New Pay By Scan Program Reduces Risk for Retailers

BFG Logo

The concept of pay by scan, in which growers ship plants to stores and don’t get paid until they sell, is, to put it mildly, heartily disliked by growers. In this model, growers assume all the risk — trusting that the store will properly take care of and display their perishable product all season. Some operations hire employees themselves to do this to protect their product.

But the unpopular concept has taken a turn for the better in a program offered by BFG Supply Company, one of the largest horticultural suppliers in the U.S. In fact, the program, called Grower Stock-Up, is so well liked among the 24 large growers who participate that not one has ever left it. This summer, BFG tested the concept for the first time with a retailer, Malmborg’s Garden Center and Greenhouse in Rogers, Minn., and is now rolling out the Retail Stock-Up program.

While the Stock-Up program’s chief benefits — making sure inventory is always available when needed and improving cash flow — are of great advantage to growers, they promise to be even more of a boon to independent garden centers.

“We asked ourselves how we could make it easier to do business with us,” says Rob Glockner, president and CEO of BFG. “We asked, ‘How do we make sure our customers have what they need when they need it? How can we make them more efficient? And how can we help them with their cash flow?’”

Glockner points out that traditionally, distributors buy inventory, put it in the warehouse and wait for the customer to call. He and his staff began to question that model and decided to do something different.

“We said, let’s work with these key customers of ours by taking our inventory and putting it on their premises. We own it, and as they use it, we’ll bill them for it. We kind of treat it as an extension of the BFG warehouse,” Glockner says.

How It Works

Currently, the Grower Stock-Up program is primarily for chemicals and fertilizers, although more products are added all the time. BFG’s information technology department designed a web-based computer system that interfaces with a scanner, which is provided to participating growers. Each grower is set up on the system with his own account and login, and he sets minimum and maximum inventory levels of the products he needs.

“We go in and label their shelves with bar code labels, and then as they scan inventory out, it decrements the amount. As soon as it hits a minimum (and it’s all real time), it hits our system and creates a transfer. We transfer more inventory to their location so they can always maintain their stock levels,” Glockner says. “It saves growers a lot of time, because they don’t have to have someone checking the inventory all the time. The whole process is automated. They have what they need when they need it, seven days a week, 24 hours a day. We added features where different people have different logins in the scanner, so you know who took what out.”

An additional benefit is the ability to assign the product to a crop, so a grower can track the quantity of chemicals and fertilizer that are used on that crop, along with the cost and when it was applied. Glockner says then BFG reps can work with growers to adjust their minimum and maximum inventory levels over time to really zero in on what they need so it is always on hand.

A Grower’s View: Efficiency Is The Biggest Benefit

Steve Mulder, co-owner of Grand Flowers in Wayland, Mich., has used the program for nearly four years.

“I love it,” Mulder says. “The main advantage to me is you just don’t run out of chemicals. In the past, I would pre-order everything — you have to make an educated guess and figure out what you might need. But then I’d run out and say, ‘I have three more [greenhouses] to go this week, and I’m out of chemicals and it’s a Friday. This way, I always have them.’”

For Mulder, the efficiency is the biggest benefit. “I never have to send anyone out to get chemicals anymore; they’re just always on hand,” he says. I used to say, ‘I’m going to use this one today,’ and then realize I was out of it. Then you have to apply one that may not be as effective just to get one on. I will always use a chemical, regardless of cost, if it works. If it helps quality, I do it. So I’d say the biggest benefit is that the chemicals are always on hand. The second benefit is that you don’t pay for it until you use it.”

Program Alleviates Risk, Aids Cash Flow

Because BFG owns all the product until it is used, it alleviates the risk of a grower overestimating the quantities needed and being stuck with extra, unused inventory. In addition, the program helps with cash flow, since a large, up-front purchase is not necessary.

“It does help [customers’] cash flow,” Glockner says. “We have 9,000 active customers, so we take our inventory and put it there. They don’t pay for it until they use it. If they’re long on inventory, we’ll pull it out and put it somewhere else so they don’t get stuck with it. But they will have the product when they need it — at night or in the middle of spraying — but they don’t have the risk associated with getting through a season and having a room full of chemicals that’s tying up all their cash. We may put it with another grower who needs it or put it back in our inventory and wait until someone else needs it.”

Glockner says the program makes the most sense if the customer has a certain volume of chemical and fertilizer needs. “If you’re a smaller grower and don’t use much of these products, it doesn’t make sense to set it all up,” he says.

“The program creates a lot of efficiencies throughout the whole supply chain and reduces a lot of redundancy,” Glockner says. “We eliminated all that to help our customers save money and make it easier to do business with us. We have truly become more of a partner.”

“No Downsides”

Mulder, who grows spring annuals and fall mums on 6 covered acres and 5 outdoors, says he can’t think of any disadvantages and would definitely recommend it to other growers. “You might pay a little bit more for some of the chemicals, but for me, I would never go back to the other way,” he says.

He keeps the scanner gun in his office; right now he and his assistant grower are the only ones that can scan in products. Employees write down what they use for the day in a book in his office and Mulder scans them in at the end of the day.

“Once a month, a BFG rep visits to double check everything because sometimes you forget to scan,” Mulder says. “He’ll reinventory everything just to make sure all the numbers are correct, and if we missed anything, it’s added to our invoice.”

Mulder says every year a few more items are added to the program.
“I can purchase Anderson injector parts, which is nice. Before, I’d have to order and wait a few days, but now I’ve got them in the program,” he says. “Also, I get my EC test kits. I don’t use their masks, but you can also buy spray masks, filters, hoses and water breakers.”

Mulder points out that it’s still possible to take advantage of sales and early-order discounts. “Sometimes there are programs where you get special deals, for example when Syngenta does their big push for early chemical orders. Anything like that I’ll buy ahead of time, so I still get the cheaper price on that,” Mulder says. “So that’s already in my inventory. I still scan it out, but I don’t pay for it. If I run low, they’ll just send new in. You don’t pay for it until it gets into BFG’s inventory.”

Glockner says the Grower Stock-Up program is entering its fourth year and most of the largest growers in the midwest are participating.

“We have 24 growers right now and will probably double that in the next year or two,” he says. “And on the retail side we’ll probably do more than that because it’s even more applicable.”

New Opportunity For Retailers Helps Level The Playing Field

Glockner says he believes the Retail Stock-Up program is a first for independent garden centers. While the grower program focuses primarily on chemicals and fertilizers, the retail program includes any hard goods you would find in a garden center. Instead of the scanner system used in the grower program, the retail program is tied to the garden center’s POS system, so inventory is scanned out as the customer purchases it, making manual scanning unnecessary.

“I don’t think they’ve ever had a program like this before, especially on the hard goods side. Big boxes do it, but it’s our inventory sitting on the shelf until they scan it out. It’s a great opportunity for them, allowing them to keep inventory on the shelf all the way through the season. This way, if you get near the end of the season and you’re wondering if you should hold off on buying more inventory, you don’t have to worry about getting stuck with it,” Glockner says.

“Because we have 12 branches and all the volume we do and all the customers we have, we’re not typically going to get stuck with that inventory. We’ll pull it out as the season winds down and reduce their inventory with their permission, working with them and finding a new home for it. This is where we can truly add value as a distributor.
“What we’re finding is that they’re saying, ‘It’s too good to be true. What’s the catch?’ There is no catch.”

Glockner says the way it works is simple. “You or I could set up an independent garden center. BFG would fill our shelves, and as we scan it out and the customer pays us for it, we turn around and pay BFG. It’s a great cash-flow model. And you don’t have to do inventory every weekend,” he says.

BFG tested the Retail Stock-Up at a new store Malmborg’s was setting up. “We worked together and tweaked the system,” Glockner says. “And now they’re taking it to their other locations because they liked it so much. As a result of seeing how well it worked and making sure we could deliver on it, which we did at Malmborg’s, we’re now comfortable rolling it out to other independent garden centers, and that’s what we’re in the process of doing.”

According to Glockner, four or five garden centers are signed up currently and BFG is in conversation with an additional 15 to 20 retailers.

“This is brand-new business for us,” Glockner says. “We never did lawn and garden. When we bought Wetsel [in 2011], we took that product line and are moving it west. For us, it’s great with the incremental sales. For our customers, it’s great because it adds a lot of value — ease of use, having inventory when they need it, saving labor of counting inventory and it’s a great cash flow model.”

Mobile App Allows Ordering On The Fly

The two Stock-Up programs are part of BFG’s overall strategy called Virtual Purchasing Assistant. The third part of that strategy is a mobile app for the iPhone and Android that provides the ability to place an order on the fly. Customers do not need to be enrolled in either Stock-Up program to participate.

In short, the user scans the barcode of the product they need and an image and description of the product pops up along with customer-specific pricing. The user enters the number of units and the order is shipped from BFG on their next delivery day. It’s also searchable by keyword, phrase or item number.

“Anybody can download the app, and it allows you to reorder any of the 12,000 items we stock right on the floor,” Glockner says. “You can place the order while it’s top-of-mind. Keep adding to the cart all day and then you hit the button at the end to place the order. It also reduces the chance of error because you’re scanning the bar code of the exact product and we send confirmation.”                                                                           GG

Leave a Reply

2 comments on “New Pay By Scan Program Reduces Risk for Retailers

More From ...
crider-rd2-internal_Rough-Brothers_featured

July 1, 2015

Rough Brothers Is Acquired By Gibraltar Industries

RBI Solar Inc., Rough Brothers Manufacturing Inc. and affiliates have been acquired by Gibraltar Industries, a manufacturer and distributor of products for residential and industrial markets, for $130 million. Capitalizing on its 80 years of design-build experience and leadership as the largest greenhouse manufacturer in North America, Ohio-based RBI has established itself during the past five years as North America’s fastest-growing provider of photovoltaic (PV) solar racking solutions. The transaction will enable Gibraltar to leverage its expertise in structural metals manufacturing and materials sourcing to meet global demand for solar racking solutions. The company also announced that it anticipates its second-quarter 2015 financial results will be in line with its previous expectations. “Acquiring RBI is an important step in the transformation of Gibraltar into a company with a higher rate of growth and best-in-class financial metrics,” says Gibraltar CEO Frank Heard. “This acquisition directly aligns with key end markets and product platforms […]

Read More

June 30, 2015

Opportunities Abound For Women In Horticulture, Says Dosatron International’s Lela Kelly

My love for horticulture goes back to my grandparents who were farmers in upstate New York. My family’s involvement in agriculture left a lasting impression that has spanned decades, and still drives my passion for our industry today. I started my career in horticulture when I owned a greenhouse, nursery and garden center in Sayville, Long Island, N.Y. We specialized in ground cover production, later branching out to producing perennials and bedding plants.     I then went onto wholesale hard goods distribution. In the 1980s, I was the first woman salesperson on Long Island. What an eye opener that was! New York is a very special place, different from anywhere else in the country. You cannot imagine how difficult it was walking into greenhouses and nurseries as a woman, in a man’s world. Luckily, I grew up in New York City in an Italian family, who taught me great […]

Read More
Medal of Excellence Award

June 30, 2015

Get To Know The 9 Variety Finalists For Editor’s Choice And Industry’s Choice Awards

Greenhouse Grower‘s Evening Of Excellence reception is rapidly approaching. Here, you can learn more about the varieties that are finalists for the Medal Of Excellence Editor’s Choice and Industry’s Choice Breeding Awards. Thank you to the 2015 sponsors of Greenhouse Grower‘s Medal Of Excellence Awards, Landmark Plastic, Nufarm and Stockosorb. Editor’s Choice Asclepias ‘Monarch Promise’ (Hort Couture) Basil ‘Balsamic Blooms’ (EuroAmerican Propagators) Celosia ‘Dragon’s Breath’ (Sakata Seed) Dianthus Jolt Series (PanAmerican Seed) Salvia Grandstand Series (Green Fuse Botanicals) Scabiosa ‘Kudos Pink’ (Hishtil Nurseries) Industry’s Choice Basil ‘Balsamic Blooms’ (EuroAmerican Propagators) Bidens BeeDance Series (Suntory Flowers) Celosia ‘Dragon’s Breath’ (Sakata Seed) Dianthus Jolt Series (PanAmerican Seed) Lobelia ‘Starship Deep Rose’ (Kieft Seed) Vinca Valiant Series (PanAmerican Seed)     Join us Monday, July 13 in Ballroom 2 at the Columbus Convention Center to find out which varieties will receive the coveted awards. The reception begins at 5:15 p.m. and the ceremony […]

Read More
Latest Stories
crider-rd2-internal_Rough-Brothers_featured

July 1, 2015

Rough Brothers Is Acquired By Gibraltar Industries

RBI Solar Inc., Rough Brothers Manufacturing Inc. and affiliates have been acquired by Gibraltar Industries, a manufacturer and distributor of products for residential and industrial markets, for $130 million. Capitalizing on its 80 years of design-build experience and leadership as the largest greenhouse manufacturer in North America, Ohio-based RBI has established itself during the past five years as North America’s fastest-growing provider of photovoltaic (PV) solar racking solutions. The transaction will enable Gibraltar to leverage its expertise in structural metals manufacturing and materials sourcing to meet global demand for solar racking solutions. The company also announced that it anticipates its second-quarter 2015 financial results will be in line with its previous expectations. “Acquiring RBI is an important step in the transformation of Gibraltar into a company with a higher rate of growth and best-in-class financial metrics,” says Gibraltar CEO Frank Heard. “This acquisition directly aligns with key end markets and product platforms […]

Read More

June 30, 2015

Opportunities Abound For Women In Horticulture, Says Do…

My love for horticulture goes back to my grandparents who were farmers in upstate New York. My family’s involvement in agriculture left a lasting impression that has spanned decades, and still drives my passion for our industry today. I started my career in horticulture when I owned a greenhouse, nursery and garden center in Sayville, Long Island, N.Y. We specialized in ground cover production, later branching out to producing perennials and bedding plants.     I then went onto wholesale hard goods distribution. In the 1980s, I was the first woman salesperson on Long Island. What an eye opener that was! New York is a very special place, different from anywhere else in the country. You cannot imagine how difficult it was walking into greenhouses and nurseries as a woman, in a man’s world. Luckily, I grew up in New York City in an Italian family, who taught me great […]

Read More
Medal of Excellence Award

June 30, 2015

Get To Know The 9 Variety Finalists For Editor’s …

Greenhouse Grower‘s Evening Of Excellence reception is rapidly approaching. Here, you can learn more about the varieties that are finalists for the Medal Of Excellence Editor’s Choice and Industry’s Choice Breeding Awards. Thank you to the 2015 sponsors of Greenhouse Grower‘s Medal Of Excellence Awards, Landmark Plastic, Nufarm and Stockosorb. Editor’s Choice Asclepias ‘Monarch Promise’ (Hort Couture) Basil ‘Balsamic Blooms’ (EuroAmerican Propagators) Celosia ‘Dragon’s Breath’ (Sakata Seed) Dianthus Jolt Series (PanAmerican Seed) Salvia Grandstand Series (Green Fuse Botanicals) Scabiosa ‘Kudos Pink’ (Hishtil Nurseries) Industry’s Choice Basil ‘Balsamic Blooms’ (EuroAmerican Propagators) Bidens BeeDance Series (Suntory Flowers) Celosia ‘Dragon’s Breath’ (Sakata Seed) Dianthus Jolt Series (PanAmerican Seed) Lobelia ‘Starship Deep Rose’ (Kieft Seed) Vinca Valiant Series (PanAmerican Seed)     Join us Monday, July 13 in Ballroom 2 at the Columbus Convention Center to find out which varieties will receive the coveted awards. The reception begins at 5:15 p.m. and the ceremony […]

Read More
lighting feature

June 29, 2015

Customizing Crop Foliage Color With LEDs: Red Leaf Let…

In the first of a four-part series highlighting the multiple uses of light-emitting diodes (LEDs), researchers share how end-of-production supplemental lighting with LEDs enhances red leaf lettuce color prior to harvesting and shipping.

Read More
LuxFlora logo feature image

June 29, 2015

Luxflora Wants To Create A Lifestyle Movement

A new organization for women in horticulture plans to take on some of the industry’s toughest marketing challenges by promoting the use of flowers and plants in everyday living.

Read More
window flower boxes

June 28, 2015

The Horticulturist And The Decorator

Allan Armitage tells shares a story about a horticulturist and a decorator to illustrate why gardening and decorating are not jobs; they are simply meant to bring pleasure.

Read More

June 28, 2015

Keep Your Cool In The Greenhouse

Summer is in full swing, and that means growers need to worry about protecting plants and greenhouse employees from brutal temperatures. No sweat! These product manufacturers have offerings to help beat the heat.

Read More
Feature image The 2015 Perennial Plant Of The Year, Geranium x cantabrigiense ‘Biokovo.’

June 27, 2015

Perennial Plant Association Wins The 2015 Excellence In…

With its emphasis on education and its Perennial Plant Of The Year program, the Perennial Plant Association boosted the popularity of perennials and helped make it the vital category it is.

Read More
Prewashing surfaces and produce can reduce debris in wash solutions.

June 27, 2015

Keeping Your Greenhouse Fruits And Vegetables Safe: San…

The last article in the four-part food safety series highlights sanitation training, policies and protocols to maintain for an effective and successful food safety program.

Read More
cannabis, marijuana plant

June 27, 2015

Concern Grows Over Unregulated Pesticide Use On Cannabi…

As most growers know well, the federal government regulates all insecticides, fungicides, herbicides and other commercial chemicals used on agricultural crops. Therein lies the problem with use of chemicals on cannabis crops – so far, the feds want nothing to do with legalized marijuana. According to “Concern Grows Over Unregulated Pesticide Use On Cannabis,” a June 17 article on the National Public Radio (NPR) network by Agribusiness Reporter Luke Runyon, the lack of regulated chemicals for cannabis has left growers to experiment on their own. “In the absence of any direction the subject of pesticide use on the crop has just devolved to whatever people think is working or they think is appropriate,” said Colorado State University Entomologist Whitney Cranshaw in the NPR report. “Sometimes they’ve used some things that are appropriate, sometimes unsafe.” Denver officials held tens of thousands of marijuana plants earlier this year due to safety concerns, but […]

Read More
Petunia-cultivarsSelecta4CMYK

June 26, 2015

Selecta Klemm’s ‘Night Sky’ Wins Fleu…

Fleuroselect, the international organization for the ornamental plants industry, announced that the FleuroStar Award 2015/16 was given to petunia cultivar ‘Night Sky’ from Selecta Klemm. Andrea Dohm, director of breeding and research and Antonella Capo, breeder of ‘Night Sky,’ accepted the prize from Fleuroselect President Herman Hamer, FleuroStar Committee Chairman Heike Gronemann and Secretary General of Fleuroselect Sally van der Horst. The winner was announced at the Green Inspiration Event on Thursday, June 11 in Bleiswijk, Netherlands. The new networking event is organized by the Dutch media agency TuinbouwCommunicatie in cooperation with Fleuroselect. Selecta Klemm’s ‘Night Sky’ was competing against Begonia tuberhybrida F1 ‘Nonstop JOY Yellow’ (Benary), Bidens hybrida ‘Beedance Painted Red’ (Moerheim New Plant) and Osteospermum ecklonis ‘Serenity Blue Eyed Beauty’ (Florensis). ‘NightSky,’ The Rising Star In Garden Centers ‘Night Sky’s White spots on the dark-violet flowers look like an ever-changing star constellation. This cutting-raised newcomer is easy to grow and […]

Read More
Figure 1. Pak Choi grown in a deep plug tray on a flood and drain bench.

June 26, 2015

The Intrigue Of Edible Petiole Crops For Hydroponic Pr…

In a twist to traditional field production, experiments with petiole crops Pak Choi, kale and Swiss chard determine their suitability for hydroponic production systems using plug trays.

Read More

June 25, 2015

Berger And Theriault & Hachey Peat Moss Form Strate…

A strategic alliance between Berger and Theriault & Hachey Peat Moss allows Berger to continue to meet its customers by ensuring the continuity of its Baie-Sainte-Anne and Bay du Vin facilities for the next 40 years.

Read More
Carol Miller

June 25, 2015

Anatomy Of How A Garden Retail Business Deal Is Made

For the regional chain SummerWinds, a clear-eyed assessment of suppliers is needed for both to succeed in a competitive market.

Read More
Syngenta Vegetable Trial Overview

June 25, 2015

Vegetable Trials Test Variety Adaptability In Contain…

How do crossover varieties normally grown by fresh market farmers, and now available to home gardeners, perform in patio containers? Vegetable container trials at Syngenta Flowers show surprising results.

Read More
Feature image The 2015 Perennial Plant Of The Year, Geranium x cantabrigiense ‘Biokovo.’

June 25, 2015

Perennial Plant Association Names Six Scholarship Winne…

The Perennial Plant Association awards six scholarships for horticulture students to attend its July perennial plant symposium, plus a stipend of $1,000.

Read More

June 24, 2015

Perennial Container Combos And New Intros Shine At 2015…

Despite a rainy start to the day, more than 300 perennial enthusiasts showed up at 2015 Darwin Perennials Day to see the latest perennial introductions first-hand and connect with some of the best suppliers in the business.

Read More
2015 Readers' Choice

June 24, 2015

The 2015 Readers’ Choice Finalists Up Close And P…

You’ve narrowed the Readers’ Choice Finalists down to top picks in the Annuals, Perennials and Best of the Rest categories. Now it’s time to pick the overall winner. Here’s a closer look at the three finalists to help you make your choice. Then join us during Cultivate'15 at Greenhouse Grower's prestigious Medal of Excellence reception on Monday, July 13, where we will reveal the winner.

Read More