Marketing & Sales 101
INFO SHEET
Having a clear marketing and sales strategy is important for your farm success. There
are many issues to consider and many different channels to get your product to the
final end-consumer.
This Info Sheet provides an overview of how to think about your strategy, how to
choose the channels that will work for you, and – most importantly – make a profit!
At A Glance
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Choose Your Sales Channels
Price Competitively
Create Your Brand
Be A Sales Person!
Track Your Sales
Choose Your Sales Channels
In general, selling direct-to-consumers is the most profitable channel, since you keep
the entire final purchase price. However, the larger your production volume, the more
difficult it can be to move all of your product as it is harvested.
Selling through wholesale channels may seem appealing in that you can move a lot of
product in one transaction, but there are administrative and regulatory costs/burdens,
so – in general – for smaller farms that don’t have economies of scale, the profit
margin is much lower and is often unsustainable.
Below is a graph created by the Sacramento Area Council of Governments (SACOG),
which illustrates the balancing act farmers must make in choosing the best mix of
sales: direct-to-consumer, to high-end wholesaler, or to conventional wholesalers.
For 20-acre farms selling:
 100% direct-to-consumer,
net revenue was $100,000.
 65% direct-to-consumer and 35% to high-end wholesaler,
net revenue was $40,000.
 50% direct-to-consumer, 25% to high-end wholesaler, and 25% to
conventional wholesaler,
net revenue was $4,000.
For 60-acre farms selling:
 100% direct-to-consumer,
net revenue was $300,000.
 65% direct-to-consumer and 35% to high-end wholesaler,
net revenue was $175,000.
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50% direct-to-consumer, 25% to high-end wholesaler, and 25% to
conventional wholesaler,
net revenue was $100,000.
SACOG: Regional Planning in the Sacramento Region, 2012
Ultimately, choosing the right mix of sales channels (even if only one) should be
based on sound financial planning and an understanding of your profit margins from
each of your current channels. (For help with this type of planning, refer to the
FarmsReach Business & Financial Planning Toolkit.)
On a more basic level, you should also ask yourself some easier questions as a
general reality check:
 To whom will I market?
 Why will the market want my product?
 How will the market know I have what it needs?
 What will I market? What do you want to sell that will also make the biggest
profit?
 Would it make sense to pool product with neighboring farms to gain access to
larger-volume markets?
 Are there already existing local marketing channels (for example, Buy Fresh
Buy Local) and/or a cooperative distribution coops I could join?
Refer to the comparison chart below.
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Common
Risks
Prices &
Profit
Volume/
Crop
Diversity
Farmers
Market
CSA
Farm
Stand
U-Pick
Agritourism
Restaurant
Grocery
Store
Institution
Distributor
Weather
dependent;
low
customer
turn-out;
price
competition;
leftover
unsold
product
Farmer
commitment
upfront;
may be
risky for a
beginning
farmer
Low
customer
turn-out;
liabilities of
people on
the farm
Low
customer
turn-out;
weather
dependent;
liabilities of
people on
the farm;
lost crop in
field
Low
customer
turn-out;
weather
dependent;
liabilities of
people on
the farm
Inconsistent
orders; high
expectations; buyer
back-out;
slow to pay;
unpaid
debts
Inconsistent
orders;
buyer backout
Inconsistent
orders;
buyer backout
Distributors
call the
shots;
inconsistent
orders;
buyer backout
Prices vary;
Profits can
be highest
among
channels;
high labor
costs; better
markets
than others
Price similar
to wholesale, but
profit is
generally
higher
Prices vary,
but high
profit
potential;
location is a
big factor in
price
Prices vary,
but high
profit
potential;
location is a
big factor in
price
Prices vary,
but high
profit
potential;
location/activities
offered are
a big factor
in price
Prices vary;
usually
higher than
other
wholesale
prices;
depend on
quality of
product
Price is low:
producer is
a “price
taker”;
wholesale
prices are
typically
low; know
wholesale
price before
approaching
outlet
Price is low
to medium;
many
institutions
prefer to
order
through a
distributor
Prices are
competitive,
but generally low:
producer is
a “price
taker”
Varies with
market; Low
to medium
for both
volume and
crop
diversity
High: wide
variety of
crops
needed;
general rule
is to serve
20-30
members
per acre of
production
Medium to
low:
location and
competition
dependent;
good place
to sell extra
volume or
seconds
Medium to
low:
location and
competition
dependent;
can market
a single
seasonal
crop
Medium to
high:
opportunity
to sell farm
products
when
visitors are
on the farm;
depends on
season
Variable,
usually
small
volume of
fewer
specialty
items;
accept nonstandard
sizes
High to
variable;
can be a
strong
channel
when
harvest is
abundant;
low to
medium
crop
diversity
Medium to
high
High
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Level of
Management
Required
Associated
Costs
Farmer
Stress
Farmers
Market
CSA
Farm
Stand
U-Pick
Agritourism
Restaurant
Grocery
Store
Institution
Distributor
High: long
distances
may need to
be travelled;
hours
dedicated to
selling;
most
markets run
3-5 hours
High: must
sell memberships,
utilize word
of mouth
networks &
facilitate
weekly pickups. Less
post-harvest
labor
Variable:
ranges from
unstaffed
honor
system to
staffed
stores; can
advertise
Variable:
ranges from
unstaffed
honor
system to
staff
supervision.
Must
advertise
Variable:
constant
communication
typical;
requires a
high level of
service for
the volume
sold;
multiple
deliveries
Low:
Relatively
quick and
easy for
volume
sold; must
meet
packing
standards
Low:
Relatively
quick and
easy for
volume
sold; can
use schools
for CSA &
farm
education
programs
marketing
Low:
Relatively
quick and
easy for
volume
sold; must
meet
packing
standards;
very little
marketing
Market fees,
equipment,
travel, hired
labor
Packaging
materials,
advertising,
brochures,
recruiting
new
members,
labor
Road side
signs and
other
advertising;
sales staff
optional;
building,
coolers,
shelving
Road side
signs and
other
advertising;
sales staff
optional
Medium to
high: need
to utilize
multiple
marketing
channels;
manage
farm activity
& programs;
manage
staff; extra
time to
make farm
attractive/ac
cessible to
the public
Advertising;
infrastructure; educational
staff; hired
labor;
insurance &
permits
Washing,
cooling &
packing
equipment
for high
volumes.
Delivery
costs
Washing,
cooling &
packing
equipment
for high
volume.
Delivery
costs
Washing,
cooling,
packing &
processing
foods for
high
volume.
Delivery
costs
Washing,
cooling &
packing
equipment
for high
volume.
Delivery
costs
Relatively
low: Go or
don’t go
Low to
medium:
must meet
customer
expectations
weekly
Variable:
depending
on overhead
& scale
Low to
medium:
have to deal
with public
on the farm
High: have
to deal with
public on
the farm;
logistical
juggling
Medium to
high
Medium to
high
Medium to
high
High:
distributors
cited as
highest
stress
consumers
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Regulations
Face
Time w/
Customer
Farmers
Market
CSA
Farm
Stand
U-Pick
Agritourism
Restaurant
Grocery
Store
Institution
Distributor
Need
certified
product sign
at POS; any
processed
food
requires
additional
licensing &
labeling per
state laws
Membership
agreement
Food retail
license; for
any
processed
foods:
commercial
kitchen;
Food safety
plan
(HACCP);
other local
ordinances
may apply
Extra
product
liability
insurance
Multiple
forms of
farm liability
insurance
needed; for
any
processed
foods:
commercial
kitchen;
Food safety
plan
(HACCP);
other local
ordinances
may apple
Some
packing
standards if
enforced by
restaurant;
any
processed
food
requires
additional
licensing
and labeling
GAP
certification;
Food safety
plan
(HACCP);
product
liability
insurance;
packing
standards if
enforced by
store; any
processed
food
requires
additional
licensing
and labeling
GAP
certification;
Food safety
plan
(HACCP);
product
liability
insurance;
packing
standards if
enforced by
institution;
any
processed
food
requires
additional
licensing
and labeling
GAP
certification;
Food safety
plan
(HACCP);
product
liability
insurance;
packing
standards;
any
processed
food
requires
additional
licensing
and labeling
High:
Connect
with
customers,
gauge
product
preference
and
feedback;
build
reputation
Low:
Depends on
pick-up
location of
share
Low to
Medium:
depends on
staffing
arrangement
Low to
Medium
Medium to
High:
depends on
staffing
arrangemen
t
Low to
Medium:
depends on
relationship
Low
Low
Low
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Price Competitively
One of the more difficult things about farming is tracking the volatile market. When
you’re operating outside of commodities, it’s very difficult to stay abreast of what is a
high or low price. It can change based on weather, (perceived) scarcity of items,
distributor influence, and whole host of reasons.
Below are some tips shared by both farmers and buyers:
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No matter what: Charge enough to pay yourself fairly. Don’t undersell yourself.
Customers will always complain about your prices; don’t immediately lower
them. Recognize (and calculate!) the value of your product and the cost it took
to produce. (Refer to the FarmsReach Business & Financial Planning Toolkit.)
Keep up-to-date of open-market prices: contact your local distributors and
grocery store buyers to check on weekly prices, or – better yet – get on their
email list of their weekly price sheets.
Develop strong relationships with your buyers; they can give suggestions on
how best to price your product.
Refer to the Organic Price Report. Compare organic and conventional prices in
markets across the country.
Create Your Brand
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Develop an identity so buyers seek you out; create relationships with your
customers.
In direct marketing, your face and name are your brand and recognition.
Create a quality product and your brand will grow quickly!
Use your label to tell the story of your farm, farming practices, and values.
Broaden markets (and increase your profit margin) with value-added products.
Take part in state-wide Buy Fresh Buy Local programs; gain access to
membership benefits and listings in local directories.
Put your logo, tagline, and image on everything: invoices, checks, business
cards, market signage, trucks, and merchandise.
Be A Sales Person!
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Profit is the goal. It’s okay to make it your #1 priority.
Overcome your fear; don’t limit your sales (and farm success) because you’re
scared of rejection.
Don’t take rejection personally. Take comfort in statistics. For every Yes, you
may need to go through 9 No’s. Think of each No as one step closer to a Yes.
No matter what – don’t sell your product for less that what it cost to produce!
Be a Professional
o Deliver in full and on time.
o Maintain open communication.
o Respond quickly to customer questions and requests.
o Ask for feedback. Please your customers.
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Track Your Sales
Many farms sell the same crops to the same channels year after year without doing
the analysis to see if it even makes sense. A little bit of business planning can go a
long way to your short-term and long-term financial health!
Just like investment advisors tell people to evaluate their portfolio each year and
move things around to maximize their return, you too should evaluate your net
revenue from each channel and determine if you’re selling the best crops to the best
customers for your highest profit.
Below are some easy ways to track your sales.
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Wholesale:
o Use duplicate invoices to create an easy-to-follow paper trail
Farmers Market & Farm Stands:
o Get in the habit of tracking individual crop sales. Take an inventory of
crops and quantities before and after market; you can reconcile
difference at a later date.
CSA:
o Do a little each day instead of letting it build up.
o Record weekly share crops and quantities – keep records!
o Periodically put all sales numbers into your sales spreadsheet. breakdown
of sales overtime is highly valuable for financial planning.
At least once a year, look at the numbers, evaluate your progress, and make changes
when needed. For more information on financial planning, refer to the FarmsReach
Business & Financial Planning Toolkit.
This Info Sheet was based on our own research and resources recommended by our member farmers:

Cultivating Direct and Wholesale Market Outlets, Miranda Duschack and Katie Nixon, 2011

Guide to Marketing Channel Selection: How to Sell Through Wholesale & Direct Marketing
Channels, Thompkins County Cooperative Extension, 2010
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SACOG Rural-Urban Connections Strategy, 2012
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Small Farm & Direct Marketing Handbook, Washington State Dept. of Agriculture, 2010

The ABCs of Marketing to Restaurants, Michelle Frain, 2002
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The Organic Farmer’s Business Handbook, Richard Wiswall, 2009; Available on Amazon.com
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Wisconsin Local Food Marketing Guide, Wisconsin Dept. of Agriculture, 2008
Was this Info Sheet helpful to you? Do you have suggestions for how we
could improve it? We want to hear from you!
Contact Eva Antczak at evaa@farmsreach.com.
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