Business is about relationships. Each one is different and has its own specific requirements. For a farmer, the most important relationship is the one with the people who sell his produce: They play a key role in the success of his marketing plans.
In simpler times, it was said that huge deals were sealed by a handshake between buyer and seller – because they trusted each other. That idyllic state is no longer as common in today’s world that’s faster, more demanding and highly competitive.
We need to have safety measures – such as contracts and agreements – in place to ensure that both parties are protected.
One area which carries no contract is the relationship you have with the people who sell your products. There might be a supply contract with a supermarket, but the people behind that contract are still the key. They, or you, can make or break that contract. A good marketing relationship – which isn’t written on paper – between the two of you is therefore essential.
In the case of your market agent, there’s no written agreement because you send him your fresh produce in good faith. He sells the products on your behalf, so you should see him as your sales manager on that market. And for this reason, he should be closely involved in your marketing plans and actions. Displaying trust in him in this way will result in his responding through good service and fighting to get you the best price under all circumstances.
The need for a solid relationship becomes even more critical because of the perishability of your products. Things change quickly on a market; for example, if the weather heats up or it rains heavily. The market agent has to make quick decisions about your products and that’s where a healthy relationship will kick in. Without frequent communication and his understanding of your objectives, he won’t be able to make decisions in line with your marketing aims.
Another important aspect of a marketing relationship is for both parties to visit each other’s work environment. You should be calling on your market agent at the market as frequently as possible.
If you’re located far from the market, try to get there at least once or twice a year. Don’t arrive during normal office hours because then the market is virtually over for the day. The action is early in the morning: You should be there by 6am at the latest – sooner if possible.
This will give you a good idea of how a market operates, you can meet some buyers, do a little informal promotion of your products and you’ll be able to see your agent in action. And, above all, he’ll appreciate your presence.
Likewise, he should visit you on the farm. He needs to see your set-up, get a feel for your operations and see what you’re growing, how much, and when it will be ready. Make sure that, while he’s there, you take him into the fields and walk through the crops so that he really understands them and what your growing methods are. He needs to see your grading and packing and to offer advice when necessary. He needs to understand your situation, so that he can perform better when he’s selling your products.
A marketing relationship is never easy and there will be times when it’s severely challenged. At such times, it’s necessary to step away from all the commotion and ask yourself if you trust this person. If the answer is “yes”, go back and try to sort things out.
If the answer is “no”, well – you know what to do. No relationship is ever a bed of roses, but if both parties persevere and they are sincere, it will be worthwhile in the long term. The bottom line for both is openness and honesty.
When you get the relationship right and there’s mutual respect and trust, you can go forward with plans and actions. Over time you’ll see the difference in your prices, the volumes you’re moving and the improvement to your bottom line.
- This article was written by Michael Cordes and first appeared in Farming SA.