SPIN Pricing 101

Although backyard-scale growing produces much higher volume than a typical garden, the volume is much less compared to multi-acre farms. So because you have a limited amount to sell, you need to get good prices to make it worth your time and effort. Low production and low prices are a recipe for failure.

Getting good pricing takes innovative thinking. Never take pricing as something that is fixed. Fixed pricing is more common to larger scales of production. As a farmer selling directly to the public, you have the ability to vary your pricing according to what’s available or scare at market, the volume of your production, and your needs.

Look at what other vendors are setting their prices at. Chances are they using fixed pricing and selling at the low end. Set your prices higher, and never reduce your prices towards the end of the market to sell out. This will hurt you and the other vendors by training people to come late and haggle. Take surplus produce home or donate it to a food bank. As you gain experience, you will more likely sell out before market’s end, rather than have leftovers.

Always question your own pricing scheme. This year I have re-arranged my pricing. With SPIN’s old mix and match pricing of 2 for $5.00 I had too many people spending just $5.00. Now I have $3.00 for one, 2 for $5.00, and any five for $10.00.

The pitch is you buy 4 bags/units get one free. Making unit sizes smaller to compensate. Now I am getting many more $10 – $20 purchases. So for my green garlic, even at $2.00 per bunch, that makes a row $50, with a 15 foot bed worth $250, with five rows per bed.

SF photo Wally green garlic test crop harvest

As a small business owner, which is how you should think of yourself, you have to find price points that not only please your customers, but that also please you.