Thoughts on the 80/20 Rule

[duanermb]

Thinking on the usual WS threads and some of the comments made regarding changes to the industry.

I would like to know everyone's thoughts on the old 80/20 rule.

My take:

Why earn a commission, when a flat rate makes more sense?

$100 order - $20 bucks
$200 order - $40 bucks - $20 extra for what?

The receiving store takes all the risk on the higher order.
Is it really worth $20 clear cash to send an order out?

 

[shannonlovesflowers]

well, it depends.

Some people really need their hand held when ordering flowers. You may be with the customer for quite a while.
maybe not.

It's a crap shoot.

There are florists that we send orders to direct all the time. Works great. No WS involved.

Also a flat rate really doesn't work always.. $20 for $45 order may seem a little steep, but 20% of $45, not so bad that's only $9.

It's an old system that with the internet has become pretty obsolete.
Pretty much everybody 40 and under knows how to online shop. Once they get wise to ordering DIRECTLY from a local florist, there will be less and less of people wanting to come into shops wanting to send flowers out of town.

Every year is see a decline in wire ins and outs. Almost all the wire ins are from OG's or TFhqtrs.

 

[duanermb]

well, it depends.

Some people really need their hand held when ordering flowers. You may be with the customer for quite a while.
maybe not.

Same goes for a customer in your store, and likely you don't get an up-sell on those ones either.

It's a crap shoot.

Just like any other retail business?

There are florists that we send orders to direct all the time. Works great. No WS involved.

Us too, but it would be really great if there was a better way to find them, a "coalition of the willing" that would be free to develop a relevant system on their own, rather than just making a phone call to someone you don't know anything about, except that they are good at SEO.

Also a flat rate really doesn't work always.. $20 for $45 order may seem a little steep, but 20% of $45, not so bad that's only $9.

Agreed. $20 is too much, even for a $100 order. I guess you can see where I am going with this one. $9 is a nice number for any order I would say. (The $150 customer is probably the least work of the bunch)

It's an old system that with the internet has become pretty obsolete.
Pretty much everybody 40 and under knows how to online shop. Once they get wise to ordering DIRECTLY from a local florist, there will be less and less of people wanting to come into shops wanting to send flowers out of town.

So true. I think there already are, and this ties into the discussions seen on a weekly basis of people trying to combat this system over the years. Wasn't possible before, but it certainly is now. Bad timing on choosing to give up!

Every year is see a decline in wire ins and outs. Almost all the wire ins are from OG's or TFhqtrs

We have never had one, but I guess that is bad for those who rely on that system to survive.

 

[CHERYL BAKIN]

Sorry, Shannon, but I have to disagree somewhat.

There will always be a need for some type of order transfer system, because the corporate world demands it.

Admin. assistants do not have the time to search the internet extensively for every city, town municipality that they might need to send flowers to. those people rely on US, the real florists, to help them each & every day. If we are not around to help, then it automatically goes to one of the "biggies" who wil attempt to do this for them.

I for one am not willing to give up that level of business, and service to my clients, who I also help with their local needs.

Once someone has gone from using me for a particular type of service once, it is too tempting for them to do it again, and again, and there goes your client.


I also think that a 90/10 split is a more fair split, with the automation that most florists use today....and the price needs to include a reasonable amount for delivery. (Sending florist also keeps the wire charge. So, on a $100.00 order, the sender would keep $10 + a service charge of $5.00 (?), or a total of $15.00. Not bad for less than 5 minutes worth of work.)

JMHO, for what it's worth.

Cheryl

 

[shannonlovesflowers]

you don't have to be sorry Cheryl!

I just gave my opinion and observations. I believe, that in my town, they are valid.

 

[goldfish]

I want a flexible commission system in which each filling florist shop bids the max commission it's willing to pay.

With this system in place, I'd bid 0-10% during busy seasons. During slow seasons, I'd bid 20% or even more.

Let the market decide the optimal commission rate.

 

[RWK]

Now Goldie - I have to say, I take offense at your tag line 'Evil Florist who fills OG orders'

Nothing at all evil in doing what you feel is best for your business. Whether or not I or anyone else agrees or diagrees is beside the point. YOU said it yourself - Do the best for your business, your customers, your local area.

Would you consider changing that......I see nothing 'evil' at all?

 

[shannonlovesflowers]

Same goes for a customer in your store, and likely you don't get an up-sell on those ones either.
No, not exactly. We are using our time and our employees to make the sale for the receiving shop. Then we call a shop and quickly give them the order. So it's not really the same.

Just like any other retail business?
Again, no not exactly. I don't go into walmart here in Durango, pick out a bunch of stuff, take it up to the checker and tell her "OK, now I will give you an extra $10 to send all of this stuff to Florida, and it MUST get there today by 3pm"

It's a unique and ever evolving business we are in.

 

[Hal Conklin]

MAS Direct

I want a flexible commission system in which each filling florist shop bids the max commission it's willing to pay.

With this system in place, I'd bid 0-10% during busy seasons. During slow seasons, I'd bid 20% or even more.

Let the market decide the optimal commission rate.

Thats exactly what our MAS Direct is, choice and the florists set the commissions to whatever they want to agree on. Some of our florists are doing 80-20, 75-25. The best part is they are getting paid immediately.

 

[duanermb]

I want a flexible commission system in which each filling florist shop bids the max commission it's willing to pay.

With this system in place, I'd bid 0-10% during busy seasons. During slow seasons, I'd bid 20% or even more.

Let the market decide the optimal commission rate.

Very interesting idea Goldie! I had never thought of it that way before, and a system could be put in place to do just that. In bigger markets with lots of competition, you would have to be competitive. Smaller markets with less shops, and likely smaller more needy shops would also benefit because they could demand more for the product, but the sender would still get to serve their own local customer.

I am writing this one down for sure!

FSN also has this kind of system. Most shops are 80/20, and the shops in the country, where there is only one shop demand 100%. Makes perfect sense to me.

Now we are getting somewhere!

 

[marigold]

I do the 100% sending and a flat fee, mine is $12.95 , I usually encourage
a $60.00 minimum that would include the delivery fee.

 

[bloomz]

FSN also has this kind of system. Most shops are 80/20, and the shops in the country, where there is only one shop demand 100%. Makes perfect sense to me.

Remember Shelby tried that with IFA - sending only at 100%.

Problem was, no one would send back to him at that rate.

It's a tit for tat kinda deal I would imagine.....

 

[AMB]

I do the 100% sending and a flat fee, mine is $12.95 , I usually encourage
a $60.00 minimum that would include the delivery fee.

Do your customers accept the $60 minimum? (Obviously, they do.) We've lost sales because senders thought $45 minimums are too high. Ours is a mixed middle class (suburban) market. Our clients range from blue collar to executives, with lots of business accounts who have spending limits imposed by their corporate HQ.

[Understanding that markets vary geographically and that certain products require higher price tags, I sometimes worry that florists are pushing the everyday buyer to other, more economical non-floral gift options by setting high minimums. Don't mean to stray from the theme of this thread, but this is something I wonder about.]

 

[marigold]

Do your customers accept the $60 minimum? (Obviously, they do.) We've lost sales because senders thought $45 minimums are too high. Ours is a mixed middle class (suburban) market. Our clients range from blue collar to executives, with lots of business accounts who have spending limits imposed by their corporate HQ.

[Understanding that markets vary geographically and that certain products require higher price tags, I sometimes worry that florists are pushing the everyday buyer to other, more economical non-floral gift options by setting high minimums. Don't mean to stray from the theme of this thread, but this is something I wonder about.]

Yes, they do. but, I give them two options. I can take care of the order
for them for the fee of 12.95 and give full value to the florist.
Or, I tell them that I am more than happy to look up a number for them
to call, if they want to save the fee and /or , get something for less.
Most just want me to take care of the order.
The few that would rather call themselves think we are great because we
looked up a number for them, and they remain our local customer.
I know that when they do call direct, their total will be very close to the
$60.00 after all. But, they will have saved the $12.95.
They do like the fact that I don't keep a % and just charge a fee.

 

[duanermb]

Still trying to understand this minimum thing everyone is talking about. Why?

See Mark's website: Midland, MI Florist

I see 2 choices under $30 on his home page. Why the big minimum? Because of the loss of 10%.

If someone wants to spend $50 including delivery and fees why not let them. I am sure Mark will be happy with it.

 

[marigold]

Still trying to understand this minimum thing everyone is talking about. Why?

See Mark's website: Midland, MI Florist

I see 2 choices under $30 on his home page. Why the big minimum? Because of the loss of 10%.

If someone wants to spend $50 including delivery and fees why not let them. I am sure Mark will be happy with it.

Honestly, I am giving the florist room to make a nice design. If it is a plant request, I will suggest less.

I know my customers and I don't want them to be disappointed at
a bud vase delivered for $40.00.

Aren't you happier with a $60.00 order coming in to you rather
than a $35.00, that includes a delivery fee?

 

[duanermb]

Honestly, I am giving the florist room to make a nice design. If it is a plant request, I will suggest less.

I know my customers and I don't want them to be disappointed at
a bud vase delivered for $40.00.

Aren't you happier with a $60.00 order coming in to you rather
than a $35.00, that includes a delivery fee?

Sure it's nice to get bigger orders, but we sell one rose for $2.99 in the store all the time. A $25 order is just fine for us as long as it is chosen from the website or discussed with us prior to the order.

Anything on our website is fair game. Why wouldn't it be? We will give a 10% discount for a florist call in, then add the delivery on top of that.

We have sold many of these at the $30 price point, and have had very happy customers. 40 bucks with delivery. We also deliver our cash and carry product at much lower than that, but we haven't got it on the website yet. Some callers just don't want a basket or a vase! Probably delivered fifty $19.99 bouquets on MD, but they all include our delivery fee. Since adding it to the front page of the site, we have never been questioned. It even shows up in the site description from Google.

It sounds to me like the minimum is to make sure that a store has enough dough in there so that they can still make something look nice, because after the 20% discount, there is not enough left to fill to value.

 

[shannonlovesflowers]

you are still supose to include the 20% discount.

And THAT is the problem, right there. People don't understand. They don't get it. They get something in their head and cannot grasp how it's supose to be done.


here is the other thing. We don't want to send out $2.99+delivery. Waste of time if you ask me. We wont send out anything for less than 35+del. ever.

now if someone wants to pick something up for less than $30, no prob.

 

[BBJ (Big Bad John)]

We also deliver our cash and carry product at much lower than that, but we haven't got it on the website yet.

If you deliver it...................it ain't cash and carry!!!
You should at least rename those specials to "economy bouquets" or something like that.

 

[duanermb]

If you deliver it...................it ain't cash and carry!!!
You should at least rename those specials to "economy bouquets" or something like that.

Called it cash and carry for clarity.

Of course someone isn't going to send a $2.99 rose plus $9.99 delivery, but they will send a $20 bouquet.

Service, service, service. That $20 bouquet is $9.99 down the street, so we are happy to unload everything we can at any time we can.

They chose us to buy from, no minimum, and we make a few bucks on the delivery.