Are Farmers Markets Worth It?
Overview
Farmers Markets can be a crucial avenue for many Farms to build their brand, meet new Buyers and sell their products. For other Farmers, some may see Markets as time-consuming, costly, and a lot of work with little return.
It is important to ask yourself if Farmers Markets are profitable and worthwhile, or something to skip altogether. Setting aside your personal bias, be sure to ask yourself these 3 questions to determine if attending a local Farmers Market is profitable for your business:
1. Are you Meeting your Ideal Buyers?
Farmers Markets can be a common place for communities to frequent. In other cases, markets may simply be tourist attractions and fail to attract repeat, local buyers. Depending on the town, various Buyer types may attend a certain Farmers Market. Consider your ideal Buyer, including their average income, household size and frequency of purchase. A single person in an urban city may be willing to pay a premium for your Farm products, but may not purchase as much or as frequently as a large family in a suburb. Choose Markets that are in a convenient location and easy to access for your ideal Buyer.
Listen: Farmers Market Best Practices
In all cases, the attendees at Farmers Markets must be willing to pay a higher price for your products and appreciate the value of sustainable, local products. Your harvest is not subsidized, and you’re not selling on the commodity market; rather you offer a unique variety of products grown by a local Farmer. Ensure the potential Buyers at your Market are willing to pay more to support your commitment to sustainably raise and harvest your products.
99% of Buyers do not attend the Farmers Market regularly. Many Buyers choose to shop from the comfort of their homes and get their products ordered for pick-up or delivery. For many Farms, the majority of their Buyers are not at the Market, and choose not to spend the time, effort and money to set up a booth (or simply are unable to make the time commitment).
Be sure to analyze the attributes of your ideal customers and where they prefer to frequent to gauge if Markets are the best place to meet them, or if you should invest your time elsewhere.
2. Does the Market Fit into your Schedule?
Farmers Markets can take up several hours or days of your week, especially when you consider the time to pick and pack products, set up and take down your booth, and be present full-time selling during market hours. Farmers Markets can be well worthwhile if you make enough to cover your costs, pay yourself and your employees for that time. Many find that the profits made during a day at the Farmers Market can cover the cost of labor and time spent. However, every Farm and Farmers Market is different. Some may find that a Farm stand, or simply their online store, brings in more revenue (attracting a higher average order value).
If a Farmers Market is far away, you can set up deliveries or pick-up locations on your route. This way you “kill two birds with one stone” to fulfill orders and secure payments before you arrive at the Market. Many successful Farmers offer pick-ups at the Farmers Market, too, to streamline the experience for loyal Buyers (and ensure customers attend the market, regardless of the weather).
It is important to ask yourself if you can consistently attend Farmers Markets in your area. Your Farm can build Brand awareness among Buyers who recognize your booth and products if you regularly show up at the same Markets each week. However, if you skip Markets too often, you may fail to build Brand loyalty and a stable base of customers.
Successful Farmers who attend weekly Markets typically share a consistent Farmers Market schedule in their newsletters and social media feeds to keep Buyers informed of their whereabouts, and spur more purchases. If your local Farmers Market hours work well with your schedule, they can be a viable avenue to build Brand recognition and a stable base of customers.
The top performing Farmers attending Markets regularly, always seek to add all their in-person customers to their email list. Some Farmers pay $1 for every validated email captured at Markets to their employees, knowing they can convert those Buyers online to a larger average order and/or secure pre-orders ahead of time
Read:How This Farm Grew Its Average Order Size from $20 to $88
3. Is your Farm Making a Return?
It is crucial to evaluate the return-on-investment (ROI) of your Farm’s participation at each individual Market. Some markets may be very profitable, others may not be worth your time. Consider all the factors (e.g. time, labor, booth fees, vehicle costs & gas, and customer list acquisition) when measuring the ROI on each Market to make an informed decision.
While free Markets may seem enticing, they may be looking to attract Farms because they do not have a lot of foot traffic and are unable to charge booth fees. However, some Farmers Market expenses may be too hefty, or too saturated with “like” Farmers with your same products, and the costs outweigh your returns at a particular Market. Be objective when evaluating Markets in your area to accurately determine what costs you are willing to invest, and what measureable returns you expect.
Note, Farmers Markets can result in a quick ROI with in-person sales, but be sure to utilize the opportunity to turn those Buyers into repeat customers with online sales and pre-orders. Ensure you are promoting your attendance at every Market to attract more Buyers. Evaluate your time spent and cost of going to the Farmers Market each season, and determine what channels are most profitable for your Farm.
Conclusion
Farmers Markets can be a great way to meet new Buyers and secure a quick return, however, some Farms find it to not be profitable, or more hassle than they're worth. When setting up at a Farmers Market, be objective about determining if your booth is costing you money, or helping your business grow. Target Markets that cater to your ideal Buyers, maintain a consistent schedule and expect a demonstrable ROI for every Market your Farm attends.
Barn2Door offers software for Independent Farmers to create and promote their brand, sell online and in-person, and save time managing their business. If you’re curious to learn more, watch this 5-minute video.