Is 30% of Something better than 0% of Nothing???

[makescents]

BTW - If I - (I said I meaning me and no one else) ... If I fill an OG order. 1800 FTD TF whatever and make money off of it...

In the end I will lose money - because recip is a potential customer - If Suzy buys Granny MeMaw a $60 bouquet and I send out $32 in flowers... UUMMM I am the one that looks bad... RIGHT?

I don't know about y'all - BUT I am all about the lookin' GOOD! Bad is not my color!

 

[Joe Mioux]

BTW - If I - (I said I meaning me and no one else) ... If I fill an OG order. 1800 FTD TF whatever and make money off of it...

In the end I will lose money - because recip is a potential customer - If Suzy buys Granny MeMaw a $60 bouquet and I send out $32 in flowers... UUMMM I am the one that looks bad... RIGHT?

I don't know about y'all - BUT I am all about the lookin' GOOD! Bad is not my color!

Except you aren't supposed to do that.

 

[goldfish]

This is one of those threads in which I know exactly who will say what, including my own. I'm resisting my urge to repeat myself over and over again.

 

[RWK]

One thing I am curious about though Goldie - You and I both know that some shops have it figured out how to seemingly make WS incoming work for them.

Like I said in an earlier post....seems to have gotten overlooked though.....one shop I freelance at goes all out to capture those incoming orders......I know they are bloomnet, TF, FTD, and they may even be BBrooks as well.

Two things about them though....they go through an incredible amount of flowers.....On any given day, I can go into that shop and find at least 3 full boxes of roses ready to be processed for example. At least 3 to 5 boxes of carnations ready to be processed, - they buy in huge quantities. They keep a reefer trailer all year long going in addition to their storage and display coolers.

They also are METICULOUS in following the posted recipe for the particular WS arrangement.

Could buying in vast quantities and following the recipes to the letter be the critical difference in losing with incoming WS and winning with incoming WS?

 

[Mark Anderson]

Could buying in vast quantities .... be the critical difference in losing with incoming WS and winning with incoming WS?

Hey Rick,

Of course - buying smart helps. Smart doesn't have to mean huge quantities but buying in volume will typically mean lower prices and that can help an operator squeak out enough to make more orders profitable. You can see how a shop that gets one or two orders a day and has to buy off the truck to fill them has no chance of making money while someone who is buying case lots might. It's one piece of the puzzle.

I have definitely seen shops that can make incoming work but there are some important things to consider. First of all they have to be in an area that gets a lot of incoming business - it probably won't work in a small town. They have to buy in volume at low prices - no picking and choosing off the truck. They also need cheap space and probably cheap labor.

What do you end up with? In many cases a mass-production flower factory. There is nothing wrong with that but I don't think it's the kind of shop where you - or a lot of the other people on this board - want to work.

You still shouldn't assume that those incoming orders end up being profitable despite what activity in the shop would lead you to believe - there are plenty of owners who aren't totally sure what is going on when it comes to their incoming wire business. There have been many discussions of how some florists are using a strong local business that is more profitable than they realize to subsidize an incoming-wire-fulfillment-business that is less profitable than they realize. It is very difficult to know what is really going on behind the scenes just by watching what happens in the store.

 

[RC in Dayton and Cincinnati]

Ricky,

I'm buying 500-600 boxes of flowers every week and am quite sure I cannot make the incoming wire business profitable.

I strongly believe it is BAD business, so much so when I hear my major competitors are chasing incoming I literally jump up for JOY!

RC

 

[Rhonda]

personally, I believe that it may well benefit smaller shops who don't "have the volume" but can easily let out of their mouths when receiving a reciped order "I can fill as close as possible" and produce a quality product. a la "fields of europe" crap....
and can say no when volume exceeds their production (local orders vs incoming discounted orders)
Two sided coin on either side.........

 

[RWK]

Ricky,

I'm buying 500-600 boxes of flowers every week and am quite sure I cannot make the incoming wire business profitable.

I strongly believe it is BAD business, so much so when I hear my major competitors are chasing incoming I literally jump up for JOY!

RC

Well, I've made it no secret - I'm no fan of WS incoming discount order. Quite frankly, I think I can make something far prettier, nicer, and higher design quality that not only meets, but exceeds my customer' needs.

With what I know about the Wire Service - I cannot understand how people make money at it. But, That's just me.

I also like to think I'm a pretty smart cookie.....3 IQ points shy of genius level and qualification for MENSA.....and I can't figure it out.

Oh, Well, I am sure the WS debates will rage long after I am fully retired from this crazy biz.

 

[Lady Biker Florist]

I learned from coming to Flowerchat how to crunch the numbers to see if I am making any money on wire in orders.

I ended up leaving TF and then FTD after twenty something years. I joined a smaller wire service (just my preference) called Florists' Interlink and have been with them for quite a few years now. I have a great relationship with them and they allow me to pay my bill in four parts every month (makes it easier for me). I still get $3 per wire out paying this way.

I have been dabbling with TF and FTD the last year and a half at next to nothing fees. Ended up now I am with both until the end of the year and TF a little longer for $99 a month. I check my statement and there are always errors but my reps from both work with me well. Getting two big checks a month while paying a not so big bill in four payments works well for me! I scrutinize the COGS so as not to lose money there. One thing I do that most may not do is I just figure cost of labor as a wash. It used to work that way, remember? The 20% you make on an out cancels out the 20% you don't make on an in. I can live with that. We wait for our check but we're able to use wire out money in the meantime.

You have to keep on top of your statements. I didn't for three months then all of a sudden I saw that we were being charged a reciprocity fee. I got on the ball and emailed my rep (FTD) and he had me fax him a copy of my TF statement to prove I was NOT sending my outs TF. I got reimbursed for all three months. I now have to send 1 out of every 5 in - I can live with that.

BIG ONE
What about those new penalty fees for not rejecting a dotcom order soon enough. My rep never mentioned it. I saw a $138.00 penalty fee on one of the months and the other two months had smaller ones on them. I called and talked to FTD and she explained the fees. I asked for them to be reimbursed since my rep never mentioned it. I am very respectful but straightforward with them. We got reimbursed, don't give up if you really believe you are right. it won't always work, but sometimes it does. I NOW understand the penalty fees and abide by the rules. I know it is all in the membership book, but honestly who really reads those? it's not realiztic. They could have got me on that technicality and I said it to them first but also explained that I believed it's the spirit of problem and that the rep should explain all new rules to oldtimers. They agreed!

It is stressful and sometimes a pain but I really don't want to go work for someone else - so for us it works. When it doesn't then we leave, AGAIN!!! It's a revolving door isn't it?

 

[bloomz]

:dunno:

Maybe it's the 100% orders they're getting from consumers finding them on search engines. (see attached)

right - nobody finds me on search engines cuz I don't know much about them - I'm new at this you know so I don't get many internet orders.

My way of thinking is the incoming might be helping to pay the bills, but your real money is coming from other sources.

I betcha I'd be making more money if *something else* was paying the bills (read as:incoming) and we have just a bit more overhead.

Or maybe the have gained local market share because their prices are seen as a better value to local customers (since they don't add outgoing WS delivery charges to them). (see below)

Are you saying you'll fill that order for $30.99?



Read mine please as "realistic pricing", also when that bouquet is made in our store, at our price - it is twice as big as that picture - I know I've seen it done many times.

Also btw - I don't care for that arrangement -I think it is flat ugly and outdated looking - note to self - find a better cookie cutter...

Are you saying under pricing wins? (that bouquet was originally priced on our FTD site at $30.99 also - I raised it) That site you showed was a hands off cruise control let FTD do it all site.

I thought you recommended against wire template sites - do you seriously think that is outperforming mine?

Maybe I need to promote our FTD site more?

Creative argument, but....no cigar.

It also didn't answer the question.

Maybe, Twila should update the website so it shows they can do more the wire service designs.

Funny those sure looked to me like 100% wire service designs on those other sites too.

Yikes, not only is Inbloom 45% more expensive their arrangement looks smaller.

See above - ours is way more than 45% bigger as well.

One thing I am curious about though Goldie - You and I both know that some shops have it figured out how to seemingly make WS incoming work for them.

I know, and we're primarily hearing from people here who obviously haven't figured it out.

I want to figure it out.

The thing I haven't mentioned here yet is - we have 3 fairly new vans, and our facility is 3 times as large, as well (as is our corresponding overhead).

We can certainly use something like Ivy mentioned to help pay the bills.

I have a way of checking hospital delivery counts for shops in our area, and I do so about every couple months. Then I go back to the shop and see how many times we've been there that time period. Each time I've checked - we do more each day than the busiest does in a week.

I don't really have my head in the sand about what's going on in my local market, like a couple are seemingly inferring here. This other shop isn't like, kicking my ass or something - did my question get misinterpreted? Is this why all the diversion from the topic at hand? Was this question about additional revenue streams or comparing websites?

I think Fox mentioned a *possibility*.

Other than that, it's fairly clear to me that filling incoming is helping her bottom line.

And it's becoming way more obvious to me I am missing out on an additional revenue stream.
I can get that 30% or I can let somebody else get it.

I've been wrong again (hate when that happens, but I guess you live and learn)

Gaylon I believe is on a par with Paul Goodman, and I think both of these guys have forgotten more about floral accounting than most of us put together on this board know, (perhaps with the exception of Joe Mioux). Gaylon has told me more than once we need more incoming business, and are remiss not to encourage it.

I think the diversion from the topic was just that - diversion. And since nobody answered the question I will - it's a non-arguable fact that 30% of something is better than 0% of nothing.

But it's been fun listening to the arguments to the contrary. :thumbsup Thanks!

 

[Mark Anderson]

I will - it's a non-arguable fact that 30% of something is better than 0% of nothing.

You're right Bloomz - nobody can argue that. But I stilll have an issue with the foundation assumption - that we're talking about 30%.

Can you really assume it's 30%? The cost of getting those orders (in the form of membership fees) has risen dramatically over the past decade. The price of filling them (rent, labor, product, etc.) and delivering them has risen dramatically as well. Meanwhile - from what I am told - the value of the orders themselves has been flat or even decreased due to discounting by order-gatherers.

So yes - you can argue that "is 30% of something is better than 0% of nothing" but the answer is self-evident. The question isn't even worth asking. Personally I think the more appropriate question would be "is -10% of something is better than 0% of nothing?" but that's obvious and not worth asking either. The real question is what number is the right one to plug in to that equation. And nobody can agree on that.

I worry that some of the arguments about encouraging incoming are coming from people who got their start working on behalf of the wire services. In some cases their arguments were originally approved and sanctioned by the wire services. A lot has changed in the industry. Has their message?

 

[Mark Anderson]

P.S. I take this really seriously because there are a lot of shops right now that are struggling.

Some of them have zero chance of making money by chasing incoming business. They carry little inventory and have to buy everything off the truck at inflated prices. They have to pay high delivery prices to a delivery service. Even if they could make a little profit on an incoming wire they would never be able to get the volume to cover the fixed monthly membership fees.

Some of these shops are sharpening their pencils like they never have before as they try and figure out how to survive. And some of them are getting close to making a very counter-intuitive decision - that they might be better off if they were less busy filling incoming wires.

This is a very hard realization to reach. Most small business people associate being busy with being profitable. And when times are tough it is very difficult to understand that turning some business away might be the right decision. But some of them are getting there.

Then they come here and see a trick question like "is 30% of something is better than 0% of nothing?" and they lose their courage.

Even worse - they do like a guy I talked with last month. He has really been struggling for some time now. He was down to one traditional service and was going to dump it in favor of a newer alternative service that would have given him everything he needed for a fraction of the price. Then - one night, right out of the blue - he decided incoming wires would be his salvation. Before the end of the week he was a member of FIVE services, taking all the listings and add-ons he could.

The poor guy has no chance. But who can blame him? If you really believe "30% of something is better than 0% of nothing" he did the only logical thing.

 

[CHR]

There's a consistent message from people who provide services to florists (outside of current WS employees) to be very wary of the financial impact of pursuing incomings.

This post from a wholesaler on Flowers and Cents says it well:

The wire services are dinosaurs. The quicker the retailer (the smart ones) realizes this, the better their chance of survival. The model served its purpose once upon a time before the internet. The wire services know this, hence their ever increasing fees. Every retailer I deal with that I have talked out of the wire services have become more profitable.

I believe that the wire services are a bigger problem for the industry than the lack(?) of cold chain management. The consumer feels cheated more often than not after receiving their "wire service" purchase. NO VALUE. They pay 75.00 for a 35.00 arrangement. The biggest complaint I heard about MD was the number of wire orders for specific arrangements at 29.99. Think about it ..... 29.99 - 20% right off the top = 23.99 - del.chg lets say 8.00 = 15.99, what can a retail florist possibly produce for 15.99 that looks like 29.99 that a consumer will be happy with. One of three things happen:

1) retailer receives order, reads order, pisses pants laughing, rejects order.
2) retailer fills order minus 20% & del.chg. Consumer feels ripped off, won't buy flowers agin,whole industry gets a black eye.
3) retailer fills order as if it where being paid 29.99. As a matter of fact fills all incoming orders to value. Is out of business in a year because in reality they are LOSING money on everyone of these orders.

How does it affect importers and wholesalers you may ask?
The smart retailer knows he can't make money on these orders unless he buys sharp. So he beats me, the wholesaler, down until hea gets the price he wants because I know he buts a @@@@load of product. I in turn, beat the importer or farm down and they cave because they know I buy @@@@loads of product. Nobody makes any money, all suffer.

Now the dumb retailer,who knows no better and thinks they hit the motherload of orders without crunching the numbers, starts buying product like a crazy MFer. At full price. Because they have these great orders. Awesome. This goes on for a few months. Now it's time to pay the bill. Gee, I sold all of the flowers, not much shrink. Where the hell is the money?

That's where many of our A/R issues come from today. I challenge you to look at your receivables, see who is way behind, and find out how many of them fill a lot of wire orders. You'll be surprised. They are losing their asses. Let them know you know. They will thank you.

Emphasis mine.

As one of TF Top 10 sending shop owners told me in person, "You cannot make any money filling incomings. WSs are weighted entirely to benefit senders."

I am sorry to repeat these messages and would prefer not to, but when I read mis-information here at FC, I'm not yet burned out enough to just let it stand.

 

[CHR]

In all sincerity and honesty, I would like to hear from the folks who nominated Goldie's post in this thread for Thread of the Week.

Where does the SSDD start? What to do about it?

When a post is created to rehash the same, much, much, debated topic, are the rest of us just supposed to shut up?

As Mark said, we have new members joining every day and they have not been part of these debates.

 

[LJVF]

Can you really assume it's 30%? The cost of getting those orders (in the form of membership fees) has risen dramatically over the past decade. The price of filling them (rent, labor, product, etc.) and delivering them has risen dramatically as well.

That's a great point. IMO, 1) it doesn't take rocket science to break even on incoming, 2) it's very easy to lose money on incoming and 3) it's very challenging to make money with them. You're right, that 30% number is not the same for every shop with different variables.

Even worse - they do like a guy I talked with last month. He has really been struggling for some time now. He was down to one traditional service and was going to dump it in favor of a newer alternative service that would have given him everything he needed for a fraction of the price. Then - one night, right out of the blue - he decided incoming wires would be his salvation. Before the end of the week he was a member of FIVE services, taking all the listings and add-ons he could.

The poor guy has no chance. But who can blame him? If you really believe "30% of something is better than 0% of nothing" he did the only logical thing.

Mark, great series of posts. I'd like to point out that your example of the guy who made a rash 180 degree on his decision to drop the wire services to joining 5 of them in one week can also work the other way as well.

Spontaneously quitting 1, 2, 3 or more wire services all within one week can have detrimental effects on a florist. Phasing out the wire services takes a solid plan to make the transition a smooth one. Losing revenues are still revenues. Some shops are very dependent on the wire services and by quitting cold turkey, it could turn a slow death into a quick one. Without a plan to adjust payroll (assuming the costs are variable), the sudden drop in cash flow can make the situation bad to worse. There are also an array of other adjustments to be made as well that do requiring some planning.

One lesson to be learned from this, is that spontaneous rash decisions for a business is usually not smart business. The wire services should be looked at as an investment. I think a lot of florists are guilty of making poor investment choices and decisions, some out of desperation and some because they really don't have a clue and have no business owning any business.

 

[Bigted]

bloomz; that 30% of something is better than 0% of nothing.

Just a tecnical correction since I'm working on a Sunday morning and I'm grouchy. The phrase is actually 30% of something is better than 100% of nothing.

 

[Joe Mioux]

Just a tecnical correction since I'm working on a Sunday morning and I'm grouchy. The phrase is actually 30% of something is better than 100% of nothing.

and while we on this line of thinking....


shouldn't it be 73 pct of something is better than 100 pct of nothing?

now I got to go back to bed.

joe

 

[bloomz]

I stand corrected on the thread title...point taken.


Kewl - more tactics!

Mark hints of our consultants veracity - is he working for bloomz - or is he secretly working for (cue the creepy music) FTD??? To mislead bloomz into being part of the zombie army of FTD automaton slaves?

Then uses a little know trick to call a statement of fact a "trick question".

Finds an example of excessive lunacy (joining 5 wire services in a week and yer right - he's a goner - he raised his fixed expenses past the point of noreturn).

Then CHR finds a person that states that "you can't make any money on wireins" and calls it a consistent message. (Heck you coulda found more than that right up in here)

Labels my analysis of my business and situation as "mis-information".

Did I miss anything?

Did I accidentally give the errant impression I am jealous they have a new van? The other one they've been using is a mid-90's Astro.

I guess no one can (or could or will) take my own situation into consideration, but I am talking about myself, my observations, my situation, MY reasons for deciding I need more incoming, in my shop.

I belong to said wire service anyway - accepting incoming costs me zero in additional wire expenses, excuse me - that huge FTO fee.

I pay my rent, electricity, water, phones, insurance, etc., whether I get them or not.

I pay my employees whether I get them or not.

Fixed expenses, hmmm. I could most certainly use help with them.

We have excess production capacity. We don't use all the flowers we buy each week. (no I'm not cutting hours or buying less flowers - we have our reasons for this)

I live in a small enough city that delivery expenses for an additional few orders - not a huge consideration - usually going near there anyway (tho they are taken into account)

I've now finally found a way to get a decent number of recipients to start coming into my store (contrary to popular fc belief - you can't turn a recipient into a customer).

I know quite a few Top Sending shops too and "you can't make money on incoming" is very far from prevailing opinion. Most, nearly all, of the biggest shops in the country welcome incoming.

I call these people industry leaders - they know more than I do. (lest it seem like I am dissing RC - I learn a lot from him and he is brilliant - out in left field, but brilliant just the same)

With the branding/packaging I am working on - the amount of marketing we do, the agressiveness and proactivity and dynamic nature of our business (willingness to reinvent and re-assess at least annually) - I have hopes of following another very smart friend's philosophy - and I'd like every flower delivered in this town to have our name on it.

Speaking of bad advice - here? Never! Why, we're the most successful florists in the industry here. We're not? oh, sorry...

As for which opinions/advice is bad and which aren't?

Well opinions will vary

So why do I bother?

Entertainment value I guess - I think I get a kick out of fairly well constructed arguments that cover for often illogical emotional reactions to an industry that seems to be failing (where did I hear that?)

Yup SSDD but a new observation I got in my little world which is affirming a new direction I need to take.

For some reading this but not commenting - I believe I am aguing against a prevailing premise often espoused up in here that if you fill incoming you're not smart, and if you fill OG incoming you're some kind of traitor to the Real Florist Cause.

Call it bloomz annual review reinvent to dynamically prepare for 2010 - I seem to be seeing more F2F orders being lost to the Gorillas every stinking day, and none of us can stop that - time to figure out how to use them like others have.

Hey - it's all good and hopefully also clear it's all in good nature :kuddle:

Rock on - time to shower then go work on my Koi pond.

 

[LJVF]

I just came back from buying my little boy some Bakugans, on the way home I passed our main local competitor's shop. She's been the one who wants all the incoming. I've been content to get all the outgoing and let her have all the incoming.

I see a brand new delivery van sitting outside her shop, covered with flowers, ala Expressions in Bloom (sincerest form of flattery I guess) -

B-b-but she's NOT supposed to be making money on all those incomings. I know that - cuz I read it on flowerchat [sic]. No money in filling incoming orders! Ask just about anybody around here!

She gets all the 800TFTD orders for our city, I've checked. But there's no money in them!

hmmm.....

and she's got a new van, in a depressed economy...


hmmmmm...... :argue:

Could Gaylon have been right that 30% of something is better than 0% of nothing?

I think it's time I sought out more incoming

Glad I have decons in place.

JB I just re-read your original post and it got me to thinking, If I drove by my biggest competition and I saw a brand new shiny van with all the glitter, it would raise an alert flag to me too.

I could make two calculated assumptions either:

1) this shop has a strong bottom line and decided it was time put some money back into the business

or

2) they decided that in order to grow, it was necessary to take out a loan and put some money into the biz.

or 3) The owners are set for life and are doing it as a hobby

I think it's #2.

The US Census Report states that in the year 2000, Corvallis Oregon had a population of only 49,322. If Expressions in Bloom has as dominating a local presence in all facets of a florist as I think they do and Penguins Flowers are chasing for all the wire in orders they can muster; with a local customer pool of only 49,322, it just doesn't seem possible that they can be doing all that well with that kind of business plan.

I have a feeling they are re-structuring their business plan and could be a force to be reckoned with for your local competition.

The other shop that caught my attention is the Stargazer one. Seems like they have a pretty strong internet presence for Corvallis keywords.

 

[RWK]

..............They also are METICULOUS in following the posted recipe for the particular WS arrangement. Could buying in vast quantities and following the recipes to the letter be the critical difference in losing with incoming WS and winning with incoming WS?

Ok, We covered the part of my question about buying in huge quantities.....and RC said that even with 500/600 full boxes of flowers weekly, he did not feel that was enough to make incoming profitable.....so, lets add the other part of my question to the equation......that was METICULOUS AND EXACTING ATTENTION TO THE POSTED RECIPE.

This shop follows to the letter the exact recipe for any given WS arrangement. Not one stem, flower, or leaf in the design other than what is listed.

I'll give an example.....during Mother's Day, there was an FTD vase design that used 3 stems of stargazers and 2 stems of limonium in a rectangular vase. No additional greens, No additional flowers. No additional ribbon....nothing at all except for the 5 stems of flowers.

Could that be the missing difference?