What was Seth Godin Thinking? Why FTD is the Walmart of the flower industry

Posted on July 17, 2017

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Over the years I have written many articles on Walmart, starting with the July 9th, 2007 post; Public Sector Procurement and the Walmart Effect which was updated in March 2013.

Suffice to say, Walmart, and more specifically the Walmart model for supply chain has become the poster child for partner abuse.

Because of the negative impact of the big guy rattling the little guy’s financial chain approach is well documented, I was surprised that Seth Godin appears to advocate a similar-type model being FTD.

In talking about the florist’s dilemma in his most recent post, Godin suggests that when a local florist receives an order through FTD, that they can either “average up or average down,” or “can hide or show pride.”

The basis for his comment is that some florists will send their very best flowers to fulfill the FTD order, while others will not. Or to quote Seth directly; a florist “can deliver his very best effort and the most beautiful flowers he has in stock, even though the sender will never know his identity or buy from him again,” or “can use up the damaged stock and the fading flowers, confident that the sender will never know his identity or buy from him again.”

He then, dismissive of the latter florist, concludes by saying “It turns out that the florist who doesn’t use up the damaged stock and the fading flowers never seems to have trouble affording better stuff.”

While I am not advocating the delivery of inferior products, what Godin fails to grasp is the old axiom that every action has an equal or greater reaction.

I will let the following comment from one reader regarding Godin’s post explain what I mean;

“I’m a huge fan of Seth Godin, but this is wrong. When you order flowers from FTD online, they take 30-40% of the profits off the top and then send the order to a local florist who then needs to put the order together for the customer and deliver it.

That means unless the florist is charging you an 80% mark up, they are at most trading four quarters for a dollar or losing money on the deal.

Most consumers don’t know how much money FTD takes from these small businesses, nor do they realize that the florist often can’t afford to deliver what they’ve ordered because it’s not realistic.

More and more florists are eliminating FTD from the mix and are choosing to operate on their own so they can provide the value a customer expects and make a living doing it.” – Lisa Larter

Like Vlasic Pickles or Cott Cola, the FTD model is predatory and quite frankly is only likely to attract suppliers that are desperate for business, any business.

Or to put it another way, it is hard to be proud when standing in the soup line.

Man-holding-bunch-of-dead-flowers

Cons: Florists are annoyed with how FTD corporate works. – Glassdoor

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Posted in: Commentary