considerations for selling wholesale (2017)
TRANSCRIPT
CONSIDERATIONS FOR SELLING WHOLESALE
Molly NicholieProgram Director - ASAP
Overview
◻Direct vs. wholesale markets
◻Requirements
◻Pricing
◻Challenges/Barriers
◻Recommendations
◻Resources
Direct Market Opportunities: Farmers markets, CSA, Roadside stands
Benefits :
◻Higher prices
◻Direct relationship with
consumers
◻Easiest entry point for small
producers
Entering into the Wholesale Environment
Benefits to selling in this market:
◻Somewhere to turn with surpluses
◻Convenience/efficiency
◻Cross promotional opportunities
Different types of wholesale markets and distribution options:
◻Restaurants
◻Grocery
◻Distributors
◻Institutions
Restaurant
◻ Highly variable, usually close to retail price point
Grocery
◻larger volume (variable), insurance and food safety plans often required, single or multiple locations, standard sizes/packing
Distributors
◻Distributor
◻Wholesaler
◻Broker
◻Packer
Institutions
◻Highest volume, low price point. Highest level of purchasing requirement, often requires selling through distributor or going through bid process
Understand the industry:
What is the Right Fit for your Farm?
➢ Volume ○ What is your capacity to scale up?
➢ Price Point ○ What are the costs of production
for your operation?
➢ Time○ How do you want to use your
time & hired labor?
➢ Resources○ What are your skill sets?○ What is your capacity packing and distribution?
⬜Invoicing: be professional
⬜Delivery times + locations (Is refrigeration necessary?)
⬜Communication style ■Find out their preferred
method: calls, emails, texting, fax
■Consider a weekly price sheet/availability list…mimic the industry
Requirements to Consider:
Requirements to Consider:
⬜Product liability insurance⬜Certifications - Organic, GAPs,
etc.
⬜Vendor application process⬜Post harvest handling
ex: squash iron spots, potatoes
⬜Packaging - mimic the industry (ex: iced broccoli)
⬜Pricing
Packaging
◻Check with your customers, ask to see examples◻Check out your local distributor◻Packaging standard sheets & box companies ◻Appalachian Grown branded materials available
Standard Packaging
Pricing
Factors that effect pricing:⬜Cost of production!! Record keeping is key!
■ Variable & fixed costs■ Soil amendments■ Pest management■ Labor■ Irrigation■ Machinery & equipment (repairs, fuel)■ Marketing (boxes, packaging)■ Land
⬜Loss leaders & breaking even
What products make economic sense for your farm?
Other Market Factors
⬜Seasonal trends (weather in other areas), supply and demand⬜Specialty crops vs. commodity crops⬜Resources for market pricing
■ WNC report http://www.ncagr.gov/markets/mktnews/RA_FV001.txt
■ Distributor price sheets (MFP, Leading Green)■ Organic sources (Agricultural Marketing Service, Maine
Organic Farmers and Gardeners Association, Northeast Organic Farming Association of New Hampshire, Organic Farmers’ Agency for Relationship Marketing (OFARM), and the Rodale Institute)
Value Pricing
⬜What is the promotional value for the customer? ⬜Will they pay more than the national market
price?
L ve L cal
Policy and Contract Barriers
◻GAP Certification
◻Hold Harmless Agreement
◻Liability Insurance
◻Electronic Payment Only
◻Thick Paperwork
Quality and Packaging Standards
Buyer concerns:● Post harvest handling/ temperature● Inconsistent product quality and sizing● Specific product issues:
varieties/shelf life, pricing, short season
Other Barriers to Local Purchasing
● Volume● Product variety ● Communication● Inconsistencies ● Delivery time/ logistics● Pricing - budget of buyer● Packaging ● Locating local product
Recommendations
◻Do your homework
◻Have your documentation
◻Ask questions
◻Sell your story
◻Be accessible
◻Be persistent, ask for feedback, and be responsible for follow through, if you don’t have it…let them know!!!
◻I talk to buyers all the time that say farmers never call them back….if you don’t have what they’re looking for, tell them what else you have.
Communication
Wholesale Marketing
◻Retain the value of local/label it local - the demand for local is high and growing. Labeling your product local and connecting it to your farm and story will appeal to consumers and increase demand for your product
Point of Purchase materials
❏ Work with your wholesale accounts to label your product local and highlight your farm.
Think About Cross Promotions
Relationships are everything!
◻This applies to retail & wholesale
◻Know yourself, strengths & weaknesses
◻Samples, samples, samples
◻Communication is key
Tools for finding buyers:
◻Look at messaging & menus◻Follow food trends◻LFG/Wholesale Local Food Guide - appalachiangrown.org◻Connecting with ASAP◻Grower-Buyer meetings - stay tuned
1:1 Support for Farms in WNC
Market Planning and Assessment / MarketingThis can include discussion of new or existing enterprises, potential market opportunities and requirements, connections with area buyers, and direct or wholesale marketing resources.
As part of a special project made possible through a grant from USDA, we have the unique opportunity to offer farmers in WNC 1:1 support managing marketing, financial and production risk.
Financial and Business ConsultationConsultations often include identifying business and financial goals, setting up record keeping systems, outlining enterprise budgets, QuickBooks training, and industry specific guidance.
Production Planning & AssistanceState and regional experts within the field and give you research based knowledge and resources.
