IN/OUT ratios?

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goldfish said:
You know what I noticed? Everyone, except me, who posted the ratio claims that Out>In. This makes no statiscal sense. Is FC a select group of elite florists who always does Out>In? I guess not.

A more likely explanation for this disparity is that there's a stigma associated with those florists who do more In's than Out's in FC, so they won't speak out.

In fact to be honest with you, I do feel a little pressure whenever I say we are a "filling" florist, the term which has a distinctively negative connotation in this forum.

See, that's one reason that I don't trust at all any so-called "polls" that are based on self-declaration, here or anywhere else. In one of the most recent polls conducted, the majority of business onwers said their business ethics is above average. Makes no sense.
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You cannot fill what you do not get. Since we rejoined TF in Sept., we have received the grand total of 2 incomings. Granted we are in a small community, but we wired out about 30, some direct & some TF.

And, I sadly add that TF has already been a headache..........

Sigh. So much for my vow to stay out of this fray.
 
I agree, Washington, Pa has an older, more traditional demographic. Few of my wire out customers are under 40, if not 50. Many of my recipients of wire orders, are retirement age, especially at the holidays. And my .com orders probably do to younger people. Something to keep track of in the New Year.
 
goldfish said:
Basically, larger, more established florists tend to gather more outgoing orders than the incoming orders they fill. They suck up a lion's share of local outgoing orders. In our case, that florist happens to be 1-800-flowers (in case some of you don't know, 1800F is a Long Island company, just like our shop).

Smaller, less established shops tend to be the ones who fill more than gather orders.

Why does this disparity exist? That's something we can discuss. I think the answer is a combination of two factors.

1) Larger, established florists have more loyal customers than smaller, newer florists. Many more. These loyal customers call their florists' of choice even for placing outgoing orders, because that's what they've been doing for decades. We don't have that kind of customers.

2) Larger florists can afford to reject/forward more incoming orders than smaller shops can. This doesn't apply to us because we do reject a lot of orders. But most of smaller shops don't reject as many orders as we do.
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We're a big shop. We fill almost 1.4 orders for every outgoing. We don't reject many orders but we do require that we get enough money to fill the order properly.
 
Demography

Joe Mioux said:
I don't think it is a large v small shop, established v new shop, or large city v small city that causes a shop to be categorized as a filling or sending shop.

I think it is more Demographics and Geographic issues. Generally speaking and anecdotally, I see fewer and fewer people under the age of 40 coming to me to send outgoing wires and I can't remember the last time I saw someone under 30 in the shop wanting to wire out. The internet has changed that.
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Here's the demography of our town, greater Huntington, NY (from Wikipedia)

--- Greater Huntington, NY --- (In>>Out)
pop: 195K, density = 2,000/sq mi
age: <18(26%), 18-24(6%), 25-44(30%), 45-64(26%), <65(13%)
income: $95K (household), $103 (family)

As you can see, our coverage area consists of affluent, mid-age, working families.

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I took liberty to investigate demographies of the towns served by other florists who posted In-Out ratios here. I didn't do Randy's, because his coverage area is too big (I mean, entire SW Ohio? :))

--- Anaheim CA (Cathy, Bigted) --- (Out>=In)
pop: 346K, density = 2,600/sq mi
age: <18(30%), 18-24(11%), 25-44(34%), 45-64(18%), <65(8%)
income: $47K (household), $50 (family)

Anaheim is bigger than Huntington, but the pop age is considerably younger than Huntington and significantly less affluent.

--- Melrose MA (Lori) --- (In>>Out)
pop: 27K, density = 5,800/sq mi
age: <18(22%), 18-24(5%), 25-44(32%), 45-64(24%), <65(16%)
income: $62K (household), $78 (family)

Melrose look likes a densely-packed suburban town with reasonably rich (but not as rich as our town), mid-age people.

--- Carlyle Il (Joe) --- (Out > In)
pop: 3.4K, density = 1,400/sq mi
age: <18(23%), 18-24(10%), 25-44(24%), 45-64(21%), <65(21%)
income: $37K (household), $48 (family)

Joe's town looks like a typical rural American town with aging populations. Income level is about national average. Joe, you probably are also serving nearby towns, I assume these towns' demographies are similar to Carlyle.

--- Zephyrhills FL (RDeighton) --- (In=>Out)
pop: 11K, density = 1,700/sq mi
age: <18(18%), 18-24(7%), 25-44(21%), 45-64(21%), <65(33%)
income: $28K (household), $34 (family)

Zephyrhills looks like a typical retirement community.

--- Midland, MI (BOSS) --- (Out >> In)
pop: 42K, density = 1,300/sq mi
age: <18(26%), 18-24(10%), 25-44(28%), 45-64(22%), <65(14%)
income: $48K (household), $65 (family)

Midland looks like just about an average American town. Not particularly young like Anaheim, but not aging.

--- Washington, PA (ivygreen) --- (In >> Out)
pop: 15K, density = 3,500/sq mi
age: <18(21%), 18-24(13%), 25-44(28%), 45-64(21%), <65(17%)
income: $26K (household), $35 (family)

I don't know what to make out of this. The demography looks very similar to Midland MI, but the income level is way below national average. Maybe ivygreen can explain...

--- Piedmont, SC (Connie) --- (Out >> In)
pop: 4.7K, density = 500/sq mi
age: <18(25%), 18-24(8%), 25-44(30%), 45-64(24%), <65(14%)
income: $36K (household), $42 (family)

Piedmont looks like similar to Joe's town (Carlyle, Il), only even less densely populated.

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With these very limited sampling, a couple of things can be said about In-Out ratio versus demographies.

Rural towns generally have fewer incoming orders. Rich suburban towns, again generally, will receive a lot of incoming orders.

Income levels might matter too. Generally, towns with affluent families receive a lot of incoming orders.
 
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goldfish said:
Basically, larger, more established florists tend to gather more outgoing orders than the incoming orders they fill. They suck up a lion's share of local outgoing orders. In our case, that florist happens to be 1-800-flowers (in case some of you don't know, 1800F is a Long Island company, just like our shop).

Smaller, less established shops tend to be the ones who fill more than gather orders.

Why does this disparity exist? That's something we can discuss. I think the answer is a combination of two factors.

1) Larger, established florists have more loyal customers than smaller, newer florists. Many more. These loyal customers call their florists' of choice even for placing outgoing orders, because that's what they've been doing for decades. We don't have that kind of customers.

2) Larger florists can afford to reject/forward more incoming orders than smaller shops can. This doesn't apply to us because we do reject a lot of orders. But most of smaller shops don't reject as many orders as we do.
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Goldfish,

Your two reasons for the disparity may have some validity to them, but they are not the main reason.

The main reason is the 80/20 rule applies to sending wire orders but does not apply to receiving wire orders.

80% of outgoing florist to florist orders originate from the 20% largest shops, but the receiving of incoming orders is relatively evenly distributed to all shops. By the way, the 80/20 rule applies to all orders, not just wire orders. 20% of the shops do 80% of the business.

Another reason is larger shops tend to have larger delivery areas. My shop is probably an extreme but a good example. We deliver to over 4,000 sq miles and well over 100 cities, yet the wire service lists us only in one city, Dayton, which is only 47sq miles.

If a florist in Long Island is sending an order to Dayton and is not familiar with any one shop, my shop would have a one in twenty (20 shops listed for Dayton) chance of receiving the order. This is regardless of the fact that a large percentage of orders leaving Dayton originate from my shop.

Now, if that same Long Island shop is sending to Huber Heights, OH (two miles up the road), my shop would have virtually no chance of receiving that order because my shop is listed in Dayton only.

In conclusion, it would be very difficult, and take a lot of time, money and effort for my shop to ever come close to receiving the number of orders we send, while a micro florist can hardly avoid receiving more orders than they send.



RC
 
Goldfish,

Another way to look at it.

A new shop could open up next door to my shop, have zero customers, join three wire services, and immediately have many more incoming wire orders than me.

The more micro a florist is, the larger the number of incoming wire orders will be as a percentage of their total sales, especially if they choose to be members of multiple wire services.



RC
 
Much of Washington, and Washington County Pa is an older population. Built around the mills and the coal mines. Greene co, just to the south is even less affluent. Things are changing and the nothern end of the county is seeing rapid growth. Retail centers are popping up everywhere, and so are housing plans. But for many years people have moved away to get better jobs. And big paying jobs are not many in town. Main st and the business district are trying to revitalize, but I believe it will never be the same. It seems to be moving to a professional area, which would be an improvement, and walk in is not good. Phone business is our # 1 area of sales.

RC's point about the micro florist is very good. And from my experience, it is hard to take it to the next level. I think it gets better once you can move your shop to the next level.

Joe and some others comment on the need for shops to close and this is probably true.
In Washington, I count 2 grocery florists, 6 florists, and 2 more who really just do a few jobs a month, for the customers who keep coming back. Of the 6, two chase wedding and party work, and have gifty shops. One larger shop of the six has the lion's share of the business. My only consolation, he considers me a threat, for now we are friendly about it.
 
I don't know the "science" behind it, but I think he means the smaller your shop is, the less funeral work, weddings, everyday accounts you may have. And the wire service is sent to all the florists who have it,(equally?) so therefore wire business becomes more of your bottom line.
 
Great Discussion!!!!

What a great discussion!!!

Our ratio is 1 to 1. One outgoing order for one incoming. My guess as to why this is true is because of the demographics of our area. Quite a few retirees - few flower shops, etc. Once again, I think these stats will depend on the area you serve and the "economic circumstances" of that area.

All the best,
 
RC said:
The more micro a florist is, the larger the number of incoming wire orders will be as a percentage of their total sales, especially if they choose to be members of multiple wire services.
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Joe said:
RC
Can you elaborate, Randy.

I don't see the correlation of a very small shop and its incoming ws business.

thanks joe
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Joe,

For the typical American florist 30% of its revenue is from incoming wire orders.

For a micro florist with sales of $200,000 a year that equates to $60,000 worth of incoming wire orders, or roughly 1,000 incoming orders a year. This scenario is easy to achieve, maybe even tough to avoid.

For a mid-large florist with sales of $2,000,000 a year that equates to $600,000 worth of incoming wire orders, or roughly 10,000 incoming orders a year. This scenario is possible but difficult to achieve.

For a very large florist with sales of $20,000,000 a year that equates to $6,000,000 worth of incoming wire orders, or roughly 100,000 incoming orders a year. This scenario is probably impossible to achieve.


RC
 
RC in Dayton and Cincinnati said:
Joe,

For the typical American florist 30% of its revenue is from incoming wire orders.
RC
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This is what I don't understand. It seems you are generalizing without any documentation to back up this claim.

If my second statement is true, this is why I have problems with flower shop owners/mgrs/etc. making comments about wire services without citing that this is their experience in their own shop or basing their comments on some unbiased survey.

To continue, my incoming wire service business continues decreasing which may correlate with my funeral flower business changes, or out of town customers are drop shipping flowers or they choose someother gift giving. I think in other threads we have discussed that the WS business is declining everywhere.

So, if we as florists see a decrease in WS business how can one view ws business as a static 30 pct of most small business?

joe
 
Well Joe,

I don't really know how to respond you.

I'm only talking from my experiences and knowledge. I thought my view and perspective being different than most might have some value, but apparently you, as well as others, have a problem with it.

I don’t care enough to spend too much time researching to prove my points. You can take them or leave them.

As for my knowledge and experiences, I won’t share them here anymore. You seem to know it all anyway.

Good Luck,

RC
 
I just browsed the Oberer's website, where I found flowers99, do any others here participate in this program? I was amazed at the price points, so if you have any doubts about his serivce or insight in the industry... I say look at his site!

Excellent site, overall, images are lovely,well staged and photographed.

Just my thoughts here...
 
If you are going to set up a poll

RC in Dayton and Cincinnati said:
I don't but guess it would be somewhere between 30:1 and 60:1.

It would be interesting to see what others would say. Maybe we should set up a poll. RC
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Boy, you guys are sure going to confuse . If you set up a poll, MAKE SURE THAT IT IS CLEARLY SPELLED OUT. May I suggest a way to report numbers?

Here is how I would look at the numbers. Just grabbing some figures.

30 orders Out - 15 orders In = Ratio 2 to 1 or 2/1

$1,200 Out $750 In = $1.60 out/$1.00 in or 1.6/1

What ever numbers you want to compare, spell out precisely what #s to use.

Aren't the numbers going to be scewed by values?

If one sends out high value orders and gets low value orders in, he will be better off.

Or if one sends out low value orders and gets high value orders in, it's a totally different result.

If you had every wire service member in the country reporting, there would be an equal number of orders out and in. Can't be any other way.

But the value of the orders would drastically change the picture.

Or am I the one who is all mixed up?

Tom
 
RC in Dayton and Cincinnati said:
In conclusion, it would be very difficult, and take a lot of time, money and effort for my shop to ever come close to receiving the number of orders we send, while a micro florist can hardly avoid receiving more orders than they send.
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I understand your point. Basically, the number of outgoing orders of a florist tends to be more or less proportional to the size of that shop. The bigger the shop, the greater the number of outgoing orders.

In our shop, the revenue from outgoing orders constitutes about 7-8% of total revenue. I believe this percentage, 7-8%, is not that different from the percentage in much bigger florists.

What is different between small shop and bigger shops is that the number of incoming orders. In our shop, it's about 25% right now.

Two years ago, when we started up, the incoming percentage was almost 50% of total revenue. What happened is that our shop became "bigger", i.e., total revenue increased while the number of incoming orders stay the same or slightly declined.

You're probably right. If, say, our shop became twice as big, while the number of incoming orders stay the same, the incoming percentage will become about 12%. At that point, since the outgoing percentage is about 7-8% in our case, in-out ratio will become close to 1:1.

So in a sense, in-out ratio is an indirect measure of the maturity of a shop, if everything else is equal.
 
RC in Dayton and Cincinnati said:
As for my knowledge and experiences, I won’t share them here anymore.

RC
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No! NO! NO! Say it won't happen! We need you here. It is the differences in knowledge, experiences, and opinions that make FC such a good place. IMHO We learn from each other. And, IMNSHO, we need you!
 
RC in Dayton and Cincinnati said:
Well Joe,

I don't really know how to respond you.

I'm only talking from my experiences and knowledge. I thought my view and perspective being different than most might have some value, but apparently you, as well as others, have a problem with it.

I don’t care enough to spend too much time researching to prove my points. You can take them or leave them.

As for my knowledge and experiences, I won’t share them here anymore. You seem to know it all anyway.

Good Luck,

RC
Click to expand...

my apologies to you.

My intent ws not insult your expertise.

I was just asking a question.

Part of what makes this forum great is that we have diverse ideas, opinions and experiences.
 
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