Wire Service Free?

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The WS calculator needs to be used with care & caution(that is a nicer way of saying the instructions are flawed). You can not use total Payroll costs from your Income statement to determine an accurate profit or loss on an individual item.

I have argued many many many times here that if a florist does not hire a designer to specifically arrange incoming wire orders then labor should not be included at all.

I also once conducted a poll asking florists here if they eliminated their WS, how many employees would be fired. Most florists said, in the poll, that they would maintain their current staffing.

This tells me that labor is not and should not be considered a variable cost but rather a fixed cost.

If a shop does not employ extra staffing for WS business, then those labor costs should not be used in the calculation.

Accuracy is the outcome you want. Remember if you don't use accurate numbers, you are only lying to yourself.

Another way and I think a better way is to use Break even analysis where you determine how many units must be sold in order to break even. I once did a thread on that and it is here somewhere. and if any one wants me to go through Break Even Analysis, let me know.

joe
 
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Joe - In the interest of those who have joined FlowerChat recently - It might be a good idea to go ahead and post about Break-Even Analysis. I am sure that Lil Goldie and quite a few others would appreciate it.

After all - the whole thread is how to determine if wire services are profitable for us or a liability for us.
 
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I've been there

Things change fast these days, so my reasons now may also change.

I was wire service free for about 5 years. Then I decided to change our store locaation after 79 years [my birthplace] and expected sales to drop, but I did not want to cut my payroll accordingly.

What I did: I rejoined Teleflora and the next year I picked up Bloomlink.

Logic: the payroll will be here anyway, so filling a discounted order was utilizing payroll that would be here regardless.

Result: Our sales went up our first year but our payroll went down as a percentage. Employees became more productive, more efficient.

Where we are at now: GM closed its largest and oldest plant in our city of 65,000. 4,500 people laid off, estimated that 2,500-3,000 were local residents.

How I feel now: Thank goodness, I belong to a wire service.

I send everything via Teleflora [I like them more than Bloomlink].
When I start adding design payroll, I will drop Bloomlink. By the way, they came to me, I did not go to them. So we are not penalized for low/no sending.

WHAT FLORISTS SHOULD NOT FORGET: The marketing program of florists exchanging orders is a huge factor in where our industry stands today. WE MUST NOT FORGET THAT. Whether we do it through a wire service or Florist to Florist is not the issue. WE MUST KEEP THAT MARKETING CONCEPT ALIVE.

At this point in time: I will place my bet with Teleflora. Are they the perfect fit for a florist? Probably not, but if Teleflora operated like florists want them to operate, they probably could not survive [meaning make a profit]. That's just an opinion/observation, not a financial analysis.

IF TELEFLORA IS SMART: They will do everything they can to make the florist profitable in handling wire orders while also keeping themselves profitable. It has to be Win-Win.

For the year ending last July 31, [7 months of which GM was closed] and through our 3rd year in our new location, CUT FLOWER sales were down 1.5%, thats ONLY 1.5%. Not bad, still higher than any year in our 79 year location.

Overall, the florist side of our business was down 8.6% and that was because our largest commercial account [Lear Seating] closed the same day GM closed and they purchased about $750 in foliage plants per month. Plus when me moved we pretty much went out of the gift business because of the very low turnover. We might have gone too far in the regard.

I am also in high-end Casual Furniture and Artificial Xmas Trees. We have been severly hit there. I don't even dare think about that side of my business.

IT'S NOT EASY ANYMORE Tom Carlson
 
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Tom gives a great example of a situation where one or two memberships make sense and work. There are lots of them out there.

The problem with the ongoing wire service/incoming order discussion is that it is very complex and full of subtleties, nuances and countless intermediate positions but it gets polarized into two viewpoints:

Wire Service Membership & Incoming Orders Are GOOD

or

Wire Service Membership & Incoming Orders Are BAD​

The problem with the "good" argument is that there are a lot of struggling shops out there who are looking for a quick fix. They don't know how to improve their retail business and they don't have money for marketing. There is no quick/cheap fix and that is what they desperately want.

They see the argument "ws membership/incoming orders = good" and they like it in no small part because they want to believe it. Why? Because while it's not possible to turn their retail business around overnight they can join a wire service immediately. In fact they can join 2, 3, 4 or more and, since membership and incoming is good then more memberships and more incoming must be even better!

This almost always spells disaster. I'm close with an owner who chose to join every possible wire service a few months ago in an effort to save his struggling business. I tried to talk him out of it but couldn't. He listened to the concerns but he was sure that he could beat the odds and make it work. I hate to say it but at that moment the countdown clock started ticking.

Now he is desperately (and unsuccessfully) trying to sell a wildly unprofitable business. He will be very, very lucky if he makes enough to clear his debt and he will see nothing for the twenty plus years he put into this store. It may have been doomed to fail anyway but chasing all those incoming wires only sped things up.

It is essential to really think things through and not chose a viewpoint because it appeals to you emotionally (you're mad at the wire services for certain business practices) or justifies a long-held business practice (you've been filling for a long time and don't want to consider that it might not make sense).

For anyone who is on the fence: It's worth noting that some of the most vocal wire service haters on this board still maintain one or more wire service memberships and that some of the biggest proponents of filling incoming wires only belong to one. Like Tom said it's not easy anymore!

Every shop is different. If anybody is thinking about making a change they should consider posting all the relevant details of their situation. That way you will probably get opinions that are at least tailored to that situation.
 
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Bloomnet

We've been approached by Bloomnet recently and we are on the fence. They do the hard-sell up front with guaranteed volume, but once we go the contract the sales rep backed off saying we should start out as a regular florist member which has no guarantee level.

Does anyone have experience with Bloomnet?
 
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Hey Minotts,

I saw on your introduction thread that you already belong to Teleflora. That means that you already get the stuff that goes with a traditional ws membership - sending, images, containers, marketing materials, etc.

Joining additional services will always mean diminishing returns: One set of images are very helpful, second third and fourth sets less so. This isn't a BloomNet issue, it's a multiple membership issue.

So are you looking to join primarily for incoming orders? That is typically pretty much the extent of what a second (or third or fourth) membership can provide.

If that is the case - that you just want more incoming - you need to look at the volume, the average order value and the membership cost at the promised volume.

Once again it's not a BloomNet issue but a multiple memberships and expectations issue. I recently encouraged one of my closest friends in the business to join BloomNet because it made sense for him - but his situation was very different.
 
minotts said:
We've been approached by Bloomnet recently and we are on the fence. They do the hard-sell up front with guaranteed volume, but once we go the contract the sales rep backed off saying we should start out as a regular florist member which has no guarantee level.

Does anyone have experience with Bloomnet?
Click to expand...
Let me ask a rhetorical question...

How can they guarantee a volume of orders, since they are based on consumer purchases?
 
Mark Anderson, thanks for the reply. You are correct, we would join strictly for more incoming orders. We do not utilize Teleflora products on our website and wouldn't add Bloomnet.


Mark,

They 'guarantee' an incoming gross $ amount based upon the historical volume in your market. The issues from us are you need to meet an outgoing volume, the guarantee is limited to the monthly fee and for us they are not supported by our software vendor (FAS) as Teleflora is, meaning dual entry for our staff.


Matt
 
No, I never heard of direct2florist until just the other day. We are doin poorly here, we are cancled from teleflora which was our source for orders/income in the way of website orders we would get lots, now I have had to go on my non tf hosted site and put picures of our work and sell from there but it's goin real slow. ftd cut us off from sending and if it werent for getting roped into the pos we would have dumped them long ago and we only hold onto 800 for wire outs. So we are exploring new avenues out of desperation, these ws are literally shutting me down in this economy. There is no help out there for us atleast not in this stinkin state Our accountant nearly fell over when she saw all the darn fees the ws are sufficating us with. What would they do if 100% of all of us refused their orders where would they be then? it's a nice thought :)
 
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Hey Matt,

If all you are looking for is incoming order volume evaluating a prospective ws partner becomes easier - you only have to look at that one aspect of their offerings. IMHO the gross $ amount is part of the equation but ideally you would see more information on what the orders looked like - specifically order values and what the customer paid and was promised (like free delivery) vs what you receive. That would help you make a decision.

Good luck!

P.S. Have you tried searching for posts on the various services? There is already a lot of information on most of them in the forum.
 
minotts said:
Mark,

They 'guarantee' an incoming gross $ amount based upon the historical volume in your market. The issues from us are you need to meet an outgoing volume, the guarantee is limited to the monthly fee and for us they are not supported by our software vendor (FAS) as Teleflora is, meaning dual entry for our staff.


Matt
Click to expand...
Hey Matt... nice to meet you...

Yea, I've heard this guarantee before, not much of one dollar wise in reality, and not worth signing a contract. Not worth dual entry.<period ;)
 
Mark Anderson said:
Hey Minotts,

I saw on your introduction thread that you already belong to Teleflora. That means that you already get the stuff that goes with a traditional ws membership - sending, images, containers, marketing materials, etc.

Joining additional services will always mean diminishing returns: One set of images are very helpful, second third and fourth sets less so. This isn't a BloomNet issue, it's a multiple membership issue.

So are you looking to join primarily for incoming orders? That is typically pretty much the extent of what a second (or third or fourth) membership can provide.

If that is the case - that you just want more incoming - you need to look at the volume, the average order value and the membership cost at the promised volume.

Once again it's not a BloomNet issue but a multiple memberships and expectations issue. I recently encouraged one of my closest friends in the business to join BloomNet because it made sense for him - but his situation was very different.
Click to expand...

Emphasis mine:

The continued debate over wire services has everyone holding onto the fees vs. the return. Why not take 3 months worth of those fees and do something very interesting?

I'll say it again. WS Fees should be considered part of a marketing budget. I am not sure how they are coded in accounting, but looking at it this way clears up much of the questions in my mind. Remove the assumption that it HAS to be profitable from your mind, and assume it is a marketing endeavor, which is what it really is. YOU have to market the outgoing to offset the low margin incoming. There is no order switch! Try it, you might like it!

Decide where your marketing dollars are best served to gain more orders and to be successful in the long term. This is a huge decision for us to stay away from the big 3 memberships right now. We have so much untapped local marketing to do it's not even funny. (Starting with, and not limited to - marketing to local recipients, better signage, re-branding that is still ongoing...)

It seems more difficult to do this, but its more in our control and more profitable business in the long term. Once we have all this sorted out, we may need a boost in incremental sales, and more incoming, but certainly not right now.
 
oldtownflowers said:
No, I never heard of direct2florist until just the other day. We are doin poorly here, we are cancled from teleflora which was our source for orders/income in the way of website orders we would get lots, now I have had to go on my non tf hosted site and put picures of our work and sell from there but it's goin real slow. ftd cut us off from sending and if it werent for getting roped into the pos we would have dumped them long ago and we only hold onto 800 for wire outs. So we are exploring new avenues out of desperation, these ws are literally shutting me down in this economy. There is no help out there for us atleast not in this stinkin state Our accountant nearly fell over when she saw all the darn fees the ws are sufficating us with. What would they do if 100% of all of us refused their orders where would they be then? it's a nice thought :)
Click to expand...

Hi Old town - Fife Flowers here, in Tacoma WA - Direct2Florist is getting started - not a lot of activity in our areas yet but we're hoping. For outbound orders, you can use a credit card and Internet to locate florists and eliminated the WS charges - 800 Flowers/Bloomnet actually does a good job with their "guarantees" of certain volumes to certain shops - but I personally caution any florist considering them, 800, to price out their designs for their 29.99 on up to their 149.99 - for Valentines they have featured in 2007 - 2008 - 2009 18 roses in a red victorian vase with 12 stargazer lilies for $149.99 - and they guarantee for 7 days - don't know what you pay per stem for lilies and roses but I can't afford to produce this for a net of $106.50 including delivery.

Old Town, pls give us a call if there is anything we can do to help - we have visited your shop and I find it charming and would like to help if we can.
 
"they don't have money for marketing. There is no quick/cheap fix and that is what they desperately want."

If the average order is about $60 and you pay out 27%+ for an incoming order...why not give local customers 25% off today. Tight times might attract customers at that discount and it cost you onlt 25%. You may have earned a customer who will pay full price in the busier season ahead. Busy times are not the time to be filling your time with discounted wire orders!
 
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Bloomnet does not stand behind the florist. They like to carry cheap arrangements with tons of flowers. You will lose money. Try flowershop.net. They have a one time fee yearly for the website and you usually receive 100% of your order. Sometimes 80%. And a nice website you can use. Otherwise, why aren't floral shops charging to other floral shops? Give them a discount of 20% for fulfilling the order or vice versa. I can't see where anyone is making any money on other wire services. I am also quitting Telefloral and was a member of Bloomnet.
 
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You know, I had not thought of this before.

Anda and Nicole - Try playing Devil's advocate with this thread. From YOUR end and YOUR viewpoints.......Why should we NOT join with Teleflora?

Sometimes we get so ' gung-ho' on one direction........In this case.....promoting the good of Teleflora......that we overlook the bad that always accompanies the good.

SO, playing Devil's advocate and determining all the reasons WHY I SHOULD NOT DO THIS can really help to concrete a decision.

I do this a lot with any major decision.......like right now, I am debating whether or not to spend the money on a totally new bed or just replace a mattress.
 
augustblooms said:
Bloomnet does not stand behind the florist. They like to carry cheap arrangements with tons of flowers. You will lose money. Try flowershop.net. They have a one time fee yearly for the website and you usually receive 100% of your order. Sometimes 80%. And a nice website you can use. Otherwise, why aren't floral shops charging to other floral shops? Give them a discount of 20% for fulfilling the order or vice versa. I can't see where anyone is making any money on other wire services. I am also quitting Telefloral and was a member of Bloomnet.
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I agree with you august - Bloomnet does not stand behind the florist - that is my point on their pricing structure - the florists works hard, deals with perisable product and they enjoy 20% plus handling etc. Teleflora is a WS like FTD and 800 - they are in business to make $$$ 1st - always remember that. The services they offer - Websites, Dove, etc. are - IMO - better than the others - but if you have time and are resourceful you can do better than TF and use credit cards for outbound orders w/the internet - so if you get your own Website do it your self.
 
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