Leigh Caldwell’s book the Psychology of Price has some great ideas to figure out your prices and marketing strategies. The example he provides about a new tea product and where he sells it was thought provoking. For example, he mentions that if he sells the tea in the grocery aisle, folks will only be willing to pay a similar price to other tea products, but if he sells it next to other tea and coffee products in a coffee shop, he can get a higher price. He also covers overhead costs and that it is difficult to factor those costs in if you don’t have a solid number of how many products you will sell. At Stone Coop Farm, we do a crop plan in January, factor in potential losses (due to weather or pests), and then consider how things have grown in the past. This gives us a good estimate of how many pounds we will produce for the whole year and we can use that to determine an overhead cost per pound. We should also break this down by crop, but right now we are using the average per pound as a guide.
Last week, in my blog on Sales and Pricing Strategies, I shared how we determine our Production Costs. Once we have our Production Costs and Overhead Costs we can determine our Target Price.
We also consider a few other things to determine our final price.
And lastly we do a reality check. This method of looking at actual costs, overhead, profit, etc. tells us a story about whether this crop is profitable or not. Over the years we have reduced the number of items we have grown so we can focus most of our efforts on our most profitable crops. We tried to grow everything our first year and learned the hard way that we couldn’t grow them all in a profitable manner.
Our customer feedback is also super crucial to our product mix and we have annual planning meetings with our wholesale accounts, chefs and also send our customers a survey each year to see what they would like us to change or grow. All this information is incredibly helpful for our planning process.
Did You Know that Survey Monkey is a simple online survey tool and if you have less than 10 questions it is free? It also allows you to save past surveys for easy updates.
Recommended Viewing and Listening: Enjoy a unique version of "Thunderstruck" by some down home country boys - Steve'n, Seagulls.
This month with Abundance Cubed we are focusing on how to determine our prices and reading the Psychology of Price by Leigh Caldwell. I have just started reading it, but wanted to share some of my sales and pricing strategies this week and see how they compare to Leigh Caldwell’s book later. Here are some things we consider when determining what to grow and how to sell our products at Stone Coop Farm:
Then we look at the actual production costs per crop. Our hourly wage includes the cost for Workers Compensation, unemployment, vacation, etc. which is approximately 25% added to the hourly wage we pay to our employees.
The production costs are NOT our target price for selling our products either wholesale or retail. It does NOT include administrative costs or profit. We will look at that next week.
Recommended Viewing: Check out Angie’s recent video when she visited us at Brighton’s Farmers market. It was a cold wet day and although we are at EVERY farmers’ market from May through October, we cannot ensure that the customers and other vendors will show up. That means that on these miserable days, we bring back a lot of the wonderful produce we harvested, without selling it. That is a loss that is also factored into our prices.
Did You Know that many farmers are not covering all their actual costs when they sell their products? Many consumers expect to get cheaper prices at farmers’ market than at the grocery store, but what these consumers don’t consider is that, of the actual farmers that do sell at the market, many of them are small farmers that have huge labor costs because they cannot afford expensive automated harvesting equipment. Stone Coop Farm’s tagline is Friendly Farmers, Caring Consumers because our customers care about the food they eat and the farmer that grows it! We want to THANK all the folks that support Stone Coop Farm and other small farms in our communities.
I had a coaching session last night with James Tripp. His tagline on his website is “Make Life Your Craft”. He was helping me through a process of defining what is important to me and how to clarify my priorities. I struggle sometimes to make decisions that may have an impact on my life and my family. Some days one scenario sounds fantastic and the next day I see everything that is wrong with it. I often don’t want to make any decision based on these extreme thought patterns because I am not sure which one is truly how I feel. James explained that they are both true. In those moments, how I am feeling, is true to that moment. He said one thing I can do to clarify the entire picture is to evaluate all the scenarios before I make a decision by using the same questions:
What do I love about this scenario?
What do I fear about it?
He suggested I write the answers to these questions for each scenario. I may see some patterns or similarities that can help with my decision. Even if there are no patterns, it will help me define the questions and answers that I NEED to know before I can feel comfortable about making a decision. Ultimately he said, every decision is an imperfect one.
Recommend Reading: James Tripp and his family are traveling all over the world. They are getting a insightful perspective about different cultures. Check out his blog titled Mental Health, Social Health Cultural Health.
Did You Know that Stone Coop Farm, like so many other green spaces, smells wonderful after a storm? We had a thunderstorm last night and it stopped right before sunset. The thunder clouds were still in the sky, but the air smelled green, fresh and wet. Breathe deeply!!!
So many things are going on around me, all the time. It is easy to get caught up in a routine and get used to seeing the same things. I walked through my woods and meadow on Monday and found so many things that I have never seen before. Part of it is that in the last couple years I have rarely taken time to enjoy these beautiful spaces on the back of the farm. I am so focused on the farming, that I don’t see the other magical things going on around me. It was a reminder that I need to look at the farm, my life, and my future with different eyes. A friend of mine, Ann, did a sound blessing Wednesday on me and one thing she mentioned was that I should step away from my image of myself and look at the infinite possibilities of all that I am. Such a wise woman.
So what should I start stepping back from to see with new eyes? How can I change the landscape or images and impressions so I see them differently? What am I not seeing that could brighten my day and my life?
Recommend Viewing: Healthy farms and gardens have all manner of critters. Here are a few at Stone Coop Farm. Many of these help us control bugs, mice, voles, and others that eat our crops. So when we find a new friend, we stop, we share, and we celebrate that they are here. They are wonderful farm partners sharing our journey and sharing our healthy ecosystem.
Did You Know that many Farmers Market's in the Midwest start the first week in May and continue through the end of October? We will be at Brighton's Farmer's Market tomorrow from 8:00 AM to 1:00 PM with loads of our beautiful produce. Come see what we have to offer!