by You’ve finished a delicious meal from a Michelin-star restaurant, and the bill just arrived at your table.
You could technically eat dinner for a fraction of the cost at a fast food joint — but you won’t complain.
That’s because you expect to pay more for the fine ingredients, the chef’s experience, and excellent customer service.
The same principle applies when setting prices in your farm store. The right customers are willing to pay premium prices for your farm’s produce because they understand the hard work that goes into each of your harvests.
In this blog, we’ll explore how to price produce in your farm store, covering the most common pricing mistakes to avoid and our top tips to achieve profitability.
Let’s dig in!
3 Common Pricing Mistakes To Avoid
Before we explore how to price produce in your farm store, let’s cover what not to do. These three pricing mistakes are all too common — and they could be holding your farm store back from higher profits.
1. Competing With Supermarkets
The number-one mistake farmers make is competing with big-box supermarkets on price. These businesses have higher sales volume, lower costs, and lower-quality products — which means you’ll never win.
Instead, focus on what makes your farm store unique.
Whether you’re committed to organic and regenerative farming practices or simply believe your produce is the most delicious in town, you’re offering something customers can’t find anywhere else.
Customers who believe in the farm-to-fork movement and crave crisp, farm-fresh produce are willing to pay more for it — without comparing your prices to the grocery store down the road.
2. Setting Prices That “Feel” Right
“Go with your gut.”
It’s great advice, except when it comes to setting prices in your farm store.
Prices that seem right aren’t always aligned with the value of your produce or your farm store’s financial needs, which is why farmers who rely on intuition often set prices that are too low.
Instead, you should base your pricing strategy on real data, an in-depth understanding of your operating costs, and the unique value of fresh, locally-farmed food.
3. Always Charging the Same Amount
Another common mistake farmers make is taking a “set it and forget it” approach to their prices. They decide on a price for each of their products and never change it, regardless of shifts in their sales trends.
This mistake is particularly dangerous when it comes to e-commerce. If you charge the same amount for an in-store sale versus an online purchase, you’ll lose money because of the increased labor and cost of preparing and shipping an order.
Finding a balance between consistency and flexibility when pricing your products is tough, but it will help you stay profitable despite challenges and changes.
How To Set Profitable Produce Prices in 3 Steps
Now that you know the pitfalls and how to avoid them, you’re ready to learn how to price produce. Let’s look at three must-follow steps to craft the perfect pricing approach for your farm store.
1. Invest in the Right Tools
Still using a spreadsheet or notebook to manage your prices? Then it’s time for an upgrade.
A farm store point of sale (POS) system keeps all your data — including inventory turnover rates, sales trends, and your prices — in one convenient place. This makes it easier to evaluate your farm store’s financial success and adjust your pricing strategy as needed.
Investing in a farm store POS system with built-in e-commerce tools also helps you manage separate prices for your in-store and online customers. You can factor the cost of packaging, insulation, and additional labor into the cost of your online offerings to provide a more transparent shopping experience for your virtual customers.
2. Calculate Your Costs
The next step when learning how to price produce is understanding the cost to harvest it.
Every fruit or vegetable from your farm represents money and time, and your prices should reflect this hefty investment.
Calculate your farm’s operating expenses, including land, labor, seeds, farm equipment, packaging, and other costs to keep your farm store open. Then, break these costs down by individual products. How much does it cost to produce one head of lettuce or a pound of apples?
These estimates provide an excellent starting point for setting produce prices, helping you turn a profit on every item you sell.
3. Stay Flexible
Our final tip is to be adaptable.
Schedule time to revisit your expense calculations, review your farm store POS system’s sales reports, and update your prices to match changes in the data.
You can also use promotions to appeal to customers and switch up your pricing approach. Here are a few examples:
- Discount surplus harvests to turn large quantities of produce into profit before spoilage strikes.
- Offer first-timer discounts to allow new customers to try your fresh produce for a lower price.
- Launch a subscription box option to secure steady revenue and keep your most loyal customers stocked up on their favorite farm products.
Taking a dynamic approach to pricing your products will help you ensure profitability in the face of new challenges and changes in your customers’ preferences.
Become a Produce Pricing Pro With GrazeCart
Ready to turn your harvests into bigger profits? You’ve got the right tips — now all you need is the right farm store POS system to help you bring them to life.
GrazeCart is an all-in-one POS and e-commerce solution designed for farmers just like you. With our software, you can set and adjust prices for your in-store and online customers, ensuring you turn a profit on every sale.
You can also rely on GrazeCart to manage your farm’s inventory, monitor your sales trends, and help you cultivate relationships with your customers.
See GrazeCart in action by launching your free, two-week trial today!