26
Oct
2016
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Trimming Your Cost of Goods

On October 18, FTD University hosted “Trimming Your Cost of Goods,” a webinar presented by Skip Paal, AAF, president of Rutland Beard Floral Group. A fourth-generation florist, Skip shared insight into the floral supply chain and making cost-mindful flower purchases.

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Farm to Retailer
Flowers go on quite a journey before they’re made into bouquets to delight your customers. It takes five months to a year to grow flowers on a South American farm. Like any other perishable, flower production can be impacted by weather, environmental regulations, workforce issues and farm capacity.

After they’re grown and harvested, flowers travel into the U.S., typically on a cargo plane, and go through Customs and Border Protection. This journey typically takes two days. They then find their way to a Miami flower brokers.

Miami Brokers
Miami brokers are “wholesalers for wholesalers.” They import product, mainly on a consignment basis, before selling it to wholesale florists across the nation. Miami brokers are limited to what they have on hand and pricing can fluctuate based on demand. While flowers typically only stay in Miami warehouses for a few days, they can linger longer, affecting freshness. From Miami, flowers are shipped by truck or air to wholesale florists across the nation.

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Wholesale Florists
Wholesale florists are the main source of fresh product for 90 percent of retailers and are a great resource for florists looking to purchase small quantities of flowers or when flowers are needed quickly. On the downside, florists are limited to in-stock availability and costs can be higher because the costs of running a wholesale flower business are passed on to the retail florist.

True Farm Direct
Moving to true farm direct purchasing allows you to put product in your cooler faster, at a lower price. You’ll also know about potential shortages and be able to confirm special orders months in advance. The downside is that locating farms in South America can be difficult, communication can be a barrier and a retail order might not be given priority among other wholesale orders. What’s the solution?

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Cooperative Purchasing
Cooperative purchasing allows you to realize significant savings, leverage the buying power of multiple retailers to gain purchasing power, eliminate middlemen and bring the freshest product into your shop. You’ll also enjoy recognition and priority treatment from farms.

Wondering if cooperative purchasing is a good fit for you? Ask yourself the following questions:

  • “Am I able to purchase flowers in case quantities?”
  • “Do I have a good credit history?”
  • “Am I okay with making purchases with my fellow florists?”
  • “Do I have strong pre-planning and inventory management skills?”

Five Rules to Buying

Know your needs.
Buy the bargains.
Business is business.
Add in all fees and charges.
Pay your bills on time.

 

Be sure to visit FTD University to view recordings of our past webinars!

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