This has been an interesting and exciting growing season.  As I have written before, we are growing for a farmer’s market for the first time.  That has added many new twists and sometimes frustrations to the mix.  Our growing area is a lot bigger and we need to plan our plantings with a more time sensitive approach.

One thing that we have found is that you cannot undersell your produce.  It is a lot of work to produce it and if you are selling at a local market, focus on the local nature of your product.  I read a discussion group that focuses on a specific model of producing and selling at markets.  Many of the participants say they can’t get certain prices for their product because of the competition.  Why would someone pay $3 for an item they can get down the row for $1?  Well, let me tell you, if you only value your product at $1, then that’s all it’s worth.  But if you truly believe you have a superior product, then don’t undersell it.

Case in point, at our first market a few weeks ago, I was definitely intimidated by the competition.  I knew there would be competition, but I didn’t expect it to be as big as it was.  We had picked a smaller market because we thought the bigger vendors would be at the bigger markets.  But that first day proved me wrong in that area.  There are several other produce vendors at our market selling the same or similar products.  And their price point was less than I had on my signs.  Before the market officially opened, I was faced with a dilema; should I price down my produce, or should I stick to my guns?

I chose to leave it and see how things went.  That proved to be the right decision.  People were truly interested in our story (which incidently is that we grow sustainably/organically, we are local, and we are family operated).  That story involves a higher price point that the other vendors, but it didn’t inhibit the customers.  We sold out of everything by the end of the market.

As the season has gone on, we have had much more product available, and as such we have not sold out.  But our overall sales have increased, so that is the direction we want to go.  Bottom line, our product costs more to produce and is therefore worth more.  I have not had any customers (or potential customers) tell me they thought my price was out of line.  If it was, certainly at least one person would have said so.  Additionally, we have had repeat customers with positive feedback.  That tells us that our product is good and that it is appropriately priced.

Finding that appropriate price can be hard, but it is important to start it high.  I have a good friend that started selling pickles several years ago at farmer’s markets.  My wife and I told him that his expected price was too low, he should start higher.  We said that as he got going and figured out that a low price was too low, it would be harder to raise prices to a consistent audience than it would be to cut if they were too high.  That proved to be quite successful advice and he has grown to offer his product not only at farmer’s markets all over the area, but also in several large chain stores.

I almost didn’t take my own advice, but now I’m glad I did.  We can’t compete with our competition on price so we have to focus on our story.  Our competition are big vendors that don’t actually produce everything they sell.  They bring hot-house tomatoes in May and June that they didn’t grow themselves.  They have tables of beautiful looking perfect produce.  The problem is that what they are selling is no different that the grocery store.  Most of it is not organic, most (if not all) is not “local”, and with the exception of a few items, most is not actually grown by the seller.

Contrast that with our story.  Our product is grown naturally and organically without the use of chemicals or pesticides.  But that is only the beginning.  We grow our product 15 miles from the market.  We live in the community, shop there, spend our money there.  We grow all of our own produce.  If it’s on our table, we grew it.  I can tell you everything about how it was grown because I did it.  My family is my work force.  My wife and my daughters helped till, plant, weed, water, harvest, and package everything with me.  The competition can’t say that.  And there is a market for what we offer.  We have received positive feedback on every aspect of the points I outlined above.  Every one of those points requires a premium price point because our cost of production is higher.

So the moral of the story is, don’t undersell your product just because the competition is priced lower.  Just because the competition is at a farmer’s market does not mean they are local, or organic, or any number of other things.  It just means they are there.  Find out more about the competition before you make any adjustment to your strategy.  Don’t get into a pricing war with a larger producer with a lower cost of production (or purchase, if he’s not growing it himself) unless you are willing to essentially give away your product and work for free.  Focus on your story, build a regular customer base, treat them right, and give them a great product.  They will be loyal to you.