Impacting other florists

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Griff

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Oct 16, 2003
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On another tread I gave an example of what can happen in a city with 3 florists who all belong to a WS and what can happen if one of those florists suddenly drops the wire service. I did this because Dana had indicated that she didn't think that only a hand full of florists talking about .coms was going to do anything to change the outcome. I understood from her comments to infer that one or two florists aren't going to change any outcome.

I disagree with this philosophy especially when it comes to the floral market. If you look through your WS directories you will see that vast majorities of the towns and communities have one to four floirsts located within that town. Whether you are talking about .com orders or orders wired to you from other florists, the example I used is a correct one. WE all have some impact on the florists around us and they have an impact on us and our business. In the example of one florist dropping the WS, those incoming orders have to go somewhere in the future and whether they go just to the florists in that town or some are sent to some of the also served, they will have an impact on their businesses and in most cases a negitive impact.

BOSS replied to the example and felt they it wouldn't have much impact on his area because so many other florists are listed as also served. He indicated that he can't figure out why some are not going broke because of delivering in large areas for $30 orders. In his opinion, "it is not because of the WS orders, it is becasue they are not smart enuf to either say NO, or to actually look at their businesses and figure out they are not making any profit." Well , BOSS, some of these florists ARE going broke and it is because of WS orders. It might be one thing to deliver a $30 full value order from Bay City to Midland, but it is truely a different thing to deliver a WS order the same way. In the old days a florist could offer his local customers delivery to other towns and at the same time decide to get listed as an also served with the WS for those same towns,but now it may not be such a smart move. Extended "windshield time" with discounted business is now very costly.

So the point of all this, every florist can make some impact on his or her area by forcing the other florists to do things that is not economical to their advantage. And as we all know, many florists don't look at their numbers very often, so for any florists on the edge of going broke... well you get the idea.
 
Again Sir, I do concur

But, I also believe that if they either 1) Stayed in their own delivery area (an area where it is convienent and profitable to deliver to) or 2) ( IE: reject those orders they can not make money on (most take all comers) )

No one I know can deliver even a "Full Value" order of $30.00 plus a $5.00 DC to an area 20 miles away and make a profit, UNLESS they have many multiple orders to that same area daily. Many will run 1-2 deliveries that far, while others will simply wire the order, keep the %, and allow me to make a profit (albeit less than on a full value order) as well as get my stuff into the recipients door...
 
Can I say...??

There are many flower shops who ARE the area providers of the "clubs" and these market areas will get so over-saturated with members of those "clubs" and those members will be selling the same old stuff or brand or "my service is better than yours". Ya know, it all becomes a mute point of entertaining a vendor service so one can enable their business of sending or receiving flowers worldwide without the hassle of doing it themselves without someone pick-pocketing their hard earned cash.

:spin Who said "get back to basics?"
 
We are only a 2 florist town. I was FTD and TF and the other smaller shop is only teleflora. I get the bulks of the orders my way. I droped FTD May 1 and from what I am seeing I put myself in the driver seat. I have the choice to accept a order or simply say, Sorry I don't fill order for 1-800 flowers or any order gatherer that I don't want to deal with. I am sure the other shop doesnt have a clue on what is happening with a wire service. I know my out going are going up because people are charge a high amount from the other shop and they come to me or they even may leave and say screw it. Slowly I will make changes in my town to educate the people as much as I can. It happen again this week, from Canadasflorists.com. THey sent me a order with the 20% discount already taken off. At Christmas I told them I am not giving them a discount. THey keep sending me orders with customer info and so far will all the orders I have been able to get them to cancel those order and order directly from me. With FTD I am filling domestic retrans if the order comes froma legit flower shop.
I also received 2 direct order this fathers day from people who could not get tjeir order delivered at mothers day because of the screw up with FTD and 1-800 flowers.
I love it when I can beat them at their game.
Luc
 
But BOSS, these florists will tell you they ARE making money

And we have heard all the reasons they feel they are making money. "I need to keep my designer busy or she earned her salary on the first three designs so the fourth is labor free." "I need to keep my driver busy or the van was going in that direction anyway." And the best one I like is, "no I didn't make full margin, but we managed to make a couple of bucks profit and profit is profit". In fact I think you just said that when they were talking about roses wrapped. The problem is too many florists believe that if one florist can make money this way, so can they. Not true!

We have a very large florist far north of here and they are listed as an also served for a town near me. It is a 40 minute trip one way from their shop to the heart of this town. They do not use a delivery service. They deliver with their vehicle. Now maybe because we have the only hospitals between here and there, they might feel it is worth there trip for THEIR local customers, but why would you be willing to pay $8 a month to list as an also serve to drive 40 minutes one way for a discounted order or two. THEY DO! Now I'm sure they don't accept any wired orders when they don't have anything else going and they absolutely will not accept wired orders for any holidays, but I bet they can show you this trip will make money for them! But I sure couldn't do it.

By all common sense, florist should do as you indicated and only work their areas for delivery and do what makes them money. But for only $8 more per month you can get all those additional orders that can help you rotate your flowers, keep your employees busy and oh yes, help you lose money.

The old time florist may have ways to make these ideas work, but the average florist today doesn't have all the advantages that these larger well established operations do. Most florists can't even tell you what their monthly "bogey" number is. If you don't know that number, how can you determine how much discount business you can afford to handle?
 
SAd but TRUE and yes sir I do

Yep, Griff... ALL too true.

"Most" florists do NOT have a clue, and I would not limit that to the new kids on the block either. As you know, I am in many stores a month, and dinner conversation is always about how to work in todays flower world.

That $8.00 a month, generally bring more trouble than its worth. You can have all the "order flow" you want, but unless you are crunch the numbers, you will lose.

Some florists I know, have gone to weekly number games, because if you wait until the end of the month, it may be to late.

Yes I did say that.

I like it when folks show me their delivery numbers, and tell me they made a "profit" on them. Then I throw their numbers into Excell, and add things they leave off like car washes, oil changes, tires, repairs, GAS, vehicle cost, insurance, grafix, drivers salary, delivery boxes/cubes, and....

Controlling Cost of Operations is the KEY THING a florist has to do these days.
 
Controlling their cost of operation??

Most of the florists I know are just trying to keep the wheels on these days. From much as what has been posted these days, most seem to be more interested in searching out orders rather than worrying about the cost to produce and deliver them.. And I'm no saint, when it comes to this subject, either. Thank heavens I have a little manufacturing background before I got into this business. I'm just waiting to see how many will ask what a "bogey" number is?

I'm also trying very hard to keep this subject on top of the other one going on at the same time.
 
Bogey numbers

We will try this one more time.

Anyone care to define a florist's monthly bogey number? And can you find this number without a computer? And lastly what does this have to do with impacting the other florists in your area? Rememeber the original post was about impacting other florist and this is about that subject.

And BOSS, I already know you know the answer, so let's see who else does.
 
O.K. Griff, ya got me.
Are we talking about straight bogey number or profit bogey number? (Gawd, I hate the term bogey, makes me want to go golfing)
Straight bogey is the point where revenues less variable expenses less fixed expenses equals 0.
Profit bogey is the same, but subtract your desired profit dollars as well.
A variable expense changes dependent on sales volumes (flower costs & labor).
A fixed expense does not change, regardless of your level of sales (rent).
The problem almost all florists have is they treat labor as fixed instead of variable, usually by keeping high paid designers on during slow periods.
Instead of designing, they end up filling water tubes, bleaching pails, or filling those discounted wire service orders. :boggles:
This is where you get the attitude "well, I have to pay them any way, so might as well keep them busy doing something productive".
May not have your manufacturing background, but I do have a degree in Commerce.
So how am I doing so far?
 
prestonway said:
"well, I have to pay them any way, so might as well keep them busy doing something productive".

So how am I doing so far?
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So do like I do and send 'em home! I do it DAILY!!

And you're doing just fine!
 
Labor in our shop is variable, not fixed!

We also send designers home when there is no more work to be done. Filling water tubes - a highly paid designer? No way in our operation - that is just not cost effective. We keep them as little or as long as needed. They don't mind because from the beginning, they understood that is how we do things. Like BOSS said, a key to success is to control your operational costs!
 
Let's go a little further

Preston, your explination was excellent. Now let's go a little further.

I don't expect everyone to agree with me on this next point, but this is what I was taught.

Let's say that you determine that you use a 2 time mark-up on your product <widgets> and your weekly bogey number to break even <just to cover all expenses, fixed and variable, is $1,000 in sales. Let's say that to reach that sales number last week, you had to discount the last sale which was $150 and you had to discount it 20%. In other words,the customer wasn't going to buy unless he got a deal. You rang in the sale as $150, but your customer is only going to pay you $120. To meet your profit goal for the week of $500 on a $1,000 of sales, you are now going to fall $30 short. To make up that shortfall,next week you have to sell $75 COG at a 3 time mark up to balance the books. You can do your own math with 3 time mark-ups and approximately 10- 20% of your weekly or monthly business devoted to the wire business.

Now the big guys don't always worry about this for many reasons. That's why you wil hear them say that they can take the wire order and make a couple of bucks. They base that on the fact that they are always going to be over their bogey number every month. I'm willing to bet, however, that vast majority of florists don't know what their monthly bogey number is therefore are basing some of their business decisions on what other florists have told them. Remember, just the fact that you own your building will make it easier to make you numbers.

This again is only my opinion, but it would be more advantageous for our industry if we found away to educate florists about their personnal bogey numbers rather than the proper way to account for wire business. This is like arguing if the previous play should be scored as a hit or an error. It only matters if it was a no hitter.

How long do you think it would take to convince someone how much more they have to sell a product for once they discount something and can't make their monthly bogey?
 
Griff said:
How long do you think it would take to convince someone how much more they have to sell a product for once they discount something and can't make their monthly bogey?
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We figure weekly...then monthly, and so on.

What you've written makes complete sense, And I'm sure that it wouldn't be hard to explain and change some florists, as long as they're still willing to learn. I'm always receptive to better ways of doing things...Try to convince some of my family and friends that have been in the biz for 40 years and you may be beating a dead horse. If you're really interested in passing along your successful experiences, just try to make it easy enough for everyone to understand (I have a marketing and science education...and minor in criminal justice...not manufacturing)!

I always appreciate feedback from other florists..."right or wrong"...And I'm so happy I was able to stir something up here! :) (Seemed like it touched a nerve on you, Griff...you've gotta understand that I'm far more of a goofball than you seem to think...you can't take much of anything I say here THAT seriously...I come to this board to kick back and shoot the s%^t, not to stress out MORE over work :) It's like day care for me...I get to play while I learn. )

Dana
 
Frank said:
We also send designers home when there is no more work to be done. Filling water tubes - a highly paid designer? No way in our operation - that is just not cost effective. We keep them as little or as long as needed. They don't mind because from the beginning, they understood that is how we do things. Like BOSS said, a key to success is to control your operational costs!
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I agree...All of my high-paid designers are P/T ONLY. 4 P/T designers on a rotating schedule with a 20 hr/wk average. They work like heck when they're here and then I cover the slack if something pops up when someone isn't around. I agree...I couldn't stand the thought of someone making big $$$ to tube or scrub.... My 4 year old LOVES to fill water tubes...so that's her job, anyway!
 
Pure Logic

Please understand that I'm not trying to make a big deal about coming from a manufacturing background. I've always felt that the broader the education, the more equipped you are to solve problems.

Again the point of the discussion is impacting other florists. What most florists don't seem to understand is the harmful effects of discounting has on their business. We have talked about the "average florist" and one to one ratios on outgoing to incoming orders and when you put that together with monthly bogey numbers, you begin to see what really happens. Even an average florist with a one to one ratio will find that approximately 15-20% of their monthly business is producing almost no profit after all the dues and fees. Unless the remaining 80-85% of the business is sufficient to cover the "bogey number", that florist will always be in the hole.

Many of the large senders have to keep encouraging some florists to accept and fill their orders and some of the information being passed out just isn't true for the average florist. You will never get the "real" information from a WS on this subject because it is not in their best interest.

So the moral of the story is if you want to get rid of your local competition, feed ALL your incomig wire orders to them and let them figure out why they have the problem.

Dana, in your case, feeding all your local incoming to your neighbors won't work because you have one of the largest national order gathers in your town.
 
How come your designers don't quit?

BOSS said:
So do like I do and send 'em home! I do it DAILY!!

And you're doing just fine!
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the concept is simple..but in reality my people work because they need money to live,, and they budget their lives around the paycheck anticipating the hours addigned each week..
yeah sometimes people enjoy unexpected free time.. especially if it is paid time off.. but my people would have a massive problem if I all of a sudden decided it was slow so go home at no pay.. yeah I can legally do this.. it is written in my employee manual, but it is the last thing I would do.. I need to be smarter with setting up the schedule before hand and not force the problem on my employees at the last minute..
of course I live in rural NH.. so I can't just go out and get another talented designer at the drop of the hat.
I just quizzed my staff and they all said.. ok to give them the option to go home but if you make it a habit they will need to find someplace else to work where they can trust the employer to provide them with the work if he schedules them
Just my take on things
 
carol said:
the concept is simple..but in reality my people work because they need money to live,, and they budget their lives around the paycheck anticipating the hours addigned each week..
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I do understand, however as a business owner, MY first priority is to the business, and not their budgets.

We have no set schedule other than the days you are to work, not the hours, thus you will work the day you are scheduled, but you may not get 8 hours.

MY staff, for one thing, is most likely paid very much above the average and they know when there is work to do they are expected to be here, and when there is nothing to do they go.

If you look at the yearly average, they make up in overtime at holidays what they lose in the slow months. It's not our job to help them budget, nor to make their payments.

I do understand your issues, with regard to finding employees, I have the same problem...
 
Boss, I too understand where you are coming from, and I understand also that the company must create a return to the investor(s) (me). With that in mind, I must also be aware of the daily "living" of each staff member and the committments they have in life. To that end, I have found that when the shop is slow to offer time off to Volunteers. (this works especially well in the Summer) Every day a volunteer list is sent around the shop, and those interested in leaving early as the day starts to slow down will be the ones told that they are free to leave. This way, I am not forcing anyone to have a cut in hours, and I also have staff to show up for the day in case we become busy. The choice is theirs, and they know that if it slows down, we are going to be doing "busy" work, and I think they would rather leave than assist the maintenance people with shop maintenance. This does help on beating my projected budget for wages, and saves the company additonal labor expense. I am astounded at the takers on this, as I'm sure most of you would be as well.
 
BOSS said:
I do understand, however as a business owner, MY first priority is to the business, and not their budgets.
This is true, it's just not the whole picture. Talented designers are a finite group of people in our city, we have far too many shops and not enough talent. We can get a mediocre part-timer or an excellent full-timer - for us, our quality would suffer if we go option A instead of B.
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If you look at the yearly average, they make up in overtime at holidays what they lose in the slow months. It's not our job to help them budget, nor to make their payments.
We wouldn't be able to keep our staff if we held to that philosophy. It's great if you can do it but we can't.

Audra
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If a florist is not able to exceed the their monthly bogey number...

there are only a couple of things you can do.

I agree with the above comments and it isn't always easy when you are talking about employees. However, if any company isn't generating enough business to meet or exceed their monthly bogey, then you either have to increase profit on your current level of business <raise prices>, find additional full value business <new accounts>, or reduce your monthly expeditures <variable> because it is almost impossible to reduce fix costs. Remember taking more discounted business will hurt you ,not help you. The only one that can really take discounted business is the florist that has already made their bogey number and ANY business after that point is profit!
 
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