How To Develop A Pricing Structure For Your Produce

Take the mental math out of the growing season by determining the cost of your crops before you plant.

by Jesse Frost
PHOTO: Patrick Kuhl/Flickr

Pricing can be one of the more frustrating parts of being a market farmer. When you’re selling 10 or 20 different vegetables, it’s difficult to keep up with how they should be priced. More difficult still are all the outside factors: how much your neighbor is selling his tomatoes for, if they are in season or out—it gets tricky, but it doesn’t have to. Setting up a pricing structure is the best way to ensure no time is wasted on pricing and no food is wasted on charging too much or too little for it. And, like so many things, most of it can be done in the winter, long before food goes into the ground.

The Custom Structure

There are catchall pricing structures for produce, which I’ll describe below, but it is also worth considering a structure specific to your farm and market. This is especially true if you are going to sell lower-profit crops, like broccoli and cabbage, in addition to higher profit crops, like lettuce These crops require their own approach, so a custom pricing structure can be ideal.

To start, go through and write out every crop you intend to grow—a simple spreadsheet would be great, but I promise this won’t get complicated. For each crop, decide on two prices: one for high competition and one for low. Heirloom tomatoes for instance should be priced higher in times of low competition (September or June, for instance) and lower in the high season.

The overall goal here is that with each crop you will have a go-to price that will require little thinking in the moment and that any helper can easily identify. Of course, if you feel in the moment that you need to alter that price to sell more, do so and make a note of it. In market sales, a little flexibility to adjust for yield, competition, demand and seasonality is necessary.

How you select the two prices can be based on a couple of things: the going rate (check with your local natural foods retailer) and how much the crop needs to make to turn a profit. To determine the latter, decide how much you’re going to grow, research what a good yield is for that crop, and then determine how much that area of your garden space should make for you per crop. I cannot tell you what that number should be, but it should help you meet your yearly budget. You shouldn’t lose money with either the low or high price.

Once you have finished pricing every crop, laminate the list and post it to your cash box or market clipboard so it goes with you every week. Also, make notes throughout the year and update the list regularly.

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Catchall Structures

One easy way to price produce is price it all the same. This could be, say, separating food into $2 and $4 units. This way, everything is simply priced, no thinking on the part of you or the customer and the math is easy. Another good structure is to sell everything at one item for $3 or two for $5. The genius of the latter system is that you actually create units—that is, pints or quart baskets, bags, etc.—that are worth $2.50. So it encourages more sales. And if someone wants only one item then you make a little extra for it.

The Magic Nine

It may seem silly, but pricing something at $4.99 instead of $5, or $1.99 instead of $2—or even $3.49 instead of $3.50—has been shown time and again to encourage sales. That said, on a small scale, this will require you to calculate each sale and be prepared to give exact change. I recommend experimenting with it, but be cautious. If pricing this way winds up costing more time than increased sales, it may be worth going back to round numbers—or at least numbers that end in increments of 25 cents.

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