Is a wire service right for my shop?

[Mikey the Flower Guy]

Other than the high-volume oriented sending mechanism, what tangible benefits are offered?

let's just say, that I get to meet many of my florist friends, at least once a year, most expenses paid, by my wire service!!...one of THE MOST TANGIBLE reasons I HAVE to be where I am!!
Also, there is NO POSSIBLE WAY, that ANY GROUP of florists could EVER assemble a directory of florists across our great nations!
Also, for what it's worth, I have been here long enough, to know how much I KNOW about this business yet, and how much my florist friends can still teach me, because I get the chance to meet them face to face!!
Also, being a member of FTD, and attending at least ONE major conference, most expenses paid, pays me back almost ALL of my year's membership fees...without a Damacles sword hanging over my head!!
Also, from a business perspective, our constant involvement in committee work, has raised our profile in the eyes of our fellow florists...trust is given, when trust is earned...often over cocktails!!
Also, FTD literally TOLD US, many years ago, that the marketplace, and consumer buying habits were gonna change, and change they did, and those shops that couldn't stomach change, blamed the wire services for their pitfalls...our former CEO even went so far as to say so!!

 

[fairfield]

You know....


We can all come up with examples, but nothing will beat trial and error.

What is wrong with some good advice so that we can avoid some of the error?

Rule 1: Get a good accountant who can help you interpret P & L. especially as it relates to WS business.

This is great advice, but my personal experience tells me that very few accountants will come equipped with this specific knowledge. With accountants rates at more than $100 per hour, it would be wise to have some preliminary information. If you think that maybe I just had bad luck with accountants then I would ask why SAF published a series of articles addressing this specific problem.

Rule 2: Join a WS and if after a year you made less money than year prior to you being a WS affiliate, drop it.

This is not helpful at all. Can you swim? Jump into the deep part of the pool with the sharks in it and find out.

Rule 3: Funerals rule the WS business. Monitor the number of funerals you have each years and pay attention to the WS business derived from said bus.

I would say that is purely regional.

Rule 4: Mothers Day and Christmas are the only two remaining Major holidays that impact a Real-Live Florist's gross sales. Easter and thanksgiving have diminished into a non WS event. Sec Day and V day are basically on the same scale ..... NON WS event.

How do these holidays affect gross sales?

Rule 5: Go home and enjoy your family

Joe

I like this one.

 

[fairfield]

The problem is no one wants to give the correct answers or offer real solutions concerning any Wire Service because they have figured it out on there own.

Do you ever get the feeling that you are an outsider that just stepped into a good-ol'-boy clubhouse?

 

[Eric S]

Everyday but it won't change a thing. The silent majority is the winner from my post and every florist that calls me and express their graditude is the real inspiration.

When someone says that A is better then B I want to know why just like everyone else. As the flip flop post only confuse the situation I want to provide answers from experience and real solutions to the problem.

And when I am wrong I will be the first to admit it as long as there is fact to back it up.

I do not believe for one second that any part of any wire service offers an acceptiable profit for any size shop and if it is they are either fudging the numbers or skimming to off set the cost.

 

[Joe Mioux]

Hope you all interpreted my last post with a bit of seriousness and a bit of tongue-in-cheek.

Was just thinking outside of the box and providing some alternatives.

joe

 

[fairfield]

Let's try incomings...

Since I am only breaking even with the sending side of the wire-service, I will add to my bottom-line with incomings:

incoming order at $40:

$40 minus $10.80 (27% clearinghouse/commission) equals $29.20
$29.20 minus $1.25 (order transmission fee) equals $27.95
$27.95 minus $9.60 (COGS of 30% on $32) equals $18.35 *****note: $32 is $40 minus $8 delivery
$18.35 minus $8 (labor of 20% on $40) equals $10.35
$10.35 minus $2 (vehicle expense of 5% on $40) equals $8.35

$8.35 total
if ordered direct by customer you add $8.35 + $10.80 + $1.25 for $20.40 total


incoming order at $50:

$50 minus $13.50 (27% clearinghouse/commission) equals $36.50
$36.50 minus $1.25 (order transmission fee) equals $35.25
$35.25 minus $12.60 (COGS of 30% on $42) equals $22.65 *****note: $42 is $50 minus $8 delivery
$22.65 minus $10 (labor of 20% on $50) equals $12.65
$12.65 minus $2.50 (vehicle expense of 5% on $50) equals $10.15

$10.15 total
if ordered direct by customer you add $10.15 + $13.50 + $1.25 for $24.90 total


incoming order at $60:

$60 minus $16.20 (27% clearinghouse/commission) equals $43.80
$43.80 minus $1.25 (order transmission fee) equals $42.55
$42.55 minus $15.60 (COGS of 30% on $52) equals $26.95 *****note: $52 is $60 minus $8 delivery
$26.95 minus $12 (labor of 20% on $60) equals $14.95
$14.95 minus $3 (vehicle expense of 5% on $60) equals $11.95

$11.95 total
if ordered direct by customer you add $11.95 + $16.20 + $1.25 for $29.40 total

Keep in mind that a dedicated phone line may be required and figure accordingly. If you were to add web-services or a POS, you would also need to add those costs in.

Do these look like ballpark figures? Please tell me how this is not accurate.

 

[CHR]

Wire Service Calculator

Fairfield,

Thanks for all the calculations.

I don't know if you've ever seen this here at FC but one of my team members created a Wire Service Profit to Overhead Calculator in Excel and it's free. Just click the link at the bottom of the first post and download it.

I suggest printing out the first post there to make it easier plug in the correct numbers.

HTH

 

[Mikey the Flower Guy]

Do you ever get the feeling that you are an outsider that just stepped into a good-ol'-boy clubhouse?

you made me grin!!
We do indeed have a problem!! Many of us ol timers have a problem fathoming living without a wire service...plain and simple...myself included!!
The math that you are presenting is pretty correct, and concise, and we appreciate your generous time alloted to it!!
May I be so bold, as to say, that wire service order transfers WERE NEVER INTENDED to generate positive revenues for your shop!!
They WERE intended, as a service to clients that needed to get orders to other jurisdictions.....plain & simple!!
Your true hope, was that at the end of each month, you could balance incoming AND outgoing, as closely as possible, and ALMOST ALWAYS overlooked the fact that sometimes you MADE SOME MONEY, and sometimes you LOST SOME MONEY!!
Younger people, with skillsets such as yours, and the burning desire to make it in the floral industry, probably have skills we never dreamt of, and don't even know how to spell some of them!!
The internet, and OG's have changed all that...sort of, kind of, pisses us off!!
We lament the fact, that whether we sent you an order by mail, or by phone, or by telex, or by Merc/Duck, it could AND WOULD, be taken care of, and we'd hoped, that NEVER WOULD COME A DAY, where we would make a list, and HAVE to check more than twice!!
I have NEVER had to spend as much time researching end points, and guessing, and hoping, that the shop filling the orders for my shop customers, would care for them, as we do theirs!!

 

[Mikey the Flower Guy]

by the way Fairfield....

no shops should allot more than 10% of it's gross sales to wire service sales...preferably something between 5-8%
Grow your local sales at 100%, maximize the margins on your own shop sales, limit your losses from unprofitable work, and the math will take care of itself!
By the way, I've seen so many shops, grabbing at orders that THEY KNOW they are gonna lose money on...I'd rather have a beer:beer in the ol' clubhouse!!

 

[CHR]

May I be so bold, as to say, that wire service order transfers WERE NEVER INTENDED to generate positive revenues for your shop!!

Sure they were. What business owner in his right mind would participate in a program that didn't add to his/her profits.

WS membership was at one time very profitable for the majority of florists. It's the changes within the last 10 years (non-florist OGs, ever-increasing membership fees, unequal sending penalties, higher commissions, more by-the-picture orders) that have eroded the profitablility on the filling side. It was never great but at least helped rotate products. Now fillers need to stock specific products just to fill the incomings. The sellers are totally in the driver's seat.

We lament the fact, that whether we sent you an order by mail, or by phone, or by telex, or by Merc/Duck, it could AND WOULD, be taken care of, and we'd hoped, that NEVER WOULD COME A DAY, where we would make a list, and HAVE to check more than twice!!
I have NEVER had to spend as much time researching end points, and guessing, and hoping, that the shop filling the orders for my shop customers, would care for them, as we do theirs!!

Boy, is that ever true. IMO the networks are far more unreliable than I ever recall. Our biggest fear is sending to a shop that lives for incomings and doesn't have its own customer base. If locals won't shop there, what does that tell you?

 

[Mikey the Flower Guy]

Sure they were. What business owner in his right mind would participate in a program that didn't add to his/her profits.

I smell an oxymoron here......

 

[prestonway]

I do not believe for one second that any part of any wire service offers an acceptiable profit for any size shop

WOW!!!

What a statement...

Did some wire service abuse you as a child to make you so bitter?? :hammer:

 

[Mikey the Flower Guy]

WOW!!!

What a statement...
:hammer:

are you being Frank here??

 

[sfox]

Reply To Eric

Posted by Eric -

"And when I am wrong I will be the first to admit it as long as there is fact to back it up.

I do not believe for one second that any part of any wire service offers an acceptiable profit for any size shop and if it is they are either fudging the numbers or skimming to off set the cost."

Eric, I think you are being blinded by your own opinion. How long have you been in business? Have you ever done the volume that many present wire service members are doing? And do you feel every shop operates with the same set of circumstances?

I'm not trying to knock you, but what I am trying to do is state facts.

First, wire services were created as a way for florists to send orders, not just to fill.

Second, over the years every florist felt that they had to belong to wire service. The biggest reason being that they felt they were losing out on all those incoming orders.

Third, most wire service free florists who preach the mantra, were for the most part filling florists rather than sending. And most of them looked only at the costs associated with filling orders, not the profits of sending orders.

If you really want to see if you can make money with a wire service, figure out both sides of the equation. Plus, keep an open mind to the fact that for every sent order, there has to be someone to fill that order. Now if real florists who send only fill orders for real florists, and the balance between sending and recieving is kept equal, then you can make money belonging to a wire service.

And if you really want to know who the real enemy has been and is still to this day, it's florists. Why florists?

It was florists who were blinded by the dollar signs they saw when the likes of 800FLOWERS first came on the scene. They got hooked on filling hundreds of orders a month and getting large checks back from the wire service. Today, it's still florists who still @@@@@ to the field rep because they are not getting enough incoming orders. Most florists who leave a wire service do so because they feel that wire service is not providing them with enough incoming business. The reason most florist buy wire service containers is so they can get incoming orders for those products. The reason most florists pay the high fees of belonging to a wire service is they view the wire service as a source of income, not a tool to send their own customers orders. You create the profit by sending, just look at the big ordergatherers.

And lastly, many who are wire service free preach about offering a service to their customers, like giving or searching for a florist to fill their customers outbound floral needs. Why? When you became a florist, did you start your business with the intention to become a charity. Because in every other industry, offering services translates into revenue. You pay a fee everytime a customer of yours pays for a floral purchase and uses a credit card. You build in the cost of accepting credit cards into your business. Using the same reasoning, why should you send an order for free for a consumer, when they have come to you full knowing that they expect to pay for the service you offer.

 

[prestonway]

What why wire service provides me...

O.K....so you've made me think of why I am in a wire service...& here I go...:soapbox:

My wire service provides me with the following...

The ability to send & receive orders WITHOUT using mine or the other shop's credit card.

A comprehensive POS system to track my orders & assist with my bookkeeping, marketing, and deliveries.

A system to clear my credit cards at 0% for outgoing orders.

A commission & rebate system to reward me for sending orders to other shops.

An opportunity to convert new wire-in customers into local customers.

An arbitrator to resolve any problems I have with another shop, on both the filling & sending side of the equation.

Networking venues & conventions to meet with other florists. As one fellow attendee recently commmented at a convention, "I have to go to these things...it's where I go to meet my friends!"

A library of standard images to use on my website.

A FSR who visits IN PERSON on a monthly basis, and calls every two weeks to make sure there are no problems.

A directory of member florists across Canada & the U.S., and access to international florists in over 150 countries.

An OPTION to purchase containers.

An OPTION to participate in co-op advertising.

An OPTION to purchase flowers.

An OPTION to have my phones answered 24 hours a day.

An OPTION to have an "instant" cookie-cutter web-site.

An OPTION to have my web-site orders automatically sent through my POS system.

An OPTION to promote my web-site through their system.

An (opt-out) OPTION to become a member of S.A.F., with monthly payments.

Are they the cheapest or the best in providing these services? H*** no! Do I subscribe to all of their services...H*** no!

As a business owner over time, I have chosen those services which enhance my profits &/or lower my expenses.

But one stop shopping sure is convenient...

 

[prestonway]

Yup I am being Frank...

Just give me a "Mike" & a soap-box...

 

[Mikey the Flower Guy]

Posted by Eric -
And lastly, many who are wire service free preach about offering a service to their customers, like giving or searching for a florist to fill their customers outbound floral needs. Why? When you became a florist, did you start your business with the intention to become a charity. Because in every other industry, offering services translates into revenue. You pay a fee everytime a customer of yours pays for a floral purchase and uses a credit card. You build in the cost of accepting credit cards into your business. Using the same reasoning, why should you send an order for free for a consumer, when they have come to you full knowing that they expect to pay for the service you offer.

to those of you, that this makes sense to, please put your hands up!!:thumbsup

 

[Mikey the Flower Guy]

As a business owner over time, I have chosen those services which enhance my profits &/or lower my expenses.

But one stop shopping sure is convenient...

Someday sermon.....for those that get it!!

 

[Mikey the Flower Guy]

Yup I am being Frank...

Just give me a "Mike" & a soap-box...

that, just made my day...how are you with babies??(political)

 

[Eric S]

How long have you been in business?

Monday January 22nd will mark our fourth year completed. I hope you aren't implying anything.

Have you ever done the volume that many present wire service members are doing?

I think my best month was 145 orders sent out and about 200 order recieved. That was just with Teleflora and i wasn't involved with any others at that time.

And do you feel every shop operates with the same set of circumstances?

No I don't. I know that every shop is very different and will operate according to consumer demand in their area of operration.

If you really want to see if you can make money with a wire service, figure out both sides of the equation. Plus, keep an open mind to the fact that for every sent order, there has to be someone to fill that order. Now if real florists who send only fill orders for real florists, and the balance between sending and recieving is kept equal, then you can make money belonging to a wire service.

I wouldn't mind re-exploring the option of sending and recieveing except from my experience the only way I can offset the expenses just like everyone here says is sending a lot of orders. To send more orders out I can only see this being accomplished by marketing as a nationwide sender. That would also involve added advertising expense which would also need to be offest with the so called profitablity of the magic 20% and rebates.

Order Gatherers are in trouble and they will need to figure ways out new ways to continue to skim and deseve consumers. To battle their threat I do not want to stoop to the same level and I really believe this is the only possiable way to make the sending side profitable enough. Recieving again is the worse side and again would require a filler to keep cost at a minimal and the only way to do that is to skim and fill orders with cheapest flowers available and that again will only do more harm then good to the industry.

So how can we come up with some solutions.