Thoughts on the 80/20 Rule

[lori042499]

I personally think that with the rapid decline in Wire orders, we should all be looking at the 100% order with just getting our service fee...There really is no reason to get any percentage, well from my standpoint because I don't deal greatly in wire outs althought they keep creeping up as I sign more corporates...but I do think our service charge should be se at plenty of money to cover the costs associated with providing that service and then the pwerson doing the work should get paid for doing their job...everyone is happy at that point...everyone gets aid a fair wage for doing their part and all is good in the hood...

As for the high wire minimums, the reason for this is the fact that most florists have a high minimum especially on wire orders....because they are discounted....I personally will deliver anything that I can profit on, so as long as it is a realistic want from the customer and I am not over promising what they will get and they understand what they are buying, but when selling a WO I do not have the same confidence that another florist will want to bother with a 25.00 vase even at 100% because honestly most florists don't want to bother selling things under 40.00 even if they have the stuff available and the extra capacity to produce and delver it, why I don't know, I do believe that this is one of the major problems in our industry...we all have this illusion that flowers are so special that everyone should want to spend 60-100 dollars all the time, but the reality is that way more people would buy flowers if they had a thought that they could confidently walk into a flower shop and buy something for less than 25.00 and not be treated like they just walked off a spaceship from another planet...

Oh and never underestimate what people will have delivered...I had a guy come in and get 2 wrapped carns and a 6 dollar bear, a 9.00 sale and spent 7.99 on delivery 6 blocks away because he wanted it delivered and didn't want to walk in the bank with his gift and feel like a dork...I got paid he got what he wanted delivered to boot and left the story happy as a clam..

 

[SpringCity]

I question the fundamental idea that it's a "rule". Whose rule? Not mine. Sorry if I sound like an arse, but srsly.

 

[duanermb]

I personally think that with the rapid decline in Wire orders, we should all be looking at the 100% order with just getting our service fee...There really is no reason to get any percentage, well from my standpoint because I don't deal greatly in wire outs althought they keep creeping up as I sign more corporates...but I do think our service charge should be se at plenty of money to cover the costs associated with providing that service and then the pwerson doing the work should get paid for doing their job...everyone is happy at that point...everyone gets aid a fair wage for doing their part and all is good in the hood...

:thumbsup

...we all have this illusion that flowers are so special that everyone should want to spend 60-100 dollars all the time, but the reality is that way more people would buy flowers if they had a thought that they could confidently walk into a flower shop and buy something for less than 25.00 and not be treated like they just walked off a spaceship from another planet...

Very well said!

Oh and never underestimate what people will have delivered...I had a guy come in and get 2 wrapped carns and a 6 dollar bear, a 9.00 sale and spent 7.99 on delivery 6 blocks away because he wanted it delivered and didn't want to walk in the bank with his gift and feel like a dork...I got paid he got what he wanted delivered to boot and left the story happy as a clam..

And.... there you have it! :headbang: (Buffie would drive that one there on her way home and put $7.99 in her pocket - Not bad on that one!)

I know there is much discussion about getting more business through attacking DIY and lower margin work. How about just grabbing more orders that are already in the store? Sure its less $ per order, but it's all at standard margin for both delivery and for the product.

 

[lori042499]

:thumbsup

Very well said!

And.... there you have it! :headbang: (Buffie would drive that one there on her way home and put $7.99 in her pocket - Not bad on that one!)

I know there is much discussion about getting more business through attacking DIY and lower margin work. How about just grabbing more orders that are already in the store? Sure its less $ per order, but it's all at standard margin for both delivery and for the product.

It takes longer to explain that you have a high minimum and lose the customer and look unwilling to sell to them than to talk with that customer and see what they want to send if it is a single rose in a budvase you can definately do it and make money and keep the customer...also it helps if you set your delivery charges so that that in itself is a profit baring area f business...

 

[PhillyPhlorist]

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

Thank you and Thank you... Internet or not, there STILL a need to electronically x-fer orders. If it were not, then why are our wire out's up 2% this month?

I too am for the 90/10. That 7% marketing fee is a load of you know what... That ship has sailed...

- H.

 

[goldfish]

Some kind of flexible commission system is the only viable option. FTD/TF should develop a software to allow this. A lot of florists might re-join them if they had this system in place.

If you want more incoming orders, go ahead and you bid a higher commission. Even a busy shop might want to do this in the middle of summer when all your designers are filling water tubes.

If you already have enough orders, you simply lower the commission all the way down to 0%, instead of suspending the merc/dove.

It should work. Not all problems can be solved, but many will be.

For example, we always have trouble wiring out Mother's Day orders to Florida, because most shops over there suspend merc/dove early.

With flexible commission, these shops would have just lowered the commission to 0%. Why not? With 0% commission, it's the same as local orders with an dded benefit of not having to deal with the customer.

Would we have sent a wire to 0% commission shop? Of course we would have, as the alternative (canceling order) is worse. Win-win situation.

 

[goldfish]

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%.

I know (we are also an FSN member - 80/20).

The problem is that it's static. I want to change my commission at any time.

Heck, if my competitor's is bidding 20%, and all my designers are picking noses in a slow day, I would bid 20.1%!

 

[CHERYL BAKIN]

hERB:
Our wire outs are up too....all corporate stuff.

Our corporate people expect & demand that we take are of them. And we do.....I will NOT give up this piece of business, because it ties too critically into what else we do for them.

We also need the ease of transfer. I do NOT have the time to sit down, and call out 10, 15 or 25 wire outs each day......maybe others do.

I am quite willing to transfer an order at 100%......keeping only a small service charge, which I have directly charged my customer for.

I also expect that florists transfering orders to me will do so at 100%, keeping only the service charge.

(90% also works for me).

Cheryl

 

[duanermb]

I know (we are also an FSN member - 80/20).

The problem is that it's static. I want to change my commission at any time.

Heck, if my competitor's is bidding 20%, and all my designers are picking noses in a slow day, I would bid 20.1%!

LOL, well, they are here and listening! Bigger problem is that most of the florists on there will remain at 20% and during the busy times... wait a minute, that's what we want! Never mind.

(Reminds me... One of my competitors added their discount at 12% to up my 10% for spring discount on the directoy - oh well....)

 

[alisonm1215]

I voted 90/10 because 80/20 is misleading.
The WS is pulling an additional 7% from the filling florist and then there are the other erroneous fees.
What I would like to see and, hell will of course have frozen over by then, is full service filling and sending shops get the full 80/20 and the WS would get their monies through membership fees. I think this would help eliminate dOGs because they would have to actually fill orders. I'm sure they would find a way to get around it, but In my mind if you were filling and sending, it might make each shop a little more aware of the types of arrangements we were requesting.

Or maybe the WS that gathers orders could give the filling florist, oh, I don't know-say-93% of the order when they get a headquarter order. Why is it that they get the full 27% when they are not even a florist?

I know this is a rainbows and unicorns scenario, but you asked.

 

[CHERYL BAKIN]

You would have to ask TOTO, but I think at one time you did get a higher percentage on a HQ order. that was before the days of the heavy .com stuff -- and was designed to get you to take & fill the orders.

this was, as I recall, when the FTD.com stuff was just starting out....and remember, way back when, to had to SEND AND RECEIVE!!

Somewhere, probably when FTD was sold, the rules changed and the filling florist got screwed....and until most recently, most of them did not know it, or how much was gone.

In the age of all the .com orders, I think more & more people have come to realize how how the fees are (and % taken are) for these incoming .com orders.....and are beginning to think thru the problems a little more clearly....and deciding what makes sense for them.

Cheryl

 

[Mikey the Flower Guy]

You would have to ask TOTO, but I think at one time you did get a higher percentage on a HQ order. that was before the days of the heavy .com stuff -- and was designed to get you to take & fill the orders.

this was, as I recall, when the FTD.com stuff was just starting out....and remember, way back when, to had to SEND AND RECEIVE!!

Somewhere, probably when FTD was sold, the rules changed and the filling florist got screwed....and until most recently, most of them did not know it, or how much was gone.

In the age of all the .com orders, I think more & more people have come to realize how how the fees are (and % taken are) for these incoming .com orders.....and are beginning to think thru the problems a little more clearly....and deciding what makes sense for them.

Cheryl

I like Cheryl's post, BECAUSE it SHOULD "remind" us, that the current model is broken, serves little purpose, and current "value" of wire services is toast, BUT, having said that, and going BACK to BLOOMZ's post about Shelby, and for THOSE of you that "remember" how far back that WAS, how much has truly "changed"??
I would LIKE to re-assert a model, which gives that sending florist a flat fee, and the filling florist the balance, and FORGET about the "flexible" attributes, and the split structure...it's old, archaic, and it's on it's last legs...EXACTLY, what we are trying to RID ourselves of!!
When WE send a direct order, we charge TEN BUCKS PERIOD...the filling florists get the rest...in a round about way, it's 20% on a FIFTY dollar order, and 10% on a HUNDRED dollar order, and 5% on a TWO HUNDRED dollar order..it's simple, easy, and the he11 with the rest of this nonsense!!

 

[Tuberose]

Maybe I'm dense, but I don't get the flexible fee thing and bidding on getting an order, too confusing. I'm with Cheryl and Mikey, since the advent of the internet, it's broke and it needs to be FIXED or there will be no filling florists. Once upon a time, it kind of balanced, you lost 20% on filling but gained it back by sending orders, it's now mostly filling unless you go hog wild on order gathering. If you fill for what you end up getting minus the 20%, the customer gets zilch. Unless the wire services wise up, they will be left holding an empty bag, or should I say vase?

 

[duanermb]

Those who like 80/20, please post your incoming vs. outgoing.

(Ya, I know, good luck getting that info...)

 

[bloomz]

How come I'm the only one who liked 70/30?


(ducks)

 

[Carol Bice]

How come I'm the only one who liked 70/30?


(ducks)

Why do you like 70/30?

Carol Bice

 

[CHR]

I believe it's already past 70/30 for 1-800 LFCs. IIRC the split is 31% to 1-800 and 69% to the LFC.

Bravo to the folks pointing out that there's no such thing as 80/20. WS commissions and receiving fees consume approx 10% of the order value so its 70/10/20.

'Unequal senders' will pay even more to the WSs.

 

[Hal Conklin]

MAS Direct

I believe it's already past 70/30 for 1-800 LFCs. IIRC the split is 31% to 1-800 and 69% to the LFC.

Bravo to the folks pointing out that there's no such thing as 80/20. WS commissions and receiving fees consume approx 10% of the order value so its 70/10/20.

'Unequal senders' will pay even more to the WSs.

We are serious... What if we were to provide MASDirect and you choose ??? Work it out between you... for .35 is it worth it

 

[duanermb]

Thanks everyone who added to the voting.

A full 70% are fans of a change to the industry standard. Good. I feel another poll coming on!

 

[Bruce Hatcher]

Duane; sorry I did not get in on the poll. I think 90/10 would be great! If a florist needs more than that get it from a service charge. Personally our interest is providing the service so they come back for in-town deliveries. Our ads always mention :NO SERVICE CHARGE ON OUT OF TOWN WIRE ORDERS. Been doing it for many years. We get our share of incoming but our outgoing is always a way more!
and we want to keep it that way!!!