While the prospect of eliminating the middle man is alluring, bear in mind the added labor and costs that diversifying your business can entail. For more on direct marketing and other material related to value-added agriculture, please refer to Chapter IV.
Eliminating the "middle man" from the marketing stream of your product or production is a simple explanation of direct marketing. Direct marketing is now more than just having a farm stand. There are numerous direct marketing outlets to consider and choose from. In general, direct marketing offers a number of advantages over wholesale marketing. Typically higher prices can be placed on products, there's a high level of interaction with customers - if that's desirable to you, and direct sales often serve as a gateway to potential wholesale customers. However, direct market outlets are usually seasonal in nature leading to less consistent cash flow throughout the year. Additionally, there can be low delivery efficiency, depending on specific outlet you choose. The important thing is to thoroughly research each outlet type and determine which best fits with your operation and business goals.
Penn State Extension offers a number of publications on specific direct marketing outlets. These include: Agricultural Alternatives: Community Supported Agriculture and Agricultural Alternatives: Developing a Roadside Farm Market. Additional publications on market outlets, including CSA's, Cooperatives, and Farmers' Markets can be found here. The Agricultural Marketing Service (AMS) provides news, information, and guidelines for starting your own Farmers' Markets. AMS also has a tool for finding farmers' markets in your area with their Farmers' Market Search.
Fruit and vegetable growers face additional challenges when direct marketing due to post harvest handling issues and product suitability for fresh market vs. processing. The publication, Agricultural Alternatives: Fruit and Vegetable Marketing for Small-scale and Part-time Growers, provides a thorough overview of direct marketing focused on issues relevant to these growers.
Direct marketing meat or meat animals to consumers is an option for dairy and livestock producers. Meat CSAs are also becoming more popular. Penn State Extension offers resources on the advantages and disadvantages to direct marketing of livestock and meats on their Marketing Meat Animals Directly to Consumers webpage. Guidance is provided on topics such as pricing, market identification, and choosing a processor.
Many times, producers will decide to produce a value-added product to direct market. Direct Marketing as a Value-Added Opportunity for Agriculture explains the different categories of value-added products, as derived from the USDA definition, providing examples for how value-added products can be derived from various commodities (e.g. beef, corn, dairy), as well as partnerships between producers.
For all direct marketers, promotion of their business is essential to marketing success. Guide books or directories, both hard copy and online, are common and valuable promotional tools. Ag Map is one such online searchable directory of America's agricultural businesses which includes producers, processors, and service providers. AgMap contains listings of not only traditional agricultural businesses, but also the businesses in forestry, turf grass, landscaping, nursery and much more.
Advertising, is a useful promotional tool and one that most are familiar with. The Center for Profitable Agriculture with University of Tennessee Extension has an introductory publication, Advertising 101, that provides an overview of the different advertising media the can used as well as some tips on developing advertisements.
Web, or internet, based tools - including social media - are quickly becoming the go-to for promotion. While these tools, and the features they offer, change quickly, the decision-making and strategy development behind their use remains steady. Penn State Extension offers a number of resources on these tools and their use on the Web, Social Media, and Direct Mail Marketing page.
For any direct marketer, remaining current on available market outlets, regulations, pricing strategies, legal concerns, promotional tools, and numerous other issues is essential. AgMRC, offers a directory of resources on their Direct Marketing of Your Production and Products site that you will find helpful.
This publication is available in alternative media on request.