farmers market

Top 5 considerations for direct to consumer producers

The following information is provided by Nationwide, the No. 1 farm and ranch insurer in the U.S.

Consumers increasingly want to know where their food comes from. This trend paves the way for direct-to-consumer sales and brings consumers peace of mind. For producers, the benefit of direct-to-consumer sales includes diversification of the operation and the ability to enter profitable niche markets. Before selling directly to consumers, however, keep the following tips in mind:

  1. Watch your step: Selling at a farmers market or roadside stand can be a great way to attract a variety of customers to your products and establish your brand. Be mindful of your space and what tripping or slipping hazards are present. Give the space where you interact with customers the same amount of care and caution that you would at your own home operation.

  2. Be attentive to your industry: The food processing industry is complex but being aware of what is happening on a commercial scale is important. For example, subscribe to industry newsletters to keep up-to-date on recent food safety requirements and recalls so you are prepared to talk about your product when others have questions. Build a relationship with your county Extension educator to stay abreast of recent research and to discuss your questions.

  3. Keep track of your receipts: Accounting for what you earn and spend informs important business decisions that you make, or that others recommend for you. For example, an insurance agent might use this information to provide you with the resources you need to be successful. Knowing whether selling directly to consumers is an incidental expense or if it makes up a large portion of your income will inform decisions like what insurance you need.

  4. Know your process: Be able to communicate what you do with people who are less familiar with how food is grown. Keep detailed records of everything you do to produce your product and why. This information will help you communicate with customers as well as other stakeholders, including lenders and insurance agents. Being able to explain your process will give stakeholders an idea of how you operate and what potential risks are associated with it.

  5. Plan for the worst: Although you may be aware of the risks associated with your business, you may not be properly prepared. Don’t make the mistake of falling into the mindset that something won’t happen to you. Assess your risk by walking through everything that could go wrong. Then, take the appropriate steps to protect yourself against those risks. Talk to an insurance agent to make sure you have appropriate coverage to protect yourself in the event something undesirable happens.

Selling directly to consumers provides wonderful opportunities to diversify your operation and give consumers a glimpse into the food and agriculture industry. Make sure the reward is worth the risk by talking to a Nationwide insurance agent today about what type of coverage you may need to protect yourself and your livelihood.

 

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