Profit From Outgoing

[Eric S]

Okay so I'm sitting here playing with my Tf statements for the year.

I decided to see how profitable my outgoing orders are for the year.

So this what I have

$21,294.50 outgoing orders.
$4258.90 comission.
$621.00 Rebates
$4185.00 Fees.

Total Profit $694.90

Yea thats what I said.

So the only way I can show a little more money is by adding in the incoming.

So I guess my question is why? The only way I can see to squeeze more money is by getting them to lower fees in order to make my outgoing orders more profitable. As an owner what would you say to your rep concering these fees?

Do ask for less fees or do you just say no more wire service and tell your customers sorry. I have thought about this all year and really wanted to see what the outcome was at the end of the year. And it looks terriable.

I know all the arguments so no need to re-educate this owner. I've been trying to figure out what to do about our POS and this kinda tells me what I need to do. But do I really risk losing customers that depend upon me to send their orders outside of our delivery area?

To give you all more info here are my monthly fees.

$149.95 Membership
$215.00 Technologies
$20.00 Network Quality
$19.95 Low Sending Fee If I don't send 20 orders. It happens
My favortie fee $3.99 statement fee.

So help me out. Do I finally say adios to Teleflora or do I try even harder to get more orders to send.

 

[anytimeflowers]

Hi Eric,

I'm a self-described dummy at WS. However, I can tell you first hand that you need some way of serving the needs of your customers. For the first nine years in business, I did not belong to any WS. I sent my customers down the street to another florist who belonged to them all, wrongly thinking that I was providing a service to these customers, and of course, they would come to me for their in-town needs. I succeded in putting the other florist on the map, people didn't even know they existed!

So, I joined Flower Shop Network. However, that cost me $500.00 a year, just to have the ability to send out orders, and my volume of wire-outs is a fraction of yours. I do, maybe, in a busy month, 11. Average is 5!

I know Mark would say to just give them a phone number, but I have found that people don't want to do that for themselves. They will just go home and place an order on line to a "trusted" og. And, I don't even know where he gets those numbers to hand out, been meaning to ask!

So.....$600 PROFIT does not seem so bad.

Just my opinion.

 

[Eric S]

Well its more then just that little number at the end of the year.

Its the continued rise in cost for doing this type of business that I'm concerned with. If I where to say that this year I sent more orders then last year then yea I guess I'm building my outgoing business. But I'm afraid not.

Most of us Eagle POS users are also being faced with addtional cost that will be spent on our systems in order to upgrade them to the next level of Eagle. This is yet another cost that some of us just can't afford. Especially since most of us just finished paying off our $20,000 systems only to find out that we need to throw it away and go into another system or pour more honey on the exisitng one.

The current price structure for sending at least 20 orders a month is just not worth it. You have to send at least 30 to 40 orders a month to make it worth your wild. There needs to be different price points set depending upon how many orders you send.

I know then Teleflora would not be able to afford the super bowl comerical.

 

[goldfish]

Eric,

In your example, if you filled approx $12,000 incoming orders a year, that would pay the entire WS fees (~$4,000). That is, you would be break-even on the incoming end.

If you do that, the entire commission & rebate on any wire-outs you have would be yours to keep.

Looking the other way around, since you are already breaking even on the outgoing end, any incoming orders you fill would give you 30-35 cents profit for every dollar of incoming orders.

It's important to have both.

 

[conchandler]

Eric, call TF and tell them to stop the statement fee. Can you print it off the internet for less than $3.99? I know that's not the big picture you're after but you can get rid of that.

 

[marigold]

Hi Eric,

I'm a self-described dummy at WS. However, I can tell you first hand that you need some way of serving the needs of your customers. For the first nine years in business, I did not belong to any WS. I sent my customers down the street to another florist who belonged to them all, wrongly thinking that I was providing a service to these customers, and of course, they would come to me for their in-town needs. I succeded in putting the other florist on the map, people didn't even know they existed!

So, I joined Flower Shop Network. However, that cost me $500.00 a year, just to have the ability to send out orders, and my volume of wire-outs is a fraction of yours. I do, maybe, in a busy month, 11. Average is 5!

I know Mark would say to just give them a phone number, but I have found that people don't want to do that for themselves. They will just go home and place an order on line to a "trusted" og. And, I don't even know where he gets those numbers to hand out, been meaning to ask!

So.....$600 PROFIT does not seem so bad.

Just my opinion.

I am glad it only took you nine years figure out that sending your customers
to the florist down the block was not a good idea.

You can service you customer with outgoing orders and not belong to
a WS and not send them to another florist.
Call the order out yourself, charge a fee for your service. You will make
money and not have to pay a WS anything, and, you will keep your customers
in your store.

I have found that people DO appreciate if you give the option of providing
them with a phone number or taking care of the whole order for them.

About half just want me to take care of it and pay me my fee, and the others
think it is great that I give them a number and they and they come
back to me for their local needs. (BTW, you asked where we get the numbers?
Just google florist and the zip, for example. )

It seems like there are way easier ways to make $600.00 profit a year
than by belonging to a WS. Shoot, I bet Eric paid at least that much
a year just in consolidating the statements each month!

 

[CHR]

I wouldn't recommend including your POS expense in your calculation since that cost will occur whether you belong to a WS or not.

If you charge a sending/relay fee, that should also be added to WS income.

IMO Goldie's 33% contributing margin on incomings is a little high. More along the lines of 25% (or less) after including the cost of delivery, so you'd need to fill about $16K to offset the WS expense entirely.

 

[JCT]

I know all the arguments so no need to re-educate this owner. I've been trying to figure out what to do about our POS and this kinda tells me what I need to do. But do I really risk losing customers that depend upon me to send their orders outside of our delivery area?

Eric you don't mention if your POS is paid for or not. If it is, just keep using it. I think florists as a whole feel we need to start over again (with technology) when dropping the wire services, you don't. Tell Teleflora you want to keep processing your credit cards through them (thus the ability to keep using the POS), but that you don't want to be a member any more.

I joined Flowershopnetwork several years ago as a means to send outgoing orders. I also have a website through them. My cost is about $600/year. I send most of my orders out this way. But...I am finding that the entire florist to florist system isn't what it used to be years ago. The system is broken. More and more I'm doing what Mark does and giving customers phone numbers of flower shops I know of and trust. I'm tired of apologizing to my customers for a screw up that some florist in East Gish has made. It makes me look bad, so I'm just taking myself out of the equation by letting them make the phone call themselves.

It's a tough decision you're making. I wasn't so worried about the outgoing when I dropped FTD, but was worried about the incoming $$. I've taken a huge hit in 'Total sales' this year between the economy and dropping FTD - but my bottom line has never been better. Never.

And, oddly enough the two other shops in my town are now competing with each other for the wire service pennies. One used to be only Teleflora, One used to be only FTD with me. Now they are both Teleflora and FTD. The wire services are the only ones winning in that situation. jenny

 

[Mikey the Flower Guy]

though the "profit" margin on such orders was "small", the truth is it was POSITIVE, so, where you ARE ahead, is that MANY,MANY florists, both overstuff AND lack cog controls, and wind up with NEGATIVE on the final balance sheet.
It MUST be stated that, IF you charge a 'sending fee" that TOO, must be included in you ws inputs...

 

[master J]

If you took a service charge on each outgoing, you would have more profit. We charge $10 fee to wire out an order.

Also drop TF, unless they tell you they will give you 6 months free, they offer it to other members, so play hard ball with them and get better monthly fees.

or, You could just drop Tf all together and do sending only with Bloomnet($ 50 a month) or FSN & sign up for Floristware POS to send out orders.

 

[Doug Munro]

I am curious about your numbers

First , what is the "technology" amount made up of?

I will assume these is more than simple access to Dove and that you have a POS. If so I think you need to ask yourself if the technology has a benefit to your business other than just sending and recieving wire orders, if so. How much? And would you require a POS if you were not a wire member?

If so be fair and prorate the technology number number you use to remove the POS cost. That way it is still a cost of doing business, but not a cost directly attributable to sending and recieving orders.

Also, add a service fee. Something as simple as $7.95 would change your calculation to a more positive one.

In reality even based on your calculations you are showing a small profit on this segment of your business, there's a lot to be said for that. Maybe it is not as large as you would like to see but keep in mind that you attained it while providing a customer service.

And last but not least, you ask "do I try even harder to get more orders to send?" I suggest this is the wrong question.

Maybe you should asking how you build your customer count overall. In doing so by default you will have more orders to send and a healthier business.

 

[Eric S]

The technoligy breakdown includes 89.95 for access to dove. POS support $100.00. And the remaining can be summed up into messages and taxes.

And Yes our system is paid for.

We can add in the incoming orders. 64 of them for the year at $5,393.42. To make it look pretty but hey I'm not waving a flag over here saying I'll fill orders. The profit from the incoming is nothing and we all know this. Lucky if you break even. For fun lets just say my profit on the incoming is 10% $539.00.

So for the whole year of playing around with $26817.92 with of orders I'm left with $1150.00. So around 4%

And no I didn't charge a service fee this year.

Sure I could go back to charging a service fee for those orders but its hard enough trying to get my customers to pay for an arrangement plus delivery to the filling shop. Kkeep in mind that my incoming minimums are $50 plus $8.99 for delivery. So to do right I will at least send out the same amount.

Last year It looks like I played around with $31647.71 So I will probally match this years totals with last years. Except I charged a $10 fee last year. So I made some money last year.

It really boils down to if the savings from processing credit cards with TF are worth it then that is the only part.

Naw its still not worth it. The savings are no longer there. 2.39% plus .30 transaction fee for MC Visa and Discover and .55 for Amex.


Its not looking to good for Teleflora.

 

[anytimeflowers]

I am glad it only took you nine years figure out that sending your customers
to the florist down the block was not a good idea.

You can service you customer with outgoing orders and not belong to
a WS and not send them to another florist.
Call the order out yourself, charge a fee for your service. You will make
money and not have to pay a WS anything, and, you will keep your customers
in your store.

I have found that people DO appreciate if you give the option of providing
them with a phone number or taking care of the whole order for them.

About half just want me to take care of it and pay me my fee, and the others
think it is great that I give them a number and they and they come
back to me for their local needs. (BTW, you asked where we get the numbers?
Just google florist and the zip, for example. )

It seems like there are way easier ways to make $600.00 profit a year
than by belonging to a WS. Shoot, I bet Eric paid at least that much
a year just in consolidating the statements each month!

Yep, like I said, "Dummy". I did not have the internet, didn't even know how to e-mail until about 2003. Way behind on tech, but I'm learning fast. It's ridiculous that it took this economy to make me run my business like a business. I deserve all the knocks on that one you care to give me, sometimes a hard hit to the ol' noggin is the best way to get through to me.:spankmecu

 

[3genflorist]

Check with your local banks to process credit cards, and take your tele statement with you, they will do more than match it. Also, we dropped American Express because of the higher % fee, no problem, have not lost an order yet, everyone that has am exp in their wallet has another card visa or mc or dis. Your are not alone in the wire service thing, the charges are eating us up too. Not to mention the" just flowers "orders that tele headquarters keeps sending and resending the same orders with NO DELivery included, ! How can a florist get a break when Teleflora won't protect us??

 

[Eric S]

So is 4% good enough to keep this part of the business?

 

[BOSS]

So is 4% good enough to keep this part of the business?

Perhaps... but it's NOT big enuf to worry too much about

 

[marigold]

So is 4% good enough to keep this part of the business?

Eric, I guess the question is , do you enjoy this 4% of your business?
If you do, then great.
If not, is there another way to make 4% income? $640.00 is not that
much to come up with in a year, that is $50.00 a month.
One or two new clients?

 

[BOSS]

If not, is there another way to make 4% income? $640.00 is not that
much to come up with in a year, that is $50.00 a month.

Heck yea... we could just skip breakfast 4 days a month...

 

[Rhonda]

Also, we dropped American Express because of the higher % fee, no problem, have not lost an order yet, everyone that has am exp in their wallet has another card visa or mc or dis.

ditto, did this and haven't had one problem. I just explained it was too much for us to pay to honor that card. They just whip out another card.

 

[dhamil6490]

This is a little off topic, but I wanted to respond to the AmEx fee issue. Yes, AE does charge a flat 3.5%, but do the math. You will find your total fees with MC & VI are nearly the same. My provider is Global Payments, and I routinely pay 3.3 - 3.4% each month. The discount rates are only the tip of the iceberg. Look at the other fees on your statement, too. They add up quick. All this to say AE isn't a bad deal.