Rio Roses

[bigwahoo]

So whats the deal with Rio Roses.

They are selling to retail florists and at the same time to wholesalers. Does this uspset anybody?  I just heard they are using local wholesalers as their delivery agents but doing all the selling direct from Miami.  Further they are saying that they own and sell their own product.  From what I understand, they buy from a lot of grade B farms at really cheap prices.  

Whats the deal?  why are they selling to both retailers and wholesalers at the same time?  Do they actually own any farms?  Has anybody been affected by them?  Are they a good company?  whats up with Rio??

wahoo

[nomas]

Biggy,
I guess you need to enroll in the Rio University to truly understand how it works. Give em a call if your a true wholesaler and want to devulge your top 10 customers.

[hopeful]

Wahoo,

What evidence do you have that they are selling to retailers?

I think they have developed a great flower marketing model. While they aren't doing everything right, they are certainly well ahead of most of the industry.

There is a lot we can learn from their success.

Hopeful

[Direct_usa]

The never ending fascination with RIO! They DO know how to generate buzz.

Hopeful is correct, they have developed a good model. They also do a better job of executing then 90% of the importers in Miami.
Having said that, I would also say Wahoo is at least partially correct in that they do buy from a number of farms in both Colombia and Ecuador. Although they do own some farms, I believe they purchase more product then then they produce. Whether they can be characterized as "grade B" I could not say.
As to selling retailers, show me a single importer in Miami that is NOT selling retailers. Everyone is, some are just more brazen then others.

[bigwahoo]

Hopeful,

I know for a fact that they are at least soliciting large retailers around the country.  As a matter of fact they are soliciting retail business directly and in person.  Then they are offering local wholesalers commissions to receive the flowers, but all the sales and the relationships are managed through Miami.

I wonder how the local wholesaler feels about this.  Might as well close chop, move to sunny Miami and sell to my customers out of Miami, hell we could do it out of Colombia, give the Rio people a run for their money.  For the price of one salesperson in Miami I could hire 4 in Colombia.

[nomas]

Biggy,
The Colombia model is already in place they have so many salespeople selling farm direct it's almost funny. The good thing is they can speak English now.


We've seen many adventures of new flower programs over the past 10 years,  I don't mind sharing customers with good growers or competitors but to hand somebody your top 10 is just stupid business in my book.  You would think (with history in this biz) that at some point there might be a falling out with a whlser and who wins? I'm guessing it will be the people that have established the "best" relationship with the florist, Fedex will allow for the same quick service a retailer is use to.  

Are the commisions that the wholesalers receive the same margin they would get if they were handling the product? I don't think so. Is this program similiar to what is happening in Miami where importers are handing off their logistics and warehousing to cut cost?

Ahhhh look at it this way scarier things have happened in the floral industry.

[sellflowers]

Direct,

My experience is they (Rio) does not do a better job of executing, they would, however,  tell you different.

[zenexec]

Nice spin bigwahoo, but it's not accurate.  Rio Roses is absolutely commited to having the wholesaler distribute to retail florist, first and foremost.   When a local wholesaler agrees to distribute Rio to their retailers, this is the only distribution model for rio.  When the local wholesaler says "no" to distributing Rio, perhaps because they are buying directly from a farm at cheaper prices or otherwise disintermediating, the objective is to still include that wholesaler in the sale, even when they choose not to support the rio value proposition.  At times I am overwhelmed by the level of duplicity and hypocracy in our industry, do as I say not as I do.  In certain markets, there are large retailers (bigger than most wholesalers), with their own trucks out of Miami. It doesn't matter to rio that many wholesalers and retailers are cutting out their traditional suppliers in search of lower cost of goods, ie: "direct", rio is not cutting out the wholesaler.  However, if the local wholesaler won't buy Rio for whatever reason, it should not mean that the consumer is forced to purchase whatever rose the wholesaler decides to source.  Why should rio allow themselves to be locked out of markets?  The consumer should decide what rose they receive, not the suppliers.  

[thinkflowers]

Right on. I totally agree. And I hope consumers choose our roses over Rio!

[sellflowers]

ZEN,
What if you develop brand loyalty in a market with out a wholesaler and then a wholesaler wants to distribute your product? Do you give them the exclusive or continue distributing direct?

[nomas]

Zen,
What about exclusivity? From what I understand there are only certain wholesalers in an area that can carry Rio roses. Is that true?

[bigwahoo]

Zen,

From what I understand Rio is doing the same thing that "The American Clock" or " Flowerbuyer.com" is doing. They are using the wholesaler as their distribution solution, and letting them make some money off of distributing flowers for them.

In reality I am not against this model or any model, its a free country.  I feel that anybody can sell to retailers, or sell to wholesalers, or sell to both.  I think that the market is a free place and everybody can sell to who they please, I just wonder what the local wholesaler has to say about this approach.  

It seems like Rio is forcing the local wholesaler to either do business their way or no way.  Its like saying.."look the 10 top customers of city X want my flowers, we have talked to them and everything is ready to go.  Either you distribute them for me and make x off of this or I’m going to another wholesaler who will agree to my terms"

I wonder why the local wholesaler wont buy from Rio directly or in other words why Rio has to find retailers to later convince the wholesaler to carry Rio.  I would suppose that if Rio roses were good and fairly priced the wholesalers would buy their roses automatically.

This is my question...what is the model?  i still dont get it....

wahoo

[stemrap]

In business school terms, this is a push vs. pull question.

The floral industry has always been a push business, with the original wholesalers just sales outlets for the growers, who pushed a limited supply product to the market.  Later growing moved south and the wholesalers just kept trying to push.

Rio is attempting to create a pull-  advertising and telemarketing to (small) retailers, then forcing the wholesalers to get on board, thus "pulling" the distribution network to its brand.

Of course none of this resonates with the end consumer.  That is the job of the retailer.  I am asking all of my suppliers to "brand" their products, because I would love my consumers to come in and "demand" the brand (since my competition-other supermarkets-don't carry the quality brands I do)

Bravo to Rio.  Make the dinosaurs change their stripes  (??)

-Rap

[zenexec]

sellflowers: A talented value-added wholesale partner is rio's choice for regional distribution.
nomasflores: Depends on the size of the market and the footprint of the particular wholesale florist.  Among other things, this distribution control helps avoid competing against your own product in a market.
bigwahoo: Buying decisions are seldom only about price and product quality (ie: why one buys a harley davidson has very little to do with quality and price).  As you most likely would agree, there are other reasons why we as consumers make purchases.  Some of these reasons include loyal relationships to other vendors or brands, existing comfort levels with what is safe and known and already established, preconceived notions about the competing product lines, etc.  The logic is simple, help create profitable sales for the wholesaler and retailers, and fight like hell against being commoditized by the marketplace.  Last time I checked, helping your customer land a profitable account was a really good thing.  Wish more breeders did that for us.  Nobody is forcing anyone to do anything, but neither should rio be limited by those who choose not to distribute for them.

[nomas]

Zen,
Thanks for the explanation.