Selling to stores

Discussion in 'Homesteading Questions' started by Jena, Mar 15, 2004.

  1. Jena

    Jena Well-Known Member

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    I've had several people tell me I ought to approach the local small meat market about my poultry. They say he has good meat, but his poultry is wal-mart like.

    I want to do this, but don't know how to handle my own local sales, along with selling to him (if it happens). My price is the same for everyone, wholesale or retail. My other big wholesale customer marks it up slightly and resells. They are not in my local area, so my sales aren't really affected by that.

    So..if he wanted to buy my chickens, do we each just keep selling on our own? I have no problem keeping my mouth shut about providing the poultry to him. It wouldn't be fair to him to tell everyone that they can get it cheaper from me and it doesn't give me any kind of advantage. I'm still selling the same number of chickens for the same price. His customers seem quite loyal, which is ok. I think there's room for both of us.

    I would like to have some kind of idea or plan on the sales thing before approaching him, in case it comes up. Any ideas would be appreciated.

    Thanks
    Jena
     
  2. Mike in Ohio

    Mike in Ohio Well-Known Member

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    Decisions, decisions......

    Think about why you are selling to your wholesale customers. It allows you to move more product at a reduced cost of selling. I would recommend coming up with a discount schedule based on quantity purchased over a given timeframe.

    I'd also highly recommend that you work out an arrangement for developing a brand for your chickens even if they are sold through your wholesale customers. You want people coming in asking for YOUR chickens. Provide a little flyer that tells your story.

    I've been holding off selling our honey through stores because we currently sell all we produce ourselves (at retail). I have several (healthfood) stores interested. When we do sell we will provide quantity discount incentives (probably on a quarterly basis).


    As usual, just my 2 cents.

    Mike
     

  3. Ross

    Ross Moderator Staff Member Supporter

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    I agree we sell to stores and I want it labled with my farm name on it. Its good stuff (lamb pepperettes) so I see no reason not to get people asking for it by name. I've been thinking about selling regular lambs to stores as well but of coarse they will get a discount (about 15%) I do the retail thing at the farmers market and that works out about right for the meat I buy in (Venison and Bison)
     
  4. fin29

    fin29 Well-Known Member

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    We sell our poultry to a couple of health food stores. Our retail price is $2.50 per pound off the farm and we have been selling to them for $2.25 per pound (going up this year to $2.50). They can't mark the meat up very high, but they always take anything we offer them because they feel that offering meat brings in more customers that will buy other, better marked-up items. So basically, it's one of their biggest loss-leaders. We don't label the package (saves money), but we display a company card in the cooler, and we have received several calls from customers who would prefer to order in bulk from us on slaughter day, so that's definitely a side benefit.

    Now, if your potential customer is "just another" meat market, there might not be that kind of incentive. If he can get gross factory chicken on the cheap, he will do it, unless he's going for the higher end customer. But, he might also be willing to offer it in addition to the other chicken he has, as a "local," "organic," etc. alternative at a hefty markup. I've seen chicken like yours and mine sell for $6-7 a pound in national natural food store chains. But, if he agrees to take a certain amount of it in bulk, you might be able to give him a small discount just for your convenience of delivering a larger order at one time. You can structure the deal so that the chances of him ordering enough to get that discount are slim, but if he actually gets there, it's still a good deal for you.

    With my experience, I would suggest selling it for no less than you could sell it from your farm. That way, even if he becomes "competition" in the strictest sense of the word, it still works in your favor. And don't forget the potential beef sales that might result from such a relationship...
     
  5. OUVickie

    OUVickie Well-Known Member Supporter

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    First you may need to check and see if he cuts his own meat. If so he may have to register with the Health Dept. and there are rules in some states about where meat is bought and how it's processed. Health Food stores are sometimes different because they don't usually run "meat counters" and you can list your meat as "natural" instead of organic. Organically grown usually requires specific standards of inspection and packaging.
    The best way to find out may be to just go in a talk with him about where he buys and his Health inspection requirements, etc. Tell him you're thinking about selling your meat to stores but your not sure how to go about it. He'll probably be flattered that you ask his expertise!
     
  6. fin29

    fin29 Well-Known Member

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    Organic has special standards of production and labeling, but not packaging or inspection. Those fall under the same requirements as other meats for retail sale.
    I would never ask a potential customer what he or she thinks about how I should market my meat to him. And he probably wouldn't be interested in spending time explaining how I should market it to his competition either. The best way to find out is to ask the health department yourself, do the research, then approach the meat guy like you've been doing it your whole life.
     
  7. Jena

    Jena Well-Known Member

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    His inspection requirements don't really affect me, I don't think. My birds are USDA inspected, packaged, processed and ready to go.

    He probably has a processors license also (different type than a slaughter plant), which would enable him to unpackage my chickens and put his own label on them.

    I can also have them packaged in bulk...big bag of naked chickens, with one big label on it so he doesn't have to unwrap them all.

    I cannot repackage anything, but I know he can.

    Jena
     
  8. revontulet

    revontulet Well-Known Member

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    I would tell him that meny of your customers have come to you about how they really dislike the chicken he sells and that is why they travel to your home to buy your chickens(duh) but they want the convenience of grabing one of your chickens while they are doing their shopping at his store and asked you if you could sell them there......
    That way they don't always have to trek down to your place, and they wouldn't mind paying a little more for that convenience.
    This way he is gaining customers, even if you are still selling them from your home to the ones who don't mind making an extra trip to save a couple bucks.

    You can even get a couple friends to go in there to make requests for him to sell your chickens. We have a small store and we will sometimes make requests to the owner that he get somethings in his store that we want to buy and if he can get them he always does.

    I think selling to or through stores works in differant ways. Sometimes you don't get paid untill the product is sold, then you get your percent of the sales. Sometimes they give a downpayment and then a percent of every sale. Incase some don't get sold or stolen you both lose that money. Sometimes they just buy outright. I think you'll have to talk to him about how he does it.
     
  9. fin29

    fin29 Well-Known Member

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    Jena-
    I know that Illinois has some of the tougher ag. regulations, but one angle you might want to look into are the packaging regulations. A couple of quick hacks into the chicken, and then you're talking $3 or $4 per pound.

    For example, here in Maine, the facility requirements for packaging my own meat are the exact same regulations (verbatim) as the rules the state has for my in-home catering license. It's like they just borrowed the rules from the Health Department.

    Now, I have no need to repackage right now, because I can't grow enough to meet the demand I have already on bulk orders. But if I wanted to repackage or sell halves or quarters, I could make a case that the same rules I'm following for catering apply for custom butchering and packaging, so they should let me do it.

    There are always loopholes in these rules. You might be able to qualify for some rinky-dink license that has similar requirements to your packaging rules, then make a case to apply them to your packaging.

    I think your bulk "bag-'o-chicken" is the way to go with this guy now, but it sure doesn't hurt to look into other angles.

    Just a thought.
     
  10. Mike in Ohio

    Mike in Ohio Well-Known Member

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    revontulet,

    I don't think telling him that people dislike his chicken will put him in a favorable mood. I'd just stick with the part about people like her chicken but wanting the convenience of buying from a store with regular hours.

    As usual, jsut my 2 cents.

    Mike