considerations for selling wholesale (2017)

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.

Questions?

Molly NicholieMolly@asapconnections.org

(828) 236-1282