Is a farmers’ market a good marketing choice for you?

Although I’ve never had a farmers’ market stall of my own, I’ve worked for various friends for several years as a market helper. I’ve experienced the charge of excitement getting ready for the first markets of the season, as well as the drain of energy and enthusiasm as the season plods on.

There has been an incredible surge of consumer interest in farmers’ markets in the last 10 years, a boon for farmers seeking local markets. Although most well-established markets are saturated with producers, new markets are popping up, creating new opportunities.

In assessing various marketing strategies, how can you determine if a farmers’ market is a good fit? Do you know if a market you’re currently involved in is the best venue for your products? As with any type of market, there are both tangible and intangible costs and benefits to consider. Farmers’ markets seem to have a lot of intangibles, as they involve intense and time-sensitive activity with non-guaranteed returns.

As you consider selling at a farmers’ market, or assess a current market experience, here are some things to think about above and beyond the product that goes out and the money that comes in:

Time: To prepare for farmers’ market, most growers spend long hours the day before harvesting or preparing product. There is generally a distance to drive to get to market, and time needed to set up and take down. Either you or a partner or employee(s) must spend long hours vending, whether there are customers buying or not. Bookkeeping and banking must be done after the market is over. As you look at your operation, do you have the labor available at the right times in order to do all of this work? Does it fit in with the other things you need to accomplish? When assessing market net income or viability, all of these time elements must be counted and considered.

Schedule: To be most successful, you’ll want to commit to a regular market schedule. Markets generally open early in the morning. Can you get up at 3:30 a.m. after a long day of picking? Are you still approachable after being up and active for many hours? Are you ok with being busy every Friday and Saturday from May through October, recognizing that you’ll miss many weddings, soccer games and family gatherings? Some markets are open on non-weekend days, offering scheduling alternatives.

Personality: As a regular vendor, I got used to seeing the plastered-on smiles my neighbor vendors tended to hold as the season dwindled. Being chipper for every customer (and potential customer!) can be easier for some than others. Customers are seeking engagement as much as food at the market– are you the person that can provide that to them? Assess yourself honestly to decide if you are the right person to staff the market stall, or if you need to recruit someone else

Market mix: In general, successful market stalls provide a diversity of products. Customers seek options and choices. Do you have the skills, interest and capability to produce a wide diversity of product, over a long season? If you are only interested in selling rhubarb, your potential at a market will be quite small. A visit to a local grocery produce manager may be a better marketing option.

Reputation: One thing a farmers’ market can be really good for is to introduce your products, quality, brand and farm to a broad audience. Some farmers I’ve known have set up at a market for a few years to develop customer loyalty, and then gone on to other marketing options, such as an on-farm stand, a CSA or direct delivery, once they have a substantial customer list. Even if the farmers’ market isn’t bringing in a high margin, it still might be worth participating for a few years for the sake of creating a strong reputation.

 

Price: Although there should be various factors influencing the prices you charge, many farmers’ market customers comparison shop by price. If a lot of vendors are selling beets at $1 per bunch, you will have to do a lot of work on your farm image, quality, or other ways of assigning “value” if you need to charge $3 a bunch to make your profit goals. Many farmers are successful at this, but it takes work and can be a challenge at some markets if downward price pressure is strong.

Commitment: I was asked to join a brand new market in a large city several years ago. With the “big” markets saturated with vendors, this seemed like a great opportunity. But, I ended up not making a commitment. The first year of a market, as it is becoming established, can be very tough on vendors. When you look at the feasibility of selling at a market, you must look at both the realities of that specific market and the potential. Committing to the first year, as the market develops, means you can be one of a few vendors to draw customers in, and become a cornerstone if the market grows in popularity, but you may not make much money. Investing today toward potential future revenues is a guessing game, and must be assessed in relation to the other market venues you have for your product.

Taking into account these intangibles, any decision on the success of a farmers’ market as a market venue must, of course, be based on your financial return. A good tool to use to help you compare financially how a farmers’ market might stand up to another type of market is the partial budget. The MOSES book Fearless Farm Finances devotes an entire chapter (Chapter 16) to the use of partial budgets.

Jody Padgham is the Financial Director for MOSES, and Editor of Fearless Farm Finances.

May 28, 2014

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