Good business relationships based on trust are essential, especially if you’re using a market agent.
- The principles below apply to any business relationship, but they’re slightly different when marketing fresh produce.
- Certain factors kick in right away when your market agent receives a consignment of produce from you, and they influence what happens from then on.
- The most important of these is the perishability of the product.
- From the moment it was picked, that product started “dying” and there’s nothing you can do about this.
- Even if you keep produce cool to slow down the decaying process, you cannot stop it.
- And every product is different. Stored properly, a pumpkin, for instance, can last a few months – strawberries only have a few days, at best.
Your salesperson is faced with what I call perishability pressure. The sooner he sells that product, the better.
But it’s not that simple: there are many other factors that influence the price, such as supply, demand, quality, and the weather. He’s also faced with competition from other market agents and their producers.
So his selling skills, and the quality of your produce, are tested against the quality of all the other farmers’ produce on the market. The other factor the salesperson has to have in the back of his mind at all times is the price. It isn’t as simple as wanting the highest price, and he knows that.
He should know your cost per unit so he can set a minimum price as a guide. But he cannot guarantee to stay above that price – it all depends on supply and demand.
Those are only some of the considerations you have to remember when working with your market agent. Understanding them will help you to understand both him, and the market, better.
When the market is full and prices are constantly under pressure, your relationship with your market agent will be tested to the limit. This is when cool heads should make sure everything goes as well as possible under the circumstances.
It is also the real testing time for your trust relationship, which is built up over a long period and based on the following:
Honesty. The simple fact is, if you can’t be honest with each other, you don’t have a trust relationship. You should be honest about your marketing plans and, above all, about the quality of your produce. Don’t be embarrassed to tell your agent that the quality is not up to standard.
Then he knows what to expect, what price range he can work in and which buyers to approach. Lie to him about the quality, and you are letting him down. Your market agent should be honest about your prices, from the highest to the lowest. He should also be honest about the quality, grading, packaging and any other factors that influence the price.
If he lies because he’s afraid you won’t like the (constructive) criticism and might move to another agent, it means you’re being immature instead of being a professional farmer who always welcomes criticism so that he can improve standards.
Trust. You have to trust each other. You’re on your farm many kilometres away and he’s on the market floor. He’s your agent selling your products on your behalf. You have to trust him to do his best for you; this is what happens when the trust relationship is strong – and the foundation for that is being honest with each other.
Communication. The responsibility for communicating rests equally with both parties. You and your market agent have to talk to each other regularly. If you’re sending produce to market three to four days a week, you should be talking to each other at least once a day, or even more frequently.
Good communication will prevent misunderstandings – especially in pressure situations – and help the salesperson achieve the best possible price for you. It will help if you send the best quality, in the right quantities, and at the right time, to the market.
Loyalty. All relationships are tested. On a fresh produce market, this usually happens when supplies are abundant and prices are down. You could get calls from other salespeople asking for your business and telling you how well they can do for you. (Beware! If that person trashes your salesperson, tell him or her to get lost. They have no principles; they’re acting in defiance of the law, and they cannot be trusted.)
Don’t change your salesperson unless he or she is really useless or clearly not trying. Allow for a reasonable chance, over a reasonable period of time.
Farmers who move from agent to agent, always looking for a better price, end up getting the lowest price because the salesperson knows he or she is not loyal, and so won’t do his best. He’d rather put more effort into getting better prices for his loyal farmers. (Buyers don’t like it either if farmers constantly move from agent to agent.)
Service. Your market agent isn’t the only who has to give service; you should also support him, by including him in your marketing plans, arranging with him when, what and how much to send to market, and then doing what you agreed to do.
If there’s a problem – communicate!
When you first start supplying a market, it could take some time before you find an agent with whom you feel comfortable. You may have to move on to other agents – after giving the market agent a fair chance – until you find the right one. Be patient and give one another a reasonable chance.
Trust relationships take a long time to build, but once established on these solid foundations, they work for everyone.
- This article was written by Michael Cordes and first appeared in Farming SA.