“Direct to your doorstep every month” is pretty much the retail mantra of the moment; one that holds true for the plant industry as much as any other. I’ve lost count of new online direct-to-consumer houseplant retailers that keep popping up. All that marketplace pressure, or opportunity, may have you considering shipping direct to retail customers.
With the houseplant craze still on the rise — and market disruptors such as The Sill influencing many entrepreneurs from outside the green industry to jump on the plant wagon — growers are faced with the decision of going retail to compete.
On the surface, or from the outside, it may seem like a simple enterprise to start direct shipping the plants you’re already growing. Not so. You’re creating a new profit center for your operation, which is often akin to creating an entirely new business. A new business that has very different logistical requirements than your wholesale operation. Online ecommerce capacity, inventory tracking, taxes and accounting, order pulling, packaging, shipping and so on. All these new operations require different and additional labor and costs.
If you think it’s just the logistics you’ll need to adapt and manage, think again. The marketing work that will go into targeting and engaging with the end consumer will be a whole new ball game for you. Oh, and you’ll need to staff for that work too.
Direct shipping isn’t going to be logical or profitable for all wholesale growers. For some, it could mean creating the new customer base and revenue stream they need to stay in business. Let’s look at a few fundamental considerations if you find yourself facing this decision.
Product
Before you consider going the direct-shipping route, consider your products and plant offerings. Is what you grow going to be in-demand for online plant shoppers? For example: If your current customer base is landscape contractors and your product cash cows are mostly full-flat bedding annuals, then online direct to consumer sales may make no sense for you.
If your product selection is more diverse across plant categories or unique, and you’re willing to mix and match flats and sell individual plants, then branching out into retail sales can make sense. If you are a tropical foliage or succulent grower, then your inventory is a prime target for today’s online plant consumers.
Technology
Selling product as an online retailer is going to require not only a nice modern website, but also a meaningful investment in an ecommerce platform, as well as integration with your existing inventory software and live inventory itself. Creating a new digital presence may already be a big step for you.
Directly selling plants to customers can create a new profit center for growers, if done correctly.
Obviously, there are different legal and monetary considerations when selling retail versus wholesale. Additional business licenses or certificates may need to be obtained. Taxes will need to be collected and reported differently, dependent upon where you ship. You’ll also have to make sure you manage shipping restrictions for certain types of plants across state lines.
Marketing
You’ll be creating a new profit center for your business; you should also create a new business plan or marketing plan to support it. Are you ready to start marketing to an entirely separate segment of customers? Defining exactly who you’ll be selling and shipping direct to is vital to creating effective targeted marketing. You’ll need to tailor both organic and paid marketing and advertising efforts to your new customers, as well as manage your social media engagement.
Packaging
If you’ve ever ordered plants online or from a mail-order business, you’ve probably seen all sorts of different packing styles. Some work great, some are terrible and result in damaged plants. Figuring out how to properly pack your plants so that they not only survive their shipping journey, but also show up looking fantastic, is no easy feat. You’ll need to do a lot of experimentation and invest in the right materials configuration. Not to mention, create new customer facing POP materials, such as tags, care sheets and more.
Labor
All the work that goes into shipping direct to customers will differ from your wholesale SOPs. If your sales have been declining, and your existing staff has time to burn, then it could be a good opportunity to put them back to work and grow sales. If you’re already maxed out on your labor, then you’ll need to plan for new staff to handle customer service, process retail orders, assemble orders, pack and ship, and do marketing. Don’t assume your existing wholesale staff will be able to add on retail duties or be suited to them.
Outsourcing
You may have seen a few plant “drop shipping” services pop up over the last few years. These operations plug in to your ecommerce platform, such as Shopify, and drop ship plants they grow to your customer. While I think this kind of model could potentially be useful for retailers that are not in the green industry (but want to retail plants) — or retail garden centers who don’t want to take the direct ship plunge but want to capitalize on certain retail plant trends — you are giving away a lot of control. Whatever, and however, the drop shipper handles product quality and customer service will be a direct reflection on your brand. Be prepared to keep a tight eye on quality control if you outsource your online plant sales.
We’re only scratching the surface here, as there are many other factors to consider when you’re developing a new profit center for your greenhouse operation. Direct shipping may not be right for you as a grower, but if you’re ready to jump in, just make sure you’ve done all your retail homework.
Leslie (CPH) owns Halleck Horticultural, LLC, through which she provides horticultural consulting, business and marketing strategy, product development and branding, and content creation for green industry companies. lesliehalleck.com
During a particularly crazy time at a recent trade show, I enlisted some help from a coworker to deal with a last-minute problem and said what I always say — “Thanks!” I was more than a little surprised when they responded, “I’m just doing my job.” While that was technically true, it struck me that this person probably hadn’t been shown a lot of gratitude.
In the day-to-day of shipping deadlines, staffing problems and making sales, it’s easy to forget to show your appreciation. But that’s when it matters most. When stress levels are high, you can change the mood at your operation by setting a good example. Whether it’s someone doing their job well, going above and beyond or working some extra hours, they’ll appreciate knowing that their efforts are noticed.
It’s like they always say, “People don’t leave bad jobs; they leave bad bosses.” Whether it’s a birthday card, a text, an email or a pat on the back, it could make the difference in someone’s day. And it could make a difference in employee performance and retention.
The topic comes to mind particularly now that the holiday season is over. It’s easy to remember to show gratitude during the holiday season when warm, fuzzy feelings are in the air, but it’s just as important during the rest of the year.
The issue is illustrated really well by food bank donations. During the holidays, food banks are inundated with donations while people are feeling generous. But when spring and summer hit, shelves get bare and people go hungry.
So next time things are getting tense or you notice a gray atmosphere around the greenhouse, try telling people they’re doing a good job. It just might bring a little holiday cheer all year-round.
It’s the middle of December. Snow is on the greenhouse roof. The weather is frigid and the growing season is almost over. A well-deserved break is just a few days away.
But the entire greenhouse is still bustling, still humid and muggy as poinsettias and other holiday crops are being finished. Once the plants are ready to serve as a centerpiece of the table or the lynchpin of a home’s holiday decorations, they’ll be placed carefully into trucks to be shipped out to nearby big box stores, independent garden centers or perhaps the grower’s own retail shop down the road.
Some of those plants, though, serve a special purpose. Those plants then travel to nearby churches, schools, sports teams and other groups that have sold the plants as fundraisers. And for many greenhouses, doing fundraisers is a core part of the business and represents a main source of revenue.
Growing for fundraisers, though, can be a challenging exercise for operations. For one, there is no easy way to know exactly how big each fundraiser will be and how many of each plant will be needed. There’s also the question of pricing — should it match wholesale or retail pricing, or should it be marked at a different rate? And how can a grower prep without knowing final order sizes when the growing season starts?
“There’s no good way to plan,” says Tim Holliday, head grower and wholesale manager of Roebuck Greenhouses in Roebuck, South Carolina. “You never know what trend is going to hit year-to-year.”
Bev and Tim Galema at Galema's Greenhouse in West Lafayette, Indiana
“It can be a hard place to be in."
Galema’s Greenhouse, located in West Lafayette, Indiana, sells its plants to almost every corner of the industry, from fundraisers to landscapers to their own retail store. Growing in around 70,000 square feet of greenhouse space and about 20 acres outdoors, the business produces everything from young plants to poinsettias to mums and some vegetables.
According to Bev Galema, who runs the business alongside her husband, owner and founder Tim Galema, no part of the business is more chaotic than the fundraising part of the business.
“It can be a hard place to be in because if they order a pink plant and we don’t have that for whatever reason, they aren’t going to want a red one,” she says. “So, to balance what I can offer that’s unique and have enough on-hand, because it is a perishable product and I can’t grow more, is tricky.”
Galema’s was founded by Tim in 1991, a few years after he graduated from Purdue University. He had worked for a greenhouse operation and gone back to Purdue to work in a lab, but Bev says Tim had been unhappy and wanted to get back to growing. That’s when the greenhouse that had previously employed him was put on the market.
“So we looked at them and he said, ‘I helped build them. I know what’s wrong with them and how to fix them,’” Galema says. They leased some land on Tim’s grandfather’s farm and started building the business little by little. In the beginning, Tim was still working part-time at Purdue.
“That developed into one more thing and one more thing and now we’ve got space I can’t keep track of,” Bev says with a laugh. “I have a degree in accounting [from Purdue] and actually worked full time before we had kids. And then this became my full-time job.” The Galema’s three children, as well as Tim’s parents, all work for the business.
Fundraising, she says, has been part of the business almost since the beginning and accounts for roughly 10 to 15% of Galema’s overall sales. The business grows mums for fall fundraisers and poinsettias for winter ones.
“We started with small growers, so we understand the needs of small growers and know the needs of small people,” Galema says. “We are flexible to handle the needs of more hands-on people. Not everybody wants 10,000 of one thing. And even if they get 100 of one thing, they don’t want 100 of the same color.”
According to Bev Galema, 10 to 15% of her business' sales come from fundraisers.
Fundraising for Galema’s follows that same ethos. According to Galema, the business does fundraisers with different organizations across the state with no real criteria for what kind of group can purchase Galema’s plants for them. For instance, the greenhouse began growing for around 12 fundraisers for different travel softball teams in the area after an initial team signed up. From there, word got around.
One challenge now, Galema says, is growing for fundraisers correctly without overextending the business by taking on orders that could leave the business short on plants. She says the greenhouse space is about full, so committing more space for a winter poinsettia fundraiser just isn’t an option. And even then, there is still the challenge of being able to give customers exactly what they ordered.
“For poinsettias, one thing people like that can be hard to find are Jingle Bells poinsettias, which have generally not been in a box store,” she says. “But because I can’t find it anywhere else, I can’t go to my fellow growers and ask for 50 more because the fundraiser over-ordered. So, in the past year, we have been trying to shift our customers to give us [final totals] at least two weeks ahead.”
Roebuck Greenhouses started growing for fundraisers in the late 1990s. According to Holliday, the business started working with fundraisers when a friend asked him to do one for a local middle school. From there, they developed their own brochures and started to grow that side of the business. Fundraisers take place in the winter for poinsettias and in the spring for hanging baskets.
Roebuck used to grow for big box stores like Kmart, Lowe’s and Walmart before many of those stores began sourcing all their plants from one greenhouse producer.
“We had to change our business model, so we started focusing more on the landscapers, the independents and the fundraisers,” Holliday says. He started at Roebuck in 1990 and the business only shifted hard away from big box stores in 2006 just before the Great Recession.
Currently, Holliday says fundraising accounts for around 30 to 33% of Roebuck’s overall sales from the 200,000-square-foot greenhouse. He expects that part of the business to continue growing too but says it’s the most stressful part of the job.
“It’s terrible; I’ll be quite honest with you,” he says. “The little bit of hair I have left, I’m about to pull out. We aren’t taking orders — we’ve committed to this school civic group or whatever — and their numbers are still coming in. And right now, I’m oversold based on paper. You need a good backup plan.”
“It’s one and done, and I don't have to keep after them."
Currently, Galema’s offers its fundraiser customers the same price it does its wholesale customers. According to Galema, they’ve done that for years and had no reason to do it differently until recently.
“We haven’t changed it yet,” she says. “As we get more into this and we talk to more people, we have learned that isn’t always the case.” In 2020, Galema’s could raise prices for fundraisers, although not by more than a few percentage points.
Galema says the business is still profitable charging wholesale rates. There is more uncertainly with the process, she says, but it is also a one-and-done sale. By comparison, the ongoing relationship with retailers is sometimes an ongoing negotiation.
“You’re really selling to retailers every single week,” Galema says. “You’ll call them and tell them they need to take the gerberas this week because they are blooming like crazy and they’ll fly off the shelves and they’ll say, ‘I don’t want gerberas.’ So you’re constantly in that sales mode with retailers because they are ordering what their shelves look like, regardless of how good mine look. A fundraiser is going to take them because they already ordered them.
“It’s one and done, and I don’t have to keep after them,” she says. “It’s a different mindset.”
The real key for pricing fundraisers correctly, Galema says, is finding the right balance between the different parts of the business. Each part of the business supports the other, so if there’s a rainy spring and retailers aren’t ordering as much as expected, fundraiser orders can help make up lost sales. The inverse can be true if there’s a shorter poinsettia season.
She also notes that the different parts of the business can be reliant on different crops. For instance, Galema’s would probably stop growing poinsettias altogether, she says, if two large fundraisers went away in the winter. Without the fundraisers, the profit margins are not there to make growing poinsettias worthwhile.
For Holliday, the idea is to at least break even on a fundraiser. Prices are typically set at a point where the business can either make profit — particularly on volume sales — even if extra plants must be purchased from other growers at the last minute to fill orders. His prices per plant are slightly lower for fundraisers because the volume is likely to be there. His customers, 90% of which are schools, will regularly have $3,000 orders, whereas some IGCs are buying a maximum of $1,000 worth of plants.
Right now, Holliday does not have an order minimum, which it means there can be orders that are so small that Roebuck can’t make any money on them, but he’s considering changing that.
“I’ve been hung out to dry a few times this year where someone is three hours away and their fundraiser total is $300 and I’m sitting there thinking this is going to cost me $300, so it’s not even worth it,” he says. “But you never know. That small sale may be their first sale and the next year could be bigger.”
This year, Galema’s started using a program called Farmraiser to manage its orders. Schlegel Greenhouse, an operation in Indianapolis, recommended it to Galema’s and has used it for years. Farmraiser works by having the orders placed and processed online instead of via paper slip. The streamlined process also means there’s no chance cash or checks are lost in the process.
Farmraiser does take 10% of the gross sales from the fundraiser. The platform, though, allows the organizer to set the price for each item after the supplier sets a price based on what revenue they need out of it. The supplier can also set a maximum for a certain product — say a Jingle Bell poinsettia — so fundraising organizers can’t order in excess.
According to Bev Galema, a key to successful fundraiser sales is working as far ahead as possible.
“It controls some of that unknown."
The first Galema’s customer to use Farmraiser was a fundraiser run by Bev and Tim’s daughter’s school band, who agreed to do it through the platform after Bev mentioned it.
“I got to see it from both ends, how it works,” she says. “They’ve got some kinks to work out, but I think it’s going to be a good platform. It gives me an ongoing report of what’s being ordered and then spits out specific orders of who ordered what.”
Galema also tries to only work with customers they’ve worked with in the past. Additionally, she says it is important to ease in any new customers by limiting what new customers can offer in a fundraiser. It’s also important, she says, to know what plants can be sourced from another operation if substitutions need to be made at the last minute.
Substitutions are a trick Holliday uses as well and he’s upfront with fundraisers to let them know that sometimes a change must be made. Roebuck only produces 35,000 to 40,000 poinsettias each year, so a larger grower nearby often will sell him enough to fill orders that Roebuck can’t with what’s on hand. He also limits the choices for poinsettias to 6” and 8” red, pink or white poinsettias.
Typically, he says, customers are interested in supporting the fundraiser as opposed to buying a specific plant, so substitutions — say a red poinsettia for a pink one — are a reliable solution. Another tip Holliday has: be picky about taking on new customers. In Roebuck’s case, they added 12 new fundraisers this year after a nearby greenhouse closed, but only did so because they felt it wouldn’t hinder any existing business.
Both Galema and Holliday say the best way to prognosticate for the next year is to tally what sold well in the year before and to have conversations with repeat customers to gauge what worked for them and what didn’t. That, they say, is the best way to see what sells and allows them to order the right product.
The process of making fundraisers run smoothly, however, is ongoing. More than anything, successfully growing for fundraisers is about doing what you can to get ahead and make it work as best you can.
“The farther ahead we can work on new things, and start new fundraisers, the better,” Galema says.
3 tips for selecting growing media for cannabis
Features - Production
Three professors discuss substrate considerations that can improve cultivation.
Clockwise from top center: Fine-grade peat, coarse-grade peat, pine tree substrate, perlite, course/chunky coconut husk, coconut coir
Photo courtesy of Brian E. Jackson
Some growers have a misconception that cultivating cannabis is markedly different than producing other crops. But that often isn’t the case, says Bill MacDonald, 25-year floriculture industry veteran, and professor and coordinator of Niagara College’s commercial cannabis production program. For example, he says his methods for growing and researching chrysanthemums and cannabis are very similar.
Rony E. Chamoun, academic coordinator and industry liaison manager of McGill University’s Commercial Cannabis diploma program, will soon start teaching about the nascent industry following work in the food market and at a wellness company that processes cannabis. In his experience and visits with growers, he’s found that the crop faces similar issues and has comparable requirements as other crops to grow it well. For instance, powdery mildew can infect it, and supplemental lighting can help influence vegetative growth and flowering.
One way cannabis separates itself from many other plants, though, is that it tends to be more resilient, MacDonald says. “You can beat this plant up quite a bit, and it’ll come back, whereas you do that with poinsettia, your crop’s done,” he says.
Like with any plant, growing media provides cannabis with water and nutrients. And if they follow these few substrate tips, cultivators might be granted a little mercy from this crop.
1. Work with reputable businesses and organizations.
For more than 15 years, Brian E. Jackson, associate professor and director of the Horticultural Substrates Laboratory at North Carolina State University, has worked with numerous crops such as ornamentals and produce, with an emphasis on growing media. With this experience, he is intensely familiar with the market.
Whether growing cannabis or any other crop, Jackson says growers should prioritize working with a reputable vendor, rather than picking a product and then choosing a supplier. Any commercial soil company in North America that provides service to multiple regions or growers can help growers find the right product.
Similarly, MacDonald says that if cultivators need information on growing media, they can often reach out to extensions that have experience with other crops.
2. Rethink using mineral soil.
“Cultivating containerized cannabis mineral soil is not the best approach for crop success and management,” Jackson says. This is in part due to issues of drainage, contamination, variability, weight and herbicide persistence. One of the main reasons growers shouldn’t use it, he says, is because it could contain heavy metals.
While Jackson says it may be “cheap” and “convenient” for a grower to collect mineral soil themselves, it can also be dangerous, as it could contain heavy metals. “It’s easy to cut corners on the front end, but the penalty can be great,” he says.
The fact that cannabis is consumed makes the issue more serious. “If you’re growing pansies or petunias, yeah, you don’t want heavy metals in your [growing media], but you’re not eating pansies or petunias,” Jackson says.
MacDonald agrees, and notes that Health Canada requires cannabis cultivators to test for heavy metals. “I would be very concerned [with the use of mineral soil] because cannabis can be a bioaccumulator,” he says. This means the plant can easily take up chemicals.
A peat-perlite soilless mix
Photo courtesy of Bill MacDonald
3. Weigh your options.
Many of the companies that grow cannabis use soilless container media or hydroponics, Chamoun says.
One of the soilless options that some Canadian cannabis cultivators use is rockwool, he says, adding that “The rockwool soilless substrate is considered to be a preferred substrate due to its capabilities in delivering good aeration and possessing water retention properties.”
Chamoun recently a cannabis cultivators in Quebec, IsoCanMed, that uses aeroponic systems. A relatively new development used in growing controlled-environment produce, aeroponics systems mist small amounts of water — about 40% less than indoor hydroponic systems — onto plants’ roots and recirculate the water, Chamoun says. He adds that IsoCanMed trialed this water-saving method for about six months before taking it to market. McGill’s cannabis diploma program, which starts in June 2020, plans to take field visits to aeroponic facilities, among others.
MacDonald has cultivated cannabis in peat-perlite soilless mixes and rockwool as a hydroponic medium. He says he has seen little consensus in the cannabis industry between various substrates and techniques, and so far, many of these decisions have fallen on individual growers.
“If you’re going to grow on a large-scale, I’d be heading towards the rockwool,” MacDonald says. “I just see how well it works in the greenhouse vegetable industry. And yeah, so it seems you’ve got a lot of control that way in a greenhouse, but I’ve also seen soilless media and good product out of that.”
Jackson and his colleagues have compared peat-perlite blends and coconut-perlite blends. While he says both mixes are “excellent,” the researchers didn’t see a benefit to one over the other. He adds that many cannabis growers use mixes of coconut and perlite (the latter of which is not toxic, he assures naysayers) because they have been on the market for a long time.
In general, cannabis cultivators can take a page from ornamental and produce growers in adhering to precision growth methods, Jackson says. Cannabis cultivators often try to flower their crop as quickly as possible, but they need to be able to control production by slowing down or speeding up plant growth based on weather and climatic factors.
“Growing cannabis is not like growing tomatoes,” Jackson says. However, some of the same principles largely apply if cultivators aim to achieve consistent product and yields. The ornamental industry has proven, he says, that controlling the system and the numerous inputs of precision growing can help ensure long-term cultivation and business success.