Farm Store vs Farmers Market: What's the Better Option?

Farms that sell directly to consumers make up only a small percentage of total farms in the U.S., but account for an impressive $4.5 billion in revenue.

That’s not surprising. An increasing number of people want local and healthier alternatives to big-box grocery stores.

But when it comes to in-person sales, you have a few options, the main ones being setting up a stall at a farmers market or opening a farm store. Which is the better option? That depends on you.

In this article, we’ll dive into the major differences between farm stores and farmers markets, then lay out the pros and cons of each, so you can make the right choice for your farm business.

Farm Store vs. Farmers Market vs. Farm Stand

Let’s start with the basics. To the layperson, farm store, farmers market, and farm stands are thrown around interchangeably, but are all a little different. Here’s how:

A farmers market is a shared space where multiple farmers can sell their goods directly to customers. Farmers markets usually occur on specific days and are hosted by a local store or city. Some locations also have permanent indoor farmers markets.
A farm store is a physical storefront operated by the farm to sell food and other goods on a seasonal or year-round basis. Farm stores are usually located on or close to the farm itself.
A farm stand is essentially a smaller version of a farm store and is usually only set up on a temporary or seasonal basis to sell produce. A farm stand can be as small as a few roadside tables or a small trailer with basic shelves.

For farm stands and farm stores, it’s important to check your local Cottage Food Laws to understand where and what you can sell legally. This doesn’t mean you can’t open a retail location at all, simply that you may need to get more licenses to start selling.

On the other hand, many city or town-run farmers markets require participating farms to carry a certain level of liability insurance to participate.

Farm Store vs. Farmers Market — Pros & Cons

Still stuck on which option is better for you? Before we go into the pros and cons of each option, take a moment to consider some important questions:

Budget and time: How much money and time do you have to invest in what’s essentially a second business?

DTC experience: How experienced are you in direct-to-consumer (DTC) sales? Do you know inventory management and retail best practices?

Location: What kind of available space do you have to work with on your farm, and how close are you to other shopping areas or downtown areas?
Rules: What are the regulations for selling food in your state and county? Are there restrictions for running a business property on your farm?.

Now, let’s dive into the main pros and cons of both farm stores and farmers markets.

Farm Store

Investing in a farm store has a bigger upfront investment, but some potentially big payoffs as well.

Pros:

Year-round sales: Unlike a farmers market that runs only for a few seasons or on weekends, a farm store lets you sell your products year-round.
Control over the environment: A permanent location allows you to decide on the look and feel of your shop.
Extra revenue chances: In addition to selling produce and other goods, you can use your space for other sources of revenue like workshops, farm tours, or a cafe.
Brand awareness: A consistent storefront makes it easier to build brand awareness and customer loyalty, which can help you grow your business.

As your farm gains customers and brand awareness, you also create opportunities to partner with other local businesses like grocery stores and butchers.

Cons:

Higher upfront costs: A farm store requires building (or at least renovating) a dedicated space, and even fixing up a store can cost tens of thousands.

Licensing requirements: To run a more traditional retail shop, you’ll probably need to register for a business license, health permit, and sales tax license. You’ll also need to comply with local regulations on food sales.

Complex inventory: To keep your shelves stocked and customers happy, you’ll need to manage and track your inventory.
Marketing: While not a negative in and of itself, a dedicated storefront also requires more marketing to get the foot traffic you need to stay profitable.

To truly get an idea of whether operating a farm store is in your reach, we highly recommend writing a farm store business plan. This is not only required for securing any loans or investment, but helps you understand operating costs and other key financial projections before investing any actual money.

Farmers Market

Farmers markets are a staple in many towns and cities for a good reason. They provide a cheaper way for farmers to connect directly with their community, albeit with less profit potential.

Pros:

Cheaper than a storefront: Most farmers markets only ask for a daily fee to participate (along with minimum liability insurance requirements).
Chances to network: Farmers markets bring together a mix of local farmers, craftsmen, business owners, and customers, helping you create valuable connections.
No long-term commitment: If you’re low on money and time, a farmers market lets you participate only when you have the resources.
Ideal for seasonal sales: Farmers markets tend to be more of a staple during spring and summer months, making them ideal for selling produce when it’s at its freshest.
Beginner-friendly: A farmers market requires only a small amount of products and equipment to run, making it ideal for farmers who are new to DTC sales.

A farmers market is a great way to get your name out there and gauge the local demand for farm-raised meat and produce.

Cons:

Cheap but not free: Farmers markets are cheap to participate in, but you still need to create a stand, invest in point of sale (POS) hardware for payments, and spend time commuting to and from the venue itself.
Less control: Your ability to sell to consumers is limited by when the markets are running, the weather, and other factors that are out of your control.
Space constraints: The typical farmers market booth is pretty small, which also limits the varieties and quantities of items you can sell.
More competition: It’s great that farmers markets bring together local businesses, but it also means you’ll be competing with each other, probably for smaller average transaction sizes than if you ran a dedicated storefront.

Put another way, many aspects of farmers markets aren’t in your control, making it a less reliable revenue stream for farms that are serious about ramping up their DTC sales.

A Third Option — a Hybrid Approach

If you’ve read through all the pros and cons of selling via a farm store vs. a farmers market and still can’t decide, don’t worry! Not only are you not alone, but you don’t necessarily have to choose one or the other.

Instead, many small farms build crucial business skills and find success via a hybrid or phased approach where they start at a farmers market, then add a farm store once they’ve built a customer base.

This is ideal since many farms won’t have the brand awareness or customer base to break even on a full-fledged storefront right away. A farmers market also provides a low-stakes way to learn basic business skills like product pricing, farm store marketing, and inventory management.

After you’ve created a loyal following and seen what kind of sales you can achieve, you can then consider investing in a more permanent storefront. This way, you’ll be in a better position to start your business with an established customer base and more experience under your belt.

Farm Store vs. Farmers Market? Don’t Forget Online Sales!

Many farms aren’t located in spaces that are convenient for customers to get to. That means even customers who love your products might not be willing to go out of their way to visit your farm. Similarly, not every business owner has a few hours to attend a farmers market regularly.

This is where online sales help. The majority of people find local businesses by searching online — and online sales provide a convenient shopping option.

An online farm store also requires less upfront investment or foot traffic to stay successful, making it a great option for farms in more remote or inconvenient locations. And even for established farm stores, online sales are an effective way to boost sales and revenue.

When evaluating a farm store e-commerce solution, ensure it supports:

Weight-based sales for fresh meat and produce
Robust real-time inventory management to build a product list, manage prices, and streamline fulfilment
Location-based sales tools so you can limit sales to specific zip codes or regions
Flexible fulfillment options, from nationwide and regional shipping to in-store pickup
Convenient payment options and subscription support

For many farmers, an online storefront can be yet another transition step in their DTC journey, starting with attending farmers markets, then offering online sales, and then building a physical storefront only when online sales become sustainable.

Give Your Direct-to-Consumer Farm Sales Space To Grow

Whether you’re thinking of attending a farmers market for the first time or looking for investment for a farm store, we’re passionate about seeing local farmers find sustainable, long-term success.

GrazeCart was built by farmers to offer convenient, modern ways for farms to sell fresh food online and in store. With an easy, no-code website builder, weight-based inventory tracking, in-person POS integrations, and more, we have a solution for you — no matter where you are on your DTC journey.

Try a free 14-day trial of GrazeCart today to understand how our e-commerce platform can help build a customer base and boost sales.