Wire Services Are Buying Your Customer

[Hollywood]

OKEDOKE,
When I will have something to say more interesting than rambling about WS and OG'S.:rofl::rofl::rofl::rofl:
I am done with that #$%^%$#my friends.
You all have a wonderful weekend.
I am going fishing in the Sierras, alone, Sherry is taking control.
"Asta la Vista Babies...........Arnold".
Hollywood!!.......(only for fun)orttopororttopororttopororttopor
I like these little smilies, they are OK.
Notice???? I am not BOLDING anymore. It's easier...thanks

 

[bloomz]

I like you Henry - how about another green dot?

 

[Hollywood]

You're COOL.............

I like you too, Cool Man.
And yes I'll take any green dots I can get just in case, I screw up again and get a bunch of red ones.
Thank you for your friendship and your support Jona. Hollywood!!
:thumbsup:thumbsup:thumbsup:thumbsup:thumbsup
:calidream:calidream:calidream:calidream:calidream

 

[safeguy]

If your prices are what they should be to be profitable for you, Your COGS are where you want them to be, and the wire in order has enough in funds to properly fill the item requested, then there is no reason why you cannot make money on filling a wire order.....even with the splits, if the dollars are there.......No reason why you can't.

For all the Sputum that the wire services hurl at you proclaiming how they help us the retail florist........in truth........there are those who have mastered the wire service arena and they are making the wire service pay off. Those rare shops are winning the game against the wire services.

Therefore, In spite of how I personally feel and think about the wire services.......The How to that these rare florists are using to win against the wire services is something that I would love to hear about.

The post by RWK is typical for someone who doesn't know the accounting process for wire services. If the receiving florist fills an order and only receives 80%, then unless they are making 20% profit, they are losing money on the order. (Remember - you must fill the order to 100% of value.) Then, if you add the membership fees, advertising fees, Mercury/Dove fees, advertising fees, antivirus fees, ad nauseum, the average florist only receives $64 to fill a $100 order. That's an average of 36% for wire service expenses. Then add in 35% COG, 30% labor...now we're up to 101% of the total for expenses. Where is the profit in that?

However, IN THEORY, it is an opportunity to place your product in someone's home that may have never seen your work - and that's the way that wire services were supposed to work - back in the day. Consider it an advertising expense...or whatever. If W/S companies were not our direct competitors, then perhaps this might be OK. But the average florist is actually making no money on the order and the fees that we are paying to the WS's are used to market the WS's on-line order service and to drive our local customer to the national websites.

As the originator of this thread, I appreciate the passion that I read in these posts and I am pleased to know that I am not out there rowing the boat by myself. The purpose of the article was not to @@@@@ & moan about what they are doing to us and whether they are "stealing" our customers. But instead, it is an attempt to issue a call to arms. If the WS are willing to spend $15-$20 to "buy" my (and their) potential customer, then understand that the WS's and OG's consider the potential customer as a gold mine. This customer is as much mine as it is the WS's customer. They have the deepest pockets but we have the artistic skills - without the filling florist - they are nothing. We cannot let them take the customer, then throw us a bone by allowing us to fill it - for no profit. That would be rolling over and reaching for the KY Jelly!

I agree that fighting this battle alone - or even two, three, a few dozen shops - will not work. Although my shop is large compared to many stores, my shop alone is nothing to FTD or Teleflora, as many of you alone are nothing to your wire service. But the WS's need us...the professionals. So it is time to turn up the heat. I encourage you to re-evaluate your relationship with the wire services. Hold them accountable for their actions. Pay attention to the fees charged (especially the marketing fees) and ask them exactly what they do with those fees. And, if you feel so inclined, re-evaluate whether you should be filling orders from the numerous OG's. If they can't find someone to fill the order, how long before the general public realizes that the OG's are not "real" florists?

Someone within this thread mentioned that there will be someone out there willing to fill those orders - perhaps not profitably - but fill them nonetheless. And I agree with that assessment. But with the razor thin margins, quality products and design skills suffer - placing a bad light on the WS, OGs and filling florists. This is where we fight the battle! As I tell one of my drivers..."don't just stand there...do something!" King Solomon once said: "A cord of three strands is not easily broken." Is anyone willing to quit bellyaching and do something?

 

[TOTO]

Yes, They DEPEND upon FLORIST IGNORANCE!

The post by RWK is typical for someone who doesn't know the accounting process for wire services. If the receiving florist fills an order and only receives 80%, then unless they are making 20% profit, they are losing money on the order. (Remember - you must fill the order to 100% of value.) Then, if you add the membership fees, advertising fees, Mercury/Dove fees, advertising fees, antivirus fees, ad nauseum, the average florist only receives $64 to fill a $100 order. That's an average of 36% for wire service expenses. Then add in 35% COG, 30% labor...now we're up to 101% of the total for expenses. Where is the profit in that?

Facts are that, DA FILLING FLORIST only nets 73% on the surface plus the added discount of another (-2%) FTO incoming order transmission loss on average, thus a net of only 71%.

And, as you noted the HIDDEN additional losses of their membership fees, and all of the other ancillary signed on services, can equate to another (-10%) loss or if your prefer, ADDITIONAL INCOMING ORDER ACQUISITION COSTS.

In the end, the TOTAL INCOMING ORDER DISCOUNT is 39% at best!

So, DA FILLER FOOLS net 61% or sixty-one cents from the WS smoke and mirror dollar. Even if they keep a close eye on their cogs and keep that at 30% and their COL (cost of labor) at only 25%, they have a bare bones cost of 55%. Add to that, a COD (cost of delivery) at another 15% at best, and their total cost to fill that order is now at 70%, or a NET LOSS of (-9%) for each and every incoming WS order they fill.

Back in the day (real florist to real florist pre 1984) it was TIT for TAT and EBB and FLOW as the losses incurred on the filling side was absorbed by the profits made on the sending side. With the advent of the 800 SKIMMERS, and now, the WS.CONS, our scales have been tipped and the balance of trade have become unbalanced.

And yet, so many of our fellow florists have not been able to figure out the WS ponzi scheme due to their FAILURE to properly reconcile their own WS statements along with their LAZY and INEPT accountants.

No matter though since, their staff is kept busy, their products are moving in and moving out, and their delivery person was going by that house anyway.

The really best part (of the WS myth) is that, those florists are getting their products into the home of those recipients (albeit at a loss) who will someday in THEIR FUTURE, become ONE OF THEIR BEST CUSTOMERS and SPEND LOADS OF MONEY at their shops, which makes their loss all worth it!

As Herb Mitchell put it so well: " SANTA CLAUS is coming to your town real soon! "

I've come to the conclusion that, those folks may never get it as they insist on being USER FRIENDLY!

However, I do believe that, HOPE IS ON THE HORIZON, at least for a few.

In two separate conversations with other real florists, small mom and pops, each one complained about the HIGH COSTS of their WS memberships as compared to their low returns from each.

Both are wanting to quit one, two, or even the three which they are affiliated with.

As one florist put it: " They are beginning to EAT UP MY SHOP'S MORTGAGE PAYMENT! " His only problem is in deciding just WHO MUST GO and as soon as he musters up enough of his TESTOSTERONE to help him make that decision, I suspect that, he will eventually be able to make it happen.

The other shop is owned by A LADY and I have known her since 1990. She works like a dog and even though her shop is located on the street level of her father's funeral home, she still has trouble making ends meet.

She knows who's SUCKING HER PROFITS DRY, but since she's been a creature of habit for so long, she's STUCK ON STUPID! (no disrespect intended)

And yet, STUCK ON STUPID can only last for so long, and for only as long as HER MONEY RUNS OUT!

So REX, your post was both INTELLIGENT and TIMELY and yet, you will have a few ON HERE who insist on KILLING THE MESSENGER! I've even read a few posts who swear UP and DOWN that, for a few estute florists who keep a close eye on their cogs (like under 25%) and can buy their products in quantity (like our wholesalers) and control their costs of labor (we were paying our staff anyway) and control their costs of delivery (our truck was going by there anyway), they can make a FEW (two) DOLLARS on every incoming WS or 800 SKIMMER ORDER THEY FILL. In their (very small world) the strategy is always, put everything into ONE POT, stir it up, and IT ALL PRODUCES A PROFIT, ey? In MY WORLD, each sale must stand on its own and PRODUCE A REASONABLE NET PROFIT! There is JUST NO WAY that, I intend to take any profits from my 100% sales and cost shift them over to the losses incurred on those SKIMMER ORDERS, and in order to subsidize the losses that, those OUTSIDE VENDORS wish to inflict upon mee!

On one side, we have the inner circle who PROFIT from the OG sending side while gleaning ALL THE PROFITS, their $ERVICE CHARGES, and THEIR WS Rebates for DOO-ING pretty much NADDA. Suffice it to say that, they have a vested interest in perpetuating the WIRE SERVICE MYTH!

On the other side, we have the outer circle of IGNORANT FLORISTS (no disrespect intended) who by virtue of ACCOUNTING IGNORANCE or ACCOUNTANT IGNORANCE, do not know how to reconcile their WS statements properly. In most cases, their LAZY ACCOUNTANTS treat a CREDIT CHECK from the WS as INCOME and a DEBIT CHECK to the WS as an EXPENSE, end of story.

And so, no line item debit/expense of item for item, and so, no reality in truth nor no reality in their shop's cogs either.

Which is also why, they never add the WS's annual costs to their incoming order acquisition additional costs as a percentage which then, must be added to their already TOO HIGH INCOMING ORDER DISCOUNT of (-29%).

You did good kid! Keep on talking the talk and walking the walk since, in the end, some out here and on FC might even GET IT!

For the others that never will, or the NEWBIES who get suckered into the WS ponzi scheme SCAM, and as that old saying goes: " For those who believe, no proof is necessary. For those who don't believe, no proof is possible. " lol

 

[Joe Mioux]

. That's an average of 36% for wire service expenses. Then add in 35% COG, 30% labor...now we're up to 101% of the total for expenses. Where is the profit in that?

What percent of your Gross Sales is derived from Ws business?

Is it so high that you could fire some of your staff, if you dropped the WS business? Or is it so low that the ws fees can't be costed out over a reasonable number of orders?

Are you included in that 30 percent labor?

Who and what comprises that 30 pct labor? Is it sales, design, office, processing, cleaning, delivery, marketing, advertising, merchandising, accounting labor and you?

Yes it is. That 30 pct represents your total labor bill. Eliminating the WS department isn't going to elminate that 30pct labor. It will remain almost intact if not totally intact.

There is a balance between too many and too few incoming orders that will lead to reduced or larger Net Profit.

Finding the correct balance will definitely make you more profitable.

Some on the anti-WS side do not understand this.

Joe

 

[BOSS]

And, if you feel so inclined, re-evaluate whether you should be filling orders from the numerous OG's. If they can't find someone to fill the order, how long before the general public realizes that the OG's are not "real" florists?

placing a bad light on the WS, OGs and filling florists. This is where we fight the battle!

I agree....sadly there are few that do...

You seem to be advocating a boycott :icon15

 

[RWK]

In response to safeguy's post, I used to work for the gentleman and I have a high regard for the passion he puts into his business. He is correct that when it comes to wire service accounting......never having been a shop owner.....that I know very little about the subject. As to why I no longer work with the gentleman is a private matter, but it does not change the regard I have for the gentleman.

However, judging by the many postings on FC related to the subject of wire services, there do appear to be in existence those rare shops that are winning the battle and making money with the wire services.

I am sure that I, as well as safeguy, and a host of others on FC would love to learn how these rare shops seem to be making it work.

On the other hand......most of you know that I personally feel that the wire services are redundant in today's marketplace. With the now prevalent use of the internet, proliferation of credit cards, both personal and corporate, the fact that you can go online to any and all manner of sellers to find unique containers.....a lot of times cheaper than your wire service, not having to deal with reconciling your statements wondering what this fee is for and why, and I could go on and on.

In addition, most of you who know me know that rules and I just do not get along......and there are way to many rules associated with the wire services for me to like them anyway.

IF and this is a BIG IF........ I ever get to the position of owning a shop, I may learn to feel differently.......however, it is today my firm belief that we as professionals need to change the ways we do business from the "way it's always been done" and chart our own courses.

 

[inferno63]

Use wire orders for competing.

I too have dissolved my relationships with FTD and Teleflora. I use one wire service that is the best economically for me. However, I have rules of thumb that I use. I do not fill OG orders period! And each order that comes to me is subject to a $75 minimum period! In addition to that all order's numbers are hammered out on a case-by-case basis to see if the order is profitable to me. If not, I send a message like "Add X amount of dollars to fill or cancel." Further more, on every single wire order I pick and choose to fill, I attach a marketing piece explaining that the sender overpaid by X % by not calling the local florist direct and offer the recipient a $5 coupon off to pick up the phone and call me direct when they need flowers. I lay out a sample calculation of what they pay vs. what they would have paid for the same piece by calling me direct (not the actual product delivered but a sample). Afterall, don't most recipients know and speak to the sender? Even if they cancel or I reject the order, guess what? I have the senders name and address and they quickly go onto my mailing list and I send them marketing material about wire services anyway. I know it's bold but I believe in educating my customers especially in these hard economic times. I have a fairly good response from these strategies. I am taking back my customers and the wire services are letting me know who is using them by putting me fact-to-face with the recipient. Additionally, many times I do a bit of research by calling the wire service and telling them that I need an address for the sender for my customer. Sometimes I get it, sometimes not. If not, clues in the order can lead you to them on an internet search. Then I market that sender directly.This is my proactive approach. I would be interested in getting some feedback from anyone else using these strategies.

 

[sfox]

I Have A Question

I too have dissolved my relationships with FTD and Teleflora. I use one wire service that is the best economically for me. However, I have rules of thumb that I use. I do not fill OG orders period! And each order that comes to me is subject to a $75 minimum period!

I have a question. Is every order you wire out at or over your $75.00 incoming minimum?

If not why? And if you don't send out every wire out order over $75.00 aren't you doing the same thing to florists by taking advantage of them just like the wire services you so loudly denounce.

 

[inferno63]

I don't send wire orders out. I call florists direct for my out-orders and take my 20% off the top and use a company credit card to pay.

 

[inferno63]

I don't send wire orders out. I call florists direct for my out-orders and take my 20% off the top and use a company credit card to pay.

Additionally, the out orders minimums are decided by the filling florists. I let my customer know that 20% is retained as a fee for ordering for them. Sometimes when the customer is on a budget and I can't help them, I encourage them to call the florist directly and cut me out. When I send orders out it is for MY customers and they appreciate my customer service approach to their needs.

 

[sfox]

So

Additionally, the out orders minimums are decided by the filling florists. I let my customer know that 20% is retained as a fee for ordering for them. Sometimes when the customer is on a budget and I can't help them, I encourage them to call the florist directly and cut me out. When I send orders out it is for MY customers and they appreciate my customer service approach to their needs.

So let me get this right. You get outraged with the wire services because they are taking advantage of florists. But you have no problem with setting a $75.00 minimum order for your incoming but you are willing to send orders for whatever the other florist is willing to accept........and you are very willing to skim 20% off the top for your services.

Isn't that what the wire services are doing?

 

[Mikey the Flower Guy]

So let me get this right. You get outraged with the wire services because they are taking advantage of florists. But you have no problem with setting a $75.00 minimum order for your incoming but you are willing to send orders for whatever the other florist is willing to accept........and you are very willing to skim 20% off the top for your services.

Isn't that what the wire services are doing?

Legit question......

 

[fairfield]

I too have dissolved my relationships with FTD and Teleflora. I use one wire service that is the best economically for me. However, I have rules of thumb that I use. I do not fill OG orders period! And each order that comes to me is subject to a $75 minimum period!

I don't think you are really playing a good game here. The one that loses here is the customer. You have just priced them out of everyday flowers.

Additionally, many times I do a bit of research by calling the wire service and telling them that I need an address for the sender for my customer. Sometimes I get it, sometimes not. If not, clues in the order can lead you to them on an internet search. Then I market that sender directly.This is my proactive approach. I would be interested in getting some feedback from anyone else using these strategies.

This is akin to stalking.

I don't send wire orders out. I call florists direct for my out-orders and take my 20% off the top and use a company credit card to pay.

Now you are a skimmer.

It would probably benefit you to drop the WS. Then, stop sending orders or send at 100% and charge a sending fee.

 

[prestonway]

I don't send wire orders out. I call florists direct for my out-orders and take my 20% off the top and use a company credit card to pay.

So let me get this straight...you are a member of a WS for a very limited amount of incoming...

AND

...you don't use the WS for sending, so...

Why the h*ll are you part of a WS????

 

[fairfield]

Additionally, the out orders minimums are decided by the filling florists. I let my customer know that 20% is retained as a fee for ordering for them. Sometimes when the customer is on a budget and I can't help them, I encourage them to call the florist directly and cut me out. When I send orders out it is for MY customers and they appreciate my customer service approach to their needs.

So, if I want $100 worth of arrangement and delivery, I have to pay you $125.00???

That is 3-4 times the average wire-out fee (as far as I know). How is that a good value for your customer over the shop down the street charging a $5 fee for the same flowers?

 

[inferno63]

I guess I am not understanding your objections here. I educate my customer, save them money, and get repeat business. What is wrong with that? The 20% usually amounts to an average of $8 to $10 that the customer is aware of as a "sending fee". No matter what you call it, the money the customer spends is the same. You imply that I am deceiving my customer which in fact I am not. They are entirely in the know as to what they are spending and for what. Also, I have never had a complaint for marketing the wire customers. In fact, I have received thank-yous from them for saving them money. I also think you are misunderstanding my $75 incoming minimum. That is ONLY for wire orders, not for my direct customers. That $75 minimum breaks down like this: $75 - 27% ($20.25) - delivery (8.50) - cogs (avg. $23) - labor (avg. $12) = $11.25 in my pocket. Would you accept less than $11.25 to fill a wire service order?

 

[inferno63]

I guess I am not understanding your objections here. I educate my customer, save them money, and get repeat business. What is wrong with that? The 20% usually amounts to an average of $8 to $10 that the customer is aware of as a "sending fee". No matter what you call it, the money the customer spends is the same. You imply that I am deceiving my customer which in fact I am not. They are entirely in the know as to what they are spending and for what. Also, I have never had a complaint for marketing the wire customers. In fact, I have received thank-yous from them for saving them money. I also think you are misunderstanding my $75 incoming minimum. That is ONLY for wire orders, not for my direct customers. That $75 minimum breaks down like this: $75 - 27% ($20.25) - delivery (8.50) - cogs (avg. $23) - labor (avg. $12) = $11.25 in my pocket. Would you accept less than $11.25 to fill a wire service order?

Wow, the hostility is unbecoming of a people smelling flowers all day? Are you for wire services or against. I don't understand.

 

[inferno63]

So let me get this straight...you are a member of a WS for a very limited amount of incoming...

AND

...you don't use the WS for sending, so...

Why the h*ll are you part of a WS????

I use one wire service because I want to target the customers that use them and turn them into direct customers.