What's good about Sending Florists & Rebates?

[Tom Carlson]

How does the overall retail florist industry benefit by allowing "Sending Only' members in the Wire Services?

Or asked another way:
Would the industry be better off if "Sending Only Memberships" were eliminated?

How does the overall florist industry benefit from "Rebates"?

Or asked another way:
Would the retail florist industry be better off if Rebates were eliminated?

 

[Joe Mioux]

Tom:

To answer your first question, I think the North American floral market is so large that the few "sending only" florists is probably an insignificant number.

AT this time, Ponder my cross marketing thread and this phenomenon will probably be different in a year or two.

Sending only florists are here to stay and will probably become a larger competitor to florists in the future. The answer is to find your niche in the floral market.

Rebates???? I get surcharged by FTD for low sending fees and Rebates from TF. Tom the couple hundred bucks I get in rebates from TF is insignificant in the broad scheme of my overall sales. For years, I didn't even know I was eligible for them. Rebates are nothing. At least for me.

Joe

 

[fairfield]

If it is true what I have heard about the WS's 'capturing' sender information on credit cards that they process, then SFO's (using WS CC clearing) are detrimental to the industry. My guess is that the vast majority of SFO business (Internet?) is credit card orders processed through the WS's. This means the WS is now going to market to the sender and when the sender begins to use the WS direct, the WS will also have the recipient information. They will now, of course, have cake and eat.

My opinion is that SFO's don't meet the WS eligibility requirements and should not even exist. But, what do I know. I don't even hold a WS membership. So, I can't possibly know what is right and wrong with the WS. Right?!

I have been told by WS reps that the reason for rebates is to reward the sender. That is how the money is made - sending. When I asked the Bloomnet rep recently why all of the fees were put to the receiver she said, "If we penalize the sender, they won't send orders." Wow! Maybe I should sign up and send MY CUSTOMER'S ORDER to receiving florists that are being penalized! How convenient! And profitable!

Shorter answer: They should BOTH be eliminated. (MY OPINION)

 

[BOSS]

As far a SFO's go, nope, nada, zip...there is no benifit to the industry. There is however benifit to the Wire Service that has them in their stable, based on the fact that they control huge blocks of orders, and in general offer no head aches like regular florists do....

One could assume that if SFO's were eliminated that those orders (some) would find their way back to traditional florists, thus helping them to become healthier...

I agree with Fairfield, that SFO's do not comply with the membership rules, but here we have to remember that.... there are no rules anymore...

As for rebates, they are simply a bribe to make a florist decide between the various wire services available and to tempt them into sending thru a specific network, to maintain the order volume of the network. Remember, *most* florists WANT incoming business...

I don;t know if the retail floral industry would be better off without rebates... not sure their elimination would make much of a difference.

 

[BBJ (Big Bad John)]

I don;t know if the retail floral industry would be better off without rebates... not sure their elimination would make much of a difference.

IMHO getting rid of rebates would also get rid of SOF's, it would also give the wire services more profit on a per order basis...unless they were to also reduce members fees because they don't have to pay rebates....HAHAHAHA like that would happen.
More profit for the wire services would also be a bad thing, as they would then have that much more money to market our customers...so then we would only have 3 sof's 1-880 / FTD / Teleflora and they would have all kinds of $$$ to market themselves as the place to shop for flowers.

 

[DistinctiveFlorist]

I agree that they should both be eliminated. All the SFO's are is a middle man taking a bite out of the customer's order and the receiving florist is paying for it.

Off with their heads!

Wanda

 

[BOSS]

IMHO getting rid of rebates would also get rid of SOF's,

Agree'd...the elimination of rebates would lower the number of SFO's....maybe...

Take the fact that they would still be able to garner their 20% and sending fee, upwards of $14.95 per order, thus gathering a possible $24.95 per $50.00 order.

When you look at the $24.95 gain, is the loss of a $6.00 rebate worth stopping the gathering process?? I don;t think so...

I do agree that elimintaion of SFO's would be the best thing to reshuffle order distribution amongst Real Florists, however, elimination of the rebate, most likely will not eliminate the SFO's en-mass

 

[Sher]

So what is the advantage of some florists that I know...not members here..setting up large warehouse centers in their county to produce and deliver orders from several large og's. And this is happening across the country...what is that florists financial advantage in doing that?

 

[clay]

but I think

Agree'd...the elimination of rebates would lower the number of SFO's....maybe...

Take the fact that they would still be able to garner their 20% and sending fee, upwards of $14.95 per order, thus gathering a possible $24.95 per $50.00 order.

When you look at the $24.95 gain, is the loss of a $6.00 rebate worth stopping the gathering process?? I don;t think so...

I do agree that elimintaion of SFO's would be the best thing to reshuffle order distribution amongst Real Florists, however, elimination of the rebate, most likely will not eliminate the SFO's en-mass

I believe it would help take the extra money out of their pockets that help pay the ridiculous PPC ad game....to help the reshuffle....

 

[Bigted]

Rebates

Eliminating rebates would only hurt the small florists. The big senders would go to FTD/Tele and demand some kind of advertising "allowance" to keep the orders flowing. And more importantly, they would get them. The little senders would not.

 

[BOSS]

So what is the advantage of some florists that I know...not members here..setting up large warehouse centers in their county to produce and deliver orders from several large og's. And this is happening across the country...what is that florists financial advantage in doing that?

Because, and some here will disagree with me on this, you can make a profit on discounted work, if you are geared toward doing nothing but that.

A friend of mine, has just such an operation, his first 3 years was 100% discounted biz, and sadly he took home more than many shops gross...now he's expanding into retail as well...it can be done...I do feel it has to be done from the beginning to be efficient...like in his case, after noon, the only employees left on the clock are drivers....

 

[fairfield]

Because, and some here will disagree with me on this, you can make a profit on discounted work, if you are geared toward doing nothing but that.

I agree here. This was our "Plan B" if the bottom fell out. I knew that if we accepted anything and everything over the networks from a "shop" in the warehouse district (cheapest rent) without the sinage cost and showroom costs (inventory, display cooler etc.) it would be possible. Hours would be better too. Would still comply with all the WS rules because it would still be "full-service", but I doubt there is much walk-in in a location like that.

I could be the OG filler KING! For the time being, however, we are making a go of it the traditional business way - Real, local, independent, florist.:thumbsup

 

[Tom Carlson]

So the consensus is:

On my original post, my reference to Retail florist industry would not include the wire services as they are not retail, they provide a service and wholesale hardgoods

So the consensus (majority) is:
The florist industry would be better off without SFOs (sending florists only).

And the florist industry, as a whole, would be better off without Rebates.

That being the consensus, it is probably true that either SFOs or Rebates are NOT going to go away because they are products/services of the wire services.

But it does prove that SFOs and Rebates are not a benefit to the vast majority of Real Florists. Unless, like Boss wrote, they are geared to that type of an operation.

If the majority of Real Florists do not realize a profit on incoming orders, it would be reasonable to assume that they do not want them, with one exception. And that is if florists want to send, they have an obligation to fill.

So doesn't this all boil down to the only benefit the Wire Service provides to the day to day operation of a retail florist is the ability to send orders?

What else might I be missing? Remember, I am not a member of the big 3 so I belong to IFA which gives me the ability to send orders, which is slightly less than 1,000 per year.

What am I missing by not being a member of TFD, TF or 1800 ?????
I can orders direct to florists using a directory, or
I can send orders through IFA.
I save the WS dues.
I do not have any extra fees.
I do not have to glean out OGs and SFO orders.
I can process Credit Cards through an IFA arranged processor.

 

[fairfield]

But it does prove that SFOs and Rebates are not a benefit to the vast majority of Real Florists. Unless, like Boss wrote, they are geared to that type of an operation.

If the majority of Real Florists do not realize a profit on incoming orders, it would be reasonable to assume that they do not want them, with one exception. And that is if florists want to send, they have an obligation to fill.

I think this is a leap as only 5 out of 8 posters in this thread agreed. I would tend to agree with your conclusion, but there are so many florists that do not get involved that I am not willing to hang-dry with leap-of-faith conclusions.

One step at a time...

 

[Tom Carlson]

I think this is a leap as only 5 out of 8 posters in this thread agreed. I would tend to agree with your conclusion, but there are so many florists that do not get involved that I am not willing to hang-dry with leap-of-faith conclusions.

One step at a time...

I agree, but I have also asked other florists whom I have visited with and my summation took that into account.

Fairfield, would you care to comment on my last question about "What am I missing by not belonging to any of the Big 3 wire services?

Regarding "One step at a time". Do you think our industry as a whole has enough time to solve the WS dilemma by "taking one step at a time"?

I am doing just fine without a WS. What I am concerned about is the big picture and that includes the consumer and how they are going to accept the changes we are going through. Will they continue to send flowers through Real Florists to another city while the florists are getting their act straightened out? My guess is that the consumer will react very quickly.

I have always been proud to say that "I am a florist" and always get back positive remarks. Now I am not so sure I want to admit to being a florist because there would be a lot of explaining to do.

Our industry is hurting economically and perceptively [not sure thats the right word]. Some consumers perceive florists as being high priced, not to be trusted for filling orders to be delivered out of town.

I have strayed from my question. Please, what am I missing by not being a member of any of the Big 3 Wire Services?

Tom Carlson

 

[goldfish]

So the consensus (majority) is:
The florist industry would be better off without SFOs (sending florists only).

And the florist industry, as a whole, would be better off without Rebates.

Agree. I would also add they should also get rid of reciprocity fee, low-sending fee.

If the majority of Real Florists do not realize a profit on incoming orders, it would be reasonable to assume that they do not want them, with one exception. And that is if florists want to send, they have an obligation to fill.

So doesn't this all boil down to the only benefit the Wire Service provides to the day to day operation of a retail florist is the ability to send orders?

What else might I be missing?

The fact that each individual florist would act to maximize its own gain, not the gain of the entire industry.

Each florist is competing against other florists at the local level. Decision in this case critically depends on what the competitors do, rather than relying on some kind of universal rationality that holds true under any circumstances, which is your original thesis.

In reality, however, each florist would have to consider the consequence of his/her decision on the competitors businesses, too. By the same token, what the local competitors do, whether it's rational or irrational, would affect your next move.

It's a "game" that we all are playing in a market economy; in the context of "Game Theory", it is not a group rationality that is driving the behavior of each member of that group. Individual rationalities (plural), often contradictory to each other, are the ones that matter. The results are much more complex and unpredictable than the world dictated by the universal logic.

By the way, remember a movie "Beautiful mind"? The main character, John Nash, is the guy (mathematician) who has contributed to the field of Game Theory tremendously. He introduced the concept called "Nash equilibium", for which he got Nobel-prize and is a useful concept to understand why people (including many florists) so "irrationally."

 

[fairfield]

I agree, but I have also asked other florists whom I have visited with and my summation took that into account.

Fairfield, would you care to comment on my last question about "What am I missing by not belonging to any of the Big 3 wire services?

It doesn't appear you are missing anything, except proprietary materials they provide (directory, selection guide, containers, marketing materials, publications etc.).

Regarding "One step at a time". Do you think our industry as a whole has enough time to solve the WS dilemma by "taking one step at a time"?

I am doing just fine without a WS. What I am concerned about is the big picture and that includes the consumer and how they are going to accept the changes we are going through. Will they continue to send flowers through Real Florists to another city while the florists are getting their act straightened out? My guess is that the consumer will react very quickly.

I have always been proud to say that "I am a florist" and always get back positive remarks. Now I am not so sure I want to admit to being a florist because there would be a lot of explaining to do.

Our industry is hurting economically and perceptively [not sure thats the right word]. Some consumers perceive florists as being high priced, not to be trusted for filling orders to be delivered out of town.

I think you should be proud to say you are a florist. I am proud to be one too. I get the positive remarks far more often that negative ones and I don't have to explain myself. Our industry is not hurting economically. Individual floral businesses may be hurting or even folding. I don't think the industry is going in the best direction with the WS's doing the directing. It is going to take florists' dropping out of WS's across the board and becoming independent to create the changes necessary to allow the small to medium florists to prosper and grow. Not just the elimination of SFO's or rebates. Some posters on the floral forums say we need to be more aggressive. "Market YOUR brand." Let's say for arguments sake that all REAL FLORISTS achieve their IDEAL level of marketing. What then? Will SFO's even exist? Will the WS's be needed? NO. At that point every florist would be getting ALL of the orders coming to their area. Am I wrong? I think we all know that this will never happen. This is a free market. Anybody can have a stake in the floral industry. If there is money flowing through an it, then there will ALWAYS be attempts to grab some of it - NO MATTER WHAT IT TAKES. So, I think that if you are a florist that is not happy with the WS - GET OUT! If you are content with your WS situation - STAY IN! They will be in the game as long as florists are in THEIR game. It is not going to change unless the people doing the work want it to. Yes, THOSE DOING THE WORK! And for those who think that those millions being dumped into advertising by the OG's, SOF's and WS's is of value to the industry: WHO IS GETTING THE VALUE OUT OF THAT???

Did I even answer your question Tom?

 

[Tom Carlson]

Well answered

I am not a patient person. I think changes can happen faster than they will take on their own. Someone has to push.

Your response and Boss's hypothesis are built on the same foundation. I would like to see these happenings evolve in my lifetime. And maybe that will be as I will be only 83 in the year 2015. I plan to hang in there. When people ask me about retirement, I tell them my plan is for my last day to be at my business.

We are having a very good year. I don't think many florists out of the 30,000 can say that. It hasn't come easy. I've learned the meaning of the quotation, "No pain, no gain." I have survived lots of challenges, not one of which was created by mistakes I made.

Like in 1970, I opened one of the first "mini-malls of Specialty Stores" in the USA. Unfortunately, during the planning stage, I did not give attention to the anniversary date of the UAW contract with General Motors. The strike started in early September, 1970. One month later the Governor came down to do our ribbon cutting. The strike lasted 3 months and is the longest auto industry strike in history. [See my note below] Strike benefits were $25 a week. Our city was probably about 50,000 at that time. Unemployment reached 25%. The first GM payroll checks came out on Dec 21. I missed my projections for the first quarter by 45%. The following April, this plant went back out on strike on local issues. Our town froze again, fearing another long strike. I am still here. Not as well healed as I should be, however.

There are going to be other challenges between now and 2015. The OG and SFO problems will be replace by other challenges. I did not have a crystal ball in 1970 nor do I have one today.

I just want our industry to get and stay healthy. I can't agree with you that it is healthy. I'll bet that the majority of wholesalers would say that they are carrying to much accounts receivable. That alone tells me that our industry is not in good shape, economically.

Sorry for the ramble. Tom Carlson

[note] I remember my Uncle Alfred participating in the first "sit-down strike" in the Chevy plant here. I've been told the workers actually "sat down" on the job.

 

[briparke]

I am not a patient person. I think changes can happen faster than they will take on their own. Someone has to push.

Your response and Boss's hypothesis are built on the same foundation. I would like to see these happenings evolve in my lifetime. And maybe that will be as I will be only 83 in the year 2015. I plan to hang in there. When people ask me about retirement, I tell them my plan is for my last day to be at my business.

We are having a very good year. I don't think many florists out of the 30,000 can say that. It hasn't come easy. I've learned the meaning of the quotation, "No pain, no gain." I have survived lots of challenges, not one of which was created by mistakes I made.

Like in 1970, I opened one of the first "mini-malls of Specialty Stores" in the USA. Unfortunately, during the planning stage, I did not give attention to the anniversary date of the UAW contract with General Motors. The strike started in early September, 1970. One month later the Governor came down to do our ribbon cutting. The strike lasted 3 months and is the longest auto industry strike in history. [See my note below] Strike benefits were $25 a week. Our city was probably about 50,000 at that time. Unemployment reached 25%. The first GM payroll checks came out on Dec 21. I missed my projections for the first quarter by 45%. The following April, this plant went back out on strike on local issues. Our town froze again, fearing another long strike. I am still here. Not as well healed as I should be, however.

There are going to be other challenges between now and 2015. The OG and SFO problems will be replace by other challenges. I did not have a crystal ball in 1970 nor do I have one today.

I just want our industry to get and stay healthy. I can't agree with you that it is healthy. I'll bet that the majority of wholesalers would say that they are carrying to much accounts receivable. That alone tells me that our industry is not in good shape, economically.

Sorry for the ramble. Tom Carlson

[note] I remember my Uncle Alfred participating in the first "sit-down strike" in the Chevy plant here. I've been told the workers actually "sat down" on the job.

Tom, I agree that the industry isn't in good shape economically. Some of the larger cities in Iowa are able to withstand problems a little more than the others. I know the wholesalers have a lot out on accounts receivable and are very nervous about it.

 

[Mikey the Flower Guy]

well, well, Tom.....

given that you've fought the fight, and have reached the age of wisdom, can YOU truly say that YOU TOO were NOT a "supporter" of a/some wire services??
I have "noticed" a "strange" revelation amongst ageless and experience provoked florists, in that, at a certain point, your "catastrophic challenges" have taught you the rules of engagement??
ALL FLORISTS...EVERY ONE, either DIE, sell out, or are long lived, and it ONLY SEEMS, that the "older (and wiser)" you get in this business, the MORE demanding YOU are of your peers around you, and LESS PATIENT with those that HAVEN'T seen, or experienced, that which YOU have!!
YOU seem to have reached this point!
Wire services, are for THOSE that HAVEN'T ( and in many cases WON'T)
TOM, you're a good man, with good intentions, with sometimes bad timing, and in YOUR lifetime, OG's and SFO's will NOT disappear since those florists that WON'T listen to reason (which IS the majority) will ALWAYS provide a same day service module.
And, for those of us that HAVE gained some of your skills and beliefs. will just be "bypassed" by those same OG's and SFO's.
You CAN make a great deal of money filling discounted orders.....are you "jealous" or "concerned"??
Finally, forget about "consensus" in this biz...there is NONE!
Forget about morality, or honesty, or just plain common sense...I see and hear less of it day in, and day out!!