3 Key Insights from 1000+ Farm Businesses

It is possible to be successful as a Farmer selling products direct-to-market. Farmers who are committed and willing to work hard to improve their skills have the greatest chance of succeeding. There is an abundance of demand for locally produced Farm goods, with 94% of people wanting to purchase from local sources. Americans spend in excess of $2 Trillion per year on Food. The only things Americans spend more money on is keeping a roof over their head (mortgage or rent).

Farmers operate in the 2nd largest market in the world - Food! In fact, Amercians spend 3x more on Food than they do on consumer products. 

When Farms fail selling direct-to-market, it is primarily due to: (i) inconvenient options for Buyers to purchase and receive their products; and/or (ii) lack of market awareness among target Buyers. Too often, Farmers fail to evolve their business practices or expand their market presence to reach a wider audience. 

Serving 1000’s of Farmers, here are the 3 Insights for your Farm to succeed selling direct.

Focus on Your Primary Products that drive Farm Revenue

Before putting all of your Farm Products online, analyze which Product(s) actually drive your revenues (and start there). If you’re unable to successfully sell your Primary Products, then you have a bigger problem. Do not attempt to put up a wide variety of low volume products, value added products and/or sundries initially. 

It is important that your Farm gets comfortable with managing sales of your Primary Products across multiple channels: online (web, mobile, social, email) and in-person (point-of-sale (POS)). Managing orders and inventory online is a new experience for many Farmers (who may be used to pen, paper, a clipboard and/or a spreadsheet). Your Buyers expect to view your inventory online and place an order with a simple click-of-a-button. 

To the surprise of many Farmers, 98% of Buyers prefer to purchase with a Credit Card. While some Farmers are allergic to processing fees, your Number #1 goal should be to make it easy for Buyers to order (which means accepting Credit Cards). Note, most Farmers do offer the ability for Buyers to Tip, Donate or Help Cover Fees, which can offset processing fees entirely. The best advice is to assume all Buyers pay by Credit Card, then factor that cost into your price point. 

Success: Tagge’s Famous Fruits

Tagge’s Famous Fruits moved online from phone calls, SMS, emails, pen, paper, and spreadsheets. Initially, they started with a single line of their business - their CSA Subscription box program. After learning Barn2Door and transitioning their Buyers over a six-month period, they expanded to offer Add-ons (Value Added Products). As a result, they captured an additional $80,000 in revenues, given their Farm and Buyers were conditioned to online Sales. Now, Tagge’s is expanding further to offer pre-orders for Pick-ups at their Farmer Market locations.

Keep Your Product Packaging Simple

Often Farmers believe they should make every product individually available for purchase online — but, that is not true. The most successful Farmers are selective about assembling Bundle Boxes, while making only certain Specialty Products available for individual purchase.

As a Farmer, your goal is to move as much of your Products as possible at the highest average order value. Individually listing every product is a recipe for low Buyer conversion and excess Inventory. Sixty percent (60%) of purchases come from the first 3-5 Products “pinned” to the top of a Farm Store. And, eighty percent (80%) of purchases come from the first page of a Farm Store. Less inventory increases Buyer conversion.

The most successful Farmers “pin” bundles designed for 1, 2 or 4 people to the top of their Farm Store featuring Farmer-Recommended Bundle Boxes (of their Primary Products). Many Farmers, will also entice Bundle Box purchases with desirable upsells that are included. For instance, if you want Bacon, a top-selling Pastured Pork producer requires Buyers to purchase a Bundle Box (“Bacon included with every Box”). Be selective about Specialty Products for individual purchase. Be certain they are of significant value (e.g. $8 or more), and worth your time to assemble.

Success: Old Rich Valley Farm

Old Rich Valley Farm packages their Pastured Proteins in Farmer Recommended Bundles to accommodate 1, 2 or 4 person households. Better yet, Buyers can subscribe to a semi-monthly or monthly Bundle Box, given most households appreciate the consistency and security that comes with a Food subscription. Now, a majority of Old Rich Valley Farm income comes from recurring subscriptions.

Start Fulfilling Products with direct Delivery or Pick-ups

With millions of transactions and over $100 million in Gross Sales, we know that 95% of Products sold by Farmers (powered by Barn2Door) are fulfilled locally via direct Delivery or Pick-ups. While some Farmers have built successful shipping programs out of necessity, the overwhelming majority of all Farm products are fulfilled locally (within a 3 hour drive).

Many Farmers start with strategically locating Pick-ups or Drop-Points along the regular routes of their Buyers to school, church or small businesses (aka the “Local Loop”). Buyers expect convenient options for Pick-ups, as part of their daily or weekly routines. Limiting options to “On-Farm Pick-up” or “To be arranged” (TBA) is a recipe for failure. Your Farm may choose to offer On-Farm and TBA Pick-ups as an Option, but not the only Option if you want to increase Buyer conversion. 

The most successful Farmers invest in direct Delivery one-day per week or semi-monthly within a small area of 1-2 zip codes (where a Farm has Buyer density). For consumers, charge a Delivery fee ($5 minimum) to ensure you can cover your costs. Ensure your truck, trailer, boxes or bags include your Farm Logo. You may be surprised to learn that local delivery has a tendency to “feed itself” as neighbors discover your Farm. Once you prove direct Delivery can be profitable on a small scale, then you can expand.

The quickest path to Farm failure online is expecting to build a “Bundle Box Shipping” program for commodity products (e.g. Proteins, Produce or Dairy). Farms with geographically unique (e.g. Vermont Maple Syrup) or geographically constrained products (e.g. Alaskan King Salmon), can successfully build a Shipping program because it is level-playing field for all similarly situated products (who must also ship). 

Attempting to build a “Beef Bundle Box” program, however, to compete with ButcherBox®, Good Ranchers®, or Omaha Steaks®, would take millions of dollars to scale your Farm operations and build Brand awareness. Farmers and Ranchers are much better suited to focus on 1-2 metro areas within 3 hours driving distance and be laser-focused on go-to-market execution. In all likelihood, your Farm business would be wildly successful locally if you were to capture just 1-2% market share in those metros. 

Note, the above insights can be difficult for some Farmers to humbly accept, given their market perceptions or ambitions. But, the above data is unequivocal and unbiased. Additionally, these steps are actually the most profitable for your Farm business, too, streamlining your inventory and simplifying your operations. 

Look no further than your local Microbrewery for a blueprint on building a successful local business. Note, Microbreweries charge 2x more for their uniquely flavored Products (versus Commodity Beers), without spending money on glitzy superbowl ads or television commercials. They build a strong local Brand and offer a better Product that is conveniently available to Buyers in a specific metro area.

Read: Brew Up Better Business: What Farmers Can Learn from Microbreweries

Your Farm, too, can beat Commodity Alternatives by building a strong, local Brand and offering better Products. It doesn’t take glitzy campaigns, but rather strong, focused execution in your target market, offering your Primary Products, simply Priced and Packaged, that are conveniently available to your Buyers via Direct delivery or local Pick-up.

Barn2Door is an all-in-one solution for Farmers selling direct – online and in-person. To learn why successful Farms run on Barn2Door, watch this 5-minute video.