Another Perspective
As a Newbie to FC and with only 2 ½ yrs in the floral business let me weigh in on your challenge since I love honest debate. I must add that even though my wife and I are relatively new to the retail floral business, I do bring over 20 yrs of small business experience into the discussion. We bought a shop that had been established for 14+ yrs with 70% of the orders coming via the WS and assuming this was normal!! Being a bit of a spread sheet guru I have been analyzing sales for the last two years. I wouldn’t argue too much with your numbers but I think there are some other factors and questions you have to consider in the decision process.
First not every floral shop is the same. Depending on size of your city, location, competition, etc you have to figure out a business model that works for you and your store. We have found that having 25 to 30% of our business coming from wire orders works into our model and helps us be more profitable overall. You say, “How can that be?” based on the above numbers?
Here is how I see it. I have designers scheduled every day for certain time periods based on past sales numbers from last year & current trends so I have to pay them no matter how many orders I actually come through the shop on any given day. I would love to have a consistent amount of just local and corporate orders moving through all day long but it rarely happens in retail.
So even though I don’t make as much on wire orders, they do help pay my designers and delivery people and keep them productive. When we deliver these orders it also puts us into contact with and gets our name in front of potential new local customers in our community. I am by no means pushing Wire orders but our industry has changed immensely in the last few years and I think we have to look for creative ways to make things work for each of our situations and if it doesn’t, then adjust accordingly.
We have found little tricks to the trade for working with WS orders and getting that extra five or ten bucks out of them to make it more profitable. For ex: we service two outlying areas that other shops don’t like to do either. By taking wire orders to these areas it makes our trips more profitable. The trick is refusing the orders in the morning unless they come up with additional money for delivery and being willing to taking them back in mid afternoon (when they are desperate) because no one else was willing to do them, it becomes kind of a win-win deal. But you see this works for us because of our location, competition, etc and might not work for you. There are other things you can do to reduce WS costs which I could maybe share down the road.
Moral to this story: The numbers don’t lie but you have to ask them the right questions. Here is my version:
+$50.00 Incoming Wire order
$10.00 20% Sending florist commission
$ 3.50 7% Clearing House commission
$ 4.00 Labor .25 Hrs @$14p/Hr= $3.00 5Min Order Processing @$12/Hr = $1.00
$12.50 Cost of goods (container, greens, flowers) C-$2, Grns $.50, Flwrs-$10
$ 7.20 Delivery expense (Driver @ 3 drops p/Hr @$12, +Vehicle,Gas, Ins,etc)
$ 37.20 Total cost - 74%
$ 12.80 Gross Profit - 26
As a Newbie to FC and with only 2 ½ yrs in the floral business let me weigh in on your challenge since I love honest debate. I must add that even though my wife and I are relatively new to the retail floral business, I do bring over 20 yrs of small business experience into the discussion. We bought a shop that had been established for 14+ yrs with 70% of the orders coming via the WS and assuming this was normal!! Being a bit of a spread sheet guru I have been analyzing sales for the last two years. I wouldn’t argue too much with your numbers but I think there are some other factors and questions you have to consider in the decision process.
First not every floral shop is the same. Depending on size of your city, location, competition, etc you have to figure out a business model that works for you and your store. We have found that having 25 to 30% of our business coming from wire orders works into our model and helps us be more profitable overall. You say, “How can that be?” based on the above numbers?
Here is how I see it. I have designers scheduled every day for certain time periods based on past sales numbers from last year & current trends so I have to pay them no matter how many orders I actually come through the shop on any given day. I would love to have a consistent amount of just local and corporate orders moving through all day long but it rarely happens in retail.
So even though I don’t make as much on wire orders, they do help pay my designers and delivery people and keep them productive. When we deliver these orders it also puts us into contact with and gets our name in front of potential new local customers in our community. I am by no means pushing Wire orders but our industry has changed immensely in the last few years and I think we have to look for creative ways to make things work for each of our situations and if it doesn’t, then adjust accordingly.
We have found little tricks to the trade for working with WS orders and getting that extra five or ten bucks out of them to make it more profitable. For ex: we service two outlying areas that other shops don’t like to do either. By taking wire orders to these areas it makes our trips more profitable. The trick is refusing the orders in the morning unless they come up with additional money for delivery and being willing to taking them back in mid afternoon (when they are desperate) because no one else was willing to do them, it becomes kind of a win-win deal. But you see this works for us because of our location, competition, etc and might not work for you. There are other things you can do to reduce WS costs which I could maybe share down the road.
Moral to this story: The numbers don’t lie but you have to ask them the right questions. Here is my version:
+$50.00 Incoming Wire order
$10.00 20% Sending florist commission
$ 3.50 7% Clearing House commission
$ 4.00 Labor .25 Hrs @$14p/Hr= $3.00 5Min Order Processing @$12/Hr = $1.00
$12.50 Cost of goods (container, greens, flowers) C-$2, Grns $.50, Flwrs-$10
$ 7.20 Delivery expense (Driver @ 3 drops p/Hr @$12, +Vehicle,Gas, Ins,etc)
$ 37.20 Total cost - 74%
$ 12.80 Gross Profit - 26
