In late February we introduced the Zones Program in the USA. The following FAQ is the result of questions we have received since then. You can review the original post by clicking here. Please email email@example.com or use the comments feature at the end of this article if you have questions that have not been answered.
1. In a nutshell, what is the Zones Program?
This is a program which creates different inventory levels for our partners, allowing them to operate with less inventory than previously required, and consequently reducing their cost to partner with Balloon Planet. There is also an expanded inventory option for those partners who would like to offer the broadest range of products available on the Balloon Planet web site. Each inventory level is a Zone, and there are four Zones.
Zone 1 (Basic) — for partners in small cities, includes a unique variety of mylar balloons
Zone 2 (Basic Plus) — for partners in any city, includes a unique variety of mylars and basic latex balloons
Zone 3 (Pro) — for partners in large cities, this is the original Balloon Planet inventory level, where most partners currently operate
Zone 4 (Pro Plus) — for partners in very large cities, this Zone adds a broad selection of specialty mylar balloons to the Zone 3 inventory
Every partner has been electronically assigned to one of these Zones. When a customer enters a zip code for a delivery location, the site matches this zip code with the partners Zone assignment, then shows the customer only those bouquets that are available from that partner. If a customer plans far enough in advance the site will display bouquets that include inventory the partner may not stock, but for which there is time to procure. These bouquets include a surcharge to cover shipping costs.
The Zones Project also introduces several new web site features for partners, including the ability to add and remove territory zip codes, change delivery charges, and control same-day delivery deadlines for different zip codes.
2. QUESTION: As a partner who enrolled prior to 2009, I have exclusive representation for my territory. How can I retain this exclusive status with the new Zones Program?
To maintain exclusive representation for a territory, the following criteria must be met:
1) Partners in an urban area with a population exceeding 500,000 must remain enrolled in Zone 3, or may upgrade to Zone 4. Those partners in smaller urban areas may remain in Zone 3, downgrade to Zone 2, or upgrade to Zone 4. Population figures are based on those posted on Demographia.com for the 2000 census.
2) Partner must be available for service Monday through Saturday, 52 weeks a year. Partner may block service up to 2 days per month, plus Sundays and holidays. If a holiday falls on Thursday, Friday, or Monday, the entire weekend can be included as a holiday. Unused blocks cannot be rolled into another month.
3) Partner must offer same-day service, Mon-Fri, with an ordering deadline of no earlier than 9am local time. Saturday service can be blocked at 5pm local time on Friday and not count as a blocked day.
4) A partner’s highest delivery charge cannot exceed the current MAXIMUM EXCLUSIVE DELIVERY CHARGE (MEDC), currently set at $18 (but subject to change). If a partner meets the previous three criteria, but a portion of the partner’s zip codes have delivery charges exceeding $18, the partner has two options:
a. Reduce all delivery charges to $18 or lower and retain exclusivity for the entire territory.
b. Leave all delivery charges at current levels, retaining exclusivity for zip codes set at $18 or lower, and sharing all higher zip codes with another partner.
5) Partner’s with web sites must provide an approved link from their home page to their branded Balloon Planet web site. Approved graphics and html code can be found within the Affiliate Marketing Program.
6) Partner must be enrolled in the Affiliate Marketing Program. It’s not only free to enroll, it makes money for you. Contact us for assistance if you need it.
These six requirements will be monitored beginning March 1. After this date Balloon Planet will alert any partner whose actions put them at risk of losing exclusive representation.
3. Are you saying that if I live in an area with a population of less than 500,000 I can reduce my inventory to Zone 2 requirements and still represent my territory exclusively?
Yes, as long as you meet the other criteria noted above.
4. QUESTION: If a new partner is enrolled in my area, will they have exclusive representation for any of the areas they serve?
No. Balloon Planet is no longer offering exclusive territories to new partners.
5. QUESTION: I understand that I have to keep my delivery charges at or under $18 in order to retain exclusive representation for a particular zip code. What happens if I have a higher delivery charge for a few zip codes scattered amidst my $18 zip codes because addresses within these zip codes are difficult to service (parking issues, rough neighborhoods)?
Each situation will be evaluated separately. We may try to find a new partner willing to serve these difficult zip codes for a lower delivery charge, or we may opt to settle for the status quo.
If we did bring in a new partner for these zip codes, the codes would still remain in your territory and both of you would serve them (unless you wanted to drop them). The web site will automatically send an order to the partner with the lowest delivery charge, so if the new partner is open for service, they would get orders for these zip codes because of their lower delivery charge. If the new partner was closed, you would get the order at your higher delivery charge.
Note that the new partner would not serve any of your zip codes with delivery charges set at $18 or lower.
6. QUESTION: The area closest to my shop is served with $18 delivery charges, however, areas farther out have higher delivery charges. I want to continue serving these outlying areas but I don’t want to reduce my delivery charges. Can I still include these outlying areas as part of my territory?
Assuming you meet the criteria for exclusive partnership noted above, you would retain exclusive representation only for the areas you serve with an $18 (or less) delivery charge. The other areas of your territory would be shared with new partners, but you could still retain them as part of your territory.
For example, let’s say you served zip code 98101 for a $25 delivery charge. A new partner also serves this zip code for a delivery charge of $20. If both of you were open for service on a particular day, orders for this zip code would be directed to the $20 partner. However, if the $20 partner was closed on this date, the order would be directed to you for a $25 delivery charge. The web site is now programmed to direct traffic in this manner automatically.
7. QUESTION: Let’s say I have exclusive representation for most of my region, but I share the outlying areas with partners because my delivery charges for those outlying areas exceed $18. If I reduce my delivery charge in those outlying areas to $18, can I then include these outlying areas as part of my exclusive territory?
You can take this action as long as you do it before we enroll another partner to cover the outlying areas. Once your territory is shared, the zip codes that are shared are shared forever, and orders will be routed to the partner with the lowest delivery charge.
8. QUESTION: What if I have an $18 delivery charge for a zip code and a new partner has a $15 delivery charge for that same zip code. Will this partner automatically get all of the orders for that zip code?
Trick question. No new partner would be allowed to represent one of your $18 zip codes as long as you met the criteria for exclusive representation noted above.
9. QUESTION: Suppose I serve the city of Irvine, CA for a delivery charge of $25 and another partner shares this city with me for a delivery charge of $24. Will I ever get an order for Irvine?
On all days when they are open, the $24 partner will get all of the orders for Irvine because their delivery charge is lower. You would get the order if they were closed for service on the delivery date requested.
Since you both share this zip code, it is posted as a shared zip code in your online account. If a zip code is posted as a shared zip code, you can view who shares the zip code and what their delivery charge is. You have the ability to reduce your delivery charge to $23 or lower, which would cause all orders for Irvine to flow into your account. All partners now have the ability to bid against other partners for delivery charges in shared zip codes.
10. QUESTION: The new Zone program makes it impossible for me to close my business and take a vacation each year. Is there any way around this?
We are able to redirect your orders to another vendor if you make such arrangements. This solution can be used for vacations or any other event which may prevent you from offering service.
11. QUESTION: If I am not able to meet all of the criteria for exclusive partnership and my territory is opened to shared status with new partners, what determines which partners receive orders?
The site will always send the order to the partner with the lowest delivery charge. If all partners have the same delivery charge, distribution of orders is evenly rotated.