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MTAC Meeting November, 2008 MailOrder Gardening Association

MTAC Meeting November, 2008 MailOrder Gardening Association Presented by: Camille Cimino, MGA Executive Director Ken Lane, Chair, MGA Freight Committee Wednesday November 19, 2008 Foreword In this presentation we will: The MGA – Who we are

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MTAC Meeting November, 2008 MailOrder Gardening Association

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  1. MTAC Meeting November, 2008 MailOrder Gardening Association Presented by: Camille Cimino, MGA Executive Director Ken Lane, Chair, MGA Freight Committee Wednesday November 19, 2008

  2. Foreword • In this presentation we will: • The MGA – Who we are • What we do…Our Mission • Our Members…Why we love Direct Mail • Our Metrics • Review recent Outbound Shipping survey results • How to contact us…

  3. “What’s an MGA member to do in Order to Exist 20 Years From Now?”

  4. Who we are and What we do…

  5. MTAC & the MGA • Who we are… • The Mailorder Gardening Association is a member organization for companies who sell gardening products to the consumer via paper catalogs as well as the internet. • We also represent the grower/wholesale segment of the industry • The 3rd Membership Category is our Allied Membership. This segment is represented by any company that provides a service to the cataloger or wholesaler – such as printing companies, gardening magazines, list management companies, PR consultants, shipping companies, etc. We are celebrating our 75th Anniversary in 2009. Our headquarter Office is in Elkridge, Maryland. Camille Cimino has been the Executive Director since 1987. There are presently around 200 member companies with the majority being catalogers.

  6. MTAC & the MGA • Some of our member companies…

  7. MTAC & the MGA • What we do…Our Mission • “To Make Mail Order Gardening businesses the most successful they can be.” This is accomplished by: • Promoting its members and the MGA brand • Educating and representing its members • Protecting the integrity of its members • The MGA sponsors 2 conferences annually which provides a forum for networking, education and making new contacts. Convention brochures as well as Membership Literature, has been distributed to everyone here today. • The Association’s website is www.mailordergardening.com. The site serves a dual purpose: • For Consumers – it is a resource for locating garden catalog companies as well as Hardiness Zone information. There are smart tips for consumers on how to purchase mail order garden products and what to look for and do once you receive them. • There is a Member’s Only Section that contains the results of past recent survey results, as well as demographic information on each member company and much more.

  8. MTAC & the MGA • What we do…we mail Packages!!! • Average MGA company mails is 60,000 packages annually** • Extrapolating this across the membership base provides a range of 1.9mm to 4.0 mm total MGA packages.** ** MGA external research. Estimate based on participation rate and mailer provided volumes.

  9. MTAC & the MGA • What we do…Green Thumb Awards • In addition the Education, we also help promote our member companies. In January 1998, we launched the Green Thumb Awards in order to recognize outstanding new garden products available through paper catalog and the Internet. • Winners, chosen by an independent panel of garden writers and editors, are selected based on their unique qualities, technological innovation, ability to solve a gardening problem or provide a gardening opportunity, and their potential appeal to gardeners. • The award winning companies and their products are featured in news releases and the MGA website. Companies may use the Green Thumb logo in recognition of their receiving the Award. Gardening Magazines and local Newspapers are willing to print articles on these products and their companies.

  10. MTAC & the MGA • Why do we love Direct Mail…it Works!!! • "I received my favorite gardening catalogs the day before we got two feet of snow. The gardening Gods were watching over me!” • “I just received my order today, just as your e-mails stated it would. I'm very happy, not only with the service I relieved from you, but with the USPS person who knew to put it where it would be kept dry. I know this my be a small thing, but in today's world, when someone gives this kind of service, we, the customer, really appreciate it." • “Hi! I just wanted to tell you I received my catalog today and it is gorgeous!!!!!! The colors remind me of last spring and have me pining for another season in the garden.”

  11. MTAC & the MGA • Did you know…Our Metrics MGA Member Companies “Jump” in 2008 – MGA Member First Generated $743 Million+ in Annual Sales during the 12 month period (Nov. 2007 – Oct. 2008) Direct Mail and Internet Sales – promotions of seeds, bulbs, nursery stock, gardening aids and outdoor power equipment. Number of Sales                    Gross Sales                Avg. Order *2006                6,015,637                              $385,121,074                   $64.02 2008                6,840,496                              $461,801,880                   $67.51        Variance          824,859                              $ 76,680,806                                                            13.7%                                           19.9% * January – December 2006 Source: MailOrder Gardening Association, Zed Marketing

  12. MTAC & the MGA • Did you know…Our Metrics Publications – magazine subscriptions and book buyers Number of Sales                    Gross Sales                Avg. Order *2006               12,903,276                             $241,420,296                   $18.71 2008                13,284,125                             $281,431,110                  $21.26 Variance         380,849                              $40,010,814                            8.2%                                           22.9% * January – December 2006 Source: MailOrder Gardening Association, Zed Marketing

  13. MTAC & the MGA • MTAC Communication with our members… • Three MGA Representatives on MTAC • Camille Cimino – Mailorder Gardening Association • Andy Lagendyk – K. Van Bourgondien & Sons • Ken Lane – Hathaway & Lane Direct • MTAC Workgroup 119 representation • MTAC updates at two MGA conferences annually as well as email updates during the year.

  14. MTAC & the MGA • What’s important to our members… • Costs… • Printing, paper and postage • Outbound Freight expenses • People costs… • Commissioned Market Research to quantify the MGA in total • Results on the next slides

  15. Survey

  16. MGA Outbound Freight Survey Details • 21 Wholesale and 110 Regular Member companies were sent survey via email – 58 responses • Web-based to protect anonymity • Three email blasts for survey submission • June 4, 2007 – All members • June 26, 2007 - Reminder • July 17, 2007 – Post Summer Conference Last Chance Reminder • Forty-two questions measuring… • Type of business • Usage • Packaging/Product specs Source: Hathaway & Lane Direct

  17. Section 1: Who are you and what do you ship

  18. MGA Outbound Freight Survey Responses • 21 Wholesale and 110 Regular Member companies were emailed the survey • 131 total companies surveyed • 58 responses (2 via paper response) • Greater than 40% participation (!!!) • Audience… • …Survey spoke to the right people at the right companies. Source: Hathaway & Lane Direct

  19. Survey Questions – Business Channel • Most respondents are Cataloguers or run Catalogue/Wholesale operations Source: Hathaway & Lane Direct

  20. Survey Questions – Business Channel • This translates to 95% are in the sweet spot of shipper targets… • …and 95% are shipping residences. Again, no surprises.. Source: Hathaway & Lane Direct

  21. Survey Questions – What do you sell ANY of? • There is a diverse mix of what products are shipped… Source: Hathaway & Lane Direct

  22. Section 2: Shipping Specs – Volumes, etc

  23. Survey Questions – What do ship in? • Over 80% of respondents are shipping to their customers in BOXES.

  24. Survey Questions – If BOXES, what SIZE? • Almost 70% of respondents ship in boxes not subject to shipper dimensional weight surcharges.

  25. Survey Questions – The average weight of a package shipped is: • The predominance of Gardening Hard Goods drives 71% of survey respondent packages above 5 pounds. • Weighted average is: 11.1 pounds per package Source: Hathaway & Lane Direct

  26. Survey Questions – The amount of packages shipped in 2006 was: • Annual package volumes by respondent vary greatly. • Average per respondent is 60,000 • Extrapolating this across the membership base provides a range of 1.9mm to 4.0 mm total MGA packages.** ** Estimate based on participation rate and mailer provided volumes.

  27. Survey Questions – The Month most packages shipped in is: • Overall, respondents are Spring shippers… • …converse to most mailers Q4/Q5 shipping curves

  28. Section 5: Current Outbound Freight Providers

  29. Survey Questions – Who do you currently ship most with? • UPS is clearly the current shipper of choice • FedEx growing from prior levels • USPS has opportunity for growth

  30. Survey Questions Do you pay a residential surcharge? • My guess is the IDK =Yes • “Yes” estimate is 93%. Source: Hathaway & Lane Direct

  31. Survey Questions Do you pay a fuel surcharge? • Assume Sometimes/IDK =Yes • “Yes” estimate is 90%. • There is an opportunity to negotiate these on behalf of MGA members. Source: Hathaway & Lane Direct

  32. Section 4: Impact on Business Strategy

  33. Survey Questions What would you do if your Outbound Freight Expenses increased by 5%-10% next year? • Let’s face it…rates will continue to go up and members will be forced to do things that are not good for their business • This clearly underscores how critical this issue is!

  34. MTAC & the MGA • How to Contact us… MGA Office: 5836 Rockburn Woods Way, Elkridge, MD 21075 410-540-9830 FAX 410-540-9827 www.mailordergardening.com

  35. Thank You…

  36. Marketing Solutions PO Box 1003 – Litchfield, CT 06759 – (860) 567-5275 www.hathawayandlane.com

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