Ag Marketing
NEWS UPDATE - MAY 17, 2011
Ginger S. Myers
Marketing Specialist
University of Maryland
Extension
Director, Maryland
Rural Enterprise
Development Center
gsmyers@umd.edu
301-432-2767 x338
A Booth at the Farmers’ Market:
Profit or Loss
Farmers' Markets are an increasingly popular form of direct marketing for both farmers and
customers alike. Farmers' markets differ from other direct marketing operations due to the fact
that growers share insurance, advertising, and marketing costs. Successful farmers' markets can
substantially increase the incomes of participating vendors. Maryland now has farmers’ markets
operating in every county of the state and the City of Baltimore. During 2010, there were more
than 6,100 farmers’ markets operating in the United States.
Major advantages to producers
who sell at farmers' markets
include:
Farmers can usually command their
best prices at a Farmers’ Market.
Studies indicate that farmers’ market
vendors receive between 40%-70%
more for their products at market than
selling them through wholesale outlets.
Producers have limited liability for
customers, because they are not on
the farmer's premises.
Parking space, restrooms, and other
facilities are not the farmers' responsiContinued on Page 2
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A Booth at the Farmers’ Market - Profit or Loss continued...
bilities. The facilities are provided by the market. market and works the booth himself. The market runs
from 8:00 AM to noon. Farmer Paul calculates he has
Attracting customers is a function of the market
$300 left from his market day after he deducts his
and farmers. This marketing technique may be
product costs. Is this correct?
unfamiliar to many farmers, since it is usually
Let’s look closer at all the numbers that Farmer Paul
unnecessary for them to devise marketing
needs to consider when calculating whether his market
campaigns for their customers.
day was profitable.
However, there are also costs associated with
participating in a market. These include: the
Booth Rental
$ 15.00
need for transportation to the market site,
sales tables, a cash box or register with change,
Total Labor (7½ hrs. @ $14/hr)
$105.00
organic produce and price display signs, various
Time to pack his coolers(1 hr.) Set-up, work the
containers, certified scales or other measurement
market, and tear down (6 hrs) Time to unpack the
coolers when he arrives home (½ hr)
devices, tents, tent weights, tables, and sales
people.
Transportation (time and mileage)
$ 12.00
Disadvantages include:
Time required to transport and sell at the
market takes away from the farm operation.
Market hours are controlled by the policies set
for the farmers' market, which may not be ideal
for individual producers. Also, advertising—or
lack of it—is controlled by the market. Markets
that are poorly located may not attract consumers
and other vendors may operate in a manner that
depresses price.
Other costs
$ 15.00
Product Liability Insurance
$ 15.00
(Spread over his 20 week market
season—table, table covers, tent,
coolers, signage )
State and County Licenses and Permits $ 12.00
(Processing, vending, sampling)
Many market vendors don’t have a good accounting
of the true costs of participating in their markets.
Total fixed costs per day for Farmer Paul to
market at this venue is: $174.00
These costs are needed to determine:
His profit for the day is really ($300 – $174 in
marketing costs) or $126.00
[1] The profitability of the market
[2] Amount of product needed to be profitable
[3] Assists with pricing
[4] Assists in appraising the viability of the market
[5] Time management tool for assessing time
invested vs. the financial returns
If this figure is not satisfactory for Farmer Paul, he
now knows he needs to sell more product since most
of his marketing costs are fixed costs and will not
change from week to week.
Farmers’ markets provide excellent venues for developing entrepreneurial marketing skills, providing
instant feedback on product variety and presentation,
Here’s a sample of a market evaluation and budget. and are a great way to connect directly with customFarmer Paul sells his USDA processed, farm raised
ers. When you take the time to measure your true
beef at a farmers’ market that is just 6 miles from
profitability from a market, you can then implement
his farm. He pays $15 per week for his space at the strategies to improve it.