If you’re a first-time farmer, supplying to the fresh produce markets may be the best way to get your business off the ground, advises farmer Mbali Nwoko, founder of Green Terrace.
South Africa has four main fresh produce markets, located in Johannesburg, Cape Town, Pretoria and Durban. There are also medium-sized markets to be found in cities like Bloemfontein and Pietermaritzburg, as well as smaller markets and the likes of Springs and Vereeniging. These fresh produce markets should definitely serve as an alternative choice when deciding where to send your products, especially for farmers who have never traded before.
The reason for this is that fresh produce markets offer many advantages for new farmers. These include quick payment terms which ensure that you get paid within two to three days after your product has been sold. For many farmers that struggle with cashflow, the market model can be beneficial in solving that problem.
Having a professional sales agent sell your product for you is also advantageous. Sales agents that work for market agents know the market environment, have refined their sales strategies and are best positioned to build your customer base and compete against other produce suppliers.
Just keep in mind that the market agent will take a commission fee on every product sold. Agents charge a commission fee of between 5% and 7.5% of turnover per sale. Whoever you deal with, it’s vital to ensure that fee percentages and terms and conditions are clearly established from the beginning.
Relationships are key
Furthermore, it’s important that you develop a good relationship with your market sales agent, and should they not meet your expectations, you have the option of changing and choosing to work with another agent. A typical conversation between a farmer and a market sales agent should involve discussing customer feedback, sales, packaging and the quality of the crop/produce.
The agent’s job is to sell the produce on behalf of the farmer and the farmer must ensure that the quality of the produce meets the customers expectation. A tip for farmers is that they should also visit the fresh produce markets regularly, to have a better understanding of how the trading process works firsthand.
Another advantage of fresh produce markets is that there are very low barriers to entry. You can discuss the quantities you want to supply with your sales agent. The good news is that fresh produce markets are really not stringent on how much you can bring. All they really want is for you to deliver on a consistent basis and to ensure that your product is good quality, since this will attract repeat customers.
Having said that, it does not mean that the fresh produce market should be a place where you dump low quality produce with the expectation that it will be sold. As a farmer, it’s important to remember that when you present your produce on the market floor, and a customer sees your produce, the first impression of the product will be their first impression of your farm. Therefore, distinguishing between an A and C class product in your packaging is vital.
Also try to maintain a certain standard that the customers can get used to. As such, these markets are a great avenue to test the market and attract new buyers, who value fresh locally grown produce.
The fresh produce markets are also regulated and or governed by the Agricultural Produce Agents Council (APAC) which ensures that that the relationship between the farmer and market agent is transparent and is beneficial for both parties.
There is a lot to be said for including the fresh produce market as an alternative distribution choice, so I suggest taking time to understand this platform. A good way to do this is by visiting the market at different times of the day to understand what attracts buyers. Above all, deliver on a consistent basis to build a strong brand and reputation for your products as well as your business.