As you read this, Americans are in the process of dropping $1.9 billion on Valentine’s Day flowers—much of it going to buy the 224 million roses grown just for the amorous holiday.
Surprising facts? Here’s another: While most people assume that the local flower shop is making a killing at this time of year, a good many florists are merely breaking even—or even losing money.
“People don’t understand the economics of what happens to the money they spend on flowers,” said Bonnie Bank, controller at Superior Florist in midtown New York. “And they don’t understand that florists are getting screwed in the process.”
Bank serves on the board of Florists for Change, which, through its site RealLocalFlorists.com, attempts to combat what members believe is a fungus infecting the industry.
To understand the thorn in florists’ side, it helps to understand how flower orders used to work. In the old days, smitten customers seeking posies for a faraway paramour would order through a local flower shop that, in turn, used a wire service like FTD or Teleflora to fulfill the order at a shop near the delivery point. The first florist received a 20 percent commission, the wire service took a 7 percent fee, the filling florist got the balance—and everybody was happy.
Increasingly, however, third parties—known as order gatherers—have set up websites that look like flower shops—but aren’t. Simply by setting up a gateway page and using Google keywords that make them appear to be local, these middlemen (flower trolls, anyone?) can snap up both commission and rebate, leaving florists in the red.
Order gathering has become so profitable, in fact, that the old wire services have themselves gotten into the act. “They started out as our partners,” Bank said. “But now they get all the commissions. So we’re battling it from all ends.”
Bank noted that Teleflora has partnered with Proflowers, a drop shipper of inexpensive, unarranged flowers with which it splits fees—even as it continues to send orders to local shops for fulfillment. That, in effect, puts local shops in the position of helping a rival.
What do the flower powers have to say about all this?
FTD CEO Rob Apatoff conceded that “significant shift to online purchasing” has “impacted” the floral industry, but he pointed out that his company “invests tens of millions of dollars each year in consumer marketing”—marketing that supports not only FTD but also “our florist members” as well.
In a statement, Teleflora maintained that it is “transparent in communicating our relationship with Proflowers and any member of Teleflora can refuse to accept orders.” The company also pointed out that while some flower shippers have chosen to bypass local shops entirely, “Teleflora remains committed to ... sending all of our orders to our retail flower membership.”
Bank understands the economics at work. Large companies will always leverage their size in ways that mom and pop cannot. But she noted that if order gatherers and wire services continue to prune the profits of the independent shops—upon which they depend to fill orders—they’ll only be taking the bloom off their own roses.