Clarification for Valentine Bubble Balloons

I apologize for any confusion related to our Valentine’s Bubble Balloons. These Bubble rules should clear things up.

1. The three Bubble Balloons in the top row are interchangeable with each other. Do not use any other Bubble Balloon designs in their place.

2. The three Bubble Balloons in the bottom row are not interchangeable and cannot be substituted with each other or any alternate design.

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Groovy balloons are here!

In answer to strong customer demand, Qualatex has produced two balloons celebrating the psychedelic 60’s. And the designs are fantastic! They have been posted on the web site and are available with 5 business days notice. They will become required inventory for USA Zones 3 and 4 partners on November 1, 2010, when they will become available for same-day ordering. Please refer to your online inventory guide for product numbers and distributor pricing. You are a Zone 3 or 4 partner if you see these balloons in the guide section titled (1.08) Mylar Misc Occasion 18in.

love

The Zones Program: Stage 1 – USA

Dear Partners,

On any given day 8% of our partners have their calendars blocked for next day service. And every week there are 2,000 visitors to the site looking for a delivery to a zip code we do not service. The consequences are that every day we turn away lots of potential customers. Deciding how to best address these issues has been a challenge, one we have been working on for more than a year. We think we finally have a strategy that will allow us to tackle these issues and generate more business for everyone in the Balloon Planet network — we’re calling it the Zones Program.

INTRODUCING THE ZONES PROGRAM

The Zones Program will allow Balloon Planet and its partners to expand and improve service by providing partners with the freedom to —

a) expand or reduce their service areas
b) retain exclusive territories or share their territories with other partners
c) reduce or increase their inventory levels
d) adjust delivery charges when desired, using online tools

Stage 1 of the Zones Program is for operations in the USA. Subsequent stages will include changes to operations outside of the USA.

We hope you find these changes liberating and forward-thinking. Please read on and let us know if you have any questions or concerns.

Thank you –

Jim Parker and Christo de Klerk

THE ZONES PROGRAM

Roll out date: March 1, 2009

AN OVERVIEW OF THE ZONES PROGRAM

I. The four Zones and their inventory requirements
II. How to retain exclusivity
III. Sharing your territory
IV. How to change the Zone you are currently in

V. How to change delivery charges, and add or remove zip codes
VI. Inventory changes on March 1st

I. THE FOUR ZONES AND THEIR INVENTORY REQUIREMENTS

ZONE 1— Basic Level
Designed for beginning balloon companies or florists with limited balloon experience. The inventory comprises only the most popular mylar balloons. Latex balloons are not included. 1 year in business required.

ZONE 2 — Basic Plus Level
Designed for florists and balloon companies that want to start out small but offer a broader product line than Zone 1. Standard 11-inch latex balloons are included, which allows for limited decorating sales. 2 years in business required.

ZONE 3 — Pro Level
Designed for professional balloon companies that operate a full-service balloon delivery and decorating business. Includes a full line of mylar and latex balloons (both 11in and 16in). 3 years in business required, with portfolio. As of January 2009, all US partners were in this Zone.

ZONE 4 — Pro Plus
Level
Designed for professional balloon companies interested in offering the broadest range of design options to their customers.
3 years in business required, with portfolio.

Currently, all partners in the USA fall into Zone 3 (With one exception. Our New York partner is in Zone 4).

All USA partners are now free to change to any Zone, reducing or increasing their inventory requirements. However, you will want to carefully consider the ramifications of downgrading to a Zone lower than Zone 3. Effective March 1, 2009, the following changes to exclusive representation of territories will go into effect.

II. HOW TO RETAIN EXCLUSIVITY

Effective March 1, 2009, exclusive territory representation will be continued for those partners who elect to operate within the following criteria:

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 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.

These standards 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.

III. SHARING YOUR TERRITORY

Sharing your territory with another partner will provide increased service availability for your territory. The effect will be increased orders for the territory, as customers realize that Balloon Planet is available for daily service whenever they need it. You will see increased orders for the dates you are open, assuming you are competitive with product selection and delivery charges.

Regarding how orders are distributed in shared territories, the site is programmed to distribute orders in priority of:

a) product availability (the partner with the most inventory will inevitably receive the most orders)
b) service availability (if both partners have the same product, the site checks to see who is available)
c) lowest delivery charge

If both partners have the requested product, and both are available for the same delivery charge, the site will rotate partner selections. The exception is when a customer starts the ordering process on your web site. In that case, you will receive the order if the zip code is in your territory, even if another partner serves the same zip code with a lower delivery charge, assuming you are available and you have the requested product.

Decorating projects will be distributed on a rotating basis.

IV. HOW TO CHANGE THE ZONE YOU ARE CURRENTLY IN

All partner’s are currently enrolled in Zone 3. If you would like to downgrade or upgrade your inventory requirements by moving into another Zone, please send a request by email to jim@balloonplanet.com. The change can be processed within 48 hours.

V. HOW TO CHANGE DELIVERY CHARGES, AND ADD OR REMOVE ZIP CODES

It is now possible to change delivery charges on your own. Simply access your zip code list and look for the EDIT box associated with each zip code. Open this and change the delivery charge currently posted. You can also see who shares any of your zip codes and how much they are currently charging for delivery. Partners that currently represent a city with no other partner can also add and delete zip codes at will. To remove a zip code, simply click on the trash can associated with the zip code. To add a zip code, click on ADD A NEW ZIP CODE.

VI. INVENTORY CHANGES ON MARCH 1ST

On March 1, 2009 we will make significant product changes to the site. The illustrations below show specific balloon changes which will affect all Zones. The pages linked below display all of the everyday inventory required for each Zone.

ZONE 1— Introductory Level
VIEW ZONE 1 YEAR-ROUND INVENTORY

ZONE 2 — Basic Level
VIEW ZONE 2 YEAR-ROUND INVENTORY

ZONE 3 — Professional Level
VIEW ZONE 3 YEAR-ROUND INVENTORY

ZONE 4 — Super Pro Level
VIEW ZONE 4 YEAR-ROUND INVENTORY

NOTE: As a casual visitor to the site, you may see bouquets that include inventory that you are not required to stock, yet it appears that these bouquets are available for delivery in your territory. That is true, and here’s how it works. We have programmed these bouquets to be available in your city only if ordered with a notice of 5 business days, providing us with time to ship you the product. The bouquets are priced higher than normal, which covers the deduction to your account for shipping (the deduction will also include the wholesale cost for the product shipped).

2009 Valentine Balloons

Valentines 2009 Inventory

The 2009 Valentine’s program has been posted on the web site and can be accessed using the Valentine’s banner on the home page. Required inventory items are illustrated above. Product numbers for Loftus and Rainbow are noted below. Pricing can be accessed by logging in to your orders account and clicking on the INVENTORY link.

A. SEASONAL INVENTORY

1 – Love Monkey (Loftus M0-9628/Rainbow 09628)

2 – Hugs Heart (Loftus A0-6932/Rainbow 06932)

3 – Great Catch (Loftus B8-5466/Rainbow B85466)

4 – Love Machine (Loftus A1-4985/Rainbow 14985)

5 – Bubble Heart (Loftus B8-6393/Rainbow 86393)

6 – Valentine Hearts (various designs can be used)

B. YEAR-ROUND INVENTORY (used for customized Valentine’s orders)

1 – I Love You 18in hearts (various designs can be used)

2 – We Love You 18in hearts (various designs can be used)

3 – Plain 18in hearts in Gold, Purple, Red, Blue, Silver, Teal

Fathers Day Balloon Bouquets

Applies Only to USA Partners

Father’s Day is Sunday, June 16 and the balloon bouquets for this occasion are posted on the web site. Many customers will be placing orders for delivery during the week prior to June 16. Even if you plan not to offer service on this date, be sure to stock the specialty balloons shown below for orders that will be scheduled early.

Product

Bouquet