Wire Services Are Buying Your Customer

[LJVF]

Inferno, I have always maintained that and had stated it here many times, if your incoming ws business can't cover the associated fees of wireservice membership, you should not be a member.

There is a point where a flower shop is too small and a point where the volume of WS is so large to make membership unprofitable.

I don't ever remember Joe stating that every florist will make money with a wire service. He's just offering some proof that every florist will not lose money either.

Inferno, with those numbers, (I'm not being sarcastic) why do you carry a wire service? If you answered this already, my apologies.

 

[inferno63]

Inferno, I have always maintained that and had stated it here many times, if your incoming ws business can't cover the associated fees of wireservice membership, you should not be a member.

There is a point where a flower shop is too small and a point where the volume of WS is so large to make membership unprofitable.

One question, you place labor in as a variable cost, why? After you dropped your WS affiliation did you fire any employee or is that employee still employed?

It makes a difference. Labor is not variable with regards to my WS affiliation, that designer, sales clerk, delivery person will still be employed whether I fill WS orders or not.

That is why I keep talking about manageable levels of acceptable WS business.

joe

As you describe it, my labor is fixed because I did not fire anyone when I dropped WS...the labor will remain about the same because the percentage of actual sales attributed to WS didn't greatly affect my need for employees. However, I throw a number into the mix to cover my labor, the opportunity costs for my time taken away from the other responsibilities of this business.

If everyone ran the numbers and everyone that wasn't making money dropped all WS, what percentage of florists would that truly be? (scratching my head....hmmmmm.....)

 

[Joe Mioux]

As you describe it, my labor is fixed because I did not fire anyone when I dropped WS...the labor will remain about the same because the percentage of actual sales attributed to WS didn't greatly affect my need for employees. However, I throw a number into the mix to cover my labor, the opportunity costs for my time taken away from the other responsibilities of this business.

If everyone ran the numbers and everyone that wasn't making money dropped all WS, what percentage of florists would that truly be? (scratching my head....hmmmmm.....)

RE: highlighted section.

Then how on earth or why on earth do you stick labor into the costs of WS orders profitablity analysis

Your labor is fixed and you can't just arbitrarely add labor to your WS breakeven analysis and come out with an accurate number.

Heck why not just add your phone bill to your WS break-even analysis, its just as arbitrary as adding your labor, which you acknowledge, is a fixed cost to your analysis.

You mentioned Opportunity Costs. That is Micro-economics and if you want to base your decision on Opportunity Costs, fine do it, but please don't muddle up the Managerial Accounting analysis with your personal motiviations or Oportunity Costs.

I spend way too much time on FC and I see you are spending quite a bit on as well. Maybe we better analyze the Opportunity Costs of hanging out here at FC.

Joe

 

[inferno63]

I don't ever remember Joe stating that every florist will make money with a wire service. He's just offering some proof that every florist will not lose money either.

Inferno, with those numbers, (I'm not being sarcastic) why do you carry a wire service? If you answered this already, my apologies.

If I am understanding your question correctly.....

They raised the fees in recent months but I am only in my third year of business and used the WS in year two to try to get my name in the market. At first, I thought it was a good thing and kept hanging in because they kept promising me the world to stay, giving me huge credits, etc. After a year of computations I knew that it was a losing game. I am in a small town with only 400 households and I started this shop from scratch so building it has been a wonderful, passionate challenge. I have a good location in spite of the small town as my reach is into areas that needed service. I am not going to be at any dinner parties with Trump soon but I am moving in the right direction and if I stay on this path and make the right decisions I get to visit Trump Towers some day.

 

[LJVF]

If I am understanding your question correctly.....

They raised the fees in recent months but I am only in my third year of business and used the WS in year two to try to get my name in the market. At first, I thought it was a good thing and kept hanging in because they kept promising me the world to stay, giving me huge credits, etc. After a year of computations I knew that it was a losing game. I am in a small town with only 400 households and I started this shop from scratch so building it has been a wonderful, passionate challenge. I have a good location in spite of the small town as my reach is into areas that needed service. I am not going to be at any dinner parties with Trump soon but I am moving in the right direction and if I stay on this path and make the right decisions I get to visit Trump Towers some day.

So I'm reading this as you did drop the wire service?

The small town market is an unfamiliar ball game to me. Good luck with your path to the Trump Towers!

 

[safeguy]

First, the magician statement is insulting....


And your statements are equally insulting to every florist who remains in the WS business...

I find myself in rare company when only two other florists on this board publicly and frequently posts in these threads agrees with me. I do respect their commentary on this issue. I really wish someother members here at FC who agree with me would speak up. I know you are out there because I keep getting encouraging pms and positive reps comments...

All I am saying is that I am presenting the opposite side of your argument to offer some balance. I do it with my real world experiences and not just generalized statements.

Every florist should be allowed to do their own accounting and not be brow-beaten or ridiculed into dumping the WS business by anti-WS florists.

joe

Whoa now, boys & girls...lets be civil. I did not start this thread to argue whether or not you should be in (or out) of the wire services. In fact, I indicated in my original post that I, for one, believe that membership in at least one wire service is beneficial for my shop. I never asked for a boycott, nor a war on wire services.

Instead, each shop must make their own determination and I suggest that you do your homework!! Run the numbers and make an HONEST assessment. Does the wire service actually benefit your shop? If the numbers work, then does it hurt your business when the wire services as well as the OGs are competing directly with you for your local customer? Does it bother you to pay advertising fees to your WS, only to have them take part of your hard-earned money and "buy" you customer by paying the Pay Per Click fees to Google and other search engines? Only you can answer those questions.

Personally, it gripes my butt when it appears that they are spending MY money to promote themselves and I know plenty of other small and medium sized florists that feel the same way. The unfortunate thing is that it seems as if the WS are not listening. For my shop, FTD appears to be the biggest offender and therefore, we chose to withdraw from the FTD membership. What kind of response did I get from FTD...essentially nothing...a simple shoulder shrug! The only thing that seems to work is money...if they hear enough voices or lose enough business, then they change the way they do things.

Now, for the large shop owners...you guys are in a different market and you do things differently. We'll be there one day, I am confident. In the meantime, the market continues to struggle. So don't look down your nose at the "little guys"...all of us are trying to hang in there during a very difficult economic time.

Lastly, my biggest gripe is about the OGs. Those guys don't have a brick & mortar shop, no inventory, no skilled designers, etc. They take the order, skim 20% (or more) from the top and send us the bone. Is that good for my business? No, and because of this, I will continue to refuse their orders. You never heard me say to refuse a WS order...only OGs. But, on the other hand, these OG guys found a niche, did a great marketing job and are making a ton of money. If I had thought of it, you'd be mad at me...that's for sure and I would be smiling all the way to the bank. But I feel that they are hurting the industry in general and encourage you to consider your relationship with them.

Safeguy
:ned

 

[inferno63]

RE: highlighted section.

Then how on earth or why on earth do you stick labor into the costs of WS orders profitablity analysis

Your labor is fixed and you can't just arbitrarely add labor to your WS breakeven analysis and come out with an accurate number.

Heck why not just add your phone bill to your WS break-even analysis, its just as arbitrary as adding your labor, which you acknowledge, is a fixed cost to your analysis.

You mentioned Opportunity Costs. That is Micro-economics and if you want to base your decision on Opportunity Costs, fine do it, but please don't muddle up the Managerial Accounting analysis with your personal motiviations or Oportunity Costs.

I spend way too much time on FC and I see you are spending quite a bit on as well. Maybe we better analyze the Opportunity Costs of hanging out here at FC.

Joe

Ok, you win....take that number out and tell me if that should change my decision. We can battle the terminology but it doesn't change the numbers significantly enough to make a difference. The vocabulary, or whether or not what number I think is important, or you think is important, doesn't change the end result.

 

[Joe Mioux]

Ok, you win....take that number out and tell me if that should change my decision. We can battle the terminology but it doesn't change the numbers significantly enough to make a difference. The vocabulary, or whether or not what number I think is important, or you think is important, doesn't change the end result.

It's not about winning a debate.

If you are only receiving 5 orders per month, you should not be in the ws business.


From what little I know of you and your shop, you will never be profitable with WS' affiliation.

joe

 

[mrflowermarket]

What's good for the goose isn't always good for the gander

It appears that there is some animosity building in this thread, as with others like it in the past. I, myself speaking from the newbie post as well. Have purchased an existing floral business. I looked at the #'s and saw a significant decrease in the profitability of wire services in the past 5 years of books. We dropped ftd 3 years ago, and 1800 1-1/2 years ago. I still have those dusty codified leftovers. We have used most but some linger just like dinasours--perhaps reminding us daily of the reasons for our decision. Those who say "sending" is what makes the WS business profitable, must be far more forgiving than I. As those for who they are gathering orders are directly competing with them for every single order. It appears from the posts that it takes years and years to fine tune this Ws in-out balance. We just choose to not participate with the Ivory towers in this process. There is not a WS order we filled in the last two years before burning the bridge that didn't cost us $$$$. We saw our sending rates decline significantly, despite their(WS)branding plastered all over our store etc.(at our expense interestingly enough to me. :soapbox::soapbox::soapbox: I came from the Beauty industry, We had CO-op advertising programs to help fund our suppliers "Branding". We spent 20 years building brand after Brand (even working fulltime for one of those brands) to see them turn around and stab us in the back (as little ma and pa shops). Offering higher wholesale discounts on their product to Large(corporate) Salons. Allowing their products (which we spent years branding) to end up on every grocery store, drug store and big box store shelves. These were products with "exclusive Salon only distribution". and yet the little guys(not corporate-Ivory towers) got the screws. We started building our own brand --and it was so much better. :soapbox::soapbox:
I see similar things going on in this industry. These ws companies are seeing what the independent florist dedicated years of their lives building (their(WS) Brand) and now they are capitalizing on it. They couldn't do it without the ma and pa's. If those of you that have been in it long enough to work out the semantics are willing to ride the ride, then more power to you. I for one am pissed -- they send flowers Fed-ex or UPS, cuz they can make more $$ for themselves. This is the part that doesn't fit into the "you make money sending argument--You could have made more money if THEY weren't DIRECTLY COMPETING with you and me. Interesting observation how the world sees things. Our community has finally garnerred enough class to rate a COSTCO discount super store. Everyone is excitied, it has been the front page on the newspaper for months. First they came and looked at a location, then they talked to realtors, then they requested info fron the city, then they moved some old houses, then there was talk that they may submit plans, then after months and years of rumors and speculation, they finally submitted plans to the city for approval. Everyone is so excited, the city fathers tout that this will bring more national chains and retail consumers to our area(Even though Macy's closed their mall store here 2 years ago and Dillards is closing soon). We are going to be the place to come cuz we have a COSTCO.
What the He## are they talking about. It's just the same kind of crap that happened when The big W came to town. We don't shop there either. I refuse to support the corporate clowns that are undercutting price to kill the little independent business. Look at main street USA, It's dead or dying a slow agonizing painful death because the world is looking to save 25 cents on a bag of freakin' chips.
Long story short, We as independent businesses need to take back the business or find a way to morph and make our businesses profitable. You may be comfortable riding the WS ride and thats fine with me and for you as long as it's financially rewarding. But 20 years ago who would have imagined how the WS would choose to compete directly with those who labored so long and hard to build them. I've seen the transformation in other industries, Branding yourselves without building someone elses is the best way to gain your market share. We independents need to stick together and sing a united song. We(Personally) have survived well in the midst of change and my "books" are financially in a better place as a result of that change. We Dumped them for the above stated reasons. and we're not looking back with a single degree of regret.
:soapbox::soapbox::soapbox::soapbox::soapbox::soapbox::soapbox::soapbox::soapbox::soapbox::soapbox:
Best wishes, mrflowermarket

 

[bloomz]

I spend way too much time on FC and I see you are spending quite a bit on as well. Maybe we better analyze the Opportunity Costs of hanging out here at FC.

Joe

Another quote of the week.

Whoa now, boys & girls...lets be civil. I did not start this thread to argue whether or not you should be in (or out) of the wire services. In fact, I indicated in my original post that I, for one, believe that membership in at least one wire service is beneficial for my shop. I never asked for a boycott, nor a war on wire services.

Safeguy
:ned

Ahhh but they always turn into that.

I really think there is a huge difference with filling 800TFTD orders and many seem to think any wire service membership necessatates that, and nothing could be further from the truth.

But if you equate the two - yup wire services suck. Somebody last nite (sorry can't remember who) talked about every order you fill for them builds their brand, and that is WAY true. It was another great quote.

I don't.

 

[mrflowermarket]

Lastly, my biggest gripe is about the OGs. Those guys don't have a brick & mortar shop, no inventory, no skilled designers, etc. They take the order, skim 20% (or more) from the top and send us the bone. Is that good for my business? No, and because of this, I will continue to refuse their orders. You never heard me say to refuse a WS order...only OGs. But, on the other hand, these OG guys found a niche, did a great marketing job and are making a ton of money. If I had thought of it, you'd be mad at me...that's for sure and I would be smiling all the way to the bank. But I feel that they are hurting the industry in general and encourage you to consider your relationship with them.

Safeguy
:ned

Are these OG's any different than 1800 or ftd? They too are gathering orders that would be coming to you were they not there. What's the difference?

 

[Joe Mioux]

That is a good and very valid post Mrflowermarket guy. This refers to post number 250

Before you joined Flowerchat, I dropped Ftd last year for about 8 months, I rejoined then when I got my membership fees reduced to $82 per month or something like that. No low sending, no reciprocity, no mercury, no quality assurance fees.

I am assessed a 9 pct clearing house fee.

It worked fine for the first few months, but incoming business is starting to dwindle. If it becomes unprofitable, I will dump them again. It's not a big deal to get in and out AND get the money what is owed me from them.

I might do that with one of my TF memberships as well. You never know. Once WS becomes unprofitable I am out, but as long as i am profitable and get services I desire, I will remain.

joe

 

[TOTO]

Not ANTI WS! Just anti OG!

Don't I just love those labels!

Make no mistake that, TOTO is not ANTI WIRE SERVICE!

Had a total of SEVEN of them beginning in 1969 and up and until the early 1980s.

That's when I got over my LOTUS LEARNING CURVE and the bottom line NET INCOME FORE MEE in their individual cells at the end of each spreadsheet, all had a paranenthsis' around them. (-LOOSERS)

At that point, we became an ONLY and made money with the company we owned up and until 1994. Continued to stick it out with them until 2001, at such time as they WERE DETERMINED TO STICK IT TO US. " I tried the carrot with the members, and now, I'm going to use the stick! "

http://www.sec.gov/litigation/litreleases/lr15260.txt

But TOTO is ANTI OGs, DOGs, NON-LOCAL PHONIES, and DOT.CONs who work the BAIT & SWITCH DROP SHIP GAMES.

INCOMING never generates enough of anything, other than to SPIN ONE'S WHEELS for NAUGHT. The one caveat is when the filling florists elect to CURTAIL those orders by deducting the full 29% of the discount (-27% sending florist's commission and clearing house fee) (-2% FTO), after which, they deduct another $10 in WS Wampum to net the $7.00 in real dollars to pay for their cost of delivery.

Since that's been the DIRTY LITTLE SECRET in the WS industry for quite some time now and cost many a real florist dollars due to failures in consumer confidence based on them getting less than what they paid for in delivered floral product values, no one seems to want to deal with this truth.

Just read another post when the sending florist wound up with a customer's complaint at the filling florist side. The WS, and after 90 days of the sending florist complaining, finally issued a CREDIT out of their own coffers, NOT FROM THE FILLING FLORIST'S! When the sending florist questioned the lack of quality control and asked the WS, why they allow a florist like that to continue to be a member, their response was: WE NEED COVERAGE IN THAT AREA!

Having said that, and since there is NO REAL PROFITS on the filling side, it would be impossible to pay for the costs associated with belonging to that WS(s) from the FILLING side of the WS order spectrum.

In fact, the only revenues which do pay for the costs associated with belonging to WSs, is from the commissions, rebates, and sending florist's $ervice charges, which were gleaned from the OUTBOUND ORDERS and SENT by those member florists. That anomaly is called COST SHIFTING.

It's a shell game which continues to be played out, each and everyday on DA FLORISTS and by the OGs, DOGs, NON-LOCAL PHONIES, FLORAL DOT.CONS, and their willing WS partners.

As to LABELING, that's the same game the FAR LEFT WING LUNATICS play out as well. When the majority of US CITIZENS demand that OUR BORDERS BE SECURED and our existing IMMIGRATION LAWS be enforced, the FAR LEFT label us as ANTI IMMIGRANT and RACISTS.

For the LEFT, labeling is a much easier path, than choosing to actually do something about the INVASION by ILLEGAL ALIENS which our has befallen our Country since, old (hic) (aka:the swimmer) Teddy's immigration deformed act of 1965. After which, their COSTS, to include FREE HEALTH CARE, FREE EDUCATION BENEFITS, and all other social services they require, plus the big annual vacation bonus of (un)EARNED INCOME TAX CREDITS via TINS since they can't get social security numbers. All of those FREE BEES are COST SHIFTED over to the TAXPAYERS in the form of HIGHER PROPERTY TAXES by virtue of UNFUNDED SOCIAL BENEFIT PROGRAMS MANDATED by our two houses as well as our State and Local Governments.

The ONLY INCOMING ORDERS any florist should be filling are those orders which were received from other REAL FLORISTS who can, LIKE YOU, DOO DA DOO TOO! That's the only FAIR and EQUITABLE BALANCE OF TRADE which used to keep the our scales from tilting and tipping due to too much weight for THEIR ONE SIDE versus OUR OTHER. And, my definition of a REAL FLORIST versus an OG is that, a REAL FLORIST has horizontal black lines on their thumb from using their florist knives.

Should those WSs ever decide to return to OUR CORE VALUES, they would become OUR PARTNERS once again, just like back in the OLDEN GOLDEN DAYS and before DA SKIMMERS invaded our retail floral industry.

Should that ever happen, I'll be a STAUNCH ALLY and CHEERLEADER, just like I was back then and when they treated THEIR FLORISTS like THEIR BEST CUSTOMERS

In the meantime, and as I read between some posters lines, let's continue to keep it all WARM and FUZZY since, just like in those olden days, some of you are still trying to FEED AT THEIR TROUGHS, despite the fact that, the PRICE PER BUSHEL (of their corn) has gone through the roof. And, all due to the SCAM of ETHANOL as an alternative to GASOLINE, even though it produces 20% less energy in our automobiles and costs us 20% more to produce and deliver.

The end result of our Government's debacle, is in the fact that, more poor people get to starve since they can't afford to buy the higher priced corn now. To make matters even worse, the farmers who used to grow wheat, rice, and soybeans, are now growing more corn instead.

Now, read between my lines and try and find the correlations there, IF YOU CAN?

 

[bloomz]

Don't I just love those labels!


As to LABELING, that's the same game the FAR LEFT WING LUNATICS play out as well. When the majority of US CITIZENS demand that OUR BORDERS BE SECURED and our existing IMMIGRATION LAWS be enforced, the FAR LEFT label us as ANTI IMMIGRANT and RACISTS.

For the LEFT, labeling is a much easier path, than choosing to actually do something about the INVASION by ILLEGAL ALIENS which our has befallen our Country since, old (hic) (aka:the swimmer) Teddy's immigration deformed act of 1965. After which, their COSTS, to include FREE HEALTH CARE, FREE EDUCATION BENEFITS, and all other social services they require, are COST SHIFTED over to the TAXPAYERS in the form of HIGHER PROPERTY TAXES by virtue of UNFUNDED SOCIAL PROGRAM MANDATED by our two houses as well as our State and Local Governments.

Hey Hey Hey - that FAR LEFT label fits me VERY well.

And I'm totally for a fence (or wall) and rounding up all 11 million of them and sending them home. Which would be way cheaper than supporting them.

Can you get any further left than me without falling in the ocean? :argue:lol

Yup love them labels amigo.....

 

[TOTO]

Not really FAR LEFT JB!

Hey Hey Hey - that FAR LEFT label fits me VERY well.

And I'm totally for a fence (or wall) and rounding up all 11 million of them and sending them home. Which would be way cheaper than supporting them.

Can you get any further left than me without falling in the ocean? :argue:lol

Yup love them labels amigo.....

I don't consider you to be one of those FAR LEFT WING REGRESSIVE LUNATICS JB!

Perhaps a little WOODSTOCKED now and again, but in my heart, I feel that, even you wouldn't approve of ILLEGAL ALIENS or DEAD PEOPLE voting for the next President of our United States. :rofl:

 

[Hollywood]

TOTO
I think I told you before

:yourock::yourock::yourock::yourock:

Hollywood !! :newbie

 

[inferno63]

So I'm reading this as you did drop the wire service?

The small town market is an unfamiliar ball game to me. Good luck with your path to the Trump Towers!

I still have bloomlink. I am done as of the end of April or May depending on when the new directory comes out. The written cancellation has been mailed. However, I am having a difficult time getting a response from them to make it official so if I don't hear from them I will just turn it off.

 

[inferno63]

It's not about winning a debate.

If you are only receiving 5 orders per month, you should not be in the ws business.


From what little I know of you and your shop, you will never be profitable with WS' affiliation.

joe

I agree. But I also think that the WS is out-dated and I don't believe I will ever mesh well with any of them as I grow. It is simply a matter of direction for me.

 

[Joe Mioux]

In the meantime, and as I read between some posters lines, let's continue to keep it all WARM and FUZZY since, just like in those olden days, some of you are still trying to FEED AT THEIR TROUGHS, despite the fact that, the PRICE PER BUSHEL (of their corn) has gone through the roof. And, all due to the SCAM of ETHANOL as an alternative to GASOLINE, even though it produces 20% less energy in our automobiles and costs us 20% more to produce and deliver.

The end result of our Government's debacle, is in the fact that, more poor people get to starve since they can't afford to buy the higher priced corn now. To make matters even worse, the farmers who used to grow wheat, rice, and soybeans, are now growing more corn instead.

Now, read between my lines and try and find the correlations there, IF YOU CAN?

he he he.....

I used to be a commodities broker, and a soybean market analyst.

I buy Ethanol when the price differential between Gas and E85 when the price is a 40 cent spread. Given my fuel econmony loss with E85, that is where I need to be save money.

Also, I own stock in ADM, so this ethanol craze has made me happy.

However, ADM is also one of the biggest recipients of Ethanol subsidies.

and the family owns farm ground.

Now read between those lines.

joe

 

[Joe Mioux]

Whoa now, boys & girls...lets be civil.

You are implying that I am angry. You are wrong.


Safeguy, tell me where, in the my quote that you used, I was uncivil?

Did I resort to name calling? no.

Did I clearly state my position? I think so, but you be the judge.

I am not going to sit around here and have people call other people stupid or in O.T.'s text basically telling me to be quiet so he can type away at his pleasure.

Believe me, I love good debates. you will find this out as you read my posts here.

joe