So, the customer pays the 15.00 service charges to the d'OG, The WS pays 20.00 to the d'OG, the WS retains 3.50 of the 50.00 leaving 46.50 for the filling florist.
Am I correct so far?
The WS then takes an additional 20 percent of that 46.50 leaving 36.90 in actual dollars for the filling florist.
Am I correct still?
More or less.
Without reciprocity fee, filling florists get (73% of $50) - $1.50 = $35.00
With reciprocity fee, filling florists get (68% of $50) - $1.50 = $32.50
The filling florist has to fill that order for the 50.00 total minus their amount for delivery. If the delivery fee is 5.00 then the florist fills the order for 45.00 product total.
45.00 minus 36.90 leaves the florist a shortfall of 8.10
Am I correct still?
No.
To fill and deliver a $50 arrangement, the cost would be:
$5 delivery (I take your number here)
~$15 flowers and supplies
Total cost = ~$20
Since you get paid $35 (see above),
your gross profit is approx. $15, or ~30% of the order.
To calculate your net ("real") profit, however, WS monthly fee must also be considered.
That's where
order volume comes into play.
Many small florists might be receiving only ~30 wire-ins a month for a monthly fee of ~$300. That is, their order-acquisition cost is ~$10 ($300 / 30 orders).
So the
net profit for this florist would be:
$15 (gross) - $10 (monthly fee per order) =
a whopping $5.
This is typical. Shocking, but typical.
Correct me if I am wrong.... but I am receiving $35 (actually $36, I believe, 72%) for an order transmitted to me via the dove for $50.
73% of $50 - $1.50 (order transmission fee) = $35
So in my case even if I get an order below SR, like say $50 for a dozen roses. I have a standing order of $.38 60cm freedom from Miami, plus Armellini freight brings me too $.44.
$5.28 roses
$1.17 vase
$1.05 gyp
$1.00 greens
$$.80 vase packer box, celo
$3 delivery pool fee
$1.87 designer wage (1/6 of 45 min to make 6 rose arr's at $15/hr).
Not that it matters much, but the arrangement labor should be approx ~10% of order $ (in this example, $5), because designer's wage always contains idle (non-designing) time. They don't work at max efficiency. Even though it might take only 8 min for them to make a rose arr, they are also spending, on average, ~15 min to do nothing.
Idle time should be included to calculate the labor cost. The only labor that should
not be included is the sales labor for incoming orders. That's why the industry averge, ~25% labor, is an overestimate for wire-in orders, IMO.
~$17.50 (give or take)
I was paid $36. This does not add to any fixed costs I am already incurring, b/c the product is in my cooler and the driver is already heading to the pool warehouse daily. Profit... $21.87.
Or more likely, the gross profit is ~$17.50 or 35% in this example ($35 minus $17.50 cost).
Since you are receiving >200 wire-ins a month, your order acquisition cost is very low, probably in the range of $1-2, i.e., $400 (monthly fee) / 200. So the net profit would be ~$15-$16 ($17.5 minus $1-2).
