Is a wire service right for my shop?

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You're probably right...

You're probably right, Eric (shoot me...shoot me now...).

I believe in the next five years, economies of scale are going to dictate one of three florist specialists.

First are those large senders than can compete with the W.S. on some level. Rebates, commissions, and rapidly adapting to technology have allowed for higher revenues & lower operating costs than a "traditional" florist.

Second are those large fillers that can purchase large volumes of flowers at a discount, combined with full-time designers that actually work full-time at design. Include the grocery stores in this category as it may well be coming. This area is where the smaller, mom & pop shops are hurting the most. They desperately want to fill orders, but unless they are "in bed" with the W.S. &/or O.G.'s...they receive next to nothing. With continuing higher fees & charges, many are doomed to failure.

Finally are the large local shops that again can benefit from the economies of scale in both cost of goods & cost of labor. To do so may involve capturing a niche...weddings, funerals, or corporate specialists.

If your shop wants to be everything to everybody as in the past...your gonna go down.

My suggestion is to do a strategic analysis on YOUR OWN business. In other words, strategically complete a "S.W.O.T." analysis.

"S" stands for the internal strenghts you have in comparison to your local competition, that are within your control.

"W" stands for local weaknesses in comparison to your local competition, that are within your control.

"O" are external opportunities outside of your local area, that are not within your control.

And finally "T" are the external threats outside of your local area, that are not within your control.

Once you've honestly completed this strategic analysis, you can establish goals & objectives for completing your next 5, 3, or even 1 year business plan.

And the process works even better with staff input, as sometimes we can't see the forest for the trees in our own backyards!

Good luck...
 
prestonway said:
First are those large senders than can compete with the W.S. on some level. Rebates, commissions, and rapidly adapting to technology have allowed for higher revenues & lower operating costs than a "traditional" florist.
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Have you wondered what you are going to do if the wire-service decides to go after your customers? I don't understand how you can compete with the wire-service when they are the ones that enable you to even conduct business in this arena.

You have to admit, they could pull the plug on you right now and you would be done. I'd bet that even if they pulled the bone out of your mouths, many of you wouldn't want to play anymore.
 
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prestonway said:
I believe in the next five years, economies of scale are going to dictate one of three florist specialists.
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Pretty much right-on except I believe there's a fourth specialty.

First are those large senders than can compete with the W.S. on some level. Rebates, commissions, and rapidly adapting to technology have allowed for higher revenues & lower operating costs than a "traditional" florist.
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You're right, but there are very few 'florists' succeeding in that group. Look at the OGs who are spending large amounts on PPCs and the ones placing well in natural search results. Overall, the B&M OGs are falling farther & farther behind.

Second are those large fillers that can purchase large volumes of flowers at a discount, combined with full-time designers that actually work full-time at design. Include the grocery stores in this category as it may well be coming. This area is where the smaller, mom & pop shops are hurting the most. They desperately want to fill orders, but unless they are "in bed" with the W.S. &/or O.G.'s...they receive next to nothing. With continuing higher fees & charges, many are doomed to failure.
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Agree. But there's a black hole that florists disappear into in the land between filling a few orders and becoming an LFC. Few will make it. Remember too that once a florist builds a business on incomings, his company is dependent on the selling agent(s) who can and do change the rules and 'move the bar' *at will*. To wit, 1-800 demanding shops plaster trucks with their logo, use their enclosure cards and basically give over their identity to 1-800.

Finally are the large local shops that again can benefit from the economies of scale in both cost of goods & cost of labor. To do so may involve capturing a niche...weddings, funerals, or corporate specialists.
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Also agree, but don't you think these stores will need to distance their brand identities from national players to create a stronger recognition of their own brand?

IMO the fourth niche is the wedding/event couture florist that appeals to high end buyers. Few, if any, in the first three groups will do that because they're based on economies of scale so custom work is almost antithetical to their model.

Love the analysis theme! It's excellent advice.
 
Cathy:

What is PPC and LFC?

Also, high end weddings may be easier for large Metro florists than for simple mom & pops out in a rural setting.

Joe
 
PPC - pay per click advertising

LFC - Local Fulfillment Center - Warehouses focused on large-volume production-style design primarily to fill incoming orders. 1-800-Flowers has LFC's (some operated by them, others run by 'franchisees')

Joe, you're right. Rural florists may not see much division in florist business models since few, if any, can generate enough income focused on a single niche. They will continue to be broad-based. But if an area grocery store decides to go full-service, their model will have to evolve to remain competitive.
 
Here's a real world example that happened today in our shop. It highlights the difference between old school thinking and the realities in today's age of information.

We received an email from a guy in Toronto who saw a photo on our blog. He wanted to get the arrangement delivered in Toronto for V-Day and wanted to know what to do.

We could have played go-between with him and a Toronto shop but IMO this kind of specialized design didn't need us as a middleman. He will never be 'our customer' and will probably be a happier flower buyer dealing direct with a quality local shop right there in his town. Hopefully he'll become a long-term customer there.

So I replied and gave him a link to Martin's website along with their phone number - and forwarded a link of the photo to Martin's.

We didn't make a dime but we hopefully helped a shopper get what he wanted.

In the future, perhaps referrals direct to other stores can be monetized as affiliate links are now in other industries.

For a shoppers with a less specific request, I would have had no problem wiring the order to Toronto, but for the flower lover that wants something special and specific, it makes sense for them to deal direct with the filling shop. We say the same thing on our website.

I'm sure some of you are thinking 'heresy'! OTOH I think pretending other shops don't exist or that we are the superior place to order all arrangements going to Toronto - even for the guys that live there - would be disingenuous and a disservice.

It all depends on the client.

Earlier in this thread sfox said "Because in every other industry, offering services translates into revenue." That's not exactly true. We receive client referrals from a number of hotels, photographers, caterers, event facilities, etc and none require or even request a commission. They provide referrals because they believe it will benefit their clients - and we would do the same for them and others.

If they extracted high referral fees from us, could we service their customers as well?
 
CHR said:
Earlier in this thread sfox said "Because in every other industry, offering services translates into revenue." That's not exactly true. We receive client referrals from a number of hotels, photographers, caterers, event facilities, etc and none require or even request a commission. They provide referrals because they believe it will benefit their clients - and we would do the same for them and others.

If they extracted high referral fees from us, could we service their customers as well?
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Well Said Cathy!!!
 
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