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Why Mail Order?
Many folks looking to break into the nursery business often opt to try mail order. After all, you can appeal to a large audience without having to deal with walk-in retail sales. You can reach customers that will be interested in and willing to pay higher prices for your particular product...particularly if there is not enough interest in your local area.
The downside is the incredible complexity required to run a mail order business. In addition to growing the plants, you will also be faced with a mountain of shipping, scheduling, and record keeping issues.
Customers and Products
Just like a retail nursery, a mail order nursery will require you to consider many of the same basic questions. Will you grow or purchase your plants, and will you sell potted or bareroot plants? What types of plants will you handle, and in what sizes? Once again, most of these questions should be included in your mission statement.
As the mail order industry has evolved, most small nurseries still grow their own plants. These firms typically started as small backyard operations, and simply evolved into mail order without a real business plan. Typically, it is the larger mail order nurseries that simply purchase plants and offer them for resale. One disadvantage in this strategy is that without a retail component to dispose of unsold items, too much money is tied up in left-over inventory that must be dumped at the season's end. While the same is true when plants are grown by the nursery, the cost involved is usually much less.
Typically more southern nurseries lean toward container plants, while those in more northern zones, lean toward offering bare root plants. In more northern climates the higher cost of overwintering plants in containers often prevents the nursery from being able to compete on price with southern nurseries, whose overwintering costs are much less due to milder winter temperatures. Containerized crops are much easier to fit into an extended shipping schedule, but are conversely often more expensive and difficult to maintain in their containers during the growing season.
In order to ship bare root, plants must be dug in the fall and stored in cool conditions...usually in refrigerated coolers. Many deciduous woody plants, as well as a large number of perennials, are handled in this manner. This method of storing plants in coolers is anything but an exact science, and high losses are to be expected on certain crops. Coolers will be a necessity if you are handling bareroot materials, either in the north or south.
You will need to carefully examine your target customer base before jumping into the mail order business. Typically, nurseries that grow more unusual, or simply specialty plants, fare best in this sort of business. You are able to reach across the country (or world) to plant collectors, who are often willing to pay a higher price for a specialty plant than can be charged in a more local market. For example, a nursery that specializes in spider-type daylilies might be able to charge $200 apiece for a new introduction, by targeting a specialized audience that is spread out around the country. Locally, the same plant might have little more value than a more common run-of-the-mill daylily.
For the same reason, it is difficult for a mail order nursery to compete with local retailers. A local retail nursery or garden center should always be able to offer a larger plant for a similar cost compared to a mail order nursery. The size which a mail order nursery can ship is limited by the high cost of shipping and the shear difficulty of packaging large plants. It is rarely feasible (except on very expensive plants) to ship any plant larger than a one-gallon pot.
Strategy and Pitfalls
A nursery business in mail order nurseries is the most favored by plant geeks. These often anti-social types honestly feel that they can avoid customer contact by locating a mail order nursery in an out-of-the-way location and never deal with people. While mail order does allow for more privacy, you certainly will have plenty of visitors if you do a good job of running your business. Out of pure curiosity, visitors will inevitably find you, so you will have to make a choice whether to prohibit all visitors, or to schedule these visitors in a way that will still allow you to maintain your privacy.
Since you are operating a remote business, and customers cannot just drop by the nursery, the need for prompt response to customers is even more critical than in a typical retail operation. Communication, of course, may be through correspondence such as faxes, e-mail, phone, and to a lesser degree via postal mail.
Often folks who start a mail order business are poorly prepared for the actual handling of orders. There is simply no excuse for being "blind-sided" by orders, when that is the intent of such a business. Doing a poor job of satisfying customers in your start up years creates a difficult hill to climb, so start out well prepared.
You have no doubt heard the phrase, "follow the money." Well, in the nursery business, the equally pertinent phrase is, "Follow the paper trail." In an ideal world, every order could be filled completely, and every order would arrive at your nursery with the proper payment, and shipping charges would all be consistent. As you will soon realize, this is unfortunately not the case, and without a good paper trail, confusion will reign supreme. The shipping process involved in the sale mail order nursery is far and away the most complicated delivery system in any type of nursery business.
For starters, a simple procedural rule, can avoid tragedy. Let's imagine a nursery worker who took a stack of original orders into the nursery to pull plants. Along comes a thunderstorm and all of the orders are lost or destroyed. Does this sound unrealistic? From first hand experience, let me encourage you to always protect the original order, in case of problems or confusion. I recommend generating your own separate set of paperwork, from which orders are processed. Original paperwork should never be allowed to stray from the security of your office.
In most mail order businesses, your customers rarely visit; instead you deliver your product to them, which makes your shipping operation of paramount importance. There are a number of shipping options for your plants. Be sure to thoroughly investigate each one, and choose the one (or ones) that best fit your needs. Carrier rules, regulations, and prices change so often that you will need to make a special effort just to keep up with this facet of the business. Also, be aware of the possibilities of labor strikes. Depending on a shipper who has gone on strike will prevent you from delivering your product to your customer. I will certainly never forget the year that our shipping carrier went on strike during a particularly low cash flow time of year, when we had a large number of orders to be shipped. Never completely rely on one shipper...keep your options open.
When choosing a shipping service, be aware that a shipper's published rates are not necessarily what you will pay...providing you take time to negotiate. You should contact the local or regional representative for each potential shipping service, and request a shipping rate quotation. Be sure to ask questions such as the shipper's ability to track packages that become lost or not delivered on time. What type of delivery options are available...overnight, two-day delivery, three-day delivery, or delivery whenever it arrives (usually the cheapest)?
Many shippers have some hidden surcharges (increases over their normal rates). Surcharges such as dimensional weight kick in when a package is too long for a specific set of preset parameters. Despite fitting all of their other criteria for a particular shipment charge, if the box is slightly too long, the shipping price can go up as much as threefold, so be very careful of this charge.
The shipping company will ask you for information on how many boxes per week you will ship, along with sizes, etc. Shipping rates are based on volume...the more volume, the better the rates. Another factor that comes into play is location. If you have a very remote location, it will be very expensive for the delivery service to visit your business, so they will be less likely to give you a discount. Conversely, if the shipper is looking to build up business in a particular location or has another business nearby, they may find it cost effective to give you a much larger discount than a customer in an established service area.
There are a number of computer-based shipping systems available for use whose versatility increases with the number of packages you ship. Some systems will give you the package weight, print a shipping label directly from your database, track packages, and even compare the cost of various shipping companies. Contact the various shippers for information on their systems, but also check out shipping systems in the phone book that are manufactured by independent companies. If you ship a large enough volume with a particular shipper, they will usually provide a shipping computer and system for you at no charge, or at least a label printer and software. Be sure to ask them to help you integrate their system with your own database, so that order information does not have to be re-entered into the new shipping system.
Due to agricultural restrictions, a number of states do not allow any soil or potting mix to enter, unless it has been treated with an array of chemicals. This will certainly make shipping during growing seasons difficult, but not impossible. Many nurseries simply refuse to ship into these states. If you decide that you will still ship into these states, determine the time required to wash the soil from the roots, or treat each plant, and develop a standard charge (possibly as a percentage of the order) to cover your extra cost of shipping to these states. Be aware that there is a big difference as to how easy plants are to bare root, and that survivability also varies with each species.
Another consideration in the shipping process is to locate boxes in which to ship. When getting started, most small nurseries opt for recycled boxes. Many small nursery owners can recall staking out dumpsters at the local grocery store or perhaps the recycling center. While we are confessing, I will admit to having spent far more time than I care to recall in the early years waking up drunks, or being terrorized by wild-eyed cats while prowling through restaurant dumpsters for the perfect shipping box. I will admit to having had a hard time getting used to the concept of purchasing boxes.
I will also admit that I have seen the error of my early ways, no better pointed out when a local mail order nursery reused a frozen food box for shipping a plant order. When the customer received the box, they only paid attention to the printing on the box that said to "Freeze Immediately", which they did. Only after several weeks did it occur to the customer that their plant order might be in the box...several weeks too late. At some point, you will determine that this is no longer cost effective, and that you or your employees' time is worth more doing other jobs in the nursery than hunting boxes.
Once you make this jump to purchasing boxes, you may still first consider purchasing box overruns. Most box companies offer these "seconds" at a greatly reduced rate compared to new boxes. When you require large numbers of boxes, it may become economical to purchase new boxes printed with your nursery logo and name. An alternative to having boxes pre-printed is to purchase rolls of tape (usually 3" wide) with your name and logo printed (along with phrases such as fragile, living plants, etc). This tape can be wrapped around the box and makes the identity of the package much clearer to the recipient.
When choosing box sizes, select a few standard sizes to use. Using too many sizes is quite confusing to packers, and is uneconomical as well. By choosing a limited number of box sizes, and noting how many plants will fit in each, you will save lots of time by being able to match box size to the order size. You will also need to consider the weight of your shipment. Not only do you want to the make the box manageable for your customer, but you will want to be sure to avoid shipping surcharges for sending out overweight boxes.
Now that you have your boxes picked out, think about packing material. As much as we would like it, there is no perfect packing material. If you are into recycling, there are commonly used products such as shredded paper. If the shredded paper has one drawback, other than an irregular supply, it is that it packs down in shipping, allowing the plants to move around in the box.
Probably the best packing material is still the dreaded Styrofoam peanuts. This material is very lightweight and does not pack down during shipping. While biodegradable peanuts have been used, any moisture in the box causes them to degrade instead of providing the needed cushioning for the plants. Other favorable materials include wood fiber and shredded paper products.
Regardless of your choice of materials, the key is to keep the plants from being tossed around in the box, and to reduce weight, and consequently shipping costs. You may take great care in handling the package, but you can rest assured that this will not be the case during the rest of the journey. I always recommend packing a test box, and have your staff toss it around for a couple of days, to get a good idea if your shipping material and packaging methods are sound.
When plants are shipped with bare roots, some form of media must be used to keep the roots from becoming excessively dry...some moisture around the roots is critical. During shipping, plants are most often lost from being packed too wet, although the other extreme is equally as damaging. It is equally as important that the plant foliage be allowed to breathe, and not kept moist or sealed during the shipping process. Experiment with preparation methods to find the one that produces the best shipped product at the lowest price with the least labor.
Such root-protecting materials can include peat or sphagnum moss, sawdust, or similar materials. Be sure to check with your state Department of Agriculture for special regulations to some states, and almost all foreign countries. Realistically, these regulations can occasionally be a nightmare even when they are followed. My favorite material has always been the universally accepted shredded sphagnum, which is soaked, and then squeezed free of all excess moisture before use.
Methods used to hold the root protective materials around the roots include aluminum foil, plastic, and of course there is always the option of shipping the plants in the containers. If you choose to ship plants in containers, it is critical that the soil media remain in the pots during the shipping process. There is nothing worse that receiving a box of plants and the soil is all in the bottom of the box, while the plants are in the top. Keeping the soil in the containers can be accomplished with good packing, but is more often achieved with some type of breathable seal that is secured over the soil surface of the pot.
While shipping in the containers is a boon for the customer, the increased shipping weight often drives the costs too high. Nurseries who do ship in large containers with heavy soil mixes must devise some way to hold the heavy pot of soil steady in the box. Common packing materials will not work. The pot must be secured to the side of the box by some means of attachment, such as strapping.
You must decide which time of the year to ship. There are several different thoughts on shipping schedules. Some nurseries ship from fall to early spring, while others ship from spring thru fall. The common rule of thumb is that perennials are shipped in spring and fall and woody plants are shipped in winter. While this may be the easiest for you, it doesn't allow your customers to get plants when they want them. If you really want to service your customers, you can make accommodations to ship during the entire season. There are more and more nurseries experimenting with year-round shipping, with surprising success.
Your local climate will affect your choice of shipping season. If your plants are frozen solid in the winter, then shipping during this season is going to be difficult. How you grow your plants, in the ground or in containers, will affect your shipping season. This is one of the reasons that more and more nurseries are opting for container growing, as it greatly extends the shipping season.
In determining your shipping schedule, keep in mind the effort required to maintain (water, fertilize, and prune) the plants during your non-shipping season. A delay in shipping for too long a time, may be an economic disaster. By lengthening the turnover time for a crop, your cost of production (figured based on your cost per square foot per day of growing area) will skyrocket, often past your sales price.
You will need to be careful if you grow container plants in cold frames or greenhouses, as these plants will start growing earlier in the season than plants that are growing outdoors. This can be disastrous when sending plants that are in tender new growth into colder zones. As a rule, plants should not be shipped when in young tender growth, as this is easily damaged or broken.
It is often difficult when shipping from one climatic region to another. A nursery in the Deep South may find it difficult to ship into the cold north in spring, as early southern spring heat may make shipping difficult when the northern garden finally thaws in late May. Likewise, shipping from or to warmer climates is restricted in the summer. When it's in the upper 90s or higher, plants do not enjoy being shipped, and gardeners don't like receiving plants.
Personally, I always liked to ship and receive plants during active growth. Opening a mail-order box of plants is like opening a birthday present...it should be a thrilling experience. There is something missing when a box is opened to reveal dormant or bareroot plants. While these plants may grow fine, you have missed out on the impact that is delivered when the box is opened to reveal high quality growing plants. Additionally, many homeowners are ill-equipped and feel uncomfortable dealing with bareroot plants.
Once you have gotten the preparation work out of the way, the plants must be assembled or "pulled" for shipping. To start, most nurseries will print a pull ticket, indicating items that should be pulled, as well as those that are out of stock or back ordered...assuming you have a workable inventory. The pulling is usually done in one of two ways, either by individual order, or by plant variety. The plants are then staged in the area from which they are to be shipped.
On shipping day, the plants are prepped (bare rooted if necessary), bad foliage and weeds are removed, and then they are boxed for shipment. At the last minute, there are always plants that cannot be shipped for a variety of problems...too small, insect or disease problems, etc. This can be minimized if the staff pulling your orders understands and adheres to your quality standards. You are then faced with more paperwork and the prospect of dealing with back orders, credits, or refunds, based on how your nursery is organized. This must again be recorded in your shipping records. Next, the boxes are packed and readied for shipment.
I am still amazed that most nurseries don't have a clue as to how much it costs to ship a plant. All that many nurseries see is the actual shipping costs as described above (carriage). While a nursery may not actually incur all of the costs discussed below, you should always charge as though these costs are real, for they may become so one day. The costs to ship an order begins with paying someone to open the mail, and should include the cost of fax paper, and even the cost of Internet service. Next, the order must be processed, which will in most cases include entering the order in some sort of computer systems/database, so you have data entry time, and computer software and hardware costs.
Even at the pulling stage, a number of shipping costs are incurred which are not often figured into the cost of shipping. Keep in mind that every time you touch the order, your cost of processing the order rises. Costs that pile on here include pulling of the order, as well as more clerical time. Refunds or credits will have to be issued, and again, these will present a cost, not just for the money refunded, but the time to process these. Last, but not least, the paperwork for each order should be stored for a minimum of three years, primarily for tax purposes, but because you will also be amazed how many questions will arise from customers years after the orders have been filled.
Cost of processing a mail order:
Open mail orders and record check numbers/60 per hour = 1 minute per order
Phone orders = 6 minutes per order + .10 per minute in phone charges
Data entry 20 orders/hour = 3 minutes each order
Payment processing = 2 minutes per order
Order filing by order number = 2 minutes per order
Pulling and staging orders = 10 minutes per order
Checking orders = 3 minutes per order
Packing orders = 10 minutes per order
Processing shipping information = 2 minutes per order
Customer communication about orders = 1 minute per order
Issuing refunds or credits = 2 minutes per order average
Packing cost per order (packing products, tape, etc) = .08 ea
Order confirmations (2 min)
Box cost per order = .75 each
Average time to process an order: 44 minutes
Additional charges from above: phone/packing/boxes (1.43)
If you are paying your workers an average of $11 per hour, your actual labor burden cost for the employee is probably closer to $14.49 per hour depending on benefits. Multiply this times the number of minutes per order $16/hr x 44 minutes (.73hr) and you will get a much closer idea of your true processing cost $10.58. Keep in mind that this assumes that all employees work at peak efficiency at all times. If you add this to your additional supplies figure from above, you will see that your average cost of shipping an order is $12.01. Remember that this does not include the actual shipping cost. Now that you know your costs, how small of an order can you afford to ship and still make money. The industry standard for minimum mail orders ranges from $20 to $40. Realistically, it's hard to make a profit at the lower end of this range.
How many of these costs did you figure into your shipping charges? I like to break down each of these operations into how many minutes it takes to complete each of these tasks for an average order. This will give you a much better idea of how to break even on your shipping charges.
If your business requires that a crop be ready earlier than would normally be possible by growing outdoors, such as supplying plants for garden centers to your south, or mail order to other parts of the country, then climate controlled greenhouses may be your only option.
If you are selling primarily to landscapers, then you will probably opt for larger sizes that make more of an immediate impact in the landscape. If your primary business is mail order, then you will probably opt for 1-quart pots. If you sell retail or wholesale to garden centers, you will probably offer a wide array of sizes from small to large. The key is to match the size of container to the plant, the customer, and the economics of your cost per square foot.
Retail nurseries typically deal in cash, checks, and credit and debit cards. I find it amazing that there are still nurseries that don't offer the option of credit cards. Credit cards typically charge a fee, which is a percentage of each transaction. The fees usually range between 1% and 5%, with 2 - 3% being the typical range. When you are ready to accept credit cards, shop around at different banks for the best rate. Rates are based on criteria such as your past credit history, the average value of each transaction, and whether or not you actually see the credit cards or simply have access to the numbers by phone or fax. If you sell mail order, and are charging the cards by number only, the amount of defaults are higher, and therefore the banks charge a slightly higher rate.
Mail order nurseries face a different dilemma regarding payment. When orders begin to arrive for plants in the winter, it is often a month or two in advance of the actual shipping season. There are two divergent theories on when and how to charge the customer for these orders. The first theory is to charge for, and reserve, plants when the order is received. The plants are then held by the nursery, and shipped when the customer is ready, or when planting time is correct for their hardiness zone. This is actually more advantageous for gardeners in colder climates. In this case, the plants are purchased by the customer when they are ordered, but held and maintained by the nursery until the scheduled delivery.
Some customers will not like to have their checks cashed and credit cards charged at this time, but there is no option unless the nursery is heavily capitalized. You can always ask the customer to give you the date that they would like to have their charge cards charged, and they will receive what plants are available at that time. I don't know many other retail industries that would accept an order without payment, and hold the item for months, until the customer was ready for the product.
The other theory is to only charge customers when the plants are shipped. This is more advantageous to gardeners in warmer zones, who might order 3 months later than a customer in the north, but request an earlier delivery date due to better weather earlier in the season. This is disadvantageous to gardeners who sent their orders in earlier, but due to local weather conditions cannot accept their orders as early.
Smaller retail and/or mail order nurseries often feel the need to offer bonus or gift plants. If you are dealing with beginning gardeners, this may be popular, but if you are selling to more advanced gardeners, then bonus plants most often become compost. To me, the sending of a bonus plant tells the customer that what you are selling them is somehow not worth what you are charging, therefore you will make it up to them with a bonus plant. I doubt that you will find this as a standard practice in any other industry, except perhaps as an inducement to try a new product.
The focus in a catalog should be to convince customers that they should purchase the products that you offer. This is the case whether you operate a wholesale, retail, or Mail order nursery. What entices a customer is a good description, culture information, and of course color pictures. You've heard it before and you are hearing it again...color sells! The higher the number of quality color photographs that you use, the more of each plant you will sell.
You will also need to make your catalog user friendly. Some catalogs are so disorganized, or use such illogical methods of organization, that the customer cannot figure out what they want or how to order it. I am also amazed at catalogs that use a bizarre array of confusing symbols, constantly sending the reader back to the symbol reference charts. Can you tell that I find this very annoying? If you want to say that the plant needs full sun, or that it attracts hummingbirds, then say it.
Good descriptions are also sadly lacking in many of today's catalogs. Catalog descriptions are simply re-copied from one catalog to the next, often with inaccurate information, and minimal, worthless descriptions, such as "red flrs, summer, 6' tall." Now, what does this really tell you about the plants? The answer, of course is nothing! Simply by reading most catalogs, you can see that those people writing catalogs have never actually seen the plants that they are describing.
We like to write our catalog while looking at either the plant, or at the very least, a good photo of the plant. One of our typical descriptions would read:
Arisaema sikokianum (Japanese Cobra Lily)...................................................................$25.00
Part Sun to Light Shade * Zone 4-8 * 15" tall * Origin: Japan
A. sikokianum is considered the most stunningly beautiful member of the genus arisaema...make that the entire plant kingdom! From an underground tuber in early spring (early April in NC), the dark pitcher and 2 five-lobed leaves emerge on a 1' tall fleshy stalk. After flowering, the foliage remains attractive until it goes dormant in late summer. A. sikokianum prefers a well drained dry site in the garden.
There is a fine line between a good description and too much description; between too much fluff and no fluff. You will simply have to determine what works best for you. I would always advocate too much rather than too little. Some catalogs simply list prices, hardiness zones, and flower color. Their lack of enthusiasm certainly speaks volumes to their customers. I have gone through myriads of catalogs, listing dozens of cultivars with which I was unfamiliar. With any modicum of description, and personal endorsement, I would have certainly ordered at least three times the amount I ordered.
Specialty catalogs are often written by plant geeks, who can't relate well to the average customer. After writing our catalog, I always like to give the catalog to a non-plant person and ask for their comments. I like to ask my catalog critics two questions: how easy is it to use, and without knowing the plants, can you picture what the plants actually look like from the written descriptions? Leave your ego behind, and ask for suggestions on how to make the catalog easy to use.
Some of you may be thinking: "I'm just not equipped to write a catalog," which is possibly quite true. Did you know that there are professional garden writers? Within the group of Garden Writers Association (GWA), there are hundreds of people whose job it is to do just what you need. Perhaps, a simple ad, or a few phone calls, could easily secure a professional writer. As with all applicants, request a portfolio, since anyone off the street can call themselves a garden writer. Local colleges with horticulture programs may have viable candidates for catalog writing as well. Don't try to tackle something for which you don't have a talent, as the results will be less than satisfactory.
I like to open each catalog with a personal message or brief introduction. Part of the function of the catalog is to establish a personal relationship between your nursery and your customers. Some nurseries choose to write about the trials and tribulations of their family or pets, while others describe their plants, or the going-ons at the nursery. The key is to write something that your customers will want to read, and that will establish a personal bond between you and your customer.
Does your catalog tell a little bit about your nursery? When was it founded, who are the officers, and what is your mission? Does your catalog clearly explain how to transact business? What methods of payment do you accept? Do you ship plants, or will they have to be picked up at the nursery? We devote several pages at the beginning of our catalog to sections such as ordering, shipping, guarantees, etc., each being explained under a bold heading. Critical components which are far too often left out, or hidden, are contact numbers such as phone/fax/e- mail. I like to have contact numbers at least on every other page, often at the bottom. I have spent as much as 10 minutes looking through some catalogs just to find the phone number...this is unacceptable!
Be sure to thoroughly explain how a customer can do business with your nursery. I have seen dozens of catalogs filled with wonderful plants, but trying to decipher the ordering and shipping information and charges was so difficult to understand that I never got around to sending the order. It is a good idea for catalog writers to order from other catalogs, in order to see how easy it actually is to be a customer. What are your guarantees, and what size and price are your plants? How can a customer check on availability of each item? How can a customer visit the nursery, and if so when and how?
How is your catalog organized? Without having a clearly organized and usable format, your catalog will be pretty useless to your potential customer. Remember that data is of no use unless it can be processed into usable information. A plant listing that cannot be found by a customer is a waste of time and space. Any method of catalog organization that you choose can be supplemented by using cross indexing. If you organize your catalog via plant groups, i.e. trees, shrubs, annuals, perennials, bulbs, then an index via Latin or common names would make the catalog much more useful. The key in deciding how to organize your catalog is learning to think like your target customers. Your catalog is the guide to using your nursery...make it complete and understandable!
If, for example, a customer is looking for a plant by a Latin name, then common names are useless. Obviously, the reverse is also true. If your customers are looking for a ground cover, then an alphabetical listing would not be ideal unless it was cross-referenced. If you are in a deer-prone area, then a list of deer-resistant plants would help. If your catalog is selling color, then you may wish to organize by flower color or season of bloom. If you are marketing primarily to landscape designers, you may want to color-code your flowering plants. Landscape designers absolutely love catalogs that have all plants coded using the international standard Royal Horticultural Society (RHS) color charts.
Look at different catalogs...what would make you remember one catalog over another? Are there particular catalogs that you use over and over? Can you name the catalogs that you use regularly and describe their covers? I'll bet that there are only a few catalogs, whose cover you can remember...why is that? What is it about these few catalog covers that attracts your attention and draws you back?
The first thing that customers see and remember about your catalog is the cover, yet this is often given the least consideration and thought. No matter how great the information is inside your catalog, if your customer doesn't open the catalog, or isn't inspired to keep it nearby, how much good is the catalog? If you think a cover doesn't matter, stop at a book store and study the covers on a selection of magazines. There is no part of the magazine that receives more thought, time, and money than the cover. Having a memorable catalog cover is a great way to not only build name recognition for your nursery, but to keep your catalog at the top of the heap.
What thought do you want to have associated with your nursery? How do people remember your catalog from all others? I think the idea of having identical covers every year is a tragic mistake...but an easy one to make, since it's one less thing to think about changing each year. What if your favorite magazine used the same cover each issue? What I prefer is a different cover each year which still reflects the personality or theme of your nursery. You will be amazed that customers remember certain covers and the years during which they appeared. When customers call, they will actually refer to the plants that were listed the year you had the "blank" cover.
We wanted to relay the image of a fun-loving catalog, while doing something that was completely distinctive, so we opted for a cartoon-cover format. After all, where do most folks seem to turn first in their daily newspapers? No, it's not the obituary section! Our catalog covers feature cartoon parodies of current events or situations of which most people would have knowledge. We tried to create a catalog cover that customers would not only remember, but one that would actually become a collector's item. Think about which catalogs you keep for years, and which ones you toss away as soon as they arrive.
Since you now realize that your catalog cover art is a critical component of your catalog, have you considered hiring a professional artist, photographer, or graphic designer to help with your catalog cover? If magazines feel that their cover is the most important part of their publication...shouldn't you?
Selections of Offerings
When you begin selecting your catalog offerings, refer back to your mission statement to help determine if a potential listing will fit within your nursery focus. In your catalog, you will want to offer enough items to make it worth the customers' time to look through your catalog, but not so many as to confuse customers and cause them to lose interest. I've actually received catalogs that are so extensive that it literally takes weeks to finish going through their list of offerings. I usually put these epic catalogs off to the side until I have time, which may take months, if I ever get around to reading them. Most customers are not persistent enough to stick with these massive catalogs long enough to actually get an order together.
Specialty nurseries may list 500 -1000 varieties of a particular plant such as a daylily, iris, or hosta. While there are a few collectors out there who are driven to collect every plant name, are there really that many great plants of a particular genus which are truly distinctive, or are you simply selling differing plant names? I contend that if you have trouble writing distinctive descriptions for each variety...you've got too many similar varieties. In reality, massive collector lists will leave most customers so confused that they will actually order less, if they order at all.
For long term success, be sure that the plants you offer are going to make good garden specimens in your market area. If you consistently offer plants that are quick and easy to produce, but don't grow well in your region of sales, you are doing yourself a long-term disservice in the name of short-term profit.
The part of selecting your catalog offerings that is often overlooked is the process of costing out the catalog. Let's say that to cover expenses (overhead costs + direct costs + desired profit), the nursery must produce sales of $1,000,000. If your catalog is 96 pages, then each page must generate $10,416. Unfortunately, all pages will not contain saleable plants. Let's subtract 20 pages for text, such as instructions, welcome, indexes, cover, table of contents, etc. This now means that 76 pages of plants must generate the same $1,000,000, which equates to $13,158 per page. Assuming that you have 10 plants per page, then each plant on the page must generate $1,315.
If, at the end of the season, you find that certain plants do not pay for their space in the catalog, then you must make a decision whether to continue to offer these plants. I am certainly not saying that you should drop all plants that do not reach a set economic threshold, but you will need to consider which of these plants to continue to offer, and which to drop. Keep in mind that when you are introducing a new plant to the market, it will often take 3 - 5 years for the plant to catch on with the market. In this case, you may have to suffer through a few years of low sales. In some cases, a particular plant may be a poor seller, but is desired by one or more of your good customers in marginally economic quantities. You must decide that the plant is worth offering to keep a good customer happy.
Nomenclature may seem like a small thing to a nursery owner, but a catalog without good nomenclature can certainly hurt sales. To understand why, again try to think like a customer. Would you order from a clothes catalog that was filled with misspellings or incorrect names on the catalog items? If you see a nursery catalog filled with errors, would you not assume that they grow their plants with the same lack of attention to detail? There are a number of nursery customers who will immediately discard catalogs that are filled with nomenclature errors. In short, this reflects both a lack of attention to detail as well as a lack of understanding of the plants they grow.
Years ago, I received a catalog from a regional tree and shrub wholesaler. I was very impressed with his selections, but hundreds of simple misspellings were appalling and distracting. After first discarding the catalog, I later retrieved it, red pen in hand, and took time to correct all of the spelling errors. I mailed the catalog back to the nursery owner with a note telling him that I was very impressed with his catalog offerings, and hoped that the corrections would help him to be more successful. It was nearly ten years later before I met the same nurseryman at a trade show. He introduced himself with a remark about what I had done nearly a decade earlier. The nurseryman relayed being furious over my comments, and only years later realized that this was indeed a favor, and ended our conversation with a thank you. The nursery has since become one of the top regional growers.
I certainly realize that the whole issue of botanical/horticultural nomenclature can be quite intimidating to folks who are just starting in the nursery business. You will quickly learn however that listing plants solely with common names is a nightmare. Not only do common names vary from region to region, but the same common name may apply to several different plants. Whether you like it or not, you will have to learn a bit of Latin. I do strongly recommend using both botanical and common names wherever possible. Books like Botanical Latin (Stern, 1995) will be very helpful in explaining many of these seemingly meaningless Latin words.
How and When to Print a Catalog
So, when should you assemble your catalog, and when should it be sent to your customers? As a general rule, wholesale catalogs should be sent in late summer (late August and September), while retail catalogs that arrive near the first of the year seem to be the most successful. Even within this scheme, timing is critical.
For wholesalers, catalog timing depends on your market. If you cater to landscape installers, their work usually picks up in the fall, as does the garden center market. Also, many nursery retailers prefer to order their plants in the fall, for spring delivery. If a wholesale catalog arrives too early in the summer, no one is going to pay much attention. If a wholesale catalog arrives too late in the fall, you will find that most customers have already placed their orders, and you will only manage to pick up sales when others run short on inventory.
Despite the timing of your catalog's arrival, it is critical for wholesalers to develop a method to get updated availability lists to their customers throughout the season. Whether it is done via fax, e-mail, or other means, this is critical to maintaining contact with your customers, as well as moving excess inventory.
For retailers, especially those in the mail order business, the natural consumer purchasing season is spring. The primary exception is nurseries that offer bulb-type crops, which sell best in the fall. Most nurseries would prefer to increase fall sales and fall planting, but peak interest in purchasing plants will always be in the spring after a winter of rest and a break from the garden. This is not to say that fall ordering and planting is non-existent, but it is only a fraction of the spring business. If you choose to issue your only retail catalog in the fall, it is essential to follow up again with some type of reminder in early spring.
I like to time retail mail order catalogs so that they arrive after the Christmas holidays. In many households, catalogs that arrive prior to this time are often lost or simply forgotten in the holiday rush. Conversely, catalogs that arrive too late, in the midst of spring rush, are often overlooked as well. You will find that many mail order customers actually allocate a certain budget each year for plants, which is spent with the first catalogs to arrive. If your catalog arrives too late, many customers may have already spent their budget.
Some retail mail order nurseries, especially those that sell woody plants prefer to ship in the fall and winter, and therefore issue their catalogs in the fall. While this will make shipping easier, the volume of sales will only be a fraction of what they would be if the catalog and shipping occurred during the spring season. There is little question that the customer would be better off with dormant fall shipped plants, but it's hard to fight human nature...especially the desire to garden in spring.
One of the interesting tricks that many nurseries borrow from other industries is the issuance of a number of duplicate catalogs each year. The theory is that your customers are more likely to order if they are deluged with your catalogs, 4 - 6 times per year, reminding them that they have not ordered. Each catalog will have the same content pages, with only the cover changing with each mailing. My personal feeling is that this is a waste of my time, and certainly one of paper. Perhaps during a time when there were fewer catalogs in existence, and certainly before the advent of on-line catalogs, this strategy might have worked, but I get very upset and frustrated when I take time to peruse a catalog, only to find that I have already been there and done that! A nice alternative to the duplicate catalog mailings is a spring or fall update, and updated availability list, or simply a flyer or card reminding the customer that it's still a good time to order.
Next comes the question of whether or not to charge money for your catalogs. Most wholesalers give their catalogs away as part of the cost of doing business. The trend in the retail mail order industry has been to charge a few dollars for their catalogs. The other school of thought, by virtually all of the larger mail order companies, is to give away the catalogs for free, under the premise of attracting a larger customer base that would be unwilling to pay for a catalog. By charging for your catalog, you are in theory pre-culling the people that would also be unlikely to spend money on plants and who simply wanted your catalog as reading material. While charging for your catalog does improve cash flow, it doesn't create the good will that comes with giving catalogs away for free. Conversely, the more you charge for your catalog, the more perceived value you give the catalog.
If you choose to charge for your catalog, be aware that you will not be charging your current customers, but only potential new customers who request a catalog. Be sure to charge enough to make up for the time and cost of processing the checks, as this can quickly eat up a small catalog charge.
Like all retail mail order nurseries, we were faced with the same dilemma in the early years of our operation. We wanted to do something that would give our catalog value, but without actually charging for the catalog. We studied other nurseries and actually found several nurseries that would refuse to send out a catalog without the requisite $2 - $4 fee. I was never able to rationalize the economics of this, especially where the nursery would send the prospective customer back a letter requesting payment before the catalog could be sent. This is a classic example of false economics where a business actually spends $2 to collect $1.
Our solution was to request payment as either stamps or a box of chocolates. Our in-house policy was that catalogs were actually free, and would be sent to anyone, but when the catalog was promoted, our "catalog price" was given as "ten stamps or a box of chocolates." Not only did this give the catalog value, it allowed us to eliminate cashing small checks, and it allowed us to stop purchasing postage stamps for mailing catalogs. A side benefit was that it allowed our employees an employment benefit, as they enjoyed hundreds and hundreds of boxes of chocolates each season. There is no doubt an array of other creative solutions to the normal practice of charging a few dollars for your catalog that have not been explored.
Catalog Layout and Design
Now that you have made all of the decisions about catalog content and when to publish, you are now faced with the job of catalog layout. Catalog layout is, simply put, what goes where, and in what format. You may think this is not as critical as content, but trust me, without good layout, customers can completely miss information that is right in front of them. Why do you think grocery store vendors pay so much attention to shelf space location, and are willing to offer incentives for the placement of certain items on particular spots on the grocery shelf? There is indeed a science in determining how the eye moves, and in turn how we take in information.
I strongly recommend studying as many catalogs as possible, and garnering ideas from the best ones. Ideas are simply concepts, not exact formats, designs, and certainly not text, as these are copyrighted. There is a fine line between plagiarism and the age-old concept of borrowing ideas.
The industry of graphic design has exploded, as more folks have realized the value of this formerly overlooked skill. It is the job of a graphic designer to determine and arrange your catalog size and format, determine page margins, decide how to index the catalog and best use cross-reference charts, select fonts (type) styles, and other tasks of this nature.
Something as simple as using the wrong font, or printing your text in capital letters will make your catalog incredibly hard on the eyes, and will cause your customer to overlook much of the text. Similarly, certain fonts may look artistically pretty, but may be virtually unreadable by your customers. While a good font can truly set the tone for your catalog, the wrong fonts also can be your biggest headache when working with a printer. Be sure to ask your printer to determine if your selection of fonts are compatible with their equipment before you begin to format your catalog.
Even do-it-yourselfers now have a great ability to create professional-looking catalogs, provided they have the knowledge of desktop publishing to do so. The array of desktop publishing programs has changed this capability for small businesses who are computer-savvy.
Printing the Catalog
One of the most agonizing decisions is how many copies of your catalog to print. While you don't want to have catalogs left at the end of your season, you also don't want to run out too early. Unless you are a retail nursery, you aren't going to sell many plants if your customers don't have your catalog. Conversely, catalog printing and mailing is very expensive, so don't just send off more catalogs than you can afford.
I have seen far too many nurseries that simply assume that if they send out more catalogs, or add color to the catalog, that they will make more money. There is little doubt that your sales will increase, but will the increase in sales be enough to cover your greatly increased expenses and still make a profit? If you keep accurate records, this decision becomes much easier after a few years. Start by looking at the number you printed last year and multiply by your expected growth rate based on past track records.
Keep in mind any special events that you will participate in during the season, such as presentations, trade shows, etc., for which you will need extra catalogs. If you would like to expand your potential customer base, such as through purchasing a mailing list, you may wish to print extra catalogs for this purpose. As with most purchases, price discounts increase in proportion to quantity, and in the printing business this certainly is the case. The per copy cost of printing a catalog drops dramatically as size of the print run increases, since many of the set-up and related costs are the same for a small or large run.
There are a staggering number of decisions when you move from the world of copy centers to the world of printers. Paper weight, paper size, paper finish, and paper quality, both for the catalog and the cover, must be determined. The thicker the paper and the better the finish (flat vs. gloss), the higher the cost. This must be balanced against the durability of the catalog and the perceived value of the items inside. While printing on low quality paper or even newsprint is much less expensive, it translates into less perceived value for the plants inside. Decisions on paper selection also affect the cost of mailing, since the thickness of the paper increases the weight of the catalog. Often a seemingly insignificant increase in the thickness of the paper will translate into a dramatic increase in postage cost for a larger catalog.
Another important decision is whether to print a black and white catalog, as opposed to color. There are many types of color processes as well - 2-color, 4-color, etc. The least expensive method to add color photos is to do so on separate pages, which are located together in one or two locations within the catalog. This is usually most economical on either a two or four color press. In order to print a full color catalog, where pictures are on each page with the item descriptions, you will probably find the economics better with a web style press. While there is often the temptation to use paper with a background color other than white, this is almost always a disaster. Not only will the cost be higher, but the readability will almost always be reduced.
When printing pictures, you will also need to pay close attention how the photos are scanned for the catalog. Scanning is the process by which slides and photos are transferred into an electronic format that can be reproduced in the catalog. There are an array of scanners from large drum scanners to flatbed scanners. The higher quality (and more expensive) the scanner, the better the resolution of the resulting scans. The last thing that you want is poor quality scanned photos, if your intent is to sell more plants.
When printing a catalog, be sure to get price quotes from a number of printers. The printing industry has a tremendous price variation for the same job. As I mentioned earlier, the type of printing equipment will make a difference in their price. If the printer you select has a two or four color press, then they will be more competitive on smaller runs. If the company has large web presses, they will usually be more competitive on larger runs. The more detailed specifications that you can give the printer, the less money that the printer will have to build into the bid to cover anything that you hadn't thought of initially.
More so than any other business we deal with, I like to check references for printers. How is the quality of their work? If your catalog has lots of mistakes and must be reprinted, have you gained anything by saving a few dollars on the initial printing costs? Is it always delivered on time? If you are waiting for a catalog to take to a trade show, or trying to target a particular mailing date, and the catalog isn't completed on time, this delay will cost you plenty of money.
Once you select a printer, sit down with them and work out a schedule and contract which spells out their responsibilities. It is important to specify not only a finish date, but a date for you to have specific items to the printer. Some nurseries like to include a penalty clause for late delivery from the printer. While this may indeed help assure a timely completion, the printer is more likely to build in an added price to cover this possibility. Be aware, that all printers have press overruns, due to the nature of printing. In other words if you order 10,000 catalogs, you could routinely expect overruns of 5% to 10%. The common practice is for the customer to purchase the overruns. In the meeting with your printer, you must specify that you will only accept x% of overruns.
In these electronic times, keep in mind that you will save a tremendous amount of money if all data transfers can be done electronically. Manual work that is required of your printer does nothing but force your printing costs higher.
Mailing the Catalog
If you mail your catalog to a significant number of people (usually over 200 copies), then you need to understand bulk mailers. Bulk mail refers to identical pieces of mail that are sent in large quantities to different addresses.
The U.S. Post Office sets bulk rates, but these rates vary depending on the size of the piece to be sent, the type of addresses, and a number of other factors. The cost to send a catalog via bulk mail is typically about 15% of first class postage. Although bulk mailing doesn't usually get delivered quite as fast, and some catalogs will certainly get lost, the savings usually far outweigh the problems. If, for example, you mailed 100,000 catalogs at a bulk rate of .30 each, your postage bill would be $30,000. The same catalog mailed first class would cost $2.00 each, for a total postage bill of $200,000.
While anyone can send bulk mail directly through the Post Office, in order to do so you will find that the amount of regulations are comparable to trying to understand the most complex botanical manual. I have seen nurseries actually still try to do their own bulk mailing by bringing in dozens of extra staff to print address labels and attach them to the catalogs. Next, the catalogs must then be sorted by zip codes and bound into specified size bundles with specified size rubber bands, then put into approved bags.
The reality is that The Post Office doesn't actually want to deal with individuals sending bulk mail, but instead they prefer to direct business to companies whose sole purpose is to do nothing but bulk mail. These companies are, strangely enough, called bulk mailers.
Bulk mailers are private companies whose primary purpose is to process bulk mail for commercial customers. There are bulk mailers designed to accommodate all different types and sizes of mailings. For smaller bulk mailings (several hundred pieces), bulk mailers are often located in easily accessible areas such as malls. Bulk mailers who deal with thousands to millions of pieces, are usually located in out-of-the-way places, to reduce overhead. Even most of the larger printers have their own bulk mail capabilities, so be sure to ask when you interview printers.
Bulk mailers operate on a very small markup and large volume. The nature of a bulk mailer requires them to stay abreast of the ins and outs of the Post Office bulk mailing system. Despite their charges, they can save you a tremendous amount of money. If you plan to use a bulk mailer, you will need to get their permit number and have it printed on the back of your catalog. Bulk mailers are required to pay the Post Office for postage at the time of mailing, and therefore will usually require payment for postage before the piece is mailed; so make plans for this expense. Bulk mailers do not make money on the actual postage charge.
Bulk mailers stay in business by charging a fee for each service that they perform. For example bulk mailers will address the catalog for you if you furnish them a mailing list on a disc. Each service will generally cost a couple of cents per piece. Other services that they perform include de-duplicating your mailing list (a very cost-effective service), correcting addresses and zip codes, adding special messages to catalogs being sent to a certain region, and other similar services.
Bulk mailers are also very helpful in making sure the outside of your catalog fits postal regulations. They can provide help with selecting the correct postal terms for your catalog, such as "address correction requested." The wording that the post office requires for these procedures changes often, so be sure to ask your bulk mailer if "address correction requested" or "address service requested" will deliver the desired results. You may think this is insignificant, but if you put the wrong service wording on your mailed catalog, you may be faced with thousands of dollars worth of service charges by the Post Office. Magazines also have source lists for the plants featured in their articles. This developed after readers complained that the plants being written about were unavailable for purchase. If you ship mail order, you will certainly want to send copies of your catalog to the magazine editors for reference when writing articles.
The greatest benefit from magazines comes when you are actually a feature of a story in a magazine. Depending on the size of the magazine or newspaper, catalog requests can number from a few dozen to several thousand. Before you allow your nursery to be profiled in a well known publication, be sure you can adequately handle the requests that will follow. There is nothing worse than getting started on the wrong foot with a potential new customer.
Caught in the Web
If you are a retail mail order nursery, then you will want to have an on-line catalog with electronic ordering capability. If you are a large wholesaler, perhaps the web could best serve your business by listing on-line inventory, accessible only to qualified customers, or by promoting those retail nurseries that purchase your plants. Be careful not to let the lure of Internet money and potential customers divert you from your mission statement, which happens far too often. What may seem like a profitable change in your business mission due to the Internet, may in fact trade short term profits for undermining the entire structure on which your nursery was started.
There has been no form of communication in which the audience involved has increased at such a rapid rate as with the Internet. It would be silly for me to quote Internet figures since these would be outdated in short order. I will tell you that as a mail-order nursery, our first five years of selling over the Internet, in addition to our printed catalog and on-site open houses, resulted in Internet sales which soared from 1.5% to 6.5%, to 13%, to 21%, to 30% in year five. Within the same five years, we were having over 25,000 catalog requests per year generated solely from the website.
The cost of putting a catalog on the net is much less expensive than conventional printing. The same holds true for building a large photographic library on a web site. Another great advantage is to be able to list current availabilities that relate to actual ready-to-sell inventories.
Now that web-building computer software is widely available, anyone with a knowledge of computers can build a web site. Not everyone so inclined can build a good web site. What distinguishes a good from a bad web site, is its ability to operate quickly, to provide information that is of interest to the customer, and to navigate easily. Web sites usually range between two extremes: sites that are too simple and offer no reason for the customer to visit, and sites that are so complex with excessive graphics that the customer cannot maneuver easily through the site. Be sure to spend plenty of time on the Internet looking at other web sites, not just in the nursery industry. What do you like about some sites, and which ones appeal to you?
Web sites are more attractive to consumers if the site offers something more than simply a chance to purchase on line. There are certainly educational opportunities as well as the chance to share creative ideas on the Internet. The more time that consumers spend on your site, the greater the chance that they will become a customer.
If you get serious about constructing a web site that offers more than basic information, you should consider hiring a professional web designer. There are professional web designers by the thousands. Simply enter a search in your favorite search engine for web site designers, and have your pick. In choosing a web designer, I recommend studying sites that each company has designed and talking with their clients. I also advocate talking with others in the nursery as well as other industries and gathering recommendations from others whose site you would like to emulate. There are web site designers that are inexpensive and good, while there are also those that are expensive and bad. In web design, price does not always seem to be a reflection in the quality of the finished product.
It is the job of the web designer to formulate the layout of your site, so that information is available and laid out in a logical format. What seems simple on the site is actually some of the most complex parts of assembling a web site. The designer will also have responsibility of updating the site with changes, formatting reports so that you can track the progress of the site, arranging keywords so that your site will be found by the search engines, and quite a bit more.
Unlike what some nurserymen think, web sites don't just happen. I remember a call from a well-known mail-order nursery owner in the late 1990s who had just visited our web site. She asked quite a few questions, finally getting around to how many hits our site was attracting. When I replied in the millions, the nursery owner became silent. Only after a few moments was she able to resume a conversation by telling me that their site only got 50 hits per month. She went on to explain that her staff had designed the site and that they had done so inexpensively. Are you beginning to get the picture?
If you choose to sell on-line, be sure that you or your web designer chooses a good "shopping cart." A shopping cart is a program that allows your customers to check out at the end of their on-line ordering. As with everything else, there are good and bad programs for these. Web sites are not like mystical baseball fields...if you build them, folks will not automatically come. With the number of web sites in the millions, you must advertise and promote your web site in order for it to stand out and work to promote your nursery. Promotion means that you advertise your web site everywhere. Your web site must be emblazoned on every key chain, scratchpad, matchbook, and ink pen that you give away. It must be visible on your catalog, printed on your stationery, added to every e-mail, mentioned in every article about your nursery, plastered on the side of your vehicles...it must be everywhere.
Web sites can be made more useful by using the process of reciprocal links. Links are a method of connecting your web site to other related web sites, so that you are not lost in cyberspace. Through this method, visitors who might visit a nursery who sold complimentary items would then be directed to your site. To secure a link, simply e-mail the business to which you wish to link and indicate your desire for a reciprocal link. Typically businesses are more likely to respond positively when the link will benefit both businesses.
You or your web designer will also choose a web host. A web host is an Internet service provider who allows your site to reside within their computer system. When choosing a web host, be sure that they have the capabilities of hosting a site of your size and potential commercial volume. Check with other business sites to determine their reliability. Web hosts that are inexpensive but often out of service are not a good value.
So how does a nursery (usually retail or mail order) go about developing a mailing list? A commonly used method of advertising is that of direct mail. No doubt you have all received unsolicited mailings at one time or another, advertising a product or service. This is direct mail marketing. Virtually every time you make a purchase, this information is captured in a computer database. There are businesses that collect and compile this information and then sell it to new businesses.
As a nursery owner, you can call one of these mail order list sellers and order a list of names that fits your specifications. For example, if you have a retail nursery or garden center, you could order a list of customers who had purchased lawn and garden products at least twice in the last 6 months, and who had an annual family income of over $100,000. These lists can also be selected for customers in particular zip codes. You can even order a list of customers who have recently purchased new houses in a particular region. As you can see, the possibilities are endless. Many businesses use direct mail to build an initial list, then often abandon this for higher return options. As a general rule, direct mail lists usually result in 1-2% customer response rate. This is compared to nursery owners who developed their list via more of a word- of-mouth and referral strategy that may have customer response rates of from 20-50%.
Mail order nurseries often swap or sell lists to each other. If you and another nursery had complimentary product lines of similar size, it is a common practice to exchange mailing labels for a one-time use. If you have the smaller nursery of the two, it is also fairly common to be able to purchase names from a larger nursery. For instance, most large mail order nurseries commonly sell their lists. As a small nursery, you might order the names of all customers that had ordered more than $200 worth of plants during the last year. These lists usually yield more than the 2% response rate that I mentioned earlier.
You may also borrow or purchase mailing lists of groups such as the Garden Writers Association (GWA). As I mentioned earlier, this is a group that you don't want to miss. GWA is a group of writers, speakers, and others who use public outlets to promote gardening. This group is perfect to establish a good reputation and help to promote your nursery. Many of these writers actually are quite particular about whom they write about and will investigate your business prior to writing about you. However, there are a large number of garden writers with no imagination who write primarily from press releases and catalogs. If you send a catalog or press release to these folks, you are likely to get mentioned strictly because they have nothing better to write about. Be sure, however, before you try this venue that your catalog is of top quality. There would be little worse than sending a mistake-filled catalog to a group of garden writers.
Once you develop a mailing list, you will need to maintain it. Without a doubt, one of the most valuable assets of any nursery is a good mailing list. Not only is the list valuable to keep track of customers, but it also is valuable to mailing list rental companies. So, what makes a good mailing list? Many of the factors that I mentioned earlier, such as the ability to define and thereby target particular groups of customers makes your list valuable. To do this, you will need to set up your customer database so that customers without an order history within the given parameters will become deactivated.
A mailing list is more valuable if it is kept "tight," being composed of only active customers. What nurseries consider as an active customer varies widely from one nursery to another. Most mail-order nurseries only keep customers on their mailing list for 2-3 years, after which they are dropped. The exception is the value of keeping some folks on your list that may never purchase. One group that we just mentioned are the garden writers, but others could include radio personalities, botanical gardens, libraries, extension service offices, and even gardening gurus in your region that might simply network with potential customers. Some of the larger mail-order nurseries keep all customers on their mailing list seemingly forever. There are several large mail-order nurseries from whom I have never purchased but yet continue to receive catalogs.
Am I Making Money Yet?
With all of the complexities that I have discussed above, the hardest thing to do in the mail-order business seems to be making a profit. This problem is simply one of not understanding true costs. If your intention is to operate the business as a break-even proposition, then stop reading now. If not, let's begin by grouping costs into two categories; cost of production and cost of delivery. Every cent that you spend must be attributed to one of these items.
Obviously the easy cost of production items to sort out are soil, pots, pesticides, tags, and liner cost. How about the plants that die before you can sell them? In most nurseries, the standard plant loss figure is between 10 and 25%. We're still not finished yet...how will you pay for your land, taxes, phone, water, and electricity? How about insurance, either medical, homeowner, or liability? The most often missing item is an owners salary. Many mail order nursery owners would be far better off financially if they worked flipping burgers, but they can't see how to get to the salary level that they desire. You will need to include as one of your costs, the hourly rate that you would like to earn. Unless you price your plants using this rate as a cost, you will never be able to pay yourself more. If you work 60 hours per week x 52 weeks, that totals 3120 hours per year. If you would like to make $10/hr before taxes, this translates to $31,200.
At the end of your fiscal year, look at the total amount of money that you have spent. Let's assume that you have only been able to pay yourself $5,000 in salary. The difference between this figure and your desired salary from the example above is $26,500. Add this figure to the total money that you have actually spent. In our mythical nursery, the total yearly expenses are $63,500. Adding the $63,500 in actual expenses to your desired salary increase of $26,500, and the income that you will need to generate to break even is $90,000.
Now split this $90,000 figure into the two categories that we discussed earlier...1) production and 2) processing and shipping orders. Let's say that you spent $60,000 on production and $30,000 on shipping and order processing. In our sample year, your nursery shipped 2,000 orders containing a total of 12,000 plants. By dividing your amount spent on production ($60,000) by the number of plants sold (12,000), you will see that each plant sold cost you $5. To this item, you must include a profit figure by adding your desired profit margin. In most businesses 20% is a typical standard. Therefore, in the example above, you must sell your plants for an average of $6 to make your desired profit. Do no confuse profit with your salary as an owner. You must be paid whether or not the business has a profitable year.
Next you will want to be sure that you don't spend your profit by undercharging for shipping. Shipping included the array of items that we outlined earlier. By dividing your shipping and order processing costs of $30,000 by the orders shipped (2,000), you see that your cost of shipping each order is $15. If your average order is 6 plants, then your cost is $2.50 per plant to ship. You must recoup your cost of shipping separately unless you choose to include this in the cost of your plants.
I hope instead of being discouraged, you are ready to accept the challenges of starting a mail-order nursery. Keep in mind that the life expectancy of a mail-order nursery is typically between 10 and 15 years. This is due both to unreal business expectations and the inability to understand costs. I wish you luck in becoming the exception rather than the rule.