5 Reasons Why You Should Sell Your Product at Your Farmers Market
Updated: Apr 28
A couple of weeks after our first festival, we set up shop at the Oklahoma City Farmers Public Market. We've been attending every Saturday except for when we're exhibiting at festivals, on holidays, and... in the middle of a pandemic. If you have a product that you're thinking about selling, then I highly recommend that you start at your local farmers market. Here are five key reasons why:
1. Low Acquisition Costs
Acquisition cost is the monetary value required to get a customer. Here's a simple example: let's say that we sold hot sauce at two events (Events A and B) and gained 200 customers from each event. It cost us $100 to rent a booth at Event A and $200 to rent at Event B. Therefore Event A ($0.50/person) has lower acquisition costs than Event B ($1/person).
It costs $20 per day to set up a booth at the Oklahoma City farmers market whereas the price for a booth at a festival can cost from $220-$300 per day. Although festivals garner significantly more traffic, it would take a huge number of customers to make the festival's acquisition costs competitive with the farmers market. So all things considered, the latter is a far more economical way to sell your product.
2. Direct Customer Relationships
Another reason why you should leverage your farmers market is to develop a local presence by building relationships directly with your customers. This is your chance to see who is interested in your product and to address any questions or concerns that they may have. As a result you'll learn about potential weaknesses in your product or in how you present it,
thereby affecting your marketing strategy.
Additionally, regularly setting up shop creates a reliable place for people to always find you, creating trust and making referrals easy since you might not be selling through a retailer yet.
3. Best Gross Margin
Even if you are selling your product through a retailer, you should still sell at your farmers market because of the intrinsically higher gross margin from direct sales. Gross margin, expressed as a percentage, is the price at which you sell your product minus the cost to make it, all divided by that price at which you sell your product. Our gross margin for Vatsana's Seafood Hot Sauce ranges from 65% to 78% when we sell at our farmers market. However, when we sell through a retailer, our gross margin drops to 35% to 45% due to split profits. Retailers typically have a gross margin of around 35% to 50%.
People attend farmers markets because they understand that their purchases have a greater impact on local businesses.
4. Network Value with Other Businesses
The opportunity to build relationships with other people who are in your shoes is another big perk. You may have started your business alone, but now you've become a part of a large community that can help you realize your local market. It's a beautiful thing when businesses come together for a common goal. Thanks to a few introductions by Big Buns Bakery, we are now selling Vatsana's at additional retailers!
Depending on your product, you may run into competition. However, I strongly believe that there's enough cake for everyone. Also, when you weigh the pros and cons, a little competition is nothing compared to the potential upside of the farmers market.
5. Experimental Value
My FAVORITE reason why you should sell your product at your farmers market is so that you can validate new ideas and receive unbiased feedback. This may not resonate with everyone, but for us it has been incredibly helpful to study the impact of different discount options, certain conversational points and key words, and image advertisements. In other words, it allows us to implement a lot of A/B testing and use the positive results for scale-up at festivals and integration into our marketing strategy.
To encourage purchases while growing our social media presence, we offered a 15% discount to farmer market patrons who liked our Facebook page or followed us on Instagram. This was a good idea in theory but turned out to be impractical in person. On the other hand, doing a "two-bottles-for-$12" deal (a bottle normally costs $7) has proven over and over again to be popular among our customers!
In conclusion, investing a small fee to have direct contact with customers who are willing to pay a premium to support local businesses is a no-brainer.
Maybe you've had a different experience setting up at a market. We'd love to hear your thoughts! Looking for a little adventure during your quarantine? Order a bottle today for clean and quick delivery
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