WS is really not viable = we have the internet

[goldfish]

Our priorities for the kind of work we want to associate our name with are our own. We are in Orange County CA, which has a very high standard of living and household income. The customers we serve are just not into Gerbers and Carnations.

That's a completely different issue, and has nothing to do with profitability or volume of incoming orders.

If you don't want to deliver 'cookie cutters', then so be it. But if your reasoning behind quitting WS has nothing to do with profitability of incoming orders, I hope next time you wouldn't say that florists should simply quit WS and hire sales person to substitute WS orders. I thought that was a misleading comment and that's why I responded.

You write very well and some people might actually believe what you write. If they believe what you wrote and quit WS, thinking that they would be making more $$ without WS, some of them would be in a big trouble immediately. You don't want that, do you?

 

[Joe Mioux]

Our priorities for the kind of work we want to associate our name with are our own. We are in Orange County CA, which has a very high standard of living and household income. The customers we serve are just not into Gerbers and Carnations.

Cheap arrangements with 5 gerbers and 4 carnations in a smiley vase just won't get it done. It just doesn't work for us. In lower income areas there are plenty of florists that produce minimalized arrangements.

There are plenty of grocers, and other florists in lower income areas that will deliver and sell anything that smells like a flower. I'm not knocking those people, that is their choice.

There are large numbers of people that don't know zip about flowers or what is really beautiful or not. We've all heard the "I want a big bunch of flowers in the vase that look pretty", "I want an dozen Roses (with no idea of what a really beautiful Rose is). I do not say that to knock peoples' taste. I say that because it is a fact. How many times have you been asked to poke in more flowers in a finished arrangement because the customer thought it should be bigger (not knowing the design was ruined). In effect, I do believe there are more people that know little or nothing about quality floral arrangements than there are people that respect high quality arrangements.

I suspect your thinking is not far away from what the real world is about and wants in flower arrangements. TF, FTD, 1800 and ProF have a pretty good handle on the real market, which is evidenced in the kind of arrangements presented on their websites.

I guess I should be saying many of the orders we receive from WS, not just OG orders, are the type of arrangements we do not want to associate with our business. -- As the fellow said, "There is always that". LOL

Then why does your website show a bunch of TF cookie cutter images?

http://www.flowerfusion.info/weddin...n-flower-choices*?tid_3=814&tid=All&tid_2=All

 

[lori042499]

Domineau,

You have some very valid points and the land of wire service is very very complicated, there is no way to uncomplicate it...there is no way to tell what you are gaining profit wise by quick math....there are just too many variables...

The profitability of florists all depends on volume and overhead, keeping the two in check will make florists profitable...That is the only thing...Wire service stuff must be figured separate from regular biz to figure out breakeven, then it must be analyzed as a whole to figure if it is upping your overhead to a point of loss...

Now I think it is great that you are in a unique market and that you say people do not want the cookie cutter arrangements, I am just wondering if you realize that your website tells a completely different story...Maybe you can explain this....I happen to be a fan of cookie cutter pictures, but I also have my own work on my site so people can get a glimpse into me and my designs....becuae people do like them, I just don't happen to have the money, time, equipment or knowledge to do pro photo shoots, so my pics don't look as nice...being here for almost 4 years, I cannot tell you how many award winning, accomplished designers have come on here and talked about the very things you are and poo pooing the ws yet they have a untouched, all ws photoed website without one unique thing on it...it makes you look as if your left hand has no idea what your right hand is doing....just something for you to think about...not anything to make you angry just an observation...

The other observation I make is that many people have thought about the whole hiring someone to get local orders using the left over ws money when they quit....This never works and I will tell you why...Quitting the wire service is just quitting the wire service, the orders go away, the money coming in goes away, the costs associated with ws goes away, it si a wash in most cases...There is no left over money in order to pay the sales person to go get the orders...all there is is you standing around your shop with nothing to do but sit and wait for orders...I would suggest that before you quit wire service, you write up a script for phone solicitations and start using some excess time to cold call and see where that goes, they is that goes well quite ws and go with it with all your excess time...

 

[domineaux]

However, leaving a profitable WS business in favor of hiring a sales person and paying them 20 pct was your idea.

It was a suggestion among several

Relying on someone else's comments without fully looking at the ramifications on one's own business could be disastrous.

It's kinda like watching the news... We should listen to what is being said and make up our own mind about the information.

 

[domineaux]

Domineau,

You have some very valid points and the land of wire service is very very complicated, there is no way to uncomplicate it...there is no way to tell what you are gaining profit wise by quick math....there are just too many variables...

The profitability of florists all depends on volume and overhead, keeping the two in check will make florists profitable...That is the only thing...Wire service stuff must be figured separate from regular biz to figure out breakeven, then it must be analyzed as a whole to figure if it is upping your overhead to a point of loss...

All your business costs and expenses should be tested against all your fixed costs, preferrably on a monthly basis. You can break down what you think are WS order expenses, but unless you test everything against your fixed costs you aren't getting a true picture.

Now I think it is great that you are in a unique market and that you say people do not want the cookie cutter arrangements, I am just wondering if you realize that your website tells a completely different story...Maybe you can explain this....I happen to be a fan of cookie cutter pictures, but I also have my own work on my site so people can get a glimpse into me and my designs....becuae people do like them, I just don't happen to have the money, time, equipment or knowledge to do pro photo shoots, so my pics don't look as nice...being here for almost 4 years, I cannot tell you how many award winning, accomplished designers have come on here and talked about the very things you are and poo pooing the ws yet they have a untouched, all ws photoed website without one unique thing on it...it makes you look as if your left hand has no idea what your right hand is doing....just something for you to think about...not anything to make you angry just an observation...

Sorry, about the website. We are still with WS, but we did move off their cookie cutter site a couple months back.

We have a pretty good album of photos in the works, but it takes a lot of effort and time to sort things out. By that I mean editing the photos, creating descriptions and page titles for each item,etc. Then putting them together in a shopping cart arrangement takes a lot of time.

We just moved WS products onto our site until we have time to get all the stuff together that's to be arrranged for placement on the site. Afterall, we are still paying the fees.

There are some quality arrangements among the WS choices.

Just a brief departure from the topic... doesn't it annoy you that the WS that is supposed promote our business, emphasizes containers, ballons, and so much novelty junk?
Containers are containers, and the flower arrangement should be the focal point of our work... not some yellow smiley faced container, with cheesy ballons floaitng around.
I'm OK with Ballons for the kids, but when a new baby arrives it just seems strange to give kiddie style arrangements to a mom. Afterall, she did do all the work. LOL

The other observation I make is that many people have thought about the whole hiring someone to get local orders using the left over ws money when they quit....This never works and I will tell you why...Quitting the wire service is just quitting the wire service, the orders go away, the money coming in goes away, the costs associated with ws goes away, it si a wash in most cases...There is no left over money in order to pay the sales person to go get the orders...all there is is you standing around your shop with nothing to do but sit and wait for orders...I would suggest that before you quit wire service, you write up a script for phone solicitations and start using some excess time to cold call and see where that goes, they is that goes well quite ws and go with it with all your excess time...

FEAR is a terrible business partner. If you don't see opportunity and other feasible options you should do what you view as best for you.

 

[domineaux]

Then why does your website show a bunch of TF cookie cutter images?

http://www.flowerfusion.info/weddin...n-flower-choices*?tid_3=814&tid=All&tid_2=All

Sorry, about the website. We are still with WS, but we did move off their cookie cutter site a couple months back.

We have a pretty good album of photos in the works, but it takes a lot of effort and time to sort things out. By that I mean editing the photos, creating descriptions and page titles for each item,etc. Then putting them together in a shopping cart arrangement takes a lot of time. We don't have the human resources of a WS to do the work for us. Working with most of the photos, descriptions and such has to be done by us... as most everyone knows that has built a site.

We just moved WS products onto our site until we have time to get all the stuff together that's to be arrranged for placement on the site. Afterall, we are still paying the fees.

There are some quality arrangements among the WS choices.

 

[domineaux]

That's a completely different issue, and has nothing to do with profitability or volume of incoming orders.

If you don't want to deliver 'cookie cutters', then so be it. But if your reasoning behind quitting WS has nothing to do with profitability of incoming orders, I hope next time you wouldn't say that florists should simply quit WS and hire sales person to substitute WS orders. I thought that was a misleading comment and that's why I responded.

My reasoning about WS orders has everything to do with profitabilty.
The part about hiring a salesperson was an "idea", only one idea. Please don't focus on one thing you don't like about what is said, I'm not ragging on anyone in this thread. Ooops! maybe abit on the WS.

I don't think I've been unfair in my discussion of WS.

You write very well and some people might actually believe what you write. If they believe what you wrote and quit WS, thinking that they would be making more $$ without WS, some of them would be in a big trouble immediately. You don't want that, do you?

Do you actually believe anyone is going to quit wire service, because I've shared a few ideas in this thread?

I'm just making observations and sharing thoughts, and ideas.

 

[lori042499]

All your business costs and expenses should be tested against all your fixed costs, preferrably on a monthly basis. You can break down what you think are WS order expenses, but unless you test everything against your fixed costs you aren't getting a true picture.



Sorry, about the website. We are still with WS, but we did move off their cookie cutter site a couple months back.

We have a pretty good album of photos in the works, but it takes a lot of effort and time to sort things out. By that I mean editing the photos, creating descriptions and page titles for each item,etc. Then putting them together in a shopping cart arrangement takes a lot of time.

We just moved WS products onto our site until we have time to get all the stuff together that's to be arrranged for placement on the site. Afterall, we are still paying the fees.

There are some quality arrangements among the WS choices.

Just a brief departure from the topic... doesn't it annoy you that the WS that is supposed promote our business, emphasizes containers, ballons, and so much novelty junk?
Containers are containers, and the flower arrangement should be the focal point of our work... not some yellow smiley faced container, with cheesy ballons floaitng around.
I'm OK with Ballons for the kids, but when a new baby arrives it just seems strange to give kiddie style arrangements to a mom. Afterall, she did do all the work. LOL



FEAR is a terrible business partner. If you don't see opportunity and other feasible options you should do what you view as best for you.

This is my point exactly, each and every florist here does this every day....we analyze our business and make decisions based on this every day...for some the ws stuff works for others not so much, some stay out of fear, some get out, somes are at a point that some mosths it makes sense and others it doesn't and it is complicated...we all make the best decisions we can about our own businesses, just because one way works for you doesn't mean it will work for all....I am right now at the point where ws makes sense sometimes, but not always, I analyze each and every month and it may be coming close to not making sense for me, but when it is time I will do what I need to do...

 

[domineaux]

Think I'll drop off this thread for awhile. If there is additional interest in discussion of the topic I'll post more.

If the thread continues to be nothing but rebuttals of what I've written it it is not in the spirit intended.

I do appreciate all the responses

 

[goldfish]

I think that worked for us more back when the actual product was of our own design and not a canned WS keepsake that goes in a yard sale next spring. In my area it's difficult to get rid of keepsake products. I don't like having my name on the ugly OG / WS type bouquets that generate complaints. I'm sure some parts of the country do well with those but I get more local orders that request, "Nothing that looks FTD." I will be happy to have less deliveries and less orders when I am WS free because I do not have designers filling water tubes to keep busy. I will spend any free time working on getting more local business when I am not wasting time and money with TF.

Concord, problem is that most florists right now are desperately trying to survive. If you are doing fine, congrats, but most are not doing well if they have guts to admit it.

While I admire your 'my way or high way' philosophy, most of us struggling florists can't afford that kind of attitude and hope to survive. We can't eat slogans. We need money. We low-life florists (see my nickname, "evil florist") have to do whatever consumers want, even if they are not necessarily our tastes.

Bottom line is that retail is a number game, and florist business is no exception. Every incremental sale, whether it's from "ugly" FTD arrangement or from $5 cash-and-carry supermarket bouquet, will pay our bills.

Margin of Keepsake containers

To decide whether we should purchase keepsake containers for holidays, the easiest way to analyze is to treat the cost of the containers as 'fixed expense.' If you buy 24 pieces of these and sell only one of them, you still have to pay for all 24. It is fixed expense.

To do this analysis, first calculate the contribution margin of each arrangement without the cost of the keepsake container. If this is for holidays, I'd also suggest you add 10-15% labor.

Usually the margin for WS holiday specials is smaller than usual, probably around 15-20%.

Let's say 15% (you can't go any worse than that).

Suppose TF or FTD has a holiday special selling for $65. The price of keepsake container is $6, but you have to buy at least 12, so the total cost for the vase is $72.

With 15% margin, you make $9.75 every time you sell that FTD/TF Special. Because you already paid $72 for the vase, you must sell at least 8 of them (72 divided by 9.75) to break even.

This is the worst case scenario. Your actual margin should be better than 15% to make it work profitably. But this gives you some idea how we should analyze the cost/benefit of keepsake containers.

 

[lori042499]

Not really sure what the "spirit" of the thread was...Did you only want people to respond if they were in complete agreement with you? I don't think anyone said anything rude or nasty....just bringing up some points for clarification for those reading that may not be aware of the many nuances of ws and what it can and cannot do for your biz...I think that people need to be aware of all points for this very complicated matter...I also think that this went much better than most ws treads in the past...where it got all emotional and whiney...but anywho, sorry you want to leave the conversation, it was just beginning to be thought provoking...

 

[domineaux]

Not really sure what the "spirit" of the thread was...Did you only want people to respond if they were in complete agreement with you? I don't think anyone said anything rude or nasty....just bringing up some points for clarification for those reading that may not be aware of the many nuances of ws and what it can and cannot do for your biz...I think that people need to be aware of all points for this very complicated matter...I also think that this went much better than most ws treads in the past...where it got all emotional and whiney...but anywho, sorry you want to leave the conversation, it was just beginning to be thought provoking...

The spirit of the thread was to encourage points of view, some sharing of ideas regarding WS. It appears to have become a me against them situation, which I should think anyone would think is just not going anywhere.

There is plenty more to be mentioned on this topic, but I personally don't want to carry it for rebuttal sake. Like most of you I have plenty to do, but I will definitely be a continual part of this discussion. Again, I just don't want to be "the focus" for disagreement.

Please don't hang on every word of posters looking for points for disagreement. It will be so much better for us all, if there is discussion seasoned with some dissent.

Whining, complaining and excuses don't cut it. This economic environment is not good all over the country. You don't have to take my word for that, it is obvious to everyone.

It is worth making plans and thinking alternatively. Business has never been a static environment, even more so now it is more dynamic than ever. Our markets are changing, and since we basically sell a luxury item we will all have to be more creative and innovative.

IMO, the internet is the best vehicle for promoting business. When we begin to take advantave of all it has to offer the WS will be history.

The Yellowpages in my area are already a done deal. If you polled in Orange County CA, you would find very few people even keep a Yellowpage directory. They toss them in the can the day they receive them. Then of course we do have inexpensive broadband access, and a highly computer literate population in our area.

Our local newspaper OC Register is in bankruptcy, and the prospect don't look good for the LA Times and many other well known newspapers. The internet is the catalyst for their demise.

The G3 and G4 wireless technology is making huge inroads in internet access in rural communities as well. You can get a G3 plug in for $60 for month and have 5-6 gb of downloads with broadband speeds, and much faster and cheaper than Satellite for rural users. The dial up is done for, except for minimalist users.

We need discussions about alternatives, even if they do start with ideas we might not neccessarily agree with to start.

Everyone who takes the time to make discussion should be respected for taking their time to share, unless their discussion is a personal attack or verbal abuse.

 

[goldfish]

Everyone who takes the time to make discussion should be respected for taking their time to share, unless their discussion is a personal attack or verbal abuse.

domineaux, this is off topic, but...

With all due respect, I think you are way too sensitive. After all, you are the one who invited criticism by being a thread starter.

You can't expect every reply would be pleasent to your taste. Of course some of the responses will be unpleasent. Different poeple have different ways of expressing disagreement.

If you are taking offense at every small cursing/groan/red-dots/ridicule/misunderstanding/name-calling/etc, that's unfortunate. If you are offended by whatever I wrote, I'm sorry.

 

[domineaux]

domineaux, this is off topic, but...

With all due respect, I think you are way too sensitive. After all, you are the one who invited criticism by being a thread starter.

You can't expect every reply would be pleasent to your taste. Of course some of the responses will be unpleasent. Different poeple have different ways of expressing disagreement.

If you are taking offense at every small cursing/groan/red-dots/ridicule/misunderstanding/name-calling/etc, that's unfortunate. If you are offended by whatever I wrote, I'm sorry.

Contribute or encourage others to join the discussion.

I am not too sensitive, nor am I offended.

No need to apologize.

 

[domineaux]

I've thought alot on this discussion topic.

If there is any interest I will build an excel sheet and provide away for you to download it from the web. The spreadsheet I have in mind is not to refute anyones thinking about WS. It will be to provide a breakeven analysis for you to plug in your own monthly sales, expense and fixed cost information. It will analyze your own data and give you a mathamatical response for your information.

It maybe a day or so before I have time to think it through and put it up for download. It will not be a complex spreadsheet, but I will be glad to do some explanations after you have worked with the sheet.

If you are interested just add a response to this post.

:ghug:

 

[Joe Mioux]

NO need for a spread sheet.

here is a thread I started earlier this year.

http://www.flowerchat.com/forums/showthread.php?t=22724&highlight=Break+analysis#axzz0apikQA0a

here is the OP.

WS Break-even calculator
In a few threads I have posted a little math computation that can help guide florists whether to retain or drop WS membership.

I thought I would make a new thread.

Break-even Point is determined by taking your fixed costs and dividing that the Unit's Selling Price minus the variable costs of producing the unit.

I will use my FTD activity as an example. I don't use FTD to send, I am only a member to receive some addtional incoming business.

My FTD revenue is marginal and hopefully will serve as a good indicator on what I should do.

My Membership costs were $2610. my total revenue (incoming and outgoing revenue - money I received from FTD to fill their orders) was $5415 on 154 incoming orders. We sent only 19. I am taking the net after commissions of both incoming and outgoing.

So now I know $5415/154 orders equals avg dollar/unit is $35.16. (again that is net less the commissions given up) If we divide that number by .73, we get the original average price of 48.16,

now I have to take that $48.16 times 154 order and that equals $7416.

I need that number to determine how much VC I used. For me I am only assigning COGS, not design labor because 154 orders per year is an after thought.

$7416 x 30 pct COGS gives me $2225 of variable costs.

So now the important numbers to use here are

$2610 member ship feed - My Fixed Cost

$5416 my net revenue
$2225 my Variable cost
154, my total orders.

I still have to convert the revenue and vc to a per unit cost. so$5416-$2225/154 = $20.71.

BEP= FC/unit selling price - vc

so $2610/$20.71 = 126 orders.

This number now tells me that I needed 126 order to Break-even with FTD, based on an average incoming order of $48.16

As you can see, I had 154 orders, so I did actually make money, albeit very small

And an argument can be made that I did not include some other hidden costs like FTD WS reconciliation report time, etc.

Should I stay or should I go?

Probably, the small difference between 154 and 126 orders isn't signficant.

More importantly: I now know where I stand financially with FTD and I am not basing any decisions on emotions.

Hope this helps some of you as well.
joe

 

[goldfish]

I've thought alot on this discussion topic.

If there is any interest I will build an excel sheet and provide away for you to download it from the web. The spreadsheet I have in mind is not to refute anyones thinking about WS. It will be to provide a breakeven analysis for you to plug in your own monthly sales, expense and fixed cost information. It will analyze your own data and give you a mathamatical response for your information.

It maybe a day or so before I have time to think it through and put it up for download. It will not be a complex spreadsheet, but I will be glad to do some explanations after you have worked with the sheet.

If you are interested just add a response to this post.

:ghug:

Actually there are already several versions of Excel calculators available from this forum. I have mine too. Please go ahead and just post yours if you want. Why are you asking us to request it?

I also think that there is not much point in using spreadsheets though. I used to do this sort of analytical simulation for living (have you heard of Monte Carlo sim?). What spreadsheets (or any fancy calculators) do is simply to calculate the numbers based on the equations you specify. They don't create the equations ; you do.

So the Excel results will always be precise, but they may or may not be accurate depending on the equations a human specify. Precision and accuracy are two diffeernt things.

As long as you have the right equations, pencil and paper can do the same job, albeit slowly.

 

[TOTO]

CHR (Cathy) already did the spreadsheet for us.

I've thought alot on this discussion topic.

If there is any interest I will build an excel sheet and provide away for you to download it from the web. The spreadsheet I have in mind is not to refute anyones thinking about WS. It will be to provide a breakeven analysis for you to plug in your own monthly sales, expense and fixed cost information. It will analyze your own data and give you a mathamatical response for your information.

It maybe a day or so before I have time to think it through and put it up for download. It will not be a complex spreadsheet, but I will be glad to do some explanations after you have worked with the sheet.

If you are interested just add a response to this post.

:ghug:

First, welcome to FC and let us Thank You for taking the time to share your feelings regarding the WS's Smoke and Mirror Wampum games.

Second, and since you are new to FC, we old salts and many newbies have discussed this subject Ad Nauseum, but you wouldn't know this just yet.

Here's the FC link to past discussions which will also have other FC links to CHR's Wire Service Profitability Calculator.

http://www.flowerchat.com/forums/showthread.php?t=4289&highlight=calculator#axzz0apcG1ata

You can download Cathy's spreadsheet, enter your own numbers into those cells and come up with your own WS's truth, or lies. (pun intended)

Incoming WS orders are discounted by (-30%). (-20%) Sending Commission for a sending florist or OG or WS DOT.CON, (-7%) clearinghouse fee, and (-3%) incoming order transmission fee).

Add to the on-the-surface discount other hidden order discounts to include the WS's due and fees, unequal sending fines, quality assurance fees, and whatever other ancillary or optional fees to include directory advertising, and the additional incoming order discount can be as high as (-15% to -20%), or a total incoming order discount of (-45% to -50%).

In my opinion, filling incoming orders at a discount of (-45% to -50%) is an effort in futility.

That's a heck-uv-a HUGE order acquisition cost!

Seems we have four schools of thought on this subject:

1. WS's offer SOMETHING, albeit a marginal contribution to help offset my shop's overhead expenses, so I'm PRO ws.

2. WS's offer NOTHING to my bottom line net profitability, and in fact, erode the profits I made on my 100% sales and $ervice charges, so I'm ANTI ws, or just a plain ole wire service basher.

3. WS's offer me a vehicle to get my products into the homes and offices of potential new customers, my truck was going by there anyway, and even though I know I'm loosing money by filling THEIR orders, it's good advertising for MY shop.

4. WS's have always been a part of my shop's operation, and I'm not going to change now. Besides, I'm tied into their POS technology and I need a WS to send all my outgoing orders out.

It's a crap shoot of opinions, some based in fact with others based on the warm and fuzzy WS's myths. All I can add is, one size does not fit all, and each shop must come to their own conclusion over whatever FLOATS THEIR BOAT.

Having said that (too many times already), this recession/depression has forced all of us to take another real hard look at both fixed and variable expenses, and make cuts where and when we can.

The obvious conclusion: Whichever shop expense is no longer able to produce a reasonable return on your investment, must be either greatly REDUCED or totally ELIMINATED. Failure to identify the financial hemorrhage soon enough, and in order to STOP THE BLEEDING, will result in terminal SHOCK leading to an eventual Heart Attack and subsequent PATIENT DEMISE.

In closing, keep posting and asking the hard questions. We REAL FLORISTS on FC have much to learn from each other, especially since, in the end, US WEE BEES are all we got.

 

[roysecityfloristand gifts]

Thanks TOTO I was just about to say the same thing.

Dom is new to FC, and was not aware of the blood letting involved in a discussion about WS's.

We over the years have sorta agreed to disagree, and we each take what we need from the discussions, then make our own decisions.

I am WS free and very happy and doing well, like many others on FC. Although I made that decision on my own based on what WS's were or were not doing for my business, the opinions here were interesting.

I too got caught up in the WS battle here and have the scars to prove it. I have grown to know and understand members more, and that's why we say to new members, "We disagree alot, but at the end of the day we are still a Florist Family".

 

[domineaux]

I'm glad this forums has a corner on all the good ideas, can't help here since all information is available you'll every need. I will stick to discussions.

I'll save you all some posting time. That is a sarcastic remark, it was intended to be and you need not remind me.