Good Things Come to Those Who Don’t Wait

How to Raise Margins & Reduce Headaches with Early-Order Programs

Financial Affairs
By Bob Conner, Rocky Mountain Region Hard Goods Sales representative, Griffin Greenhouse Supplies, Inc.

With spring barely behind us, now is a perfect time to consider how your operation can better meet market demands (the all-important sell-through!) and improve upon efficiency and profitability for the next spring season.

First, review the pitfalls from this season. Identify the ones you can control. Taking good notes is critical here; keeping a record of the season as it unfolds makes for much more effective brainstorming of obstacles and potential improvements with your team after the heat of the battle. The most successful organizations do this as soon as the season winds down, so details are still fresh in everyone’s minds.

As you settle on focus areas, management can leverage early-order programs, which are often presented between early June and September. Such programs vary in timing and duration, so as your supplier presents them, be prepared to take advantage of both the cost savings and delayed billing terms. Such programs can also be important, because in some cases, the supplier’s products may only be available once a year!

Always note the parameters of each program. Most importantly, pay attention to the deadlines for booking and shipping. Let’s take a closer look at navigating the early-order process with containers as an example. Containers are among a grower’s biggest purchasing decisions, with many factors to consider. Among the questions you should revisit each season:

  • What size(s) and color(s) fit my customers’ needs, but also maximize my growing space?
  • Do I need bar codes, labels or custom printing?
  • Which tray size and configuration will optimize my benches and shipping carts?

Most common containers have various options for tray configuration. Choose what’s best for you but remember: cheapest is rarely the best. Getting multiple seasons from a higher-priced tray can yield huge cost savings.

Work with your supplier to determine if most or all of your container needs could be fulfilled by a single manufacturer. More volume from one manufacturer often leads to fewer deliveries, minimal or no wholesaler warehouse or handling charges, and better overall cost.

Wholesale growers, fit your trays to the racks and benches to maximize profits while keeping your customers’ needs in mind. Which container colors or styles are the sales force going to offer next year? Arming your team with changes early allows the grower to choose the best products sooner, reducing chances of a delivery or availability glitch and helping you keep your planting schedule on track.

Many growers label containers now, for various reasons. Labeling can be time-consuming and often comes with minimum quantities to meet. Early ordering is key to having these containers on-site when you need them, especially if you’re using a custom color.

Container manufacturers are at their lowest production volumes from early June until mid-September. If you’ve planned well and can place your orders within this timeframe, the odds of errors and delays are drastically reduced. Negotiate with your supplier for spring billing and delivery when the product is available, and check that chore off your list!

Many other product categories follow the same basic program as containers. Here are some timelines to consider for other common business needs:

  • Nursery Cans: Order in June or July for the best pricing and terms of the year. You’ll often have the option of extended terms or early-pay discounts.
  • Poly Coverings: Order in May or June so the product arrives when the weather is optimal and labor is available.
  • Growing Media: The major suppliers traditionally have aggressive spring programs for users that order prior to October. Additional discounts are usually available for early delivery. These programs are typically released in July with strong spring terms, with an option for early-pay discounts and early-order discounts.

Planning ahead for early-order programs is among the simplest ways to enhance profitability. Strong planning and record keeping will help any operation maintain or improve margins without any additional labor.

Enlist your suppliers’ help to maximize the opportunities and it’ll soon become second nature. If you order multiple categories from the same supplier, including plant material, ask about additional incentives for doing so.