5 Ways Microgreen Farmers Can Improve Their Operating Margins
When building a thriving direct-to-market Microgreen business, it’s essential to understand the opportunities to maximize profits, reduce costs, delight customers, and save time. Sound impossible? It’s not!
Understanding your operating costs and your margins is essential for any business – it increases the opportunity to generate more revenue and has the potential to minimize fees, reduce expenses, and improve profitability. It’s so important for businesses that Barn2Door partnered with Intuit QuickBooks to build a direct integration that makes tracking income, expenses, and managing the books a quick and time-saving process for Farmers: Farmers can Better Manage their Business with Barn2Door + QuickBooks Online.
So, how can Microgreen Farmers improve their operating margins and contain costs? Here are 5 easy steps:
1. Consolidate Product Mix
The more time spent on growing Microgreens, the more resources you will use. It’s easiest to pack trays and organize fulfillments when Microgreen Farmers focus on varieties with similar growth times. Growers can implement a “grow to order” strategy by streamlining their product mix, making it easier to plan ahead, reduce waste, streamline future plantings, and cut costs.
Start by selecting 5-6 varieties with similar growth rates. Choose colors, flavors, and textures that complement each other and consider creating a signature blend from your Farm that’s special and unique. When you invest in fast-maturing varieties, you’ll receive a quicker return on investment, reducing overall costs.
Read: How Microgreen Farmers Can Sell Based on Grow Times
2. Skip Customizations
Packing greens to every order is a headache to manage, increases pack and assembly costs, and is simply cost-prohibitive. With Farmer recommended trays, Growers can package a variety of greens into a single “unit” for sale. This gives buyers the ability to choose one flat of a particular variety, or Farmer’s can mix and match greens, offering what’s fresh at the moment.
By skipping customizations, Farmers can streamline their inventory, cut costs, save time, and increase sales.
Recommended Blends:
Farmer’s Blend
Mild
Salad Mix
Spicy
3. Streamline Crop Packaging
Depending on who your customers are and which channels you sell your Microgreens through (online and/or in-person), the type of packaging you use is essential. Offer individual greens for sale and in Farmer-recommended blends. As more than 54% of consumers consider sustainable packaging when selecting a product, use brown paper bags, cardboard boxes (lined with additional material to reduce moisture), or ecological packaging (reusable trays are common with subscriptions).
By narrowing available options for buyers, it’ll be easier and quicker to pack and manage orders. Use stickers or stamps to brand your packaging with your Farm logo too. By offering different blend sizes – small, medium, and large, Farmers can cater to a range of buyers’ needs and move more products simultaneously. Most of your buyers will have no idea how much to order, so packaging greens into different sizes while including guidance and suggestions on which size fits different needs will be essential.
Microgreen Size Guide:
1 Person: 7oz
2 People: 14oz
4 People: 28oz
4. Sell Subscriptions
Too often, Farmers put in a lot of time, energy, and investment for a single sale. That’s expensive and inconsistent with the demand for local Food products. Everyone eats every day. Consumers and wholesale buyers alike purchase 90% of the same Food products week-over-week, so make it easy for your customers by offering Subscriptions to your Microgreens. Enable buyers to sign-up for a Subscription that’s available for pick-up or delivery on a routine basis (weekly, semi-weekly, or monthly). You will delight buyers while increasing your cash flow, reducing costs of acquisition, and simplifying your operations.
Read: 3 Farm Success Stories with Subscriptions
5. Accept Customer Tips
Buyers want to support local Food producers. In fact, 80% of Farmers who run their business on Barn2Door accept customer tips. Of those, 25% pay $0 in credit card processing fees, while the remaining 3 in 4 Farmers accepting tips only pay 1.5% of their total processing fees. When Microgreen Growers give customers the ability to tip, they can reduce costs, cover credit card processing fees, and keep any additional money leftover. Tips are an easy way to reduce operating costs, and customers love to show their appreciation and gratitude for the products you produce!
Read: How Buyer Tips Lead to Lower Processing Fees
By streamlining your Microgreen business to focus on a handful of varieties, narrowing your product offerings for buyers, and being smart about packaging options, your Microgreen business will be able to increase sales while simultaneously reducing operating costs and improving margins.
Barn2Door provides an all-in-one solution for Farmers to grow and manage their business. If you’re curious to learn why successful Farms run on Barn2Door, watch this 5-minute video.