Pro Discount?

Hap_E(z9 Berkeley CA)June 3, 2007

OK, so after getting harangued for an hour by a pushy supposed pro-garden designer I need to rant and see what other nurseries do for "Professional Discounts."

We are a small specialty nursery that focuses of cacti, succulents and xeric plants. We grow about 95% of our own stock and buy in what we don't have room to grow. We offer a "Professional Courtesy Discount" to landscapers and garden designers, as well as wholesale on some of the plants we grow.

After feeling that we were getting taken advantage by a few people with computer printed business cards... we decided that we would ask for professional credentials and then issue a discount card that they could show to our cashiers to receive their discount. Our minimum requirement was either a C-27 or for garden designers a business license.

I don't think that is too much to ask for, but I just had a "Landscape Designer" harass me that "she had been in business for twenty years and that I had to give her a discount... because she would spend a lot of money with me..." but she does not have a business license or any other credentials other than a business card. The only credential she offered was for me to Google her name and see an article in a local shoppers paper about her.

Am I expecting too much that if you are a legitimate garden designer that you at least get a business license and pay your taxes just like every other small business owner? She was so pushy and annoying that I don't feel I have to offer a discount, but I am curious what other independent nurseries require if they offer a professional discount.

Thanks

Hap

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laag(z6CapeCod)

Most nurseries in my area (massachusetts) require a copy of your vendor's license which, by any other name, is the certificate your state department of revenue gives for any business that resales merchandise in order for them to coolect sales tax on the marked up amount. Any legitimate wholesale buyer would have such a license or certificate.

If Suzy Veteran Designer is a legitimate buyer and reseller, she should not be insulted whatsoever.

It is your decision whether you offer discounts at all.It is up to your descretion who you offer those discounts to. If you can move most of your stock at retail and have a difficult time restocking during the season, I don't know why you would offer any discount. If it helps you move plants that you can replace, then it makes sense as long as it is profitable. But, you have no obligation other than the success of your business.

    Bookmark   June 3, 2007 at 8:22PM
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calliope(6)

Our state requires a service vendors license for landscaping and garden design. It also requires anyone installing woody or perennial stock to have a stock dealer certificate. It isn't required by law for me to ask for a dealer certificate, but I do. If they're legit, they have one and I'm not the only one who does this. If they can't cough one up, then they do not buy nursery stock from me. Or if they do, they not only do not get a discount, they need to cough up their vendor's license, or number and sign the exemption forms or they also get taxed.

I have had customers who flash a vendor's license at me and then expect to buy wholesale exempt. Just having a vendor's license doesn't make it a legitimate wholesale sale. If they are legit, and want your product, then I've never had one who balked at coughing up the credentials. The only ones who have given me grief are the ones whom I found out later were operating under the counter, so to speak. You don't want their business.

    Bookmark   June 4, 2007 at 2:38AM
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donn_(7b-8a)

This is an edgy subject, which has been tested in court in a number of different industries. Courts have steadfastly refused to recognize what they call "classes of business."

Basically, it boils down to this; If a buyer meets your minimum requirements, he is entitled to your wholesale price schedule, whether he is a retailer, wholesaler or plain Jane consumer. In other words, if your minimum order is 8 trays of plants, and the price is $X, it doesn't matter what the buyer is going to do with the plants, he should pay $X.

Sales tax exemption is equally clear. The purchaser must be a reseller, and be registered with the state to collect sales tax in order to earn exemption. In New York, it requires a Certificate of Authority from the Department of Tax & Finance. It further requires quarterly filing and payment of taxes collected.

    Bookmark   June 4, 2007 at 6:15AM
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gardengal48

I am not sure what requirements might apply in other areas, but in WA state tax-exempt sales (which include most professional businesses purchasing plants at a discount and reselling them to clients) is monitored closely by the state department of revenue and appropriate documentation to support these sales is required by law. That includes a form which must be filled out by the business with the licensed name and contact information, the type of business, how the materials purchased are intended to be reused (ie. resale) and most importantly, the business's UBI number (Unified Business Identifier). This immediately eliminates any unlicensed "businesses". And there is an expiration date on these forms as well - they are only valid for a limited period of time and must be refiled once that period has expired. These are subject to audit and without these forms as proof, your business may be subject to the uncollected sales tax on these sales as well as stiff penalties.

A "courtesy professional discount" is just that - a courtesy. You are under no obligation to extend any type of discount. This is a quite different situation from selling wholesale, which may or may not apply in your specific situation. How you monitor who is to receive this discount is up to you and any documentation you may require to support this professional courtesy is also under you discretion, however I would certainly check with your local taxing authority for whatever documentation they require to support tax-exempt sales. At my retail nursery, the discount is minimal - we are in the primary business of serving the gardening public, not the landscaping industry - and it comes with the understanding that it is entirely self-service. No nursery sales staff is expected to suggest or even locate specific plants - they are there to help the public. If you are in the business professionally, you should be able to accomplish this very simple task on your own.

Many wholesale nurseries in my area require both the above information as well as proof of a retail nursery license. This is to eliminate the fly-by-night landscape operations that simply want to buy cheap but do not buy in quantity or otherwise take up the wholesaler's time for little return. My business license as a designer has such an endorsement so that I am entitled to buy wholesale directly. Not all wholesalers require this added feature, however.

    Bookmark   June 4, 2007 at 9:07AM
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jspece(Josh - z4 IA)

I don't think you are wrong, here. That is your policy...your business, you decide the rules!

A bit off tangent...being a nursery owner, I get ticked at the wholesalers who sell to the general public or "co-op" orders. I don't necessarily blame the people ordering, but the seller. But, I've also heard people tell how they just made up a business name and were allowed to buy.

    Bookmark   June 4, 2007 at 6:29PM
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marcinde(7)

You're right, she's wrong. California is a tough, tough state to work in. Why give her an edge if she won't play by the rules?

Dave

    Bookmark   June 5, 2007 at 7:52AM
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Hap_E(z9 Berkeley CA)

Thank you everyone for all the feedback.

I won't sell wholesale without a valid resale certificate on file, California has strict rules about collecting sales tax and it is enough headache every quarter as it is, I have no intention of getting on their audit list. Most of our Pro buyers have no problem when we ask for credentials, though we have had to deal with some that seem to think a discount is their right, even if they have nothing to show that they are professionals. But before the other day I never had someone demand that they qualified and bought wholesale "everywhere" and didn't even have a business license, let alone a resale certificate.

We offer the Pro discount mostly because the other local nurseries do and it is expected in our market. I do approach it with Gardengal48's perspective, that the Pros should be self-reliant and not take the level of customer service that retail customers take, however since we are a speciality nursery and carry non-standard plants, we do assist with getting them up to speed with what the special cultural needs like drainage and sun requirements of our plants. It takes too long to grow a specimen cacti or tree aloe to let them go without letting everyone know how to take care of them. I don't want my Aloe dichotoma that I raised from seed and years later are finally looking like space alien trees to be planted in heavy clay and rot out the first winter rain...

Thaks again,

Hap

    Bookmark   June 5, 2007 at 12:57PM
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thistle5(z7 VA)

I work at a garden center, not a nursery. For all our customers, we have a 'garden rewards' program, $9.95/yr (not a calendar year, from March 31st to March 31st), you get a 10% discount on plants, furniture, fountains, etc. & 5% on soil, mulch & stone. For pros, if you fill out an application, submit your business card & license, we waive the $9.95 fee, when your purchases go past the $2500 mark (I think), the discount amount is increased. This weeds out the onetime buyers or those who are only tangentially in the landscape business.

Some pros come in, select & load their own material, place orders for large quantities, while others need almost as much 'hand-holding' as regular customers-I can't believe some of these guys are actually landscapers, because sometimes, they're clueless!

Our prices are higher than the big box stores, but our service level is also several notches above-all of our customers get treated equally well, whether they're buying a 6 pack or getting their whole garden installed...this is how I can just smile when the customer says, 'well, I can get it cheaper down the road...'

    Bookmark   June 5, 2007 at 5:15PM
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yert

I own a retail garden center in northern California. Why offer any discount? If the quality of your offering are good enough they will buy anyway. It's hard enough to get the type of mark-up necessary to run a business why cut into the profits with discounts.

Maybe others have had a different experience but I avoid the landscaper business and stick with my retail customers. When things are slow its always a temptation to encourage any business including giving discounts to landscape professionals. More trouble than its worth.

    Bookmark   June 30, 2007 at 11:02AM
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watergal(z6/7 Westminster, MD)

Hap, I used to work for a local nursery chain (about 20 locations in a couple states around the Washington, DC area). They only require a business card to get a 20% contractor's discount, but the contractor must submit the card with a form and get pre-approved by corporate office and put on a list. I'm about to go through that from the other end for my new business to get my discount.

This chain is "self-serve" and has good prices and decent quality, but not high-end, independent specialty by any means.

My personal opinion is that anyone who is offended by providing credentials is NOT someone you wish to bend the rules for. They are probably operating illegally or immorally and are likely to be a PITA in other ways to you later on. If you have specialty stuff, and they need it badly enough, they'll either scrounge up real credentials or pay retail like everyone else. Stick to your guns!

    Bookmark   June 30, 2007 at 9:18PM
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jspece(Josh - z4 IA)

More trouble than its worth.

Trey, do you think a minimum purchase amount would make it more worthwhile? Say, the client needed to buy at least $250 worth of plants at a time to receive the discount?

    Bookmark   July 1, 2007 at 11:09AM
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yert

It depends on how hard it is to find the plants that you are selling. It sounded like Hap has a small specialty nursery which would generally have plants that are not always available elsewhere. If thats the case then you need to get a premium for your plants and I wouldn't offer a discount. I would however offer anyone a discount over a certain amount, retail customers included. Every region is different but here in northern California starting at 1000 dollars we can talk about a 10% discount. There are plenty of re-wholesale and box stores around here to keep the landscapers happy.

When they come in our store its because they can't find what they are looking for elsewhere. So they will pay a premium and they know it.

Here is a link that might be useful: The Blogging Nurseryman

    Bookmark   July 31, 2007 at 5:10PM
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txjenny(z8 TX)

I'm a garden designer in Texas, and I have a DBA, sales tax & use number and a nursery/floral certificate from the Dept. of Agriculture. I buy wholesale from a wholesale nursery where you have to have the credentials to even shop there in the first place, and I have several other nurseries that offer "landscapers' discounts" anywhere from 10-20%. They do require copies of my nursery/floral certificate and my sales tax & use number.

That woman is crazy and self-absorbed to think she can just say she's a designer and expect a discount. Good for her that she can get the work without the credentials and apparently paying taxes, but if she expects any kind of discount she's gonna have to cough up the papers. That's what it means to play with the Big Kids. Hold firm, don't cave, and feel free to open your Can of Whoop A**, as we say in Texas!

Jenny

    Bookmark   August 1, 2007 at 9:28PM
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