How much do you really get for wire ins

[paradise bird]

In some of the previous discussions I have noticed florist describing that the wire services take 27 - 30% of the total order. I know that each florist is diffrent, some pay diffrent memberships, some have greater volume, some advertise, some have pos systems.
After deducting, ws membership fees, cc transaction fees, address verifications, cc discount fees, cc program fees, Quality program fees, web hosting fees, network service fees, maintenance fees, finance charges for pos systems, any directory fees, finance charges for any ws product on and on.
Does anyone else have these charges to consider, if so what is a more realistic breakdown of the ws order %.

P. Bird

 

[RC in Dayton and Cincinnati]

P. Bird,

Back when AFS was still around, 10-12 years ago, we were members solely for the purpose of receiving incoming wire orders, including 1-800flower orders. Since the sole purpose of membership was to receive, I attributed all charges as part of the costs for those orders.

The best we were ever able to receive was 64 cents on the dollar. At that time I decided it was a bad deal and didn't need or want those orders.

Today, I'm afraid it's much worse. I'd estimate florists are being paid considerably less than 50 cents on the dollar if all charges are included.

Seems like a no brainer, but surely a few will have varying opinions,

RC

 

[FloralFantasies]

A few months ago I calculated my percentage again and it's at 62%. I deducted web hosting, web order fees and credit card fees.

In your post you said you deducted ws membership fee. Why would you deduct that?

 

[TOTO]

Here's a link to CHR and her great posts.

Cathy posted a great WS profitability calculator spreadsheet back on April 1st, of 2005, which also happens to be back on APRIL FOOL'S DAY, oh my.

Here's the FC link to that string regarding her breakdowns:

http://www.flowerchat.com/forums/showthread.php?t=4289&highlight=calculator

Also, here's another link regarding the big question as well:

http://www.flowerchat.com/forums/showthread.php?t=17944&highlight=calculator

What many florists FAIL TO DO with the complicity of their LAZY or IGNORANT Accountants, is to factor in the costs of their WS's dues, fees, and all other ancillary charges, and turn those costs into an added discount to the already ON THE SURFACE discount of 27% plus another average 2% for the reverse the charges order transmission costs born on the backs of the filling florist.

I've referred to that additional per order discount as an ADDED INCOMING WS ORDER ACQUISTION CHARGE, most often, not factored in.

As to the question of how to charge off all of the dues, fees, and any other ancillary BIAS/BOGUS charges you pay to them, you need to use Cathy's calculator and enter in the REAL NUMBERS for 12 months.

The simple answer?

Let's assume that, your total costs per year for your WS membership is $5,000.00.

You send out 500 orders and you get in 500 orders for that year.

You can simply split the total costs and arrive at a flat rate of a $5 cost to you for both sending out, or filling.

Or, you can turn that into a percentage by assuming your average incoming order is $50, you get 500 of those each year, and that totals to $25,000.00.

$2,500.00 divided by $25,000.00 = 10% which is the additional per order discount you need to factor in.

That winds up to be 27%+2%+10% = 39% total per order discount.

100% GROSS less 39% = 61% net to filler.

When your outgoing is more than your incoming, (best case scenario), your profitability winds up being higher on both sides of the spectrum.

When your incoming is more than your outgoing, the additional per order acquisition percentage cost winds up being higher, and the net to filler can be as low as 50% (and sometimes, even lower).

With average COGS (cost of goods) at 30% and average COD (cost of delivery) at 20%, coupled with YOUR FREE LABOR, it's a BREAK EVEN at best, or even a loss, at worst.

And, any marginal contribution to your bottom line is a MYTH, which has been perpetuated by the WS's as a means to THEIR END, not ours.

Then again, at least YOU'RE GETTING THEIR FLOWERS into the homes of prospective NEW CUSTOMERS for your shop, and at sometime IN YOUR FUTURE, right?

Herb Mitchell put it best when he described this rationale as the "SANTA CLAUS MYTH".

Our own in-house direct mail marketing to those recipients over a three year period (1989-1992), wound up giving us a half percent return on that investment. Even cold turkey mail marketing had a better average return rate of 2%. And, our own direct mail occasion reminder program generated an average rate of return for repeat orders at 10%.

Proved to myself that, the majority of FLOWER RECIPIENTS are just that, RECIPIENTS, and rarely turn into FLOWER SENDERS.

As usual, this is only MY UMBLE OPINION, but then again:

"WHAT'S IN YOUR WALLET?" after ALL YOUR DOO has been DONE!

Spinning my wheels for naught ain't my idea of a good time, especially when, I CAN'T GET NO -- SATIS-FAC-TION!
lol

 

[kt4ye]

Does anyone else have these charges to consider, if so what is a more realistic breakdown of the ws order %.

P. Bird

I just started a new thread re this. See "How Much Is An Order Worth" in the WS area.

When you add in the $15 or so in "Handling/Delivery" charges that all WS and OGs add on (and keep), between 40% and 50% of the CUSTOMER'S MONEY goes to fees and commissions.

Remember: Though I respect Bloomz right to say so, It is NOT about the flowers. It's about the customer.

The customer is not the most important thing. It's the ONLY thing. And if we do not have customers, we are G O N E!

Bill

 

[treen]

Can someone answer me something...... PLEASE!!!

No one ever argues with those of us who've worked this all out and have posted it here a million times before .......

WHY DO FLORIST STILL DO IT?

I can understand if you're stuck in your own little world happily treading the never ending hamster wheel but if you can't argue with the stuff you read here what makes you still do it?

 

[FloralFantasies]

That's what I told my TF Rep, that I feel like I'm just running on a treadmill and not getting anywhere. TF incoming use to account for about 75% of my deliveries, now they're about 50%. Although that's considered a low percentage, I'm ready to try something new.

If I weren't so busy with the wire ins I'd have time to work on truely building up my business. I missed the Dec 1st deadline to resign so I still have to do Valentine's day with wire ins. But by May 1st I should be free to try.

I agree with Toto that the majority of flower recipients seem to be content to be recipients and not flower givers.

When you do a good job on a wire-in order, the recipient tells the sender that the arrangement was beautiful and to keep using the same florist (meaning not you, but whoever they went to to place the order, read TFTD1800.com or OG) if was another real florist in the sender's town I wouldn't mind

On several occasions I've had recipients say that their family always sends through us when it's always a wire-in order.

 

[TOTO]

No one right answer!

WHY DO FLORISTS STILL DO IT?

I can understand if you're stuck in your own little world happily treading the never ending hamster wheel but if you can't argue with the stuff you read here what makes you still do it?

Never found one right answer to that question.

For some, I've heard things like: "That's the way we've always done it!" to "It keeps us busy when things are slow!" to the age old SANTA CLAUS MYTH.

For others, they are THE BEST FLORAL DESIGNERS on the planet, but really poor business people.

Add to that, the PACE of THEIR TREADMILL, and they don't even have anytime left at the end of each month to reconcile their WS's statements, thus catching any thieves in the act.

And lastly, just plain ole STUCK ON STUPID might fit for some and for others, it's just easier to let the printer print out COOKIE CUTTER ORDERS rather than them going after the 100% CUSTOMER with their 100% SALE.

The FEW (Top 100) who are profitable are those folks who figured out the WS GAME long ago, and keep themselves in the position of ALWAYS SENDING OUT many more orders, than they are willing to fill.

And the REALLY FAT CATS are the ones we call MIDDLEMAN FLORAL ORDER GATHERERS. After all, why would anyone want to work like dogs to fill those orders at fifty cents from the dollar, when you can sit back on your derriere with your DOT.CON on auto pilot, and SKIM OFF all of the CREAM while sending out the CURDS and WHEY to a STARVING masse.

 

[Joe Mioux]

Given the amount of incomings I receive and my fixed membership costs, my cost is around 63 pct.

If my cogs and other variable costs (not including WS expenses) is less than 63 pct, I am going to make a contribution to paying my overhead fixed costs.

and that is a good thing!


Joe

 

[kt4ye]

That's what I told my TF Rep, that I feel like I'm just running on a treadmill and not getting anywhere. TF incoming use to account for about 75% of my deliveries, now they're about 50%. Although that's considered a low percentage, I'm ready to try something new.

If I weren't so busy with the wire ins I'd have time to work on truely building up my business. I missed the Dec 1st deadline to resign so I still have to do Valentine's day with wire ins. But by May 1st I should be free to try.

I agree with Toto that the majority of flower recipients seem to be content to be recipients and not flower givers.

When you do a good job on a wire-in order, the recipient tells the sender that the arrangement was beautiful and to keep using the same florist (meaning not you, but whoever they went to to place the order, read TFTD1800.com or OG) if was another real florist in the sender's town I wouldn't mind

On several occasions I've had recipients say that their family always sends through us when it's always a wire-in order.

GREAT Insights!

Customers have the perception that TFTD1800.com is a VAST network of shops that are OWNED BY FTD/TF/1-800-FLOWERS. And I'll be D----d if I know what to do about it.

Any and all ideas are welcome.

BTW#1 if TF is down to 50% of your deliveries then I HOPE the replacement is LOCAL, full-margin orders.

BTW#2 Where is El Dorado Hills? Foothills above Sacramento or...?

PM OK on your location. I used to live near Sacto in the foothills.

Bill

 

[RC in Dayton and Cincinnati]

Can someone answer me something...... PLEASE!!!

No one ever argues with those of us who've worked this all out and have posted it here a million times before .......

WHY DO FLORIST STILL DO IT?

I can understand if you're stuck in your own little world happily treading the never ending hamster wheel but if you can't argue with the stuff you read here what makes you still do it?

treen,

It doesn't matter why.

Your success isn't dependent on the decisions of other florists. In fact you now have a distinct competitive edge, but you need to create a new florist model for yourself and start differentiating yourself from them.

Show the world what a florist can be!

RC

 

[BOSS]

John, two answers come to mind.... the first is greed.... many feel they can't send if the do not receive... and being greedy to send a few orders a month, keeps them filling, in most cases (since we know 20% of the florists send 80% of the orders) more orders than they send.

The other would be fear... fear of change, fear of not doing all the things you mentioned.

Personally, I'm glad to see more folks asking these tough questions. And Bill, you are EXACTLY right, it IS about the customer without which there are no outs, no ins, no nothing.

All this leads right back to my theory that unless we become proactive, make the very painful (for some) step to connecting consumers directly with delivering florists the complete collapse of the industry is not far away. 2009 is going to shake a lot of the chafe out of the industry!

 

[FloralFantasies]

Yes Bill, El Dorado Hills is just outside Sacramento, at the base of the Foothills.

And, yes, my direct orders (not necessarily local) have more than doubled. I attribute most of that to the way Google and Yahoo searches now show actual local businesses and because Teleflora did make changes on our website homepages.

I've also noticed recently that when you do a search for flowers and a nearby town, that my shop shows up. This wasn't the case just a few months ago.

It's the non-local people that can now find me and call me direct instead of going through the TFTD1800.coms and OGs.

 

[TOTO]

You've UNCOVERED the MYSTERY OF LIFE!

If I weren't so busy with the wire ins I'd have time to work on truely building up my business.

Kudos to YOU!

You've uncovered one of the GREATEST FLORIST'S MYSTERIES OF LIFE in the WS MIDDLEMAN FLORAL ORDER GATHERER DOT.CON GAME!

That's always been the GRAND DESIGN which began with the very first SKIMMER back in the early 1980's.

Prior to the advent of the DOT.CON FLORAL ORDER GATHERER MIDDLEMAN PHENOMENA, the scales were balanced between REAL FLORISTS in the floral order transfer game. It was FAIR and EQUITABLE on both sides of the spectrum, and the process only became SKEWED and ONE SIDED when THE SKIMMERS began to INTERCEPT those orders from the consumers and away from the florists.

I remember vivedly, so many of their willing victims complaining that, they were forced to put their shop phones on MAKE BUSY during the major floral Holidays, because they were so backed up with their dealer's discounted incoming orders.

Could never figure that mystery out when a FLORIST was telling their own 100% SALE CUSTOMERS they couldn't help them, especially when, their own customers NEEDED THEM THE MOST!

After which, the florist's own customer calls defaulted to the very dealer who was intent on keeping THEIR FLORISTS TOO BUSY!

In the end, the florists would wind up with TOO MANY HIGHLY DISCOUNTED SALES and not enough 100% customer sales, since many turned into FORMER CUSTOMERS for the FLORIST, and new customers for THEIR DEALER.

And then, ONE DAY, and without any reason or warning, the incoming orders from their DEALER suddenly STOPPED!

In fact, their DEALER found someone else who agreed to fill their orders at an even bigger discount, or agree to pay more for the privilege.

After which, the USED UP FLORISTS were forced to DOWNSIZE their operation overnight, or in some cases, simply CLOSE UP SHOP!

Isn't it amazing when A SKIMMER'S GRAND MASTER PLAN ALL COMES TOGETHER?

If anyone posts on FC this upcoming Valentine's Week, that they had to take their Telephones off the hook and force their own customers to get a MAKE BUSY SIGNAL, because they were so backed up with FILLING HIGHLY DISCOUNTED INCOMING ORDERS from DOT.CON MIDDLEMEN, We NEW YORKERS have SEVERAL REAL RUSTY BRIDGES we can sell you at really rock bottom cheap prices.

Sure, they're all FIXER UPPERS, but just think of the TOLL FEES you can charge after you rebuild the infrastructures.

Seems that, all of THE BLUE STATES on the East and West coasts are ALL IN THE RED NOW, and don't have the proverbial pot, nor the window either. Just what happens when you GIVE IT ALL AWAY to our newly arrived amigos or fourth generation POOR PEOPLE while the LEFTIES in the BELTWAY continue to IMPORT MO OF THEIR POOR while EXPORTING MO OF OUR WEALTH!

Very similar to what I've already described above, in the WS MIDDLEMAN SKIMMER GAME.

Or, as some of us always try to warn about: "THE REDISTRIBUTION OF WEALTH!" (our earnings versus their fortunes)

 

[bloomz]

In some of the previous discussions I have noticed florist describing that the wire services take 27 - 30% of the total order. I know that each florist is diffrent, some pay diffrent memberships, some have greater volume, some advertise, some have pos systems.
After deducting, ws membership fees, cc transaction fees, address verifications, cc discount fees, cc program fees, Quality program fees, web hosting fees, network service fees, maintenance fees, finance charges for pos systems, any directory fees, finance charges for any ws product on and on.
Does anyone else have these charges to consider, if so what is a more realistic breakdown of the ws order %.

P. Bird

You should not be factoring in value added services into incoming costs, and nearly all of what I bolded above is value added that has no bearing on percentage given on incoming orders.

That's a hysterical way to look at the picture - one that is often touted up in here.

If you send at all - which we do - we use a share of membership, comissions given and FTO and that's it.

I think Joe is right - it runs around 63-65% - which leaves us with a very decent contribution to fixed expenses that I surely won't turn my back on in these trying times.

Advertising and all that other carp is of your own volition, and you will have a totally distorted inaccurate unrealistic number if you try to factor that stuff in.

But somebody here will undoubtedly tell you you should.

Take it all with a grain of salt.

Everyone has an agenda.

Mine is success.

And flowers are what give me the customers so it's still "about the flowers, sillyass..."

:iwuvyou:

Peace - out:hug:

Going scuba diving today and its time to catch a bus!

 

[BOSS]

I think Joe is right - it runs around 63-65% - which leaves us with a very decent contribution to fixed expenses that I surely won't turn my back on in these trying times.

So tell me 'Ole Wise One... You get in an order for $100.00 vase (no carns and mums) delivered, and using the high number of your scenario, that means you are getting paid $65.00.

Minus your Delivery, COGS and Labor how much is contributed to fixed costs? (Joe, what say you?)

 

[TOTO]

I've never caught a BUS. What's it taste like?

Going scuba diving today and its time to catch a bus!

Must be all kinds uv different under sea life going on in Hong Kong JB!

Scuba Diving to catch a BUS?

I've heard of diving for shrimp, cuddle fish, spiny Lobster, conch, and clams, but BUS?

Let us know if you catch one and tell us how you cleaned and cooked it? I'm also wondering if it chews like Squid (kind uv rubbery), or if it has any tough outer skin or bones in it, thus making it tough to chew?

Might even be an acronym for (B)ig (U)nderwater (S)hrimp, for all I know. Be sure not to CHUM for SHARKS before you dive! I don't care how much the fins are going for!
lol

 

[goldfish]

In some of the previous discussions I have noticed florist describing that the wire services take 27 - 30% of the total order. I know that each florist is diffrent, some pay diffrent memberships, some have greater volume, some advertise, some have pos systems.
After deducting, ws membership fees, cc transaction fees, address verifications, cc discount fees, cc program fees, Quality program fees, web hosting fees, network service fees, maintenance fees, finance charges for pos systems, any directory fees, finance charges for any ws product on and on.
Does anyone else have these charges to consider, if so what is a more realistic breakdown of the ws order %.

It depends on the volume of wire-ins, because fixed costs (such as monthly fees) will decline in percentage relative to the sale.

Let's say your monthly fee is $400. If you get only 10 incoming orders a month, you are paying $40 for each of these orders. But if you get 100 orders, you are paying $4 each. 400 orders - $1 each, and so on.

The easiest way to analyze the actual cost for filling wire-in orders is to divide the cost into two groups: direct cost and indirect (fixed) cost including labor.

Direct cost (assuming the average incoming sales = $50):

(WS related direct costs)

commission - 20%
clearing fee - 7%
FTO (Per Order Fee) - 2.5% ($1.25)
Reciprocity fee (if any) - 5%
​

(your direct costs)

COG - 28% (35% of $40 <= $50 minus $10 delivery)
delivery - 14% ($7, various)​

Therefore your contribution margin in this case is:
23.5% with reciprocity fee, 28.5% without. In other words, if you have $1 wire-ins, you have about 25 cents (give or take) to pay for indirect fixed expenses, such as monthly fees, etc.

Most shops pay as much as $400 a month or more for WS-related fixed expenses. So based on 25% contribution margin, these shops need to get as much as $1,600 wire-ins a month to just break even.

But remember that, if you are just breaking even, you are working for that WS company; you didn't make any money for yourself.

If you are paying $400 a month for WS, I think you should be making at the very least half of it ($200 a month) for yourself, to justify your membership.

To achieve that ($400 for WS, $200 for yourself), you would have to have at least $2,400 wire-ins per month. IMO, anything less than that is not worth the effort. If your fixed WS fees are $300, you would need $1,800 wire ins a month.

 

[Eric S]

So tell me 'Ole Wise One... You get in an order for $100.00 vase (no carns and mums) delivered, and using the high number of your scenario, that means you are getting paid $65.00.

Minus your Delivery, COGS and Labor how much is contributed to fixed costs? (Joe, what say you?)

Lets just use two simple figures. Figure Labor 20% and COG 20%. $25.00 of every $100 going to fixed cost.

$10,000 in incoming equals $2500 towards fixed cost. Is that enough?

 

[Joe Mioux]

So tell me 'Ole Wise One... You get in an order for $100.00 vase (no carns and mums) delivered, and using the high number of your scenario, that means you are getting paid $65.00.

Minus your Delivery, COGS and Labor how much is contributed to fixed costs? (Joe, what say you?)

Mark

Labor is fixed so you can't count it.

Some of the Delivery Expense is also fixed so you can't count that either, i.e. Depreciation, Insurance, Personal Property taxes (where applicable). If you use a delivery pool or a delivery service then yes the delivery costs are 100pct variable, but I don't.

Now to answer your question.

$65, COGS is $30, and delivery, if local is $5

$65-$35=$30.

As long as your variable costs do not total more than $65, accept the business because it will make your net profit larger.

When would labor be added? When a florist is hiring specific employees to fill these orders and do nothing else.

Another way of looking at this issue this way.

For me and many shops WS represents around 10 pct of total volume of sales. Adding 10 pct sales does not justify hiring additional labor.

Forget the WS angle, for the moment, if you could add 10pct sales to your total GS without hiring a new labor, wouldn't you accept that business?