How to Sell at a Farmers Market?

Farmer’s Market Tips and Tricks for the Home Baker

This blog post is geared towards the home baker who wants to market and sell at a farmers market. I started selling baked goods at our local farmer’s market in 2014. I expanded into a commercial space and still sell at multiple markets and festivals today. In this post, I will answer the question “How to Sell at a Farmers Market?” to prepare YOU to sell your goods locally!

Choosing a Market

internet Research of Area Markets

The first thing you want to do as an aspiring market vendor is study the farmers markets in your area. Do an internet search to find local farmers markets and visit their websites. Research and compare the following statistics for each market. Do not assume that you want to participate in the biggest market in your area. As a rookie vendor, a smaller market with less expensive overhead may be a better fit. Continue reading to learn why!

1. What day of the week and what time of day is the market? Does it fit into your production schedule?
2. How much is the vendor fee for the market? Some markets charge a flat vendor fee by week, others will charge a percentage of sales as a fee, and then others will combine the two (a flat fee + a percentage of sales). This affects your revenue, will you be able to make enough money to offset the fees, cover your product costs, and leave you with a profit that covers your time and other costs?
3. Is there an application cost and how much is it? Some markets charge a fee to process your application.
4. What are the paperwork requirements for the market and do you have everything they require? Markets may need a copy of your business license, a certificate of insurance with the market’s name as an additionally insured, a sample photo of your products, a copy of your labels, a list of products on offer, etc.

personally Visit Area farmers Markets

Next, visit each market and check out all the bakery tables. Take a notebook with you and take notes to compare plusses and minuses of each market and vendor. Answer the following questions:

1. How many bakery vendors are at the market? Is the market already inundated with bakers meaning you will not be able to compete/sell all your products?
2. Look at the bakery products on offer, are they similar or different than yours (breads, pastries, pies, cookies, etc.)? Can you create a competitive advantage by offering products not already available (i.e. will customers purchase from you rather than another baker)?
3. How much are the bakery vendors charging for their individual baked goods? For instance, a loaf of bread – $6,$8, $10 for each loaf? Take note of general prices being asked.
4. Talk to the market manager, are they willing to take on another bakery vendor? Managers try to bring in vendors that offer a variety of products.
5. Talk to a few vendors and ask them what their experience is at the market (plusses and minuses)?
6. Take a look at vendor presentation – what do you like or not like about the presentation, branding, marketing of their goods? How do vendors speak to you when you approach their table? Which vendor most inspired you to buy and why?

What Products Should I sell at a Farmer’s Market?

Okay, you have chosen the market where you want to sell your products. Now it is time to choose unique products! Choose carefully, although you may love everything you make, you must remember that you’re now producing for a target audience. What do customers want to purchase? Answer the following questions to help narrow your product offering.

1. In the sections above, you should have answered which products are already being sold at the market. Now, write up a list of your products that are totally different than those already on offer. For instance, if there is already a favorite cookie producer selling 20 different varieties of cookies, then you do not want to offer cookies. Focus instead on your different products like brownies, pastries, breads, pies, etc.
2. Next, narrow down your list by asking…Do you have the tools in your kitchen to produce those items?
3. Do you have tried and true recipes for the products you would like to offer?
4. Do you have a solid way to package your items that allows them to be transported/sold in individual portions?
5. Can you source high quality ingredients for your products consistently and at a low cost? Are they available locally? Will you have to order them/wait for delivery?

Pricing, Profit, & BOOKKEEPING

Price your products competitively so that you can create a profitable business. You will want to know your Food Cost and total Cost of Goods Sold (COGS) for each product. Click to learn more about Food Cost and visit this site to learn more about COGS. Work through the following questions to come up with an understanding of the total cost of selling that one cookie!

• Will I pay myself for my labor (production) hours? For instance, if it takes you 30 hours to produce enough products for your Farmers Market, will you pay yourself for 30 hours of labor out of your profits? I highly suggest you do this as it is important for business growth (when you want to hire another person).
• What is the food cost to produce all your products at the farmer’s market?
• What are other costs associated with selling at your farmer’s market? Vendor fee, insurance, packaging, etc.
• Does your local tax laws require you to charge tax for your baked goods? I suggest you check your city, county and state tax laws as they are all different. Will you charge tax on top of the price of your goods or take tax out of the flat price? That means, you charge one flat price for your baked good, for instance, $8 for a loaf of bread. If your local tax rate on food is .04%, then you either need to add that at check out and charge $8.04 or you will take the tax out of the price, meaning, your revenue is $7.96 after taking the .04 out of the price. There are plusses and minuses to both methods, however, ensure you take it into account when working out the price of your products.
• Think through, how will your customers pay you? You may accept cash only or offer other forms of payment like credit card or other payment applications (PayPal, Venmo, GooglePay, etc). The processing of credit cards or use of other payment applications come at a cost – know those costs and figure them in to the price of your product so you are not losing money by offering the convenience of credit card/payment applications
• Finally, add each of these costs together, see below for an example.

PRICING TO SELL AT A FARMERS MARKET

Production Costs + Food Costs + Packaging + Vendor Fee per market + Insurance per market + Licensing per market + Taxes + 1.35% credit card processing fee = COGS

(20 hours x $12/hr) production cost + $75 food cost/market + $10 packaging/per market + $35 vendor fee/per market + ($220 insurance/12 markets) + ($50 license/12 markets) = COGS

So, the math looks like this: $240 + $75 + $10 + $35 + $18.33 + $4.16 = $382.49

Then take that $382.49 and multiply * 1.0135 credit card rate, and then by * 1.04 tax rate = $402.95 COGS. Next, add in the profit you want to make, the profit is the money you retain in your business account to grow your business, purchase equipment, purchase ingredients, pay fees from, insurance, taxes, licensing, etc. Let’s say, you want to make a profit of $200, so your target total revenue for each market would be $602.95. For arguments sake, let’s call it an even $600.

$600/80 products sold = $7.50 average price per item, for instance, one product can cost $3, another 6, one 8, and another 15 ($3+6+8+14/4 = $7.75 average). That does not mean you must charge that price for each of your 80 products sold. You can do this same math for each and every product you make, however, it might be easier to have an average in mind, take in to account how much you will sell, and charge a competitive price. Keep in mind you must make at least $600 total revenue to cover your costs for the market, pay yourself $12/hour, and make a $200 profit.

FARMERS MARKET BOOKKEEPING

You may want to invest some time in learning basic bookkeeping. As you can see in the previous math example, there’s a lot of financials to consider. If you stay financially organized, tax time becomes much easier! Personal and business accounts MUST be kept separate for clean bookkeeping. The labor salary in the above example of $240 can be paid into your personal account or if you want, you can reinvest those dollars to grow your business by leaving them in your business account. The additional $200 you added as profit remains in your business account. Use your business account only for business expenses, never purchase personal items from the business account. There are plenty of bookkeeping resources out there, or if you are an Excel aficionado, you can create your own spreadsheet.

Licensing

A very important step you must accomplish prior to selling at a farmer’s market is to ensure you have the correct licensing. Research your local health department’s online page to see if you can find the requirements. Here I will discuss the general types of licensing (you must check with your local, county and state business licensing and health departments for exact requirements):

1. COTTAGE LICENSING: In recent years, many states and local municipalities have created a cottage license for small food producers who use their personal kitchens for non temperature sensitive foods. Your local authority provides the exact list of what you can produce at home and sell to the public. For some examples, in Colorado, we are allowed to sell baked goods (without cream filling or anything that needs refrigeration), jam, unprocessed raw fresh vegetables, homegrown herbs, dry good mixes (like teas, dried herb mixes, etc).
2. FOOD HANDLERS LICENSE: Generally, in the United States, any food handler must complete the food handler’s course and possibly food safety courses in order to ensure the health and well-being of customers. I suggest you check this website, as it is specific to each state/county, it is low cost, and provides easy-to-use online training.
3. STATE SALES TAX LICENSE: If you are collecting state sales tax and remitting to your tax authority, you may need a separate sales tax license. Check with your State’s Department of Revenue for specific requirements.
4. FOOD MANUFACTURING LICENSE: If your state does not offer a cottage license, you may need to apply for a food manufacturing license. Once again, refer to your State and local licensing authority.

MARKETING & BRANDING

One of the most important ways to connect to your customers is through marketing and branding your business. I suggest you use social media for marketing. However, not before you brand your business.

BRANDING

Branding entails coming up with your company’s logo, script and colors, at a minimum. Use this logo, script and colors to create all the material you use to market, package and display your items. Create tags and labels for your products that are consistent with your branding and that are consistent in appearance. The tags that I use are branded with my logo, and other important information, like business name, address, product ingredients, and date produced. Sometimes, these labeling requirements are dictated by the state, local or even market authorities. So be sure to check the requirements. Be consistent with branding and you create a very professional looking business. Inconsistency in this area leads to confusion among your customers.

MARKETING

What is marketing? Marketing is getting notice in front of potential customers that you will be appearing at a market. Give them the information they need to find you there. When, where, what time, and what you are selling is all pertinent information. Do a series of social media posts to gain attention. Ask your market manager if they have a social media following and if you can provide them with some content (photos, special deals, etc.) that they can promote to market customers.

MARKET SET-UP

Now, the fun part! Market day! Setting up and marketing is one of the most satisfying things to do in this whole process. I just love meeting customers, sharing my hard work and passion for great food. Overall, if you have made your products with love and the best ingredients you could source, then your audience will love them, be proud of what you have made and be ready to tell your customers all about them!

MARKET EQUIPMENT

I suggest the following equipment at a minimum:

CANOPY TENT: A 10’x10′ canopy, sometimes called a pop-up. The canopy is to mark the boundaries of your booth, to cover you from rain and sun and to protect your products. Ensure you have some tie-downs or weights to keep your canopy from blowing away.

TABLE and CHAIRS You will need a 6′ table at a minimum, depending on the number of products you want to display. You definitely do not want your table to look crowded so if need be, bring two tables. Consider a 6′ and a 4′ table or two 6′ tables. Bring a chair or two as well for you and a helper, if needed. Markets are long and having somewhere to sit to take a break is most welcome. Don’t forget the tablecloths (in a brand color, of course)!

DISPLAYS: I love building my displays up so there is dimension at the table. See the photo above. I used a a wooden stepped display to market small products (bags of crackers). Then, I balanced that on the other side of the table with a clear plastic display. In that case, I displayed yummy pastry products that look lovely inside a case. I package them on site in a simple bakery bag when a customer purchases something.

SIGNS and LABELS: SIgnage is one of the most important ways you will market to your customer on site. Ensure your signs are professionally done, easy to read, and convey what you are selling. My business name is the Bread Stork, since I am a bakery and predominately sell bread, my name is enough to convey what I sell. If your name doesn’t convey it, ensure your sign has your product category displayed – like “bakery,” “baked products,” “pastries,” or whatever you are selling. I bought my sign at VistaPrint, they are an online marketing company that creates beautiful, high quality products for low prices. They also made matching stickers and business cards with my information. Create labels for all your products so that customers can easily read what you are offering. Ensure your labels are branded with your colors and logo! I use Canva to create all my branded labels, tags, menus, etc.

BAGS: Bags are certainly not required, but are a convenience for your customers, especially if they are buying lots of small packages. I only offer paper bags in order to be environmentally friendly. Paper bags can be purchased in all sizes and in bulk at a Sam’s Club or COSTCO in the United States.

CASH BOX and CREDIT CARD READER: Ensure you have thought through how you will collect cash and charge credit card holders. I always bring my cash box with at least $50 in various denominations to make change, my iPad (fully charged) with a Square Reader to swipe credit cards, and my phone with Venmo application so customers can scan my Venmo account and I can verify I received the money before they leave with their purchase.

QUESTIONS?

Thanks for reading! I hope you found these suggestions useful. If you have any questions, please post it below. I always learn from my readers’ questions, so I appreciate yours! Best of luck with your business and farmers markets. I wish you all happy baking, best of marketing, and happy summer days to you all.