Starting a mail order nursery presents some unique challenges; here are some things to consider before you begin.
Tony Avent wrote So You Want to Start a Nursery (Timber Press, 2003) as "a reality check for anyone wanting to start a nursery," drawing on his own experience transitioning from a government job to a full-time nurseryman. Now the owner of Plant Delights Nursery, Avent shares his expertise on how to start a nursery with wit and clarity; the book is devoted to the business and planning concerns of the nursery owner. The following excerpt from Chapter 9 deals with setting up a mail order nursery, from deciding what products to offer to shipping and delivery concerns.
You can purchase this book from the MOTHER EARTH NEWS store: So You Want to Start a Nursery.
Most mail order nurseries started as backyard operations that evolved into mail order businesses without a real business plan. These nurseries are typically those that grow their own plants. The larger mail order nurseries, by contrast, purchase plants that they then offer for resale. One disadvantage to this latter strategy is that nurseries without a retail component to dispose of unsold inventory must get rid of it at the season’s end even though so much money is tied up in those unsold items. While nurseries that grow their own plants may suffer this same fate, the costs involved are usually much less.
Starting a mail order nursery requires that you ask many of the same basic questions you would if you were starting a retail nursery. Will you grow or purchase your plants? Will you sell potted or bare-root plants? What types of plants will you handle and in what sizes? Of course, answers to most of these questions should form part of your mission statement.
Nurseries in the South tend to lean toward container plants, whereas those in the northern zones offer more bare-root plants. The higher cost of overwintering plants in containers often prevents the more northern nursery from competing on price with those in the South where overwintering costs are much lower because of the milder winters. Although containerized crops can be much more easily accommodated into an extended shipping schedule, it is often more expensive and difficult to maintain them in containers during the growing season.
Plants that will be shipped bare root must be dug in the fall and stored in cool conditions, usually in refrigerated coolers. Many deciduous woody plants and perennials are handled in this manner. Storing plants in coolers is anything but an exact science, and you should expect high losses with certain crops. No matter where your nursery is located, coolers will be a necessity if you are handling bare-root materials.
You will need to carefully examine your target customer base before starting a mail order nursery. Typically, nurseries that grow unusual or specialty plants fare best as they are able to reach plant collectors across the country, even across the world. Plant collectors are often willing to pay higher prices for a specialty plant than what the local market will bear. For example, a nursery that specializes in spider-type daylilies could charge $200 for a new introduction by targeting a specialized, national or international audience. Locally, however, the same plant might fetch little more than a run-of-the-mill daylily.
Similarly, difficulties exist for mail order nurseries that are trying to compete with local retailers or garden centers. Local nurseries should always be able to offer a larger plant at a similar cost to that offered by a mail order nursery. The size of a plant that a mail order nursery can ship is limited by the high cost of shipping and the difficulty of packaging large plants. It is rarely feasible to ship a plant that grows in anything larger than a 1-gallon pot, though obviously there are exceptions with very expensive plants.
Plant geeks looking to start a nursery tend to prefer mail order nurseries. These often anti-social types feel they can avoid customer contact by locating a mail order nursery in an out-of-the-way location. While mail order does allow for more privacy, you will likely have plenty of visitors if you do a good job of running your business. It is inevitable that customers, out of pure curiosity, will search out and find your nursery, so you will have to decide whether to prohibit all visitors or schedule visits in a way that allows you to maintain your privacy.
Since you are operating a remote business where customers cannot regularly drop by, the need for prompt responses to customer queries is even more critical than with a typical retail operation. Communication can, of course, occur using faxes, e-mail, phone, and, to a lesser degree, regular mail. I have found that some who start a mail order business or online plant nursery are often poorly prepared for the actual handling of orders. There is simply no excuse, however, for being blindsided by orders when that is precisely how the business has chosen to operate. Doing a poor job of satisfying customers in your start-up years creates a bad impression that is difficult to overcome, so start out well prepared.
Of all the types of nurseries discussed, it is the mail order business that has the most complex process of getting plants to customers, and if you do not have a good paper trail, confusion will reign.
At the outset, let me offer one simple procedural rule that can help you avoid disaster. Always protect the original order in case of unforeseen problems or later confusion. I recommend generating your own separate set of paperwork from which you process orders. Original paperwork should never be allowed to stray from the security of your office.
Customers rarely visit mail order nurseries; instead, you deliver the product to them, and this makes your shipping operation of paramount importance. There are many 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 possibility of labor strikes. If you depend on a shipper whose employees go on strike, you will be prevented from delivering your product to your customer. I will never forget the year our shipping carrier went on strike during a time when cash flow was particularly low and when we had a large number of orders ready for shipping. I learned never to rely completely on one shipper and to keep my options open.
When choosing a shipping service, keep in mind 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 quotation of their rates. Be sure to ask about the shipper’s ability to track packages that become lost or that are not delivered on time. Find out about the types of delivery options: overnight, two-day delivery, three-day delivery, or delivery whenever the item arrives, the latter usually being the cheapest option. Also ask about hidden surcharges, which are increases over normal rates. Surcharges such as those for dimensional weight kick in when a package is too long for a specific set of existing parameters. Even if the box fits all other criteria for a particular shipment charge, if it 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, the sizes of those boxes, and other related questions. Shipping rates are based on volume, so the more you ship, the better your rates will be. Another factor that impacts shipping rates is location. If your nursery is in a very remote location, it will be very expensive for the delivery service to visit your business so you will be less likely to receive a discount. On the other hand, if the shipper wants to build up business in a particular location or has a competitor business nearby, it may find it cost effective to give you a much larger discount than any it would give a customer in an established service area.
A number of computer-based shipping systems are available to choose from, their versatility increasing with the number of packages you ship. Some systems provide the package’s 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 the phone book for shipping systems that are manufactured by independent companies. If you ship a large enough volume with a particular shipper, you will usually be provided with a shipping computer and system at no charge; at the very least you should receive a label printer and software. Be sure and ask the shipper to help you integrate its system with your own database so that order information does not have to be reentered into the new shipping system.
Several states have imposed agricultural restrictions on bringing soil or potting mix across state lines unless the soil or mix has been treated with an array of chemicals. While these restrictions certainly make it difficult to ship plants during growing seasons, it is not impossible (although many nurseries refuse to ship into those restricted states). If you decide to ship into these states, you should first determine the time it takes to wash the soil from the roots or to treat each plant and then calculate a standard charge (possibly as a percentage of the order) that will cover the extra cost of shipping to these states. Be aware that there is a big difference among plants in terms of how easy they are to bare root and that their survivability also varies with each species.
Regulations involved in shipping to other countries can also be overwhelming to a small nursery, and for that reason many nurseries opt out of that market.
Something else to consider is the kind of box you will use for shipping. When getting started, most small nurseries opt for recycled boxes, and many of their owners can recall staking out Dumpsters at the grocery store or the local recycling center. While we are confessing, I will admit that during the early years I spent far more time than I care to remember waking up drunks or being terrorized by wild-eyed cats while prowling through restaurant Dumpsters for the perfect shipping box. I had a very hard time getting used to the concept of purchasing boxes.
Once you make this leap from wanting only free boxes to being willing to pay for them, you may still want to consider box overruns. Most box companies offer these “seconds” at a greatly reduced rate. When you require large numbers of boxes, however, it may become economical to purchase new boxes with your nursery logo and name printed on them. Alternatively, you could purchase rolls of tape (they are usually 3 inches wide) with your name and logo printed on the tape. You could also have “fragile,” “living plants,” and so on printed on the tape. With tape wrapped around the box, its identity is very clear to the recipient.
I recommend that you use only a few standard box sizes, as not only is having too many sizes quite confusing to packers but it is also uneconomical. 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 must also consider the weight of your shipment: you want to make the box manageable for your customer while at the same time ensuring that you avoid shipping surcharges for sending out overweight boxes.
Now that you have your boxes picked out, think about the packing material you will use. As much as we in the mail order nursery business wish for it, there is no such thing as the perfect packing material. Regardless of which packing material you choose, it is critical that it keep the plants from being tossed around in the box and not be so heavy as to increase shipping costs. While you may take great care in handling and packing the order, rest assured that this level of care will not be given during the rest of the journey. I always recommend packing a test box that your staff tosses around for a couple of days to determine 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. Although plants are most often lost during shipping because they were packed too wet, it can be just as damaging at the other extreme. Root-protecting materials include peat or sphagnum moss and sawdust. Be sure to check with your state’s department of agriculture for any special regulations pertaining to some recipient states and almost all foreign countries. These regulations are sometimes a nightmare even when they are followed. We had several shipments rejected by a state inspector who didn’t even know his own state regulations!
My favorite packing material has always been the universally accepted shredded sphagnum, which is soaked and then squeezed free of all excess moisture before use. Materials used to hold the root protective media around the roots include aluminum foil, plastic, and of course the containers themselves. If you 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 with all the soil in the bottom of the box and the plants at the top. Good packing can keep the soil in the containers but it is more typical to use some type of breathable seal over the soil surface of the pot.
Remember that plant foliage should be allowed to breathe during shipping but not be sealed or kept moist. I recommend you experiment with various preparation methods to find one that produces the best-shipped product at the lowest price and with the least labor.
You must also decide which time of the year to ship. Several different ideas about shipping schedules can be considered. Some nurseries ship from fall to early spring, while others ship from spring through fall. Most commonly, perennials are shipped in spring and fall and woody plants are shipped in winter. While this schedule 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 will have to make accommodations to ship during the entire season. More and more nurseries are experimenting with year-round shipping, and doing so with surprising success.
Other factors must also be considered when choosing a shipping season. For example, the climate in your area will have an impact on your decision. If your plants are frozen solid in the winter, shipping them during that season will be difficult. How you grow your plants, too, will play a role. Plants grown in the ground cannot be shipped year-round, whereas plants grown in containers can be. In fact, 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 efforts required to maintain the plants—watering, fertilizing, and pruning—during your non-shipping season. A long delay in shipping may be an economic disaster. If you lengthen the turnover time of a crop, the cost of production, which is based on the cost per square foot per day of the growing area, will skyrocket, often beyond what you could sell the plant for.
It is often difficult to ship plants from one climatic region to another. A nursery in the deep South that is experiencing early spring (at least in comparison to the North) will have trouble shipping to northern gardens that thaw only in late May. Likewise, shipping to or from warmer climates has to be restricted to the summer. Plants should not be shipped when temperatures go above 95°F, particularly since gardeners don’t like receiving plants when it is that hot. I always liked to ship and receive plants when they are in active growth. Opening a mail order box of high-quality plants is like opening a birthday present, and it should be a thrilling experience. When a box is opened to reveal dormant or bare-root plants, some of that thrill will be missing, even if the plants go on to grow very well. Additionally, many homeowners are ill equipped to deal with bare-root plants and so feel uncomfortable dealing with them.
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. Shipping plants that are in tender, new growth to colder zones can be disastrous; as a rule, plants should not be shipped when young as the new growth can be easily damaged or broken.
Once you have gotten the preparation work out of the way, the plants must be assembled or “pulled” for shipping. Most nurseries will start by printing a pull ticket that indicates which items should be pulled. The ticket will also state which items are out of stock or back ordered, assuming of course, that you have a workable inventory. The pulling is usually done in one of two ways, either by individual order or in bulk by plant variety. The plants are then staged (meaning they are gathered temporarily and arranged prior to shipment) in the area from which they are to be shipped.
On shipping day, the plants are prepped (they are bare rooted if necessary) and bad foliage and weeds are removed. The plants are then boxed for shipment. You will always come across plants at the last minute that cannot be shipped for one reason or another (because they are too small, for example, or because there are problems with insects or disease), but the seriousness of this situation can be minimized if the staff pulling orders understands and adheres to the quality standards you have put in place. Having last-minute delays means that you are then faced with more paperwork in the form of back orders, credits, or refunds, depending on how your nursery is organized. All these back orders, credits, and refunds must in turn be recorded in your shipping records. Once the order is filled, the boxes are packed and readied for shipment.
I am always astounded when I learn that most mail order nurseries don’t have a clue as to how much it costs to ship a plant. All nurseries generally see is the actual shipping or carriage costs, and while nursery owners may not actually incur all the costs I outline below, they should always charge the customer as though these costs really were incurred, for one day they may be. The cost to ship an order begins with paying someone to open the mail and should include the cost of fax paper, even of Internet service. The order must next be processed, which will in most cases include entering it in some sort of computer system or database. You now have to include the cost of the time spent entering that data, as well as the costs of both computer software and hardware.
Even at the pulling stage there are a number of costs that should be figured into the cost of shipping. Costs that pile on here include time spent assembling the plants to fill an order, any clerical time spent issuing refunds or credits, and the money itself that is being refunded. Last but not least is the cost of storing the paperwork for each order. You should store that paperwork for a minimum of three years, not only because of tax-related reasons but also because you will need it to answer the questions that customers will surprise you with years after the orders have been filled. Keep in mind that every time you touch an order, the cost of processing it increases. If you are paying your workers an average of $11 per hour, your actual labor burden rate or cost for the employee is probably closer to $14.49 per hour, depending on the benefits you provide. Multiply this more realistic number by the number of minutes per order: $14.49 an hour × 44 minutes (0.73 of an hour) to get a much closer idea of your true processing cost, which is $10.58 per order. This figure assumes that all employees work at peak efficiency at all times, which is obviously not realistic. If you add $10.58 to your additional supplies figure of $1.43, you will see that your average cost of shipping an order is $12.01. How many of these costs did you figure into your shipping charges? And remember that the $12.01 amount does not include the actual shipping cost.
I like to break down each of these operations into how many minutes it takes to complete each task. This gives me a much better idea of how to break even on the shipping charges. Once I know the costs I can determine how small an order I can afford to ship and still make money. The industry standard for minimum mail orders ranges from $20 to $40, but in reality it’s hard to make a profit at the lower end of this range.
Taken from So You Want to Start a Nursery© Copyright 2003 by Tony Avent. Published by Timber Press, Portland, OR. Used by permission of the publisher. All rights reserved. Buy this book in our store: So You Want to Start a Nursery.
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