Utilizing Online & Indirect Retail Sales for Local Food Profit
Small and Medium sized farms are BUSINESSES and must be run as a business. With the plethora of fantastically fun farmers’ markets springing up like wildfire, there is a sense of false security that direct retail sales, by being a vendor at a farmers’ market, is the best and most valuable avenue for generating business profit from your farm.
Smart farm businesses diversify their sales mix to add on other forms of profit generation to minimize the high risk of vending at farmers’ markets while still enjoying all the positive benefits that farm markets bring – direct consumer interaction, community involvement, business and branding exposure, and much, MUCH more!
Let’s start with some defining terms.
Indirect Retail Sales or Mail order is a term which describes the buying of goods or services by mail delivery. The buyer places an order for the desired products with the merchant through some remote method such as through a telephone call or web site. Then, the products are delivered to the customer. The products are typically delivered directly to an address supplied by the customer, such as a home address, but occasionally the orders are delivered to a nearby retail location for the customer to pick up. Some merchants also allow the goods to be shipped directly to a third party consumer, which is an effective way to send a gift to an out-of-town recipient.
A mail order catalogue is a publication containing a list of general merchandise from a company. Companies who publish and operate mail order catalogues are referred to as cataloguers within the industry. Cataloguers buy or manufacture goods then market those goods to prospects (prospective customers). Many cataloguers, just as with most retailers, are increasingly buying goods from China. Cataloguers "rent" names from list brokers or cooperative databases. The catalogue itself is published in a similar fashion as any magazine publication and distributed through a variety of means, usually via a postal service and the internet.
Selling Local Food ONLINE!
Of course, you could create an online marketplace through Shopify where you directly control all the orders yourself. Amazon offers the same opportunity to sell your products directly to consumers but offers the additional services of warehousing and shipping your products for you (would work best with value-added items).
There are more out-of-the-box opportunities too! In Europe, farmers are using vending machines to sell their wares! What a brilliant idea for burgeoning college campuses, apartment complexes, and other areas of congregated consumers!
One of the most impressive new business models is Local Dirt which acts as a middleman providing you with online sales opportunities with included outbound distribution for both wholesale and retail customers.
Local Harvest has launched a retail mail-order catalog for value added products! Additionally, if you didn’t want to set up your own online e-commerce food store, you could list your products for sale directly in your own storefront on Local Harvest and consumers can buy directly from you online!
Indirect retail sales offer slightly less profit than direct retail sales at farmers’ markets, but are less risk adverse and take less labor! The prime costs are lower, making the overall profit margins much higher than direct retail sales!!!!!!! All farming operations should have a few opportunities like these in their mix!
Creating 4 Sales Channels for Solid Agricultural Sales: the proper product mix for an agricultural business is to mix and have all 4 modes of profit activities: Direct Retail Sales, Indirect Retail Sales, Wholesale Sales, and Partner-Profit Sales.
Diversifying your Agricultural Sales Mix Blog Series
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