On "Partnerships" with "Wholesalers"

[Tom Carlson]

"Partnership" implies "Joint Interests". A “Partnership” includes "sharing risks and profits". A "Partnership" is an Alliance. A "Partnership" is being in "cahoots".

Unless there is mutual investment, it would be hard to establish how there can be mutual risk and mutual benefit between wholesalers and retailers.
If wholesalers and retailers are going to work together, how do we [wholesalers and retailers] write the rules for sharing the risks and profits that result from working together?

Can any of you retailers see one wholesaler getting his customers to all agree on a mutual risk/benefit program? One retailer wants to promote certain items at certain price points and at the other end of the spectrum that florist does not subscribe to promotion specials.. I don’t see it happening with a group, quite possible with a one on one ratio.

But I do think it should be possible for any one wholesaler to have a tiered pricing plan that would work with any one retailer. For instance, if a wholesaler says, “I will provide you with a specific flower at a substantially reduced cost if you use it just to promote to bring customers into your shop.” That will raise some questions:
Q#1. Will the florist have a plan to promote everyday flowers?
Q#2 Will the florist use those items just for promotion and agree not to use them for regular work?
Q3, Will the florist who agrees to the wholesaler’s offer then buy flowers from that same wholesaler needed for their regular work? That brings TRUST into the equation. How does one put trust into a partnership?

It’s a given that if a retailer promotes to bring more traffic into their flower shop, they are going to increase sales through greater consumer awareness. So why wouldn’t a wholesaler want to partner with a florist who is creating awareness and traffic by making flowers available at a cost that allows promotion? Next, the florist in turn must patronize that wholesaler who is helping him.

There are some retailers who want to promote flower usage/sales. The wholesalers should work with those retailers.

I suspect that if growers could sell all their product through wholesalers that they would not have any interest in selling direct to retailers.

I also suspect that if retailers could obtain all their product through wholesalers that they would not have any interest in buying direct from the growers.

So it appears there has to be some meeting of the minds between growers, wholesalers and retailers. If their goals do not have anything in common then there is no sense in bickering back and forth as to who is right or wrong. When in fact, there cannot be a right and wrong, it has to be right for both.

If I were a wholesaler, I would consider having different price levels depending on who is a promoter of flowers for everyday consumption vs. who buys just what is needed for the immediate needs. I would not put a high volume shop in the same category as the high promotion shop. There has to be an equalizing factor. A florist in a large market who does a ton of funeral work but does not promote everyday sales should not have any better deal
than the small market florist who is doing a great job of selling everyday flowers. Both are needed. Both are just as valuable to the overall picture. Give the florist who promotes everyday use of flowers special consideration.

I know this sounds simplistic, but to me it just makes common sense. I have asked wholesalers to partner with me in promoting everyday flowers but they don’t seem to understand or don’t see a need to help my shop grow sales.

I presently give away about 500 bunches of flowers every month. It brings 500 people into my store every month. Some buy a carmel, some a greeting card, a balloon, even additional flowers. One guy walked past a $1,200 item and commented, “I’m going to bring my wife out here, she just might like this. I think it is just what we need.” Why wouldn’t a wholesaler say to me, “Hey, we know we are going to have some shrinkage” or “we can get some product for your give-a-ways” and then make a special price to help
with this promotion?

When someone has been in my store 10 or 12 times to pick up some free flowers, we are counting on them to think of our shop first when they need flowers for a special occasion. We also know that they will find our everyday flowers lasting two to three times as long those from the supermarket. If they don’t we don’t have a prayer.

 

[Frank]

I presently give away about 500 bunches of flowers every month. It brings 500 people into my store every month.

Tom, What exactly to you do to give away 500 bunches of flowers every month - gift cards, coupons, certificates? What kind of bunches are they?

It sounds like an interesting promotion.

 

[BOSS]

I know this sounds simplistic, but to me it just makes common sense. I have asked wholesalers to partner with me in promoting everyday flowers but they don’t seem to understand or don’t see a need to help my shop grow sales.

Tom, remember....common sense is not so common!

I concur with much of what you said. I'd be willing to bet, that if you started buying direct and cutting out your locals they'd be willing to listen and consider your effort, especially if you are one of their bigger customers.

I have a meeting with one of mine tomorrow, and they (thankfully) are proactive in the attempt to grow sales, often bringing me programs they have put together like a partnership for Easter that includes coupon for a Ham for the consumer. My wholesaler did it and brought it to me, I did not even have to ask...

Tomorrow were meeting on roses for the next 6 months among other things, the wholesalers even buying dinner

 

[Tom Carlson]

Flower Give-A-Way

Tom, What exactly to you do to give away 500 bunches of flowers every month - gift cards, coupons, certificates? What kind of bunches are they?

It sounds like an interesting promotion.

This program is run by a company who finds a participating florist and then contacts Jr & Sr groups with a fund raising promotion.

They pick Jr/Sr grade levels as they have parents with the demographics that should match what a florist is interested in. Our first group was the 8th grade of a parochial school.

They sell a coupon for $25.00. The maximum is 350 certificates and I believe the minimum is 200. $5 of the $25 comes to the florist. The florist also gets some certificates to sell in the store [30 +or-] and keeps the full amount.

The holders of the certificate can come in once a month for a free bunch of flowers. It is recommended that the bunch have a value of $4, or a cost of $1+or-.

The experience rate is about 60% redemption. We are doing two programs, the second one with a church for their scholarship fund.

So far, slightly about 55% are new customers, meaning that they were not in our data base when they came in to register the first time And I have a rather extensive data base.

Many of the "already in data base" customers are people who have not been in our shop for a year or more.

My employees think I am crazy. Maybe that's because they have to work a little extra.

My sales of cut flowers for the first 24 days of March are up substantially.

If you give me your full name, shop name and address, I will pass the information on to the company. E-mail me, [email protected]

 

[fairfield]

Wow, our shop doesn't even buy 500 bunches of flowers for the month of February!

I do not support wholesalers that give breaks on quantity. That method of pricing only tilts the playing field in the favor of the larger businesses. Please don't tell me that it's about the free market, spirit of competition, or rewarding loyalty. It ends up being bad for the wholesaler when, not only does their customer base shrink, but they become a hostage of the big business. Just look at the suppliers of Wal-Mart. This is the extreme of an example.

I do think it is in the wholesalers best interest that their customer shops succeed. But, if a partnership is going to be involved (to whatever extent) then an appropriate deal needs to be offered to all customer shops - not just the big ones. If a florist chooses to give away flowers, that's up to the florist. If the wholesaler chooses to give a deal on those flowers, then post it on the price sheet so all customer shops can participate.

If a wholesaler wants to reward the loyalty or high volume of a certain customer shop it can take the shop out to dinner or on a cruise. I don't care. That does not affect our shop or our ability to compete.

 

[Tom Carlson]

Well, I agree and disagree. Here's why

Wow, our shop doesn't even buy 500 bunches of flowers for the month of February! I do not support wholesalers that give breaks on quantity. That method of pricing only tilts the playing field in the favor of the larger businesses. Please don't tell me that it's about the free market, spirit of competition, or rewarding loyalty. It ends up being bad for the wholesaler when, not only does their customer base shrink, but they become a hostage of the big business. Just look at the suppliers of Wal-Mart. This is the extreme of an example.

A few points need to be clairified. The bunches we give away cost us about $1.00 so you should not compare it to buying 500 regular bunches of flowers.

I do not have an opinion on supporting wholesalers that give breaks on quantity. That has to be a deal between the wholesaler and the retailer.

The Wal-Mart reference really does not apply. What Wal-Mart does is once they become so large a buy, they can then dictate terms to the seller. That is happening today with Home Depot buying from growers on a Scan Pay invoice [consignment]. It is the wholesalers fault who allows big buyers to become so large that they dictate the terms. The Wal-Mart analogy really does not fit here.

.... an appropriate deal needs to be offered to all customer shops - not just the big ones. If a florist chooses to give away flowers, that's up to the florist. If the wholesaler chooses to give a deal on those flowers, then post it on the price sheet so all customer shops can participate.

Here I disagree. First of all, I am not a large shop, larger than the average but I am not a million dollar shop. But, if I come up with a promotion that increases my shop's sales and thereby increases the wholesaler's sales going through my shop, then I would scream all over heaven and hell if that wholesaler gave my idea to other shops. That promotion is mine and because I have used it, it is my Trademark by common law and no one else in my market area can use it. In other words, I can get a cease and desist order to stop using my trademark. If that promotion earns me a better price at the wholesale level, I earned it and the flower shop that sits on their duff should not get the same price break that I get.

Wow, our shop doesn't even buy 500 bunches of flowers for the month of February!

Here is another way to look at this. If you are willing to spend $100 a day/week/month on advertising, why not give away $100 worth of flowers instead? I have heard it said that the cost to obtain a new customer can be very high, like $8 to $12. Half of the people who come in for the free flowers are new customers [not in our data base which means they could have been a cash customer].

A very successful florist in Alabama showed me his financial statements. He had 18% net profit. His advertising was .03 % [that's 1/3rd of 1%]. But he gave a free carnation to every person that came into his shop, whether it was to purchase, pay a bill, brouse, ask a question or complain. They all went out with a free flower. That was his advertising. When any of those people needed flowers for an event, where do you think most of them shopped?

Florists in general have always expected the wire services to do their promoting/advertising and then sat back and waited for the phone to ring. That day is over!!!

Go Get 'em, Florists. The ball is in your court. If you are not going to play ball by the new rules of the 21st century, it's best that you get out of the game and let the real players show their stuff.

 

[carol]

Tom
I think you are talking about something similar to the Year of Flowers promo that has been done around the country by lots of florists..
I am not sure why you would use a company to do the selling for you?
We offered this promo to "project graduation at 2 highschools. the committee did all the selling etc. We sold them the tickets for $10. and they sold them for the $20. price printed on the tickets.. we printed the tickets so there was no other overhead involved. We did have to spend a little time designing them & printing them but not much.
Each School sold 900 (totals 1800..more than I expected)
About 70% of the people who come in every month were not on our data base. we are able to upsell a large bokay to about 20%.
This is a very very expensive promo for us.. we spend maybe $3000 month on flowers for the people coming in ..but our sales have increased, I know we have new customers buying for holidays.. and the PR factor was terrific.. when the schools were selling them they had free radio time for weeks.. and always mentioned us because that is where you have to come to redeem your ticket each month.

Our biggest learning curve was what & how to sell to these freebie people. a few are just plain arrogant but we keep reminding them they did a good thing by donating to the school. They need to be reminded that we did not get all this money to keep.
And if they miss a month..."too bad... but you did a real nice thing donating to the school and even missing a few months this is still a great deal for you"