Courtesy of Wally S., Wally’s Urban Market Garden, Saskatoon SK
Unlike selling wholesale, there are no established unit sizes in SPIN-Farming, and no standards to go by. So how much to put in a unit is an ever popular topic in our online support group.
To take the mystery out of it for beginning farmers, I tell them to first decide how much money they want to make per bed. Then determine the price/unit combination that will generate that revenue, based on their yields and current market conditions. So the exercise for establishing a price/unit combo goes like this:
- Set your targeted revenue per bed. SPIN’s benchmark is $100 gross per standard size bed.
- Set pricing. SPIN’s benchmark of $3.00 per unit, or 2 for $5.00.
- Calculate how many units you need to sell at the pricing you’ve set to reach your targeted revenue.
- Given your yield, calculate how much you can put into each unit.
After going through this exercise, you have arrived at your best guess on a price/unit combo to go to market with. Over time, your guesses will turn into better judgment based on your market experience. For instance, if you have good yields, but sell out early because you are putting too much in a unit, reduce the unit size so you can sell more. Eventually you will get a good feel for the ranges your customers are willing to pay for a unit.
Also, remember that you should always strive to make the most money you can from whatever size plots you have. If your market conditions are highly favorable because you don’t have much competition, and you are producing hard-to-get, high quality crops, $100 per bed may be under achieving.
As a farmer selling direct to consumers, you should always be adjusting your price/unit combo according to the volume of your production and your current marketing conditions. Above all, you’ve got to make it worth your while. When it comes to pricing and unitizing, your needs – not the customer’s – come first.
Beginner’s Catch -22: There are no hard and fast rules in farming, so you always need to use your best judgment. But judgment is based on experience, and as a beginner, you don’t have much yet. What to do?
SPIN Crop Profiles to the rescue! They give you yield and pricing benchmarks on 40 classic SPIN crops you can use to make informed assumptions when just starting out. They are also useful for experienced growers. These benchmarks will give you a kick in the pants if you are underachieving. Or, if you have busted pass them, let us know. Stretch goals are what keep SPIN-Farming moving forward.