My friend Angela at Garden Bliss asked some questions of me in the comment section of a recent Garden Rant on Scotts Miracle-Gro support of the GWA Garden Writers of America. She wanted to know if independents garden centers have a co-op that could buy organic fertilizers and sell them at a price that is comparable with what Home Depot sells Scotts Organic Choice Lawn Food for.
Angela's comments concerned how she had bought a bag of Scotts Organic Choice Lawn Food at Home Depot at a price that the local independent garden center couldn't match. Her point is that if she can buy a organic product that is produced by Scotts at a low price why not buy it? Is she suppose to ignore, what in her eyes is a quality product, just because its produced by Scotts and sold in Home Depot? Shouldn't we be supporting this chemical company in its efforts to supply the world with its organic products, weaning them of their synthetic products. She asked if the independent nurseries had a co-op that could produce an equal or better product for the same price.
There are nursery co-ops. One of the biggest, and the one I am most familiar with is 600 member Master Nursery Garden Centers. I had been member of this organization in the past. They do offer their own brand of products as well as central billing which helps independents get a better price on its products. There is also the GCA (Garden Centers of America) which I am not as familiar with.
To put this 600 member buying power in perspective the Home Depot has 2,234 stores. Over three times the number of outlets. When The Home Depot goes to Scotts and asks for a deal do you think they get one? I would suggest that with that number of stores the discounts would be deep. Add Lowes, K-Mart, Wal-Mart, and the rest, and you can see the chain stores are a big portion of the business Scotts does. Why would an independent even consider carrying Scotts products under those circumstances?
Here is how it works. If we order one pallet of planting mix (50 bags) we pay one price per bag. If I buy three pallets per load I get a better price. The discounts continue as you buy more and more pallets. I might have a delivery every two weeks during spring of maybe 10 pallets per load. During that same moment in time the 2,234 Home Depots are receiving 10 pallets or more every week at each store! You do the math. I would guess I am way underestimating the amount they receive. Scott's offers big discounts to big buyers.
This is why most independents carry something different than Scotts products. I do know that many nurseries carry Scotts with the assumption that while they might not make as much per bag as Depot does , it beats having the customer go elsewhere to buy. Think about it, if the independent wants to sell Miracle-Gro at the same price that Depot sells it for the independent may have to price it FOR LESS than they can buy it for. Yes, its that crazy! In many cases we can't buy it for what the box sells it for. The same for plants. My post on redwood trees and Leyland Cypress at Costco is a great example. They we're selling the plants for less than I could buy them for. Of course the quality of the trees being sold is not the quality we would carry, but the buying public doesn't know about that. They see big redwood trees at amazing prices. They don't see crappy soil, forced growth with high nitrogen fertilizers, no watering while sitting in the warehouse, etc. They just see an amazing deal!
As far as nurseries lowering their prices because of bulk buying of organics, its not going to happen. It's not so much the price of organic products thats the problem, but rather the freight charges incurred in the delivery of the product from warehouse to store. Remember that 10 pallets of material that I buy every two weeks in the spring? The freight charge to get it here is picked up by us. Either in the pricing of the product to us, or in a flat delivery fee tacked on the end. As a matter of fact it's quite trendy these days for suppliers to tack on a surcharge during â€œthese unusual spikesâ€ in gas prices. They say that as soon as gas prices fall they will get rid of the surcharge. Yea, right. Freight charges are eating away at the slim profits we make. Any extra savings in bulk purchasing is eaten up by the freight charges.
There is another problem for the small independent. Where to store the pallets of material that we bought so as to get the bulk savings? A store like Home Depot will blow through those pallets in no time. The independent has to store the extra product somewhere. Meanwhile the bags start to get bleached in the sun and soon enough the extra savings that was incurred in bulk buying is lost in product that looks like its been sitting around and needs to be put on sale to get it out of the store. Still want to start that small garden center or nursery?
Angela's argument concerning Scotts Organic Choice at Home Depot being a better deal than the more expensive alternative at the local independent only holds true if we are comparing like products. Sure Organic Choice might be a good product, but is the more expensive independent product better? I don't know since I haven't had a chance to compare. I think that since I have the day off, and my chores involve a visit to town I'll check out the local Home Depot and see what's up. I'll report back.