers!!
Realistically, the floral supply industry DOES NOT NEED florists to get it's product out anymore, and is very margin oriented right across the board, EXCEPT in florist shops.
What DOUG fails to realize, though , is that the average florist shop, CANNOT JUSTIFY ramping up staff, and product lines, for three or four major holidays, that last a few days each, to fill HIS orders, with the SAME volume equations that HE uses, when OUR end costs are rising exponentially, yet, for the same amount of effort, and work, we "earn' much less than before, and it's affecting our sustainability.
There IS "high end work" to be had, maybe Doug has never experienced it!!
TOTO
New Member
My non-compete clause!
I have no intention of competing with the STUPERMARKETS or the BIG BOXERS Doug!
That's a battle I can't win, and as we all know, one must fight the battles we can win, and retreat from the ones we can't win, to regroup and fight another day.
Our market niche is in the ONE CALL DOES IT ALL, generic gift giving scenario, coupled with our SAME-DAY-DELIVERY forte.
No one has the edge in that arena, unless of course, you count those florists who choose to give it up to the MIDDLEMAN FLORAL ORDER BROKERS and the Wire Services who enable them.
Don't know what your real market niche is, but at first glance, you seem to be marketing to florists who want to fly your BRANDED flag?
http://www.growerdirect.com/franchise
Were you ever a REAL FLORIST or are you just a pseudo franchise dealer operator much like Flower World was back in the 1970's along the East Coast. No need to answer since, that is a rhetorical question.
You are what you bee, and wee bee what we are!
As I have always stated, US WE BEES remain the backbone of this retail floral industry, and everyone else remain, JUST OUR COAT TAILERS!
Long gone are the days of ALLEGIANCE and HONOR! Farms, Brokers, and Wholesalers, will sell to anyone, everyone, and their Mother too! Give em anyone's resale number, and you're good to go! Churches, Schools, Volunteer Fire Departments, PTA's, non-profits, not-for-profits, any disease fund raisers, and any other group you can think of, can all buy at WHOLESALE PRICES now!
COST-CO, SAM'S CLUB, et al, and wholesale caskets too!
There is NO LINE drawn in the sand anymore, and it's everyone for themselves now, to include all of the Wire Services, since they don't care who contributes to their bottom line, as long as they are able to maintain their margin of profitability. Could be their own FLORAL DOT CONS, or any of their dOG's, OG's, and non-local phony middleman order brokers. Makes NO DIFFERENCE TO THEM!
As my Dear Real florist friend OZ, always put it best!
"WHEN THE WHALES FIGHT, the SHRIMP (krill) GET KILLED!"
And so, I'm going to continue to IGNORE THE FACTS since the I always check the source, after which, I'll continue to educate DA PUBLIC.
The good news is in the fact that, DA PUBLIC have a fast learning curve, and by the time they call me, they already have all of the facts.
And, they didn't like what they seen, which is why, they took the time to SEEK OUT and FIND a REAL FLORIST who CAN DOO DA DOO, rather than, GIVE THEM THE S-C-R-E-W!
Oh, did I mention why Flower World went bankrupt? The owner promised the newbies that, they would make a fortune, especially since they could buy a carnation at ten cents and sell it for a dollar.
He gave them a two week quickie course in the ART OF FLORAL DESIGN, sold them used fixtures, and set them up in a so called turn key operation. The franchisees only had to pay him 10% of their annual gross sales for the privilege. And then, and when they went bankrupt, his real profit center was in RESELLING the franchise location to another unsuspecting NEWBIE, with the same lies he snookered the first buyers into. Eventually, FLOWER WORLD just disappeared, EY?
And so did, USA FLORAL and others too numerous to mention. I suspect that, all of them IGNORED THE FACTS TOO!
Oh, the KICKER! We didn't have 1 complaint this Mother's Day from any of our own customers! Got a call from one person who thought he had placed his order with us, but it turned out that, he actually called an order broker with the same name on the West Coast, not us.
lol
I have no intention of competing with the STUPERMARKETS or the BIG BOXERS Doug!
That's a battle I can't win, and as we all know, one must fight the battles we can win, and retreat from the ones we can't win, to regroup and fight another day.
Our market niche is in the ONE CALL DOES IT ALL, generic gift giving scenario, coupled with our SAME-DAY-DELIVERY forte.
No one has the edge in that arena, unless of course, you count those florists who choose to give it up to the MIDDLEMAN FLORAL ORDER BROKERS and the Wire Services who enable them.
Don't know what your real market niche is, but at first glance, you seem to be marketing to florists who want to fly your BRANDED flag?
http://www.growerdirect.com/franchise
Were you ever a REAL FLORIST or are you just a pseudo franchise dealer operator much like Flower World was back in the 1970's along the East Coast. No need to answer since, that is a rhetorical question.
You are what you bee, and wee bee what we are!
As I have always stated, US WE BEES remain the backbone of this retail floral industry, and everyone else remain, JUST OUR COAT TAILERS!
Long gone are the days of ALLEGIANCE and HONOR! Farms, Brokers, and Wholesalers, will sell to anyone, everyone, and their Mother too! Give em anyone's resale number, and you're good to go! Churches, Schools, Volunteer Fire Departments, PTA's, non-profits, not-for-profits, any disease fund raisers, and any other group you can think of, can all buy at WHOLESALE PRICES now!
COST-CO, SAM'S CLUB, et al, and wholesale caskets too!
There is NO LINE drawn in the sand anymore, and it's everyone for themselves now, to include all of the Wire Services, since they don't care who contributes to their bottom line, as long as they are able to maintain their margin of profitability. Could be their own FLORAL DOT CONS, or any of their dOG's, OG's, and non-local phony middleman order brokers. Makes NO DIFFERENCE TO THEM!
As my Dear Real florist friend OZ, always put it best!
"WHEN THE WHALES FIGHT, the SHRIMP (krill) GET KILLED!"
And so, I'm going to continue to IGNORE THE FACTS since the I always check the source, after which, I'll continue to educate DA PUBLIC.
The good news is in the fact that, DA PUBLIC have a fast learning curve, and by the time they call me, they already have all of the facts.
And, they didn't like what they seen, which is why, they took the time to SEEK OUT and FIND a REAL FLORIST who CAN DOO DA DOO, rather than, GIVE THEM THE S-C-R-E-W!
Oh, did I mention why Flower World went bankrupt? The owner promised the newbies that, they would make a fortune, especially since they could buy a carnation at ten cents and sell it for a dollar.
He gave them a two week quickie course in the ART OF FLORAL DESIGN, sold them used fixtures, and set them up in a so called turn key operation. The franchisees only had to pay him 10% of their annual gross sales for the privilege. And then, and when they went bankrupt, his real profit center was in RESELLING the franchise location to another unsuspecting NEWBIE, with the same lies he snookered the first buyers into. Eventually, FLOWER WORLD just disappeared, EY?
And so did, USA FLORAL and others too numerous to mention. I suspect that, all of them IGNORED THE FACTS TOO!
Oh, the KICKER! We didn't have 1 complaint this Mother's Day from any of our own customers! Got a call from one person who thought he had placed his order with us, but it turned out that, he actually called an order broker with the same name on the West Coast, not us.
lol
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