Has the word “nursery” lost its meaning?

It’s time once again for more of a rant-style post. And this is going to be a long one, as in loooooong with lots of extra o’s. But it’s more than just a rant: it’s also a splendid collection of astute observations, ending with a challenge. And I had better mention that I’m not doing this just because I think it’s fun or like to be negative. It’s more that I think I am asking some very important questions that people ought to stop and think about.

A few posts back, concerning trends in nursery business models and marketing, I posed the question, “is the past the key to the future?” I noted very briefly a number of subjects surrounding this question where the game has changed considerably in the past 50 years; and, not surprisingly, there is much more to be said about how nurseries have responded to these changes, or in some cases failed to respond to them. Most importantly, as we look to the future, one has to assess “what we should do” as a business to succeed and remain relevant and competitive into the future. So having said that, I had better preface this post with an important point. I recognize that everyone has to find their own path to success (or at least try!). So it sounds like I’m trying to tell everyone how to do things, but I realize it would be pretentious of me to assume such a position; especially with my business only in its very early stages, with little going for it that may appear decisively “successful” from the outside. The disclaimer, then, is that these ideas are just that, ideas; and they are my ideas, which means I allow plenty of room for disagreement. Fire away! So, here we go.

Back in high school, when I first began taking an interest in plants, one of my favorite nurseries was a place called Olympia Greenhouses. (I would be thrilled, by the way, to hear that any of my readers remembers this place in its original form!) Olympia Greenhouses was among the last of a dying breed of nursery: the kind that propagated and produced plants on site, and sold them directly to the local community. When I walked into this place, it would be in varying degrees of disarray, with way too many of certain plants than could possibly sell, hundreds of giant houseplants, and a nursery yard going so far back you could get lost in it, with no possible hope of keeping it all tidy and under control. But that was all just part of the fun. You could go in there once a week and find something new—tucked away in a corner, or brought out of production—with each visit. And by something new, I really mean something old. Not the latest and greatest plants, but the one’s we’ve increasingly forgotten, in some cases for the better but often to our own loss.

In about 1996 (I think) this nursery was bought out by an owner (or group?) who was apparently totally incompetent and quickly ran the business into the ground. It soon closed, the greenhouses collapsed and became overgrown with blackberries and eventually alder trees, in which condition it has remained the last time I checked. Oh well.

Today I can count on one hand the number of these old-fashioned production retail nurseries in western Washington that have survived more or less in their original form (that I am aware of!). By far the best known is Flower World in Maltby. Another example (and I haven’t been there in years, so I hope they’re still around) is The Brothers Greenhouses, which is found along Highway 3 between Belfair and Gorst. I stepped in there and almost thought I was back in Olympia Greenhouses—although the selection wasn’t as interesting, the place had the same sort of feel. (They said they also did some wholesale, but it was really tough to tell who their market was—certainly not any of the local retail nurseries I have ever visited in the area.)

To be clear on what kind of nursery I’m not talking about: I can also think of a few nurseries who claim “we grow our own plants;” yet, while they may produce a proportion of their own stock, it’s obvious that they have also brought in plenty of plants from wholesalers such as Monrovia (as if they could hide those green pots!), and lots of bare-root trees and shrubs that they didn’t produce themselves. So they don’t count. Also, I’m excluding from this categorization nurseries that produce many of their own plants and offer some retail sales, yet have another major outlet (usually mail-order) for their plants. These are usually specialty nurseries and include Desert Northwest and a number of other nurseries that continue to do business this way (Raintree, Coenosium, Colvos Creek, Fancy Fronds, etc.)

The nursery industry has changed dramatically over the decades. It now appears that the majority of retail garden centers and nurseries now buy most or all of their stock from wholesale nurseries. For those that do continue producing some of their own stock, this seems to account for a continually decreasing proportion of their sales, with a trend towards producing only a limited variety of annuals with no other plant types represented. While the industry keeps trending in this direction, it’s rare that I see anyone stop to critically analyze the possible benefits and drawbacks that may result from these changes. (One could say that critical analysis in general tends to be severely lacking from the horticulture industry, and this is but one example – oops, did I just say that?)

In fact, I’m to the point of wondering why businesses that don’t produce plants should appropriately be called nurseries. My dictionary defines a nursery as “a place where plants are grown for sale, transplanting, or experimentation.” The use of the word “grown” in this context would appear to suggest that plants at a nursery are meant to increase in size while there. This idea stands in opposition to the usual intent of retailers, which is to buy retail-ready plants from vendors and liquidate them as quickly as possible, and in pretty much the same form. So I guess I have this novel idea that nurseries, to be worthy of the word, should not just sell plants, but they should grow plants. Businesses that have completely abandoned production might be more appropriately called “plant stores.” I realize that’s possibly a subjective point, depending on how much one wishes to stress dictionary definitions; but still, it bears contemplation.

When retail nurseries produced their own plants, that meant the people selling the plants actually had plenty of hands-on experience with the plants. They knew exactly what everything they sold needed to succeed in cultivation, because they had, in fact, grown it themselves. Now garden centers often pride themselves in having knowledgeable employees, yet it’s my observation that this knowledge is based more often on books, the internet, plant tags, and (everyone’s favorite) heresay than on personal experience. These sources of information are potentially less reliable, or sometimes inapplicable to our region, than good old personal observation of plants over time. Unfortunately, most people who work in retail nurseries don’t have sufficient funds or garden space to buy one of each plant offered and try it, nor do they have a chance to watch the plants over a period of time on the sales floor in the same way that they might at a production nursery. The result is that while the breadth of knowledge may be impressive, the quality of knowledge isn’t always adequate. Have you ever wondered why so much plant information circulating today is still just plain wrong, after we should have had decades to figure things out? Perhaps this is partly a result of this shift away from production by retail nurseries and corresponding tendency for many of their employees to lack the hands-on plant experience they need to discern such things. It’s something else to think about the next time you visit a nur – I mean, plant store.

Also contributing to the misinformation problem is the tendency of wholesalers releasing new plants to make definitive statements about their needs or features based on trials over an inadequately short time period or narrow range of climates. How can they really know how big something will get in 10 years? In 20? If it grows 10′ tall at the test garden in California, who’s to say how big it will get in Seattle in the same span of time? 3 feet? 15 feet? Or will it freeze dead the first winter? Now I know that sometimes growers and breeders do a better job than that testing new plants – but it’s still not always good enough to be sufficiently accurate. I have observed that, generally, retail nurseries accept whatever the wholesalers tell them and pass this information on to the customers without bothering about its accuracy. Is that really the best thing for the overall health of the retail business?

In fact, another more subtle phenomenon that has shadowed the shift of retail nurseries away from production is that, increasingly, plant breeders and wholesale nurseries are controlling the market. For a while I had doubts about whether this is true, since common theory dictates that the market is based on the demands of consumers. But if nothing else, I’m certainly convinced that the average nursery retailer has completely lost control, and this does not benefit the gardening public. The retailers should be the experts, and should be leading the way, and deciding what they sell based on what they actually want to sell. They should be able to discern that new plants promoted by plant breeders are not always superior to the old plants, and inform the customers. Instead, they (not without exception, but all too often) just play along with whatever the wholesale reps tell them, compromising their long term potential as a trusted source of garden expertise for their short term profit margin. Related to this, people are forgetting “old” plants that used to be more common and deserve much wider use. For example, Photinia serrulata is a useful, attractive, small evergreen tree that performs perfectly in Seattle, where it lingers in certain older gardens. But I can’t recall ever having seen one at a nursery. If the wholesalers don’t grow it, no one else does either, so people forget it exists. Or they’ll bring a piece of it into the garden center hoping to find someone who can tell them what it is, and none of the employees younger than 65 will be able to identify it, and if anyone wants to buy one, well they’re just plain out of luck because no one is growing it anymore.

SO… what’s the big deal? Maybe you’ve accepted all those trends as just the way things are. This is how it is in all the other nurseries, so why break the mold? But, all these other reasons (and nostalgia) aside, I can add a few very practical reasons why retail nurseries should seriously consider a deliberate return to production, and why I believe the future may, and should, see a reversal of the trend away from it.

Let’s consider for a moment what a retail nursery is paying for when it purchases a plant from a wholesale nursery. One must pay for the soil, fertilizer, and labor that went into its production, for facilities and maintenance, taxes, and (sometimes) for patent rights and water. One must also usually pay to heat greenhouses. You’re also paying for your friendly wholesale nursery representative. And I’m sure we could think of lots more expenses; that was just a quick list “off the top of my head.”

Then — the big one — one must pay for delivery. Even in those rare cases where there’s no visible “delivery fee,” we all know (unless we forget to stop and think about it – I hope not!) that you’re still paying for delivery, since the wholesaler has to absorb those costs somehow. I think we can safely predict that delivery of plants on trucks is not something that will get less expensive in the future. Obviously, producing plants on site eliminates these costs entirely—producing them off site a few miles away, under control of the retailer, reduces them substantially; and still has the side benefit of allowing for better control of one’s inventory vs. being at the mercy of wholesale suppliers.

And then – the even bigger one – wholesale nurseries have to absorb all those costs making only half as much money or less per plant as the retailer. Suppose a wholesaler puts $4.50 (all of the above costs together) into a 1 gallon plant and sells it for $5.00, keeping the remaining $0.50 as profit. In theory, the production retailer (assuming a professionally trained production staff and adequate facilities) should be able to put the same $4.50 into that plant and sell it for… $12? $15? I grant that keeping a sales staff and appealing customer experience adds a bit of additional overhead to the $4.50, but even so, it’s not unrealistic to possibly keep $5 – 6 or more as profit for the same plant!

(By the way – that math in the last paragraph is what we in the specialty nursery business call a trade secret. So, shhhh! Don’t tell anyone! Actually, anyone who has managed to read this far is welcome to it.)

And THENNN, we’re all observing a cultural trend whereby products shipped over long distances are increasingly less “cool” among those who decide what is hip and fashionable, than things produced locally. People want to “shop local” – why not be the first in town to offer locally produced plants?

ANNNND – yeah one more – as long as we’re taking about what people want (imagine that) – and tying into this problem of plant breeders and wholesalers controlling the industry – shouldn’t we be wondering how much longer customers are going to tolerate poorly adapted or just plain lousy patented plants that fail to perform as expected? I’m not saying all patented plants are necessarily lousy, but a surprising number of them are genetically weak or just aren’t bred for the Northwest’s climate. Meanwhile, wholesale nurseries push them into our marketplace at the expense of more appropriate selections. Will there be a backlash? Will gardeners someday start specifically avoiding the latest patented cultivars because they are skeptical of them in general? Who knows? – someday it could happen.

As far as I can tell, the main reason retail “nurseries” and garden centers are not interested in producing their own plants is they have established what they consider to be a successful model of business and would prefer not to change it much. But the time may come when this change may be necessary, and these businesses should be ready. We would all agree that there’s no point in sticking to your guns to the point where you start losing money and losing business to your competition. I’ve heard plenty of other reasons not to explore production, from the cost of heating greenhouses (which you essentially pay twice as much for when purchasing wholesale plants, as spelled out above), to the challenge of finding and training new staff. None of these excuses really holds water. To me, the best — perhaps the only — excuse for retail plant stores not to expand into production is the lack of available space. And even this may not be a workable reason forever, as many nurseries have found that substantially downsizing in coverage is what it has taken to get through our current difficult economy. Hmm, now what to do with all that “extra” space?

I’m not advocating a return to the past just because I happen to like it better. I think it’s partially true that what was unworkable about Olympia Greenhouses was partially its failure to adapt to a changing market at the time (although I also heard rumors of the new owner being a plain lousy and irresponsible boss making numerous missteps with management and staff). We can expect change to continue, and should always be ready to adapt to it.

But here’s one thing I think would actually be helpful to the nursery business: I would like to suggest a return to a gardening culture in which nursery people who sell garden plants are the same people actively involved in breeding, propagating, selecting and producing the best ones, rather than this ridiculous breeder to grower to broker to retailer chain we have now. I believe more than a few positive changes would result from this, all the way from quality of plant material and advice, to employee satisfaction; vastly benefiting horticulture and gardening culture at large. And that is just one reason why we at the Desert Northwest remain firmly committed to propagating and producing all of our own plants here on site. Anyway, this is getting so long, I’ll try to describe exactly what that would look like in greater detail in a future blog post.

In the meantime, just to be obnoxious (wasn’t that one of your New Year’s resolutions too?), I may as well go on labeling non-production “nurseries” as plant stores. If we don’t draw the line somewhere, the word nursery as it pertains to horticulture loses its meaning.

Peninsula Gardens, Gig Harbor, Washington in 2007. A classic example of the “plant store” business model (in their later years at least), they are now out of business.

Derby Canyon Natives, Peshastin, Washington. Although many of their plants go towards restoration projects, and the like; at least they are a grower that sells directly to the public. (I had such a hard time finding a photo of just the sort of nursery I am talking about that this was the closest thing I could think of!)

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17 Comments (+add yours?)

  1. Marigold and the Goatmother
    Mar 02, 2012 @ 16:50:10

    Here, Here! And then there is my pet peeve, and that is so many plants MISLABELED because no one is familiar enough to realize it isn’t what it says it is. Good for you for advocating a return to people selling what they actually grow and know about.
    Maryann in Sequim

    Reply

  2. george
    Mar 02, 2012 @ 17:12:15

    Thank you! I ahve been wondering (aloud at times) “proven” by who? where? for how long? I have avoided patented plants since Fragaria ‘Pink Panda’ – who would slap a fee on a weed? Lost my respect for “valued plant breeders” then. I love the rising prices on these mass produced patented products at plant sellers – I try to remind them that IF i were to buy one i would go ahead and purchase the same plant at a box store for half the price. yet the independant plant sellers complain about the added pressure that multi outlets bring, yet pander to the same colorful pots out front. Enjoy the day-

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  3. Riz Reyes
    Mar 03, 2012 @ 10:25:40

    Thank goodness for growers who still propagate and grow on their plants. You’re right, I think the distinction needs to be clear about what a nursery really is and in our area, start calling these so called “nurseries”, garden centers. Maybe back in the day they were doing production, growing on, potting up and such, but to thrive in retail, you have to buy in as resources don’t really allow for employees to have to care for plant material over an extended period of time.

    We had this conversation at an education advisory meeting at Edmonds Community College. There are people who want to start a nursery. How do we really train them? There’s the growing aspect of being a producer/grower and then there’s the retail/wholesale aspect of it. Those that work in the latter don’t really need any sort of horticultural training if that’s all they’re doing (ie managing a garden center). Then you ask what is it the students really want to do and remind them that they have to make money in the process so support themselves.

    Lots to think about and address as we move forward in our horticultural endeavors, for sure! Thanks for the rant!

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  4. Desert Dweller / David C.
    Mar 03, 2012 @ 11:14:48

    Great points as always. While some trademarked named plants have been good, esp those from the SW desert growers, others not…and I cannot help but to laugh at all the people on twitter or their blogs pimping such wares.

    “Brand” is used to describe such diverse things as Beyonce or some seasonal flower, and rarely are they something that offers much below the surface. No thanks…”meh”. Unlike a quality plant that lives beyond its original planter, or a quality design that improves with age given a caring client.

    I also think that most people like the plant resellers you describe are doing what they do to chase the $ or change for changes sake (shallow), not because they want to offer something better or more appropriate (classic). Either their gimmick works, or it doesn’t…they are business people first, not horticulturists first. Great thoughts you make on buying locally-grown, when an appropriate species to one’s area.

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  5. Loree / danger garden
    Mar 03, 2012 @ 20:04:04

    I completely get, understand, and appreciate this rant. However I feel that your standards for the terminology might be a bit too rigid for the average gardener. And by average I suppose I really mean slightly above average. I suppose the average wouldn’t make a differentiation between Home Depot and a fabulous Independent Nursery.

    For example…the “plant store” closest to my home is Garden Fever in NE Portland. They do not grow their own plants, they order in from Wholesalers. However the staff is knowledgeable and helpful. The inventory is deep and if they don’t have something you want they will order it in for you. They take care of and “grow on” the plants they order. They can advise and answer questions with firsthand knowledge a great deal of the time, I think of them as a nursery. They are in the heart of NE Portland…their space is bigger than you might think but not big enough to grow. I count myself as a lucky gardener that I can dash there in 10 minutes or less when the need strikes. They aren’t a nursery as you define it but they also are more than a plant store (which is how I think of Home Depot, Lowes, etc). What do we call them?

    Then there are the nurseries that grow their plants, or at least most of them. I love these nurseries. They are the Holy Grail…and I am so lucky to have so many close to me. They are Nurseries with a capital N. And unfortunately they are few and far between, especially in other parts of the country, we are spoiled here in the Pacific Northwest.

    Anyway as usual I’ve babbled on and not succeeded in making my point, which is that I think there are three categories and you need to give a little to the retail establishments that really are trying to rise above the Proven Winners type of offerings.

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  6. David R.
    Mar 04, 2012 @ 15:16:54

    Yes. How about what is called a “Full Service Nursery”? It seemed like I had heard that term before. The closest nursery to me(one mile away) grows all their bedding plants. I’m guessing all the woody stuff is brought in. One of the largest wholesale nursery’s in the state is about 2 miles away. They don’t grow anything and only sale to established landscapers. As for my favorite nurseries there are a few down in Austin,TX. One is Barton Springs nursery(about 5 acres) which does grow almost all their stuff. They have a nice selection plants in 4in pots too. The other nursery is the Natural Gardener. They don’t grow anything but carry a good selection of locally grown plants. They tend to buy from local growers who specialize in mostly xeric or organically grown vegetable plants. They also bring in plants from Mountain States(AZ). They do have their own brand of natural soil products both in bulk and bagged. They also have various demo gardens that seem to be family friendly and hopefully educational for the kids. I think I’ve heard it referred to as a “Garden center”.

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  7. David R.
    Mar 04, 2012 @ 17:32:32

    Oh! Forgot to mention “Marigold and the Goatmother” How cool is that! I think I may be a convert. You in the PNW are so cool!!!

    Reply

  8. Ian
    Mar 05, 2012 @ 09:52:49

    Well, sorry it took a while to respond – I posted this, then immediately took off for the weekend, LOL!

    Marigold – yes, mislabeling is another big problem. At this time of the year one especially notices it with witch hazels. Someone in the like of production goofs up and then no one in the whole wholesale/retail chain cares enough to check. Great blog, BTW!

    George, you certainly touched on another issue that a lot of independent garden centers are hotly debating right now – how did we get to the point where independents and box stores are offering all the same branded material but at different prices? And how are you competing successfully when you offer the same plants? And what to do about it? (Then there is the separate question of the quality of plant material itself.) Some are calling an all-out boycott of any supplier that provides anything to box stores. Finding it not quite possible to stay out of this discussion I find myself saying good for them.

    Riz, as I see it, a major challenge that hort. programs face is trying to be relevant to all students in what is becoming in increasingly fractured and specialized “industry” (for lack of a better term). It’s hard to know what to train people for, but I happen to be of the opinion that in-depth horticultural training and business administration courses (which I didn’t take any of – oops!) should be standard even for people who think they might not need it. Because anyone who sells plants retail should gain an appreciation for what goes into growing them, and anyone who isn’t involved directly in the business end of things should have an appreciation for how it works. As for making money doing it, well that’s another can of worms too… plants have been so devalued over time relative to inflation, it’s really a huge challenge to turn a profit selling them now, unless you have a long-established business, and sometimes even then! Then you have bad advice from bankers who don’t understand the business, and it’s almost a wonder more nurseries don’t fail.

    David C, what you describe sounds like the worst kind of example of what I am talking about… we do have a few of those around here and I get the impression that in certain parts of the country, it’s worse; and in others, better. But in general, as you suggest, there is so much room for improvement in how the nurseries undertake the plant selection and production process – which leads me to…

    Loree – you are fortunate to live in the Portland area where (it seems right now, to me) there are a lot more, and better, specialty and production retailers than we have up here. To your point, I would say that it is possible to take either business model and do it well or do it poorly, and anywhere in between; therefore, to call a business a “plant store” isn’t meant as an insult. I could think of a few such businesses up here that only buy stuff in, and do it well, because they don’t just buy based on “what they are used to” or what their wholesale reps talk them into. Then there have certainly been some production retailers that have managed themselves poorly or failed to remain relevant – Olympia Greenhouses under its last ownership was certainly an example of that. Perhaps it was unhelpful of me to devote so much attention to definitions of words, since I am really more interested in examining the business trend towards plant-store-ism and ask whether it has gone beyond the point of making sense in some cases, from a business sustainability standpoint. Because all the other sub-topics I have mentioned in this post – underperforming, patented cultivars, employee knowledge/experience, etc. – come back to this: is the way the business is run really good for its own long term health?

    David, I had always considered the term “full service nursery” (or “full service garden center” to be useful in differentiating oneself from a specialty nursery. Personally I think this is a less preferable business model as it seems to attempt to compete directly with the box stores. Sometimes this is a losing game, but on the other hand, I am aware of many full service nurseries around the country and even here in the Northwest that continue to do quite well. I get the impression that in other parts of the country more growing of your own plants is still done, compared to the Seattle area. All the nurseries you mentioned sound interesting to me and demonstrate that there are a variety of paths to success.

    Reply

  9. Ian
    Mar 05, 2012 @ 09:54:19

    BTW, does anyone know how to convert the format of this blog to a threaded discussion in WordPress? (if it’s possible without switching to one of their paid plans!) Looking at the this post and the last one, you can see why I ask… LOL.

    Reply

    • Loree / Danger garden
      Mar 05, 2012 @ 13:55:35

      I think if you use the black “reply” tag on the left of the comment header (by the name of the person commenting) then you can actually reply in threaded form. If I understand the question.

      Reply

  10. Loree / Danger garden
    Mar 05, 2012 @ 13:58:34

    Ha! Obviously I know very little about WordPress, sorry…I was assuming it worked like blogger and thought maybe you as the author just didn’t see the “reply” button. (Loree keep your mouth shut!)

    Reply

  11. Ian
    Mar 05, 2012 @ 14:07:50

    Hey, no worries – thanks for the suggestion! You’re right though, it doesn’t work in WordPress. I actually think WordPress is a total pain in the butt to use compared to Blogger, but I have had the blog at this site since 2006, and I’d rather not move it now!

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  12. Patti Stoll
    Mar 15, 2012 @ 13:35:09

    Ian, this is a most excellent post. It really clarifies what been niggling at the back of my mind for awhile now. As you know, I have experience from all angles in this business, from grower to retail “nursery” worker, to customer. I’ve been a plant junkie for 35+ years, now, and would take whole days or weekends to go nursery hopping anywhere west of the Cascades. I don’t do this very much anymore, because, well, what’s the point? There are only a handful of big plant wholesalers in the area, so all the plant retailers are buying from the same places. When most of the Seattle-side nurseries have pretty much the same stock as my local Valley Nursery, there’s no sense in taking the time or paying the gas and ferry to go elsewhere. The adventure is gone. “Nursery” shopping has become pretty boring, except for trips to those rare and wonderful small plant grower/sellers, such as yourself and Kelly at Far Reaches.

    I remember my grandmother taking me into the original Lemolo Greenhouses (circa 1950’s), in Poulsbo. They were wonderful! As were the original Bainbridge Gardens, when they had greenhouses at their original location (where they are now, but before they were at Island Center). The owners of those places would come out and greet her and spend time showing her all kinds of new things (she was a regular, good customer). Now, those were places worthy of the name, Nursery! I was always allowed to buy a heliotrope or sensitive plant, or some such novelty, they grew for the kids.

    Having worked for one of the biggest nurseries in Kitsap and watched their struggles, I hear what you are saying about knowledgeable staff. In this day and age, with the corporate midset ruling the business models, the big push is on marketing and sales skills. Delivering a quality product is de-emphasized. Even though that nursery tried to go into their own production, the approach to it was corner-cutting. The potting soil they made was terrible, the cuttings they used were from unidentified plants, often, and they guessed at names, and the care of the young plants was very haphazard, from over to under watering. Their “cost cutting” methods ended up creating huge losses for them.

    For those plant retail centers that decide they want to again be a nursery, let’s hope that they remember what that means. Production is important, yes, but good nurturing and care of the plants must come first, or production will fail.

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  13. Ian
    Mar 15, 2012 @ 20:47:15

    Patti, you certainly have the background to comment on the dark side of plant-store-ism, but as well, your observations would highlight again that either business model can be done well or poorly. It is interesting, but not really surprising, to hear about your experience at that nursery. They always seemed more into big machines and landscape jobs and I think it’s fair to say that for them plants were a means to an end. It also shows how the background of operating under a plant store business model (buy em in, move em out) fails to equip management for the practice of actually growing plants. I guess there is a lesson there for retail businesses who might actually consider going into production for some of the reasons I mentioned: if you aren’t prepared to do it really well, hire someone who can at all costs, and get out of their way! Quality plant production is a very skilled practice that is frequently undervalued by many an out-of-touch plant store owner.

    I actually think of Valley Nursery as a business that manages to do the plant-store business model well, for the most part. Their selection competes with the best Seattle area nurseries and they manage to maintain lower pricing and good quality. (Habitually commenting on this sort of thing is against my better judgment, but I’ll do it just this once, since it’s a compliment!)

    You’ll have to tell me more sometime about Kitsap area nurseries in the 50’s/60’s – I’d love to hear about them.

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  15. Sid Raisch
    Oct 09, 2013 @ 07:27:47

    There is a lot of truth in what you say Ian. Certainly there is not one good business model, and many that are not good at all. The only one that matters is the one that works, and continues to work, which means it evolves as the situation requires. The business is like most others today – too complicated to do everything for everybody. Certainly it is impossible to meet the expectations and requirements that others impose upon us, if not those we impose (often unnecessarily) upon ourselves.

    I must point out that the math you mention has no basis. There is a reason why many growers, retail growers, and retailers go out of business and that is usually because they didn’t figure out how to make the math work. The cost to produce a plant profitably at wholesale and to retail have zero to do with each other. Those numbers are not secret – they are absolutely false. The profit margin at retail is dangerously thin and nowhere near the numbers indicated which make retailing plants look like a no-brainer.

    The Garden Center Group conducts an annual in-depth P&L Study of about 70 garden centers and retail growers in the US and Canada. The average EBITDA profit is less than 4 percent. That is before Interest, Taxes, Depreciation, and Amortization. All said and done there is “on average” nothing left. And surprisingly, retail growers are not more profitable than retailers, and retailers are not more profitable than retail growers.

    Certainly there are exceptions to average in the study because average is a simple equation. These exceptions are the High Achievers and Best Practices garden centers identified each year. Unfortunately there are few companies able to consistently stay in those groups from year to year. Blame that one on the weather, but the real issue is that they are not structured properly to weather the weather.

    May your business grow and prosper as you profitably bring life through plants to the high desert.

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  16. Ian
    Oct 09, 2013 @ 09:50:28

    Hi Sid. Thanks for your comment. It was over two years ago that I wrote this post (it took me a few months to publish it) and I would probably say some things a little differently now.

    Concerning the math, I have observed that grower retailers here in the Northwest – the few we have – don’t charge nearly as much as they could for their plants, and quality retail level branding, labeling, and presentation are often deficient. They seem to miss the concept of value-added pricing. I think this comes down to the common problem of not being able to do both quality production and retail well. Perhaps it is different in other parts of the country. You have certainly seen much more than I have, and I am grateful for your input.

    So I don’t pretend the numbers reflect any current reality common to most nurseries. I am thinking more of a potential/ideal reality. I could still be wrong, and I guess I may find out sooner or later. I certainly get it that retail adds costs – but would need to discuss further what those costs are and how they compare to the lesser costs of doing wholesale. Also, I don’t mind dispensing with certain costs that may be assumed among some retailers, as long as they don’t compromise labeling/presentation and service. To me, attempting to run a full service garden center vs. just a nursery creates a lot of added challenges – having to buy in a lot of product from vendors and staff to keep on top of it all – but then there are certain advantages to being a one-stop shop.

    Sean Hogan, when Cistus Nursery still produced nearly all their own stock (and they still seem to produce more than half), once told me he figures they put about $0.05 into every 1 gallon plant they sell. I suspect he was grossly exaggerating and failing to take many of his costs into account. Or perhaps he was thinking only of the raw materials – soil, pot and fertilizer. I guess I should hassle him about that and see what he thinks now.

    Thanks for the well wishes! I’ll have to address this again someday after a few more years of nursery ownership (we’re in year 8 now).

    Reply

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