How will you compete with this?

We talked a couple of days ago about, "The Day Your Supplier Sells Direct to The Customer".  It was about the inevitability that some of our suppliers will sell direct to the public, rather than using the traditional  sales chain of wholesale, to retail, to the customer.

Four Winds Nursery is a great example of a company that has decided to sell direct to the customer, as well as the box stores, and the smaller indie garden centers. Four Winds grows and sells mostly citrus trees and have been around longer than I can remember. They we're at one time a indie garden shop supplier, then the headed into the box stores, and now they will sell directly to the end user!

The online section of their web page offers foil gift wrapping. They ship to most of the country, and also have "Citrus Zester" you can pick up in the kitchen department. What a great gift idea for friends or relatives back east. A dwarf lime tree for their mojitos! Spend over $120 and you even get a 10% discount. Wait, don't people want to drive over to your store, possibly find that citrus tree, and then figure out how to ship to their relatives? You think they will be happy to hear you say "we don't ship"? What a hassle when all they have to do is "click" buy and ship at The Four Winds Online Store.

There are only so many suppliers of citrus trees, so the  trees that Four Winds ships would have been the same trees in your nursery! What a win for the customer, and Four Winds.

Welcome to the future of garden retail.

The day your supplier sells direct to the customer

The day the vendor you have bought from for so many years starts selling direct to the public, what will you do? Don't think it will happen? Remember all those wholesale nurseries that promised to only sell to Independent Garden Centers. They are now selling to the box stores, and not looking back.

The problem for the box stores? As these vendors get squeezed on costs, shipping, and everything else by the chains they will become less profitable. The market for their garden products continues to shrink. The need for much of the stuff sold is diminishing as the public continues to turn away from much of ornamental gardening. Please don't mis-undestand. There will always be people looking for these products, but not in the quantities needed to maintain the status quo as it stands today.

Business these days need to cut out as many middle-men as possible to maintain and grow profits. Who is a middle man? Lot's of box stores, garden centers, re-wholesale operations, sales people, and more. If you don't manufacturer or grow the stuff yourself, your a middleman.  How can you stay viable in this environment? I hope to discuss some of the options here, but the first step is accept that businesses will very quickly realize that many wholesale operations will find dealing direct with the customer may be on way to stay viable.

Biggest indoor plant nursery in San Mateo Co. Ca. files for bankruptcy

According to The Mercury News, Nurseryman's Exchange “the biggest wholesaler of indoor potted plants in San Mateo County and a major Coastside employer, announced Monday that it has filed for Chapter 11 bankruptcy. The family-owned company intends to remain on the coast but is in the midst of ‘restructuring,’ according to CEO Jack Pearlstein." It’s big news as I grew up near this place, and met my wife in Half Moon Bay. It was a landmark along the coast.  San Mateo County is known as the greenhouse capitol of California. According to Rivian Bell a spokesperson for a PR firm representing Nurseryman’s Exchange, “Nurserymen's revenue was $62.7 million in 2010 and $51.1 million so far in 2011, according to financial documents. Bell said the company posted a loss in 2010 but would not say how large it was. Wells Fargo has agreed to loan the company up to $5 million to take care of its remaining debts this summer.”

“Half Moon Bay flower farmer and City Councilman John Muller said he was sad, but not surprised, to hear about the struggles at Nurserymen's Exchange. ‘The nursery business has really changed,’ Muller said. ‘The shipping costs of moving products across the county are really high.’ Most of the greenhouse nursery industry is now based in East Coast states such as Georgia, North Carolina and New Jersey, he added.”

What’s slated to be built on the site? “The grassy parcels, four in all, are zoned for housing subdivisions.” Mr. Muller is correct, the nursery business has really changed.  Just what Half  Moon Bay needs more of, homes instead of employers. It has gone from a working person's town, to a suburb of San Francisco, inhabited by those who can afford the high costs of living there. Kind of a shame, but the way it is.