Wire Service Background..
Traditionally, a wire service is a company that transfers orders between florists, across geographic divides. They collect money from the sending florist and pay the receiving florist for filling the order. The sending florist earns a commission on orders they send out and normally charges a fee for transferring an order. The wire service takes a percentage of the value of the order as a fee for sending the business to the receiving florist.
On an order by order basis, you make out better if you send more orders than you receive. However, you should keep in mind the economics of scale. For just one example, if belonging to a wire service provides the volume you need to be able to keep fresh flowers in your cooler, you may take a lower margin on wire orders that you fill and be happy to have them.
- Credit Card processing
- National advertising
- In-store marketing materials-such as design books and signage
- Marketing materials for mailing
- Internet advertising, web-site design and hosting
- Some sell hard goods supplies -FTD Marketplace www.ftdmarketplace.com and Telflorawww.myteleflora.com
Wire Services in the 21st Century..
Wire services have struggled in the past decade to remain a viable business entity. Several factors have come into play that challenge the traditional business model of wire services.
- The Internet
Using Internet search engines, consumers can now easily find a flower shop in the town where they would like to send flowers.
- Credit Cards
Consumers are willing to use their credit card to pay for flowers directly to the delivering flower shop. In the old days, customers insisted upon running a house account with their local florist.
- National order gatherers such as 1-800-Flowers…
they gather orders over the phone and over the internet and then distribute them -believe it or not-through a wire service to an actual flower shop. These businesses are rarely actual flower shops. The wire services are in this business now too. They are walking a thin line, gathering orders that once would have been gathered by traditional retail florists-who are their customers!
Unscrupulous companies have developed a business model that does just this-with a twist. They advertise in thousands of local phone books in every small town in the country. For instance, they will buy a listing under the name “Springfield Flowers”. The phone number will ring to a phone bank, in some remote location. Unwitting consumers think they are calling a local flower shop but are actually reaching an order gatherer who will charge them an extra order processing fee, take a commission on the order and won’t have the local knowledge and expertise to handle the customer’s order with the care it deserves.
In summary, wire services have had to re-write their business plans. Ten years ago, there were 5 major wire services, now we are down to 2 major and a couple of minor services. Some went out of business, some merged in with the remaining ones. Wire service companies have adapted to the challenges they have faced in the changing marketplace. Not all markets have changed at the same rate and some traditional flower shops in markets with less competition from big box and internet sales are feeling the stress of a wire service system that has changed before they are quite ready.
At one time, being part of a wire service was almost a necessity, but now with the internet they are not relevant, especially for the prices they now charge. Some of the more unscrupulous ones will also tie you into their POS system and almost hold you hostage since if you try to cancel their service, they won’t give you the customer data that you collected. The wire services make as much or more than the flower shop. If you are still convinced that a wire service is for you, be sure to read the fine print before signing any contracts.