FTD: The good, the bad, the ugly???

[goldfish]

What's unclear is where that rebate comes from.....

It comes from a pool of aggregated gross profit a WS makes, including commissions, monthly fees, etc. It's not useful to arbitrarily assign the source to a particular revenue.

With that said, I believe the rebate is largely financed by reciprocity fees, low-sending fees, and order-receiving fees paid by tiny filling florists.

For a $50 order, they pay...

reciprocity fee: $2.50
low-sending fee: ~$1.00 (if they receive ~20 wire-ins a month)
FTO: $1.50
total = $5.00 per order

That it doesn't come from the order value is clear to me

You are correct.

 

[duanermb]

What's unclear is where that rebate comes from.....

That it doesn't come from the order value is clear to me

oops, thought I was done...but don't be hatin'


Happy Day After Valentine's Day!

That I agree on too. There is always a cost associate with getting orders, no matter where they come from. These costs are paid out of overall margin, and has not much to do with individual orders. I believe that puts the pie chart right out of perspective for a generality.

You could show it as a separate piece of the pie, as WS costs, but not as the rebate.

 

[LJVF]

I agree with the gist of goldie's breakdown.

Every florist has a different set of variables, the per order value is not cut and dry.

Non OG florists that have a good grasp of cost accounting can make wire services work for them. For others, it can be very challenging and not worth the effort.

As far as whether the wire services are good or bad for the industry is arguable. I'm not saying that we should just roll over and play dead, but I have some serious doubts that the wire service universe will be going away, anytime soon. So it is important that we don't bank on things changing and keep focused on strategies on how we B&M's, can survive and grow regardless of them.

 

[duanermb]

I agree with the gist of goldie's breakdown.

Every florist has a different set of variables, the per order value is not cut and dry.

Non OG florists that have a good grasp of cost accounting can make wire services work for them. For others, it can be very challenging and not worth the effort.

As far as whether the wire services are good or bad for the industry is arguable. I'm not saying that we should just roll over and play dead, but I have some serious doubts that the wire service universe will be going away, anytime soon. So it is important that we don't bank on things changing and keep focused on strategies on how we B&M's, can survive and grow regardless of them.

Agreed! Our decision to stay WS free will stay the way it is. If something better comes a long, we will entertain it.

 

[TOTO]

OH, I KNOW, I KNOW! Pick ME! Pick ME!

I wanna know where the money comes from for Linda Resnicks shoes.

Pomegranates, you silly Goose!

http://www.newyorker.com/reporting/2008/03/31/080331fa_fact_fortini

 

[TOTO]

OK Then, let's try a KISS!

What's unclear is where that rebate comes from..... That it doesn't come from the order value is clear to me
oops, thought I was done...but don't be hatin' Happy Day After Valentine's Day!

Let me SEE HEAR ANDY!

Only two payer players in this Casino plus the House Dealer.

The SENDER who gets the per order REBATE and the FILLER who PAYS the per order REBATE. The House Dealer works off the 7% vig.

While you may think that the REBATE doesn't come from the filled order value (on the surface), most of us already know that, these rebates have always been funded by the dues and fees paid by the fillers.

The BIG SENDERS get a FREE RIDE plus other percs and benefits.

Since there have always been MORE SMALL FILLERS than BIG SENDERS, the WS ponzi scheme still seems to work.

Perhaps the best example of when it didn't work, was when AFS sponsored 800, only to realise that, the payouts far exceeded their abilty to COST SHIFT THEM OVER to their filler member base.

Which then, forced them to merge with Teleflora and take Tom in, along with the deal.

http://www.myteleflora.com/MyTeleflora/TemplateExtendedForNonMembers.aspx?MPB1=1277&HI=1276&SNID=281

Even FTDA had to CAP the rebates paid to 800 back in the day, which begot AFS picking up the account, much to their demise. I think CARIK was the first of the PLAYERS which got blown out of the water trying to work the numbers as well.

Filler florists fail to look at the entire picture and factor in their annual dues and fees as part of these additional incoming order acquisition costs. That's when they dilude themselves into believing they are still filling those orders at the on the surface discount of only 30% rather than the final net net amounts of 54% to 50% on the dollar.

This is the SMOKE and MIRROR games which the WS's have been playing out for years now, and most florists continue to be duped by being paid off in GROSS WS WAMPUM.

As always, this is JUST MY UMBLE OPINION, and you are free to believe in what you will, even if it includes TOOTH FAIRIES, the EASTER BUNNY, and SANTA CLAUS.

 

[bloomz]

these rebates have always been funded by the dues and fees paid by the fillers.

I pay dues and fees too - so I guess I contribute as much to the rebates as any other shop does.....

"Free ride"? I think not

hmmmm

:mobile: :spin :mobile: :spin :mobile: :spin :mobile: :spin :mobile: :spin :mobile: :spin :mobile: :spin :mobile: :spin :mobile: :spin

 

[Joe Mioux]

And to you two who gave me groans on my earlier post in this thread, I'm still waiting for the answer about where the money to pay WS rebates is generated if not the local florist members?

It comes from a pool of aggregated gross profit a WS makes, including commissions, monthly fees, etc. It's not useful to arbitrarily assign the source to a particular revenue.

With that said, I believe the rebate is largely financed by reciprocity fees, low-sending fees, and order-receiving fees paid by tiny filling florists.

For a $50 order, they pay...

reciprocity fee: $2.50
low-sending fee: ~$1.00 (if they receive ~20 wire-ins a month)
FTO: $1.50
total = $5.00 per order

I'm not the person who gave you the Groan Cathy but I will try to answer.

Actually, Goldie gave the answer.

I remember back in the AFS days, they started the low sending fees from shops who did not send the minimum number of OW orders each month. AFS specifically told me that money was used for the rebates.

FTD copied the small competitor AFS - which leads to Bloomzie's comment.

In my mind the money - some - maybe all - comes from low sending flower shops via the reciprocity and low sending fees. Those are the shops that should do one of two things, either dump the WS or re-negotiate the membership costs and fees with the WS.

In reality, it comes from all sources, Quality Assurance FTO, Reciprocity and Low Sending fees. Remember none of these fees existed prior to the rebate game.

joe

 

[Joe Mioux]

One other thing.

WS shops also need to ADD back the rebates they receive.

NON-WS shops do not receive this income.

Adding it back into the receiving side makes about as much sense as subtracting the rebate from the receiving shop's income.

However, that WS income does need to be accounted for in the WS part of the income statement AND it does offset costs associated with filling orders.


joe

 

[bloomz]

Thank you Joe...they were tag team beating me mercilessly with no ref...:rofl:

Close enough?

It does not come from the order value...rather from some additional "services" or penalties meted out by the gorillas. I'm also *guessing* including "sucker fees" for things like Coop and printed directory advertising as well.

Factor it in if you choose to, but it's not accurate as those value added (in this case value removed) services are not across the board.

I agree with Joe - if you're regularly getting hit with low sending and reciprocity fees, you best reassess your situation cuz incoming alone is possibly not worth all the fees you pay - unless you receive enough volume to make it up, like heavily structured incoming shops who are very good with math (and yes they absolutely do exist).

I also once was told by a large wire service exec (Gregg Coccari) when I asked how they can pay out more than their 7% that a huge percentage of shops get no rebate as they don't pay their bills on time. This puts lots more eggs in the rebates available basket.

I guess that's the bigger senders (like RC - and me) fault as well...:bangles:

TOP OF THE WEEK TO YOU ALL!!! I LOVE THIS BUSINESS!!!

 

[prestonway]

I also once was told by a large wire service exec (Gregg Coccari) when I asked how they can pay out more than their 7% that a huge percentage of shops get no rebate as they don't pay their bills on time. This puts lots more eggs in the rebates available basket.

"Sources have it" from an ex-employee that Urban was also a late payer when they were with FTD, and NEVER RECEIVED REBATES!!!

Couldn't control all that cash flow???

face:rofl::rofl:

 

[CHR]

Well, at one time, a bunch of the big boys paid late (60-90 days) and still got their rebates. As always, enforcement of terms is selective.

 

[Erlene]

Well, at one time, a bunch of the big boys paid late (60-90 days) and still got their rebates. As always, enforcement of terms is selective.

They will almost always give you your rebate if you get caught up, all you have to do is ask. Shop size seem doesn't matter, nor does the volume sent.

 

[PhillyPhlorist]

Wow, what a battle! I'm spent just by reading all this!!!

No need to comment, as the answers to the various questions have been stated. Thanks goldie and Joe.

What a board this is! And, what a country this is in that we can speak FREELY about topics like this...

- H.

PS - for the record, I don't like the groans...not needed nor warranted for those simply voicing their opinion - as, that's why we are all here.

 

[A Mood For You]

I've created a monster. haha

 

[HeatherTuckey]

Wow, what a battle! I'm spent just by reading all this!!!

No need to comment, as the answers to the various questions have been stated. Thanks goldie and Joe.

What a board this is! And, what a country this is in that we can speak FREELY about topics like this...

- H.

PS - for the record, I don't like the groans...not needed nor warranted for those simply voicing their opinion - as, that's why we are all here.

I was under the assumption that groans were NOT like red dots. Just a way to say "I disagree" or "incorrect".

No offense intended from me. As always I just enjoy the difference in opinions and how we choose to run our businesses... as there really is no right or wrong - I am continuously learning from you all and my experiences.

 

[Victoria]

I've created a monster. haha

No Jeff you didn't create the monster. You just let it out of its lair for another go round.

V

 

[RC in Dayton and Cincinnati]

OK,

goldfish, Joe, Bloomz, etc. I need help correcting my pie chart.

 

[RWK]

I have to admit - I am a little confused by the pie-chart breakdown as well.

The way I understand the d'OG's work is this...........The fee's, shipping and handling, and all the other stuff is ADDED on TO the amount of the floral order. EXAMPLE - If the flower arrangement sells for 50.00, then the amount paid by the customer is 50.00 PLUS the other fees. In the pie chart.....It is not clear to me if the amount used is extra fees INCLUSIVE or extra fees EXCLUSIVE. In other words......How much extra in the pie chart is tacked ON TOP of the arrangement selling price?

Also, Don't the d'OG's give the FILLING florist just the 50.00 amount of the order and none of any additional fees they got?

 

[RC in Dayton and Cincinnati]

Ricky,

In the example the customer ordered a $50 arrangement with a $15 service fee for a total of $65.

The Ordergatherer keeps the $15 service charge, wires the order out for $50 and then receives a 20% commission ($10.00) and a rebate (with other compensation) of $10. This all adds up to being compensated a total of $35 for that order. The wire service collects $3.50 (7%) clearinghouse fee.

What is in question is how much does the receiving florist get. I contend over time the receiving florists on average can't be receiving any more than what's left over, $26.50. Others are arguing the receiving florists are receiving approximately 70% of the $50 or $35.00.

RC