New growers' fees, how do we deal with them?
An article from FloraHolland Magazine
Name: Albert Zuijdgeest
Crop: Calendiva, Hippeastrum, Anthurium, potted gerbera and potted rose
Thinks: "It should be simpler."
"Fees are sometimes too complex"
"Depending on the period, we auction between five and ten per cent of our stock . That percentage is dropping. We auction to display what we produce and to sell any surplus. So we auction as regularly as possible, and we have the good remote buyers that we need.
We're making increasing use of the auction's paid customised services, especially logistics services such as customised transhipment and the delivery of small lots to buyers. I think the fees for direct transactions are realistic. The question is: what should the clock cost? The clock certainly has value, but to avoid cost increases, we should have it run it on a cheaper basis.
The fees are sometimes complex and that makes things difficult. At the moment there's a separate fee for each place and method of delivery. That makes it hard for customers to offer clear-cut fees. And the various surcharges mean our daily price differs for each customer. That may be fair, but it's not always practical. It produces a lot of administration and control work. So it should be simpler."
Name: Robbert Kester
Crop: Lisianthus, 2.2 hectares, wide range
Thinks: "I pay more attention to revenue than to costs."
"My sales methods result in higher sales costs"
"Eighty per cent of my production goes to the clocks at the three export locations. We grow ten varieties under heavy lighting and go for top quality. So I understand my auction costs are quite a bit higher. Although our direct sales will increase somewhat, the clock remains my main sales instrument. That's the place for the fairest prices.
No one wants higher auction costs, but it's well worth the money to keep the clock strong. That's because I'm a grower who's more interested in the highest profits than the lowest costs. My total sales costs, including transport costs, make up eight per cent of my sales. That will increase. But if you want, like me, to supply a wide range and have the opportunity to introduce new varieties to lots of buyers, the clock is indispensable. And that incurs certain costs."
Name: Carlo Elia
Crop: Decorative green
Thinks: "Clock fees can't increase."
"We can't do without the clock"
"The growers here in Italy love FloraHolland because its clocks give the smaller growers entrepreneurial freedom. Dutch growers sometimes think they can live without the cooperative. We know better.
I hope this discussion doesn't result in higher clock fees. I also hope that the international account management for growers remain strong. Then we'll keep a diverse range for the clocks. We need more clock supply. Higher fees will make that difficult. Because the fees for direct transactions are low, the clock fees have to be high. FloraHolland generates many direct sales and then says that the clock is becoming weaker. But those are often direct sales made by growers who use to sell directly outside FloraHolland but now sell through FloraHolland. That doesn't make the clock stronger or weaker. By forcing large foreign growers to become auction members, FloraHolland is putting its income stream under pressure. Clock growers shouldn't suffer as a result."
Name: Dirk Hogervorst
Job: Commercial Services Manager
Thinks: "This issue requires maximum input from members."
"This discussion begins and ends with the members"
"In the General Members' Meeting of December 2013 there was a discussion about the fee structure for growers. That structure no longer fits with the changing world in which members do business. In addition, the fee structure is complex, particularly when it concerns the fees for direct transactions. We also have to reassess the difference in fees between members and non-members. The intention is to arrive at a new pricing system for growers for the longer term.
This issue requires solid input from members. Therefore, representatives from the Flowers & Plants Advisory Committees with three experts from FloraHolland have formed a Fees Working Group, which I will chair. That working group is currently preparing an in-depth discussion to be held in the Advisory Committees. This will lead to a proposal on grower's fees for submission to management and the Supervisory Board. In the autumn, the members will discuss the management proposal on this topic, after which a decision will be made in the General Members' Meeting in December. Because this discussion begins and ends with the members."