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3 min read Diversification

Selling direct to consumer - farming edition

Selling direct to consumer - farming edition

I want to see more farm businesses succeed. I want to see farm businesses become more profitable. Farmers become better off financially and an all round more vibrant farming industry.

This is a guide to making that happen by selling direct to the consumer.

What is selling direct

As the name suggests, selling direct to consumer is the business model of selling products directly to the end user and bypassing any third-party retailers, wholesalers, or middlemen.

Beyond the farm shop though, it’s not one typically associated with farming. But the financial pressure being put on farms, the need to diversify away from the reliance on the big supermarkets and the adoption of technology in farming means that it is becoming a more popular route to market.

Reasons to consider selling direct

  1. You set the price - rather than  have the price dictated to you, you can set your price based on the cost of production
  2. You have higher margins - by cutting out the middlemen then you keep all of the margin yourself.
  3. Better cashflow -  improves cashflow and reduces the need for credit control
  4. Opportunity to build a brand - builds a closer relationships with your customers and takes you away from selling a commodity.
  5. You’re in control - from marketing, product development, data, reputation, customer experience - you're in control of all these aspects

The Process

In 2023, please don't go and spend tens of thousands on a physical farm shop before you've tested the idea online. My advice would be to set up an online store for a fraction of the cost by doing the following:

  • Decide what you’re going to sell - this can be anything from meat, clothing, cheese or frankly anything you can physically ship/deliver
  • Pick an ecommerce platform - there are tons to choose and see my recommendations below
  • Market the hell out of it - I can't stress this enough
  • Factor in delivery - price the cost of delivery into the sale price and ensure that leaves you with enough margin

Best ecommerce platforms in 2023:

My preference is with Shopify. It's SO easy to use, provides a host of professional looking templates and starts from only £25/month. You can't argue with that.

UK delivery carriers

Evri are (currently) slightly cheaper than Royal Mail but use which ever is most convenient for you.

Mistakes to avoid

Here are the big mistakes I made

  1. Lack of marketing - don't make the mistake of thinking that you can spend money of Facebook/Google ads and just watch the sales roll in. This just won't happen in 2023.
  2. Poor looking website - if you're going to invest in something, make sure it's in good photography and making the website/products look professional.
  3. Lack of margin - the sweet spot of ecommerce is products between £60 - £100 as this allows enough gross margin and a decent profit. Anything less is a bit thin.

A word on marketing

I hate marketing. Not for what marketing does but for what it has become. Marketing these days is so full of analysis, graphs, spreadsheets and layers of people that it no longer creates new or strong ideas.

Far too many people make marketing out to be some kind of science. I presume to make themselves look and sound important.

I believe marketing is just common sense with a few good ideas thrown in on top.

Don't think you need to be spending truck loads of money or hiring a marketing agency to succeed. You don't. All you need is consistent effort and some good ideas to make yourself stand out. This shouldn't cost the earth.

D2C Examples

Most physical farm shops incorporate an element of ecommerce as well but there are more and more pure-play farm ecommerce shops cropping up. Here are a few examples of each:

Physical stores:

  • Diddly squat - I'll use the example as it's the best known one
  • The Buffalo Farm - some of you will remember Stevie Mitchell from This Farming Life a few years back
  • Mossgiel Milk - a small dairy farm in Ayrshire who now sell all their milk direct to shops and consumers with great success

Pure e-commerce stores:

Published by:

Sandy Kirkpatrick