Questions for those considering "direct marketing" of farm products
U-pick and farm stand sales can be great for some people, but make sure this marketing approach will fit your personality.
April 30, 2014 - Author: James Isleib, Jim Isleib, Michigan State University Extension
Selling directly to customers can be a great way to improve net profits for produce, fruits, meat animals and other farm products. But a good deal of careful consideration should be given to the details before plunging ahead. One of the most important is dealing with people, your customers. Are you well-suited to dealing one-on-one with customers? Do people generally get under your skin? Are you a real people-person?
The following list of questions was developed with the help of a seasoned U-pick strawberry grower and retired Michigan State University Extension professional. The success and longevity of his strawberry business gives a lot of weight to these observations. Here are nine questions to ask yourself before you get started.
1. Are you a people person?
- Ninety-eight percent of customers are good people to deal with.
- Two percent of customers will give you headaches.
2. Where are you at right now with your ag business?
- Are you already producing but not selling what you intend to direct market?
- Are you already producing and selling it?
Producing and marketing need to be addressed separately.
Start where you find yourself right now.
3. What kind of market are you aiming for?
4. Who are you going to sell to?
- Individuals? (Least headaches and most profits.)
- Retail, wholesale or both?
5. Are you assuming you have a market for your product, or have you proved that your market exists?
- Talk to a lot of people; visit with organizations (local planning organizations, Chamber of Commerce, etc.).
- Who else is currently selling the same or similar product?
- Can I produce a better product than the competition?
6. Do you have a quality product?
- Compare your product with the best in the industry, not just your neighbor.
7. Do you have a business plan?
- This is essential if you need to borrow money.
- Be conservative when making the plan. Don’t assume you will have high yields, high prices and sell everything you have. Make middle of the road assumptions.
8. Do you know your cost of production? How will you calculate your price?
9. Are you comfortable with the concept of "the customer is always right?"
- Remember, the customer drives the direct marketing business.
- Get involved with an association specific to your enterprise.
- The North American Farm Direct Marketing Association is a good contact.
- The farm needs to pay for itself. Don't use your other income to subsidize farm expenses.