What is wrong with OF's?

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Joe Mioux

Joe Mioux

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Dec 15, 2004
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bloomzie made mention of the something that struck me as good meat for a new thread.

In another thread he typed the following....


They (800TFTD) are getting more and more and more of the orders every freaking day, as we get less.

They're not growing the pie, just taking what used to be our slices.

I fear time may come when they have them all, and this is the way flowers will be bought.

A bit extreme perhaps, but it could happen and we'll all be working out of warehouses without retail fronts.

So at that point - I guess lining up for the orders begins to make sense.


why is this such a horrible scenario? think about it.

low rent - warehouse facility, no advertising or marketing, no effort to make a flower shop an inviting experience.

just a flower factory.... a OF (order filler).

the concept is based on simplicity. design (actually stick flowers in a container based on some recipe) and deliver.

the key to this successful business would be buying flowers really cheap and hiring a group of factory workers that could follow some rudimentary instructions.

IN FACT.... make it an assembly line baskets greened, vases prepped, one set of flowers stuck ... vase moves down the line to the next set of flowers to be inserted etc, until it is bowed, picked, carded, and wrapped for delivery.

this is would be a bit different than the dropped shipped flowers.

just tossing out a bone here....... ;)

joe
 
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I don't think people want to eat at Mickey D's all the time. Yes you have to be smart about your business but what we do has creativity involved and is not just making a widget.
:thumbsup
 
Joe, my boss told me a story once about how the shop was involved in something like this. Years ago these guys bought the shop and several others around San Diego...they did something just like what you're talking about...apparently the work was crap and complaints were made left and right...also I think she said something about they took the money and ran...my boss bought the shop back when it was available and luckily it remains in the family!
 
SpringCity said:
I don't think people want to eat at Mickey D's all the time. Yes you have to be smart about your business but what we do has creativity involved and is not just making a widget.
:thumbsup
Click to expand...

true, but this isn't food either. so analogies might not be appropriate with one exception....

more people eat at McD's than they do at 5star restaurants.

I am attempting to segregate or define a niche.

The art isn't important for this discussion.

think about the potential of a flower factory.....

joe
 
aileen_c said:
Joe, my boss told me a story once about how the shop was involved in something like this. Years ago these guys bought the shop and several others around San Diego...they did something just like what you're talking about...apparently the work was crap and complaints were made left and right...also I think she said something about they took the money and ran...my boss bought the shop back when it was available and luckily it remains in the family!
Click to expand...

This was a nationwide thing, not just local to San Diego. Gerald Steven's has some similarities, but really it's a different ball game...

Another similar attempt were the 1800 fulfillment centers, but still not quite the same.
 
aileen_c said:
Joe, my boss told me a story once about how the shop was involved in something like this. Years ago these guys bought the shop and several others around San Diego...they did something just like what you're talking about...apparently the work was crap and complaints were made left and right...also I think she said something about they took the money and ran...my boss bought the shop back when it was available and luckily it remains in the family!
Click to expand...

that is a management issue.

properly managed this would and does work.

bloomzie just nudged my brain to pose this question.


look at the trends we have seen in the last 30 years. instead of venture capitalists investing in manufacturing, they invested in retail.

Home depot replaced the local lumber yard, and hardware store.

Best Buy replaced the local appliance store.

Ultimate Electronics replaced the tv/stereo store.

WalMart replaced the Ben Franklin store and a whole lot more.

my point is the OG's are replacing the flower shops.

aren't there not opportunities to capitalize on this industry?

joe
 
Yes....but it just seems so ....wrong....so impersonal....so sad.
 
Joe, I wonder if this highlights the separation of niches that I have felt like has been a trend in the industry.

That there are a wider amount of low spending flower buyers who will opt for the convenience and low price of internet/big box stores is a fact I will not dispute.

Then there is a niche of customers wanting a personal shopping experience with a company that treats them as individuals. You can see this trend in the growth of fair trade products which are purchased for their socially responsible value instead of the cheapest value. Also in the popular farmer's markets that support local families, and so on. This market will spend more for these reasons.

If these customers were shopping with the "lowest price" as the only qualifying factor then yes, your flower factory has a lot of merit.

But there are those of us that do focus on the market that wants that person-to-person feeling when using flowers to convey a feeling.

So I will stick with my market, and I am sure yours will grow in good leaps and bounds as well.
 
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Joe,
You are stating what we try to do, in our wedding work, each and every day.

It's mass production....line them up, and get them done,....greens, roses, fillers, etc.

next style please.

The management and the control of the work process is most important....no, critical here.

I think Randy (RC) has this down to a rare science, and does it very, very well.

Most large volume production shops do it also.

Cheryl
 
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Picture this:
A well known town figure passes away. Upon entering the visitation room you are filled with the overwhelming display of:
Glass vases with spiraled looking bouquets of solid color alstromeria, solid color roses, solid color calla lilies. Stand upon stand of the same style design. Are you impressed? Everyone's tribute looks the same whether the flowers are different or not - 4-6" above the rim of the vase. Possibly collared with lemon leaf (salal) - no ribbons.
On the top of the foot of the casket is a hand tied design of 24 red roses, just lying there........

Nope, don't think so. I know we can't live on funerals but I do know that my customers are always asking for something "different".
 
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also, I don't buy the hypothesis that the consumer is looking for cheap flowers.

I think, especially the young to middle age group is looking for convenience. and in some instances could care less what the arrangement looks like as long as they get credit for something.... anything!

joe
 
Ok I'll admit there may be a market for it. I heard about a local guy here who just buys up florist's phone numbers and operates out of a warehouse, cranking out WS arrangements. That's kind of what we're talking about here, right? I'm assume he's doing well. It doesn't appeal to me. I'd also like to say if I was thinking only pragmatic dollars and cents and nothing else, to heck with creativity, etc., well....floristry would be low on my list of career choices.
 
Let me tell you about our operation.

We are located in a business park. We started out with 2200 sqft paying around 1.37 sqft. Our shop was setup for this and when we where approched by 800flowers at the time it was just unheard of to fill their orders unless you where a conroys franchise. We also signed up with FTD as well. So here we where filling the orders. Buying the containers and spending nothing zero on advertizing. We saw our local customers beginning to decline as more and more incoming orders continue to replace them.

We had all of the Order Gatherers sending us orders as we continue to expand our delivery area to include all cities within a 70 mile radius. We recieved complements from mostly 800flower customers claiming their husband has always used 800flowers and they usually where not happy with the flower quality or design.

We had Gift Tree sending us orders. Tons of gourmet baskets and we added a huge area to our shop just for gourmet baskets. We then started supplying the supermarket with fresh flowers. All of sudden we had a $10,000 a month account and it increased our buying power. We where buying from growers from the LA Market and from FlowerBuyer. It was crazy how much product was going through our shop.

In less then a year we had grabbed as many incoming orders as we could. Heck I remember surfing the web and looking for ways to contact other companies to get their business. You could go onto some of these sites and actually sign up for filling orders.

What did us in was the dicounted products. Instead of reicveing $75 orders for roses we started seeing 50 then 39 all the way down to 29.99. I remember 800flowers pulling a fast one one week before Vday and offering roses from $65 if you ordered early. My rent was cheap my labor was averaging around $8 an hour and gas was still affordable.

Joe and to everyone I really did try this and in just two years I allmost lost our business. I saw how quickly those incoming orders could suck everything out of my business. And I think those same orders are still doing the same thing to each and everyone of you that fill those orders. It just a slower death then what we went through in just two years.

I know that an incoming order has the potential for having a net profit. But it really is such a small amount that there is now room for error. At least with doing things on your own you decide how much of your sales you want to spend on advertizing and marketing. You make some mistakes and hopefully you learn from them.
 
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In order for the flower warehouse to work there would have to be major changes to the formula...but it could work....Florists would never get rich but the would work. The amount of florists would need to cut down by many...

I see where you are going with all of that Joe...and it is a sad reality that all businesses are coming to this demise...Huge superstores are taking over and cranking the biz out...

I have said in the past, doing these orders do have their merit...If done profitably and in enough volume you can make money...but you do need outside orders to do it..Like in Eric's scenario, you cannot live by discounted stuff alone....it just doesn't work..unless of course you are panying .06 an hour to a third world person...
 
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Why don't the services fill for themselves?

In my opinion the first assumption you have to make is that big wire services have no problem competing with their member shops. They'll work together with member florists on one aspect of the business right up until the point that it's more profitable to compete against them (order gathering, drop-shipping, etc.). Beyond that it's everyone for themselves. Assume that if there is money to be made the services have no problem competing with their member shops.

It then stands to reason that if there was money to be made in filling orders the wire services would have their own fulfillment centers in every decent-sized city or - at the very least - the largest cities.

But the wire services don't get into local filling. I believe the only logical conclusion is that they know there is no profit in it. It's far more profitable to collect substantial monthly fees from florists who will pay dearly for the chance to fill any order at what for many is a loss.

I have seen a few shops that can squeeze out a little profit from almost any order. Typically these are run by very shrewd business-minded operators who are essentially running flower factories. They buy in volume at low prices. They keep all costs down and treat it like a production facility.

There is absolutely nothing wrong with that! But it's not the kind of shop most florists want to own or work in. Most florists I have seen want to enjoy their work and have the pleasure of designing beautiful product. There is nothing wrong with this either! It's not a case of either/or. People go into business because they want control over their work situation and environment to some extent.

I also know the arguments about the less tangible/ancillary benefits of filling incoming orders - cycling product, spreading the word, using excess capacity, etc. But those benefits would apply to a wire service fulfillment center too.

I have never been able to bring myself to make a bet in a casino. As soon as you walk into a nice one you're surrounded by crazy opulence. For me it's like a flashing neon sign saying "you can't win here! All of this - the fountain, the fake Eiffel tower, the fake canal in the middle of the desert - was paid for by people who didn't realize that the deck was stacked against them".

Sometimes I feel the same way about incoming wires. A rep is always quick to tell a disgruntled shop about all the orders they have received from their service. If those orders were so great the wire service would have figured out a way to fill them themselves and keep the profit they keep telling you you're making.

Just my opinion!
 
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The biggest challenge of setting up an operation based on fulfillment is that the order flow is controlled by just a few companies. I have first-hand accounts from florists whose operations were decimated when the mother-ships decided to direct order volume elsewhere.

It's great to have holiday projections and be prepared to fill large quantities - but if the real orders never materialize, as happened during this last Mother's Day to at least 3 shop owner I know well, any small profits from filling the hundreds and hundreds were wiped out by the remaining unsold arrangements - numbering in a couple cases in the hundreds, too.

There's nothing to stop local florists from increasing efficiencies and working on improving production right now. Like Cheryl said, many of us use production techniques for weddings, events, holidays and even everyday work. Don't have to be in a warehouse for that.

Without a storefront, does the local face of a "florist" become a supermarket more and more?

Fleuray spoke of a growing division between custom florists and fulfillment operations. I see it more and more at FC too where skilled designers are regularly derided for being wasteful, egotistical and/or inefficient. Some just want human machines to stamp out massive amounts of 800TFTD arrangements and work for low wages without any benefits.

But like Eric said, the margins in fulfillment are razor thin and growing smaller by the month. Mark Anderson nails it when he asks if fulfillment was so profitable, why aren't the big 3 doing it themselves? Answer - because they make more $ right now off florist services than they do off consumer direct sales.

I can't remember the exact line from that Dragon's Den piece, but one of the VC guys hit the nail on the head about controlling order volume and then putting the screws to local florists.

Moving to a warehouse and then waiting for orders to be fed from someone else would be a very risky move right now, IMO.
 
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What a thought-provoking thread! (At first I inadvertently typed "threat.")

One can live on bread and water for a while, but when the guards start giving just water..... Well, you get the picture.

We use an assembly line now for such things as Lori mentioned, some wedding and party pieces. We also use the line for roses at Valentine's Day.
 
While there is a lot to be learned from the OF method of manufacturing and filling orders which could apply to smart retail florist operations, the OF business plan is a sure fire formula for going out of business sooner than later.

When a retail florist loses a customer or two, it's not a major disaster. When the OF loses a customer, most often most (or all) of the business is lost and there is nothing to make up for it. They're instantly out of business. This isn't speculation. It's been proven over and over again.

Do a little research. Check out how many businesses, growers, and manufacturers have gotten all excited about landing a major customer like Wal Mart or a lesser big box. They dropped their own marketing programs and dealer networks to devote all of their resources to one or two major accounts. And then, voila, somebody beat their price or they were told to sell at below cost or lose the account. Either way, they were out of business.

That said, there is a lot to learn from the way "warehouse" operations would have to operate in order to make a profit. There's nothing to prevent florists from keeping and marketing to a larger, more diverse, and safer customer base while incorporating money-saving methods used by these operations. Just don't get taken in by some snake oil salesman from somebody's purchasing department.
 
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