Hey everyone! For the past few weeks I've been working on another project: a micro-business!
Farmer's Market- Real Deal or a Fantasy Business?
I've decided to find out for myself.
Before committing to sell at a farmer's market, I wanted to address the following problems:
1) Being tied to the market every single Saturday morning this summer.
2) Keeping the farmer's market a "side hustle" and not letting it take over my entire life.
3) Keeping expenses low and profit high, in order to make it worth my time.
To fix the first two problems, I partnered with my sister-in-law, offering to let her sell some stuff at my booth. This is a good deal for her because I take all the responsibility of the booth- i.e. setup, marketing, administration. She pays half of the booth fee ($4 per week) and either milks my goat Saturday morning or gives me a 5% commission for selling her stuff. If she runs the booth on Saturday morning, I give her a 5% commission of my sales. It's a good deal for me as well, because I can split the cost of a booth and get some Saturdays off.
The third problem was a little harder. I picked a market relatively close market (20 minutes away) that had a lot of vendors and customers. I decided to have a bakery & candy booth, with me doing the candy and someone else doing the baked goods. Candy can be made ahead and kept for several weeks, and there is a high profit margin compared to baked goods. I picked baked goods because I know a lot of people who would be willing to bake for me if I needed them to. My sister-in-law was a good fit because she lives close by, enjoys baking and thought it would be fun to work the stand. In addition, candy and baked goods easily fit within Michigan's cottage food law.
Fantasy check #1: Start-up Costs
The farmer's market I picked had a relatively low booth fee, compared to other markets. I could either pay $20 per day or $200 for the season, which comes out to $8 per day. I opted for the $200 option. Even though this obligates me to go every week, it costs less overall, and I have to be there every week anyway to establish a customer base.
I also had to source a tent and table for the stand. We borrowed a friend's tent for this first week, but will probably buy one eventually. A good tent costs $100-200. We also borrowed a table from my in-laws. Hubs made me a pretty display shelf for the table with scrap lumber.
Fantasy check #2: Products
Farmer's Market- Real Deal or a Fantasy Business?
I've decided to find out for myself.
Before committing to sell at a farmer's market, I wanted to address the following problems:
1) Being tied to the market every single Saturday morning this summer.
2) Keeping the farmer's market a "side hustle" and not letting it take over my entire life.
3) Keeping expenses low and profit high, in order to make it worth my time.
To fix the first two problems, I partnered with my sister-in-law, offering to let her sell some stuff at my booth. This is a good deal for her because I take all the responsibility of the booth- i.e. setup, marketing, administration. She pays half of the booth fee ($4 per week) and either milks my goat Saturday morning or gives me a 5% commission for selling her stuff. If she runs the booth on Saturday morning, I give her a 5% commission of my sales. It's a good deal for me as well, because I can split the cost of a booth and get some Saturdays off.
The third problem was a little harder. I picked a market relatively close market (20 minutes away) that had a lot of vendors and customers. I decided to have a bakery & candy booth, with me doing the candy and someone else doing the baked goods. Candy can be made ahead and kept for several weeks, and there is a high profit margin compared to baked goods. I picked baked goods because I know a lot of people who would be willing to bake for me if I needed them to. My sister-in-law was a good fit because she lives close by, enjoys baking and thought it would be fun to work the stand. In addition, candy and baked goods easily fit within Michigan's cottage food law.
Fantasy check #1: Start-up Costs
The farmer's market I picked had a relatively low booth fee, compared to other markets. I could either pay $20 per day or $200 for the season, which comes out to $8 per day. I opted for the $200 option. Even though this obligates me to go every week, it costs less overall, and I have to be there every week anyway to establish a customer base.
I also had to source a tent and table for the stand. We borrowed a friend's tent for this first week, but will probably buy one eventually. A good tent costs $100-200. We also borrowed a table from my in-laws. Hubs made me a pretty display shelf for the table with scrap lumber.
Fantasy check #2: Products
Because I had never been to this market before, I didn't know what would be a hit product or what would be "flooding the market". I chose to use Hubs' Amish heritage as a selling point to differentiate us from all of the other home bakers.
All of my products fit under the Michigan "cottage foods" law. This means that we can sell certain foods without a licensed kitchen IF we put a big ugly label on our products, and if we stick to making "safe" food items; basically anything that has enough sugar in it to last a few years. While I'm grateful to be able to sell without a licensed kitchen, the cottage food law has a ton of restrictions and makes it very hard to find a product that the market is not completely saturated with. I would have much rather sold something like healthy like kombucha or goat's milk, which is obviously not "safe".... but I digress. We stick with the rules.
Fantasy check #3: Marketing
I spent a few hours last week making a simple two-page website on Weebly. Weebly is free and easy to use. I did not buy a domain name or business cards. I put a short Amish history article and picture on the homepage, and then a short bio of both me and my sister-in-law. I also made a page with some of our products and prices.
After I made the website, I pulled the Amish history and bios from the home page and made it into a 1/3 page double-sided flyer to have available at the market. On this flyer I also put a QR code to our website.
~~~~~
The First Week
Our first week went pretty well. I took Hubs along, and he helped me talk to the lady in charge to find my spot. He also helped me set up the tent and table and did all the heavy lifting. Later he talked to some of the customers and answered their questions about the Amish, which was extremely helpful.
Products
My sister-in-law made bread, coffee cake, cookies, cinnamon rolls, brownies and rice krispie treats. I made flavored marshmallows, cashew toffee, Amish peanut butter, egg noodles, and granola. People seemed to like the variety. I made the most money ($15) on the peanut butter, then toffee ($12), cookies 'n' cream marshmallows ($10.50) and mint chocolate chip marshmallows ($9.00). Not a single person bought the granola or egg noodles. Some people looked at the granola, but hardly anyone looked at the noodles.
Customers
I was a little concerned that the market customers would be hippie/crunchy/all-organic/anti-sugar people, but most of them were not. Only a couple people asked if we had anything "healthy", and one woman wondered how much sugar was in something. The great majority of people who stopped at our booth were happy to buy sugar-laden brownies, cinnamon rolls, marshmallows and toffee.
Competition
Halfway through the morning, Hubs ran the stand for me while I checked out some of the other booths. As I had guessed, there were plenty of people selling baked goods. There was a bread vendor, a pie vendor, a specialty pastries vendor and a few home bakers. There were several booths that had a variety of products (meats, jams, granola, catnip??). I saw one booth selling lollipops along with their crafts, but no other candy.
I did see one other woman there selling marshmallows out of the back of her van. However, she only had one flavor (plain).
I noticed that several vendors (both home bakers and commercial stores) were selling granola, and it was all much cheaper than mine. So my granola was WAY overpriced for the market.
There was one other vendor selling noodles, also cheaper than mine, better-looking than mine and more nicely packaged than mine.
I also noticed that out of all the home bakers, only half of them followed the cottage food law labeling requirements. As far as visual appeal, there was a large gap between the commercial bakers and the home bakers. I think my products nicely filled this gap. Directly across from us there was a "market store" booth selling breads, honey and granola. These were all very nicely packaged. Hubs whispered in my ear, "I think we have a marketing advantage because our stuff doesn't look as nice". There may be a sweet spot when it comes to packaging that is halfway between grocery store and kindergarten bake sale. After all, people don't come to a market to buy something they can get at Kroger. But nor do they want to buy a melty brownie with the plastic wrap coming off and dog hairs stuck to it.
The Bottom Line
Did I make a profit the first week?
Expenses:
$74.95 (not including $200 seasonal booth fee)- Ingredients, packaging, $4 for daily booth fee, misc. supplies, gas. Does not include 15 hours of work during the week and seven hours of work at the market.
One thing to keep in mind is that I still have sugar, flour, butter and cashews leftover from my initial "shopping spree". In the coming weeks I will be able to make these ingredients into products to sell.
Income:
$46.50 - Marshmallows (two kinds), cashew toffee and Amish peanut butter
It's interesting to note here that the marshmallows- my biggest money-maker and half of my profits- only cost $5 to make and thus more than paid for themselves (and there are still more left to sell!). Technically I am "in the green" with the marshmallows. The Amish peanut butter, on the other hand, cost much more to make and selling 5 jars did not pay for the other 5 jars that didn't sell. In the future, I hope to sell more items like the marshmallows and less like the peanut butter.
Net Profit: -$28.45
Well, so far this has been a fantasy business! Stay tuned to find out next week if the Farmer's Market Experiment can redeem itself.
All of my products fit under the Michigan "cottage foods" law. This means that we can sell certain foods without a licensed kitchen IF we put a big ugly label on our products, and if we stick to making "safe" food items; basically anything that has enough sugar in it to last a few years. While I'm grateful to be able to sell without a licensed kitchen, the cottage food law has a ton of restrictions and makes it very hard to find a product that the market is not completely saturated with. I would have much rather sold something like healthy like kombucha or goat's milk, which is obviously not "safe".... but I digress. We stick with the rules.
Fantasy check #3: Marketing
I spent a few hours last week making a simple two-page website on Weebly. Weebly is free and easy to use. I did not buy a domain name or business cards. I put a short Amish history article and picture on the homepage, and then a short bio of both me and my sister-in-law. I also made a page with some of our products and prices.
After I made the website, I pulled the Amish history and bios from the home page and made it into a 1/3 page double-sided flyer to have available at the market. On this flyer I also put a QR code to our website.
~~~~~
The First Week
Our first week went pretty well. I took Hubs along, and he helped me talk to the lady in charge to find my spot. He also helped me set up the tent and table and did all the heavy lifting. Later he talked to some of the customers and answered their questions about the Amish, which was extremely helpful.
Products
My sister-in-law made bread, coffee cake, cookies, cinnamon rolls, brownies and rice krispie treats. I made flavored marshmallows, cashew toffee, Amish peanut butter, egg noodles, and granola. People seemed to like the variety. I made the most money ($15) on the peanut butter, then toffee ($12), cookies 'n' cream marshmallows ($10.50) and mint chocolate chip marshmallows ($9.00). Not a single person bought the granola or egg noodles. Some people looked at the granola, but hardly anyone looked at the noodles.
Customers
I was a little concerned that the market customers would be hippie/crunchy/all-organic/anti-sugar people, but most of them were not. Only a couple people asked if we had anything "healthy", and one woman wondered how much sugar was in something. The great majority of people who stopped at our booth were happy to buy sugar-laden brownies, cinnamon rolls, marshmallows and toffee.
Competition
Halfway through the morning, Hubs ran the stand for me while I checked out some of the other booths. As I had guessed, there were plenty of people selling baked goods. There was a bread vendor, a pie vendor, a specialty pastries vendor and a few home bakers. There were several booths that had a variety of products (meats, jams, granola, catnip??). I saw one booth selling lollipops along with their crafts, but no other candy.
I did see one other woman there selling marshmallows out of the back of her van. However, she only had one flavor (plain).
I noticed that several vendors (both home bakers and commercial stores) were selling granola, and it was all much cheaper than mine. So my granola was WAY overpriced for the market.
There was one other vendor selling noodles, also cheaper than mine, better-looking than mine and more nicely packaged than mine.
I also noticed that out of all the home bakers, only half of them followed the cottage food law labeling requirements. As far as visual appeal, there was a large gap between the commercial bakers and the home bakers. I think my products nicely filled this gap. Directly across from us there was a "market store" booth selling breads, honey and granola. These were all very nicely packaged. Hubs whispered in my ear, "I think we have a marketing advantage because our stuff doesn't look as nice". There may be a sweet spot when it comes to packaging that is halfway between grocery store and kindergarten bake sale. After all, people don't come to a market to buy something they can get at Kroger. But nor do they want to buy a melty brownie with the plastic wrap coming off and dog hairs stuck to it.
The Bottom Line
Did I make a profit the first week?
Expenses:
$74.95 (not including $200 seasonal booth fee)- Ingredients, packaging, $4 for daily booth fee, misc. supplies, gas. Does not include 15 hours of work during the week and seven hours of work at the market.
One thing to keep in mind is that I still have sugar, flour, butter and cashews leftover from my initial "shopping spree". In the coming weeks I will be able to make these ingredients into products to sell.
Income:
$46.50 - Marshmallows (two kinds), cashew toffee and Amish peanut butter
It's interesting to note here that the marshmallows- my biggest money-maker and half of my profits- only cost $5 to make and thus more than paid for themselves (and there are still more left to sell!). Technically I am "in the green" with the marshmallows. The Amish peanut butter, on the other hand, cost much more to make and selling 5 jars did not pay for the other 5 jars that didn't sell. In the future, I hope to sell more items like the marshmallows and less like the peanut butter.
Net Profit: -$28.45
Well, so far this has been a fantasy business! Stay tuned to find out next week if the Farmer's Market Experiment can redeem itself.
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