In this episode, you’ll learn…
- How to set-up an online farm store.
- My recommendation for how to sell farm products online when you price by weight (and may not know the actual weight until later).
- How to keep an accurate inventory when selling both online AND in person.
- The best way to accept reservations and payments for farm tours.
- And lots more.
- Don’t forget to check out the Small Farm Nation Academy whenever you’re ready to GET GROWING!
So, I’ve got some more questions from farmers to answer about marketing a profitable farm business.
Okay, this week I’ve got three questions to tackle.
- One is about the tricky issue of selling meat by product weight online.
- A related question is about managing inventory of meat when selling both online and at a farm store.
- And the third question is about managing the reservation and payment process for farm tours.
Enjoy the episode!
CLICK HERE TO READ FULL TRANSCRIPT
Hey farmers you’ve got more questions about marketing and managing your farm business, right? Today, I’ll cover how to sell meat online by weight and manage inventory, and discuss how to manage reservations and payments for farm tours!
Hey there, thanks for joining me again this week. So, I’ve got some more questions from farmers to answer about marketing a profitable farm business. If you’d like to submit a written or recorded question for the podcast, head over to smallfarmnation.com/question and ask away. Ask any question related to marketing your farm business or running your farm business and I’ll try to help you out.
Okay, this week I’ve got three questions to tackle. One is about the tricky issue of selling meat by product weight online. A related question is about managing inventory of meat when selling both online and at a farm store. And the third question is about managing the reservation and payment process for farm tours.
Let’s get started.
Question one is from Teresa in Colorado, who asks, “How should I set up my online store since most of our products are sold by weight? I don’t know the actual weight of a steak or other item until I pack it, but that happens after the order is placed. So what do I do?
Okay, great question and I’ve covered this same issue many times for members of Small Farm Nation Academy. Many of them also struggled with this issue as well as managing inventory, which I know is your second question. But we’ll get to that later.
As for this question I’ll tell you in a second what I did on my farm and why I still think it’s the best approach. But first, let’s cover options you have.
One option that some folks do is to list your product at a per pound price. For instance, you could list ribeye steaks for $20 per pound. Then you could have the person place the order online using any number of systems. In terms of payment you could have them make an estimated payment amount and then you could adjust that to the actual amount after you pick and pack the order.
A number of farms actually do something like this. But I don’t like the approach for two reasons.
One is that it’s inconvenient and potentially frustrating for the customer. We live in a point and click world where we see products listed, place an order and we’re done with it. Now we’re disrupting that model and potentially frustrating the customer when they get a notification that the order costs more than anticipated.
The second reason I don’t like this approach is that it’s more work for you as the farmer. You have to not only pick and pack the order, but you then have to go back in, physically edit the order and make sure it’s charged correctly. You need more work to do, right?
This is a tricky issue whether you’re selling grassfed beef, farmstead cheese, pastured poultry or pork, charcuterie, artisan chocolate or any other high value product that’s typically sold by weight, if it were being purchased in person.
On the other hand, you could just list a fixed price for your products, right? Instead of saying ribeyes cost $20 per pound you could just say ribeyes come two to a pack and the pack costs $25, or whatever. But if you do that you could leave a lot of money on the table, couldn’t you? Because what if a pack weighs two pounds and you sold it for $25 rather than the $40 you would have gotten if sold in person.
So what do you do?
Here’s what I did, and it worked great.
Simply create a product in your online store. Again, let’s use ribeyes as the example. Then, define multiple weight variations.
For example, when the consumer sees the ribeye product page and is given the option of placing an order, she’ll see several options. One option may be for a .75-.99 pound package, another may be for a 1.00-1.24 pound package, the next for a 1.26-1.50 pound package and so on.
Now for high value products such as grass-fed steaks, I made my increments in quarter pound packages as I just described. For lower cost products such as a whole pastured chicken, I made my increments in half pounds. So a chicken from 3.5-4.0 pounds, from 4.0-4.50 pounds and so on.
Once I did that I set a fixed price for each product variation. Let’s stay with the ribeye example, and let’s assume I set a price per pound of $20 for ribeyes.
For each of my product variations, I then picked the midpoint of each weight range.
For my 1-1.25 pound product range, the midpoint would be about 1.12 pounds, right. So I’d multiply that number times my price per pound of $20, and arrive at a price of $22.40. That would be my price for that particular product variation.
My product description would state that this product will weigh between 1 and 1.25 pounds.
Now if you’re using WooCommerce, which is what we use in FarmPress and it’s by far the most popular solution for online stores, you set this up using product attributes.
In fact, if you want to see this exact demo I described in action, just go to farmpressdemo.com and click on shop. Go to the grass-fed beef section and look at the ribeye product and you’ll see exactly what I just described. Again, that’s at farmpressdemo.com.
Of course, members of smallfarmnationacademy.com get a FREE FarmPress website, hosting included, as part of their membership.
So this is how I suggest you handle online meat sales. By creating a single product, such as ribeyes, but defining multiple variations based on weight. Just as you may see multiple color variations on a product at Amazon, with each variation costing a different amount.
This is what the consumer is used to, and it’s easy for you to manage. And it’s easy to set up using FarmPress, or on your own if you’re using WordPress. But I strongly prefer and recommend this approach versus adjusting prices after the order is placed.
Now, Teresa, you asked a second and related question about managing product inventory, so let’s tackle that next.
Managing product inventory online.
Okay, as a follow-up to your first question, you also said, “We sell online and at our farm store. How do I keep my online inventory accurate with in person cash sales?
Okay, so in other words, you’ve got 20 ribeyes that weigh between 1.0 and 1.25 pounds, and they’re in the freezer in your farm store. Online it says you have 20 in stock.
But someone walks into your farm store on Saturday morning and snatches six of your ribeyes. What do you do?
First, of course, you have to know your beginning inventory. What we did was first define our product weight ranges as I just described. Then when we took delivery of meats back from our processors we would record how many of each category we had when transferring from the delivery vehicle to our on-farm freezers.
So we started off knowing how much inventory we had of each item, such as ribeyes, and of each weight product within that.
From there what I suggest you do is create an online store as I described earlier. Use FarmPress or another solution if you want. Then, enter your starting inventory for each item. You can also define other aspects, such as whether you’ll allow backorders or not, or if you want notifications when inventory hits certain thresholds.
Obviously when someone places an online order your inventory will automatically be reduced each time an order is placed.
For in person sales, such as at farmers markets or your on-farm store, I suggest you simply keep open your admin panel of your online store and reduce the inventory real-time as each sale is made.
Here’s what I mean.
I’m in my farm store and have my FarmPress WordPress dashboard open. This can be on my smart phone, iPad, laptop…whatever. Someone comes in and grabs six one-pound ribeyes. I take their money, thank them, then decrease my online inventory by six items. Simple as that.
Look, none of us as small farmers are big retailers. We don’t have the same integrated point-of-sales tools and automated systems. But we have a lot of great options at our disposal. I’ve just walked you through an example of how you can easily take online orders for weight-based products and manage inventory pretty easily and accurately.
Does this mean you won’t have to occasionally take inventory? No, of course not. That’s basic inventory management. But this will give you a workable system that’s convenient for you and your customers.
Okay, my final question this week comes from Alex, who has a diversified livestock farm in the midwest. He says, “We’re planning on offering farm tours this year for the first time. What software can I use to get payments in advance and handle reservations for my farm tours?
Good news, Alex. This is simple, and relates to everything else I’ve been covering. You just create a product in your online store and call it Farm Tour. Just as we defined multiple weight attributes with different prices for our ribeyes, you can do the same with your farm tours. In this case the different attributes will probably just be different dates.
Again, if you want to see a demo of how I’d do this just go to farmpressdemo.com, go to the store and click on farm tours. I set it up where there are multiple tour dates so you can see what it would be like for your customers.
You can charge for the tours or not, but I agree with you that you should charge for farm tours. If you’re uncomfortable with that then charge anyway, but offer to refund that amount if the customer applies it towards a purchase in your farm store after the tour.
Now, when you set up your farm tour product you can also define inventory availability. We used to limit our tours to 75 people and would often get over 100 wanting to come. So we had a wait list option in case some wanted to cancel.
You don’t have to define a limit, but you can.
Also, you use this same approach for other agritourism events. You know, events such as farm dinners, classes on butchering, cheese or soap making, flower arranging, farm schools or whatever you’re doing. Those are all products. So define and market them as products.
If you’re using FarmPress or a WordPress based solution I recommend you facilitate payments using at least two tools, Stripe and PayPal. This covers over 99% of what people want and makes it easy to handle credit card payments.
And don’t ever charge extra for credit card payments. Don’t be that amateurish person. Just factor it into your costs the way every other business does.
Okay, so there we go. Three great questions this week, and three answers.
I appreciate the questions Alex and Teresa. And if you have questions out there Small Farm Nation, just head over to smallfarmnation.com/question and tell me what you want to know. I’ll get you the help you need.
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Thanks for listening. Until next time!
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