Not Much Hope for Wire Serive Change

[Tom Carlson]

Many good thoughts and opinions have been expressed about the Crisis Facing Brick & Mortar Florists.

Key Royer laid it out well.

But there is not much hope for change until one of the Wire Services eliminates all the non-filling florists [middlemen-order gatherers].

I wonder if that could be done by Teleflora? I don't know what it would cost TF, but they have the most members. Maybe their lost revenue could be recovered by increasing the dues structure for members, all of whom would be filling shops.

That means shutting down all their non-filling members.

Their membership shoud increase greatly so the increased cost could be spread out over a large data base.

Now that would really SAVE THE FLORISTS

Could someone from Teleflora voice their opinion on this? It would be great to have a Wire Service that was exclusively comprised of filling shops.

Tom Carlson

 

[concord]

I asked TF this many times and they always said "it does not work with our current business model." The closest thing we have to a wire service that is all filling florists is FSN and it just doesn't have enough quality/quantity membership at the moment. I think we just have to save ourselves by concentrating on our local business and teaching our customers how to find true local florists when they want to send out of our delivery areas. Wire service does not work with my current business model!

 

[lori042499]

If they could afford it they would...There are way too many florists that still whine about wanting more incoming...I know that with my current incoming and outgoing TF charges are way too much. I am tempted everyday to take the orders from The og's just to get some money towards the membership until I decide that it is not worth it...This was the first time in months that my incoming dollars match my out going doolars, funny thing is I had to fill twice the amount of individual orders than I sent, there is a serious problem with that in the fact that so many florists aren't selling quality orders just like teleflora, my out going sales are generally double my incoming values...so florists in general are selling the same crap that the og's are and I find that many, mnay florists are still not collecting a delivery charge for the filling florist, which means that we ourselves are still pussyfooting around the fact that delivery is taken out of the value of the flowers...until the florists change and press the WS for change with serious consequences like not filling for the trash companies or even better with taking away memebership dollars you won't see them change especially as long as florists want incoming...when tf starts seeing a drop off of og's because they cannot get their orders filled and they start to just hang up their hats because it is just too hard to make money, that is when you will see them start to change their business model..I still think that that is years away from happening, I think we are going to see a harder time of filling way before the og's do, simply because we look for quality fillers and the ogs just look for a means to an end filler, there are so many lesser quality fillers ready and willing to just take any order still, it is scary the quality they put out, the reason they are still in biz is because of just flowers, just barely...but still struggling with a faint heartbeat and still making the machine run...

 

[lori042499]

What I would like to see is for tf to separate tech and membership...I would gladly pay tf for my tech support and cc, even my website...but then I would like a tiered membership structure or a florist to florist membership option...they should have the lower tier for those of us that are very happy with lower volume and not filling for og's, 800-flowers has the option, you won't get their higher volume orders but can still use their network of real florists for sending and recieving for one lower price, you want the trash you pay a higher price for incoming to cover the rebates that you cause the system to incur, I think it would be a more fair pricing structure...all the gathered orders should have their own system, tf.com, jf, blooms today all of them should go thorugh headquarters and only go to those shops that opt in for them and pay the higher fee structure, the rest of us can send and recieve between us for our realistic fees less the fess generated for the rediculous rebates paid out...I also would like for them to require that all florists separate flowers from delivery and make them include the stated deliver on the codification...and make the ogs and tf.com stae it on their websites, just to give people a realistic view of what they are paying for across the board so a realistic comparison is made....right now for those of us that declare what the customer is paying for on a wire out, it makes us look like we are high priced, but if you compare the back office complaints those of us that are honest with our customers probably get fewer complaints because they are getting more for thier money on the end product and are happy with their purchase..

 

[KABERS]

I'd like to know if they are really having any difficulty finding fillers - or is it wishful thinking on our part. I had to run to the wholesaler yesterday, talked with an older florist in the Southbend/ Mishawaka In. area. He is in ALL the wireservices and delivers to small towns 30 miles away. His reasoning is "there are 26 florist in my area and I have to fight for every order".

 

[duanermb]

I'd like to know if they are really having any difficulty finding fillers - or is it wishful thinking on our part. I had to run to the wholesaler yesterday, talked with an older florist in the Southbend/ Mishawaka In. area. He is in ALL the wireservices and delivers to small towns 30 miles away. His reasoning is "there are 26 florist in my area and I have to fight for every order".

There are approximately 26 TF florists and 26 FTD florists in my area also.

Here are some calcs to consider. I imagine every shop is different in this, so I ran them using 30%, 20% and 10% margin to be fair and compared to the amount of orders they have to gather and are required by the local florists. I also show how many orders you have to generate to pay for your own marketing using the same WS fees as the basis.

I can't define the incremental business vs. attaining less higher margin orders unless I can see how each shop is run. For us, it's better at this time to spend our money on local or internet marketing.

 

[lori042499]

In some areas they have to be finding it hard...I only send out between 10-15 orders a month for my corporate cliets and I am having trouble with small cities, I will expect that many of their orders go to major cities and there they would have no problems, and there the volume of filling for these leeches can make or break your shop...the volume is what is the deciding factor on if you make enough money to bother or not...Volume is what makes or breaks all florists in regular neigborhoods, it is less of an affect on high end florists because they have higher margins and have factored in lower volume by upping the focus on design and quality and seeking out clients that will pay for that..

 

[BOSS]

It would be nice to have Teleflora step up and do the right thing. We know the others will not. Problem is, that whichever one does make the first move, that one will be the one to lose the most members the fastest, because for the "most part" florists are filler fool lemmings... they do not think they can survive without incoming orders, and sadly many base the value they put on a wire service solely on incoming volume. Technology is secondary or even third.

Ideally all 3 would make the same move at the same time... again, the reason this will never happen, is twofold, one it could be considered collusion by the feds, and secondly those filler fool lemmings I mentioned earlier. They would all make more money, and so would the florists if they simply discontinued rebates. We would all make more money, wire services included if they dumped the dOG's, again think filler foo....

Yes Lori, they can always find a filler... it's the quality that's the issue. Evidently they are OK with what they are getting, even if the consumer is not.

Until enough florists stop filling, *company orders* at the least, nothing will change. But stop they are, and in time this will have a profound effect on the industry. It already is, we hear it from customers regularly, they call for your phone number and we gladly give it, they call us direct from across the globe and we gladly handle their needs. Yes, I'm labeled a radical because I simply stopped sending and empowered my customers, that's OK with me.... you too will be doing the same things one day, eventually you will have no other choice, I'm just ahead of the curve.

 

[steve]

The problem is as a business grows there comes a time were based on the infrastructure you have built to support your business that going back / getting smaller is no longer possible. The wire services have long since pass that line of no return so they may know its the right thing to do but it would be their death to do it.

 

[conchandler]

Curious what TF filling member numbers are at this point. It has to be dropping. Just in my area, another florist and us have dropped TF and one joined. One step forward, two steps back....I've got to think this is happening in a similar ratio around the country. At some point, things have to give...just like for us, the cost of keeping TF vs what we were earning as a member no longer made sense. Just curious what their next "model" will look like.
Like Helen, FSN fit our business for providing a relay service for our customers who want us to do it all because we are "their florist". This works for us until they can be weened or a better option comes along.

 

[domineaux]

There is no way the wire services can change their business model. They have stockholders who demand profits and increases in stockhold equity. Sorry, but there is no way they can meet the needs of local florist shops and meet those kind of profit demands.

The OG pour the orders in and the local florsts who pay the huge monthly WS fees get orders. The local florists don't have any idea what the WS is actually costing them, because the statements are rigged in such fashion as to conceal the lack of profitability.

It has been mentioned and explained so many times on these forums, in a lot of ways. None of them point to profitablilty of WS for delivery orders as far as I can tell.
All the money to be made is on the sending side only, where orders are incentivized by the WS. The monthly fees paid by local florsits is the life blood of WS. The WS will continue to do anything they can to supply orders to filling florists who are paying the fees that make the WS profits so strong.

We stayed with WS over 1 year and did our best to connect with the recipent customers, that was our principal motivation to keep WS. We knew we weren't making money of the WS for delivery orders.
The math was pretty simple.

Check my sig to download a very simple excel spreadsheet, based on WS statement. It's not complex "CPA type comprehensive spreadsheet", but if you play with it a bit you'll sure know whether you are making money or not.

We basically concluded it would be better for our business to just put together a nice arrangement each day or so and gift it to someone that came in the shop. We would create more good will and absolutely have more money at the end of the month. Better still we didn't have to deliver the arrangement and lose even more money.

We finally became so frustrated with lack of income from WS orders we demanded our fep come to see us. Hesitatingly, the TF rep told us "straight talk". We could expect to make on average $8 to $10 on each order, and we had to keep our delvery fees low at that.

Sounded like a prescription for losing money from the start. We spent appx $4,000 with TF just fees - not commissions that year.

Yeah, I know, we all know florists have always been noted for accomodating wire ordrers. This has really been the strong point the WS continue to emphasize, but anyone that is checking their numbers knows this is a major hook into local florists. That has all changed, with Wall Street types running the WS and exploiting the local florists to make themselves more money.

We, in our business, now just search Google - Flowers or florist and enter the city name, pick up the phone and call a local florist. We give CC information and discount the order 20%. The fill shop gets their money presto, the customer always gets good service and quality and we make a new friend. This is all a plus for our business.

Click this link for example I went to Google inserted - Flowers Yorba Linda CA, and these are the results I got. It is just too simple to give up so much money in WS fees, when the world is available on the internet.

http://www.google.com/search?hl=en&...=&as_occt=any&cr=&as_nlo=&as_nhi=&safe=images

We have done this for sending flowers to some very remote places. Google will give you some kind of results just about any place you search.

It is beyond me how anyone can in all honesty accept the financial beating of the WS unless you are an OG or send alot.

Oh, if you play with my little spreadsheet abit you'll find you can plug in your send orders and test them as well for profitability. You can plug in your what if numbers as well, and test your data in alot of ways to see just how beneficial your WS is to your bottom line.

 

[BOSS]

All the money to be made is on the sending side only, where orders are incentivized by the WS.

The TF rep told us "straight talk" we could expect to make on average $8 to $10 on each order, and we had to keep our delvery fees low at that.

You make $8-10 as the prostitute, and the Pimp makes 40-50%...and often more

So on a $50.00 order, you get $7-11.00 NET(maybe), and the order generator gets $33.50+++ sounds fair to me...

Lemmings..........

 

[domineaux]

You certainly have a way with words...

My wife runs the shop so I'd prefer to use an anology something like... you make the $8-10 as the gullible florist, and the OG gangster makes 40-50% ...and often more.

It is really sad, there are so many florists that continue to embrace the old ways of doing business when WS was reasonably priced and didn't consort with the enemy. Maybe it is nostalgic memories for the good old days gone by that keep florists in the WS loop, it is beyond me. I wonder, maybe they expect to continue to pay the fees hoping one day the WS will wake up and appreciate their continued loyalty.

Sadly, we felt the WS expressed their love for us by charging an exorbitant $79 late charge on us for a very small monthly balance. I don't recall how we handled the late charge, because I didn't pay the statement. My wife probably paid it rather than dispute it. She just paid it with a dismissive statement such as "well I was late", regardlless of how out of line the charge was.

 

[NicoleAtTF]

Tom-
My first instinct is to respond much the way Lori did - a large number of our members continue to call on us to provide more incoming orders for their shops. If we were to drop all non-filling members, we would also stand to lose a large number of those small shops because our incoming volume would drop significantly.

While those of you here have a different take on what we can bring to the table as a partner, I would venture (I don't have hard research, just my own gut sense) that the majority of our members would be angry at the drop in incoming orders. They would not be sad to lose non-filling florists, but they would be upset at the change in volume - unfortunately, those two things (non-filling members and a certain level of overall order volume in the network) go closely together at this time.

I would like to point out (per Domineaux's post), we are actually not beholden to share holders and, thus, have the freedom to do things that may not be the most profitable choice but which we feel is the correct choice for our long-term sustainability as a business partner to florists. The major example there is the fact that we do not offer drop-shipped products and we remain committed to that stance. If we were out just for profits and to make shareholders happy, we, too, would likely have entered that racket. Because we are privately held, we have the ability, however, to do what we think is right.

We are still a business, not a co-op or a charity, so certainly we are out to be profitable (which is why the loss of non-filling members and all of the repercussions therein would, as far as I know, not be viable for us at this time), but we can do it in ways that our owners feel is right, rather than simply maximizing profit.

I would put out there that if someone (like SAF who can run a non-biased survey) who could present that it would be a short-term hit and that we would then return to an equal or greater level of profitability, than I can certainly imagine management here investigating the idea (or other ideas like Lori's idea of tiered membership or so on) further.

 

[domineaux]

Response to NicoleatTF

You said in black, my response in italics

My first instinct is to respond much the way Lori did - a large number of our members continue to call on us to provide more incoming orders for their shops. If we were to drop all non-filling members, we would also stand to lose a large number of those small shops because our incoming volume would drop significantly.

No doubt about that, and the consequence would be even more members leaving TF.

While those of you here have a different take on what we can bring to the table as a partner, I would venture (I don't have hard research, just my own gut sense) that the majority of our members would be angry at the drop in incoming orders. They would not be sad to lose non-filling florists, but they would be upset at the change in volume - unfortunately, those two things (non-filling members and a certain level of overall order volume in the network) go closely together at this time.

The partner comments can get you into serious litigation issues. I'd suggest you talk to your legal department before calling your members partners. I agree 100% that your members would be angy at the drop in incoming orders, especially since your monthly fees are so high there is no way they can pay them without some orders fromTF.

I would like to point out (per Domineaux's post), we are actually not beholden to share holders and, thus, have the freedom to do things that may not be the most profitable choice but which we feel is the correct choice for our long-term sustainability as a business partner to florists. The major example there is the fact that we do not offer drop-shipped products and we remain committed to that stance. If we were out just for profits and to make shareholders happy, we, too, would likely have entered that racket. Because we are privately held, we have the ability, however, to do what we think is right.

I did not say PUBLIC shareholder equity, I said "shareholder equity". There are shareholders of TF, or it would be a proprietorship/partnership.
The bit about drop shipping really a chord you shouldn't play. If so maybe you should explain

http://www.floristexpress.net/

A proflowers company (dropshippper) using TF arrangements. Me thinks something stinks.

I don't blame you for trying to defend you company and paycheck, but sainthood for TF is really stretching it.


We are still a business, not a co-op or a charity, so certainly we are out to be profitable (which is why the loss of non-filling members and all of the repercussions therein would, as far as I know, not be viable for us at this time), but we can do it in ways that our owners feel is right, rather than simply maximizing profit.

You said, "we can do it in ways that our owners feel is right". As local florists we know it's not about us that is sure, it's good to know you place the checker right on the square --- the owners feel is right.


I would put out there that if someone (like SAF who can run a non-biased survey) who could present that it would be a short-term hit and that we would then return to an equal or greater level of profitability, than I can certainly imagine management here investigating the idea (or other ideas like Lori's idea of tiered membership or so on) further.[/QUOTE]

I would agree, but there is no way you can go back to square one. It's like weaning a tiger off fresh kills, the taste of blood is so strong it cannot be done.

TF and all the rest of them should probably sell off now in order to find a greater fool, because as their earnings sag it will become harder and harder to accomplish. The internet that has fed and nourished the profits of wire services by OG and destroying local florists is now going to be the same monster that will eat the wire services. The local business listings, search engines, immediate access to florists and international acceptance of the big four credit cards is going to be the demise of WS. Loacal florists don't need WS anylonger. It is just a matter of time before the local florists realize it fully within the industry.

Touting the miniscule benefits of the TF above the other WS is not enough to win the hearts and minds of local florists in the future. It won't be done in a day that is sure, but WS as they operate today will not exist within a few years.

 

[BOSS]

My first instinct is to respond much the way Lori did - a large number of our members continue to call on us to provide more incoming orders for their shops. If we were to drop all non-filling members, we would also stand to lose a large number of those small shops because our incoming volume would drop significantly.

Nicole, that's very true, many shops base (as I have stated) the value they place on a wire service on the number of orders it generates. Sadly, these florists have NO CLUE as to what it has done and continues to do to the industry, not to mention their very own shops.

Yes, Teleflora would lose a sizable volume of orders.... but to me, ethics are more important than dollars... too bad the Resnicks do not agree.

The truth is, this road will end one day, the train will come to the end of the track, then what ya gonna do? As I see it, Teleflora and SAF have a choice, ride white horses and champion ethics, honesty and clarity and be viable down the road, or continue to ride the gray horse (both side of the fence) and become extinct as you become more of a liability than an asset.

I wonder how many florists you will lose when you begin to really have a hard time finding filler fools.... that day too is coming.

 

[Tom Carlson]

Thank you, Nicole, for speaking from the TF side. I hope you are speaking for the company as much as you are speaking for/from your gut feeling.

If TF's orders coming through TF, then they have to know exactly how many "headquarters orders" there are and should be able to determine exactly what the impact would be to operate without allowing any orders from non-filling sources.

It might be interesting to know that the vast majority of difficult orders are not coming from filling shops. They obviously know why it is too late in the day, or that not enough dollars are left after taking out the delivery fee. You would be surprised now many times we get a call from "Just Flowers" about one hour before closing to get an order delivered immediately. Designers have checked out for the day at 4pm after being certain there is a good selection freshly made in the cooler. But the drivers hav completed all their deliveries by 3:30 and are not sitting around until 5 pm in case "Just Flowers" calls. So we have to reject or turn down those orders. That's not good for the consumer who is sending the flowers. But if he had talked to a brick and morter filling florist, he would have been "educated" and probably convinced to have the order delivered on the first run the next morning.

The fact is solidly true, the OGs are causing a lot of complaints in our industry. And the callers sometimes just cannot be understood. People from India speak quite differntly than Americans.

Yes, we need incoming orders for this reason. By 2pm, all of today's orders are done. The payroll clock continues running until 4pm. If we can do a few incoming orders for tomorrow, that's great because the payroll cost is there regardless. BUT THE DAY I HAVE TO HIRE MORE DESIGNERS TO FILL INCOMING ORDERS IS THE DAY I HAVE TO START REJECTING ORDERS FROM HEADQUARTERS AND ALL THE OGs.

How about furnishing your filling florists with an insert pointing our the wisdom of using a Brick & Morter Florist instead of Teleflora.com. That would go a long way towards "Saving the Floirst".

And I highly commend TF for what they are doing, but TF is doing it with "tongue in cheek" when they capture orders through their own OGs.

Thank you again for your response. I wish I could express my thoughts with more brevity. Tom Carlson

 

[BOSS]

"Saving the Floirst".

Tom, Tom, Tom.... the "Save the Florist" campaign is nothing more than propaganda developed to keep florists in line and remaining filler fools rather than think for themselves and make choices that are in their and the industries best interest. The need the fillers so they can continue to flood the market with gathered orders.

The number that would be truly interesting would be the number of orders ProFlowers funneled into the TF system for Valentines and Mothers Day... but alas, it's secret, so florists don't get a clue. Then we can add in all their other dOG's and get a complete picture of what they are doing to the industry.

Teleflora's old argument, of "We had to do it otherwise FTD would have" holds no water... so what, let FTD have the junk. Giving ProFlowers same day delivery ability was and IS simply another nail in the consumer direct to florist coffin, that down the road, will lead to the majority of orders being force fed to florists with the profit used to fund more dOG operations, Pomegranate Plantations and mountain housing complexes that are in violation of local building codes.

Some day, retail floristry will again be devoid of dOG's and wire services... I only pray I live long enough to see it... the 4th generation is now managing my business for the most part... thank God, Erika has a clue.... too bad more florists do not.

 

[802pianoluver]

I'd like to know if they are really having any difficulty finding fillers - or is it wishful thinking on our part. I had to run to the wholesaler yesterday, talked with an older florist in the Southbend/ Mishawaka In. area. He is in ALL the wireservices and delivers to small towns 30 miles away. His reasoning is "there are 26 florist in my area and I have to fight for every order".

Did you tell him by the time he pays for all the wire/membership fees and advertising fees from each wire service he is in a loosing proposition no matter how many orders he takes in. We jumped ship from Teleflora a little over 2 years ago it was a loosing proposition after they took out the advertising and membership fees it left us with nothing but with a thousands of dollar loss. We have been Wire Service free now for two years and love it. We call florists directly ourselves. We even have the wire services calling us to fill orders in our outskirt areas and we only take the order at 100% and at our minimum rates, and they pay with a credit card. The only way to alleviate the middle man is for us to get rid of them.

 

[BOSS]

BOSS's Second Quote of the Day!

We even have the wire services calling us to fill orders in our outskirt areas and we only take the order at 100% and at our minimum rates, and they pay with a credit card.

The only way to alleviate the middle man is for us to get rid of them.

Right on.....