Tuesday, October 29, 2013

Wholesale or retail?

On http://Permies.com under the farm income forum, Adam Klaus said the following.

I started our farm 8 years ago, it has been a constantly evolving journey over those years. The one surprising development for me, has been my embrace of driving to higher value farmer's markets. I was really set on our wholesale and restaurant customers for the past four plus years. I liked the ease, the paychecks, the volume. But in time, it soured a bit for me. I have found the wholesale angle to be limited by the bottom line motivation of groceries and restaurants. They exist to make money, and will ultimately squeeze me to make more for themselves. They will place 'race to the bottom' with other growers to get the lowest possible price. Things start out good, but it has gotten frustrating over time. 

So this year, I took a chance, skeptically, and started participating in a high-dollar farmers' market. I drive about an hour and a half, to a resort town here in Colorado. The customers come for the good food, and pay a nice premium for everything. Yes, I take a risk in moving my volume. And really, I hardly ever sell out completely. But at the end of the day, I am making much better money. The customers arent trying to squeeze me for every penny so that they can make more profit for themselves. They pay well, and just as importantly, really appreciate what I do and the products I offer. I feel much better as a farmer delivering food directly to the end use consumer. I never imagined that it would be such a positive experience, both for me and my farm, but it has really exceeded my best hopes. The farm market also has much better legal restrictions than wholesaling, so there are many products that I can sell direct to customers, that I can not market through a grocery. My customers know and trust me directly, and do not expect me to have any official certifications, so I save big money and hassle not being organic certified, not having massive insurance premiums, etc. It is a much simpler relationship, that I much prefer. I am building direct relationships with many, many customers, rather than being dependent on a few wholesale channels. It feels much more stable and secure, rewarding and profitable. So I guess I would say, driving to Atlanta sounds like a pretty good opportunity to me! 


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