MARKETING: WHAT IT'S ALL ABOUT
This report is based on information found in my manual,
Without a market you are nowhere. NEVER START GROWING ANYTHING UNTIL YOU HAVE ESTABLISHED A MARKET FOR IT. Not having a market can make or break you. Obvious, right? You'd be surprised at the number of people who don't heed this advice and have had to learn the hard way what needs to be done. Too many neglect this absolutely crucial aspect of the business. What's surprising, in most other business endeavors you don't run into this sort of naivete.
To start out: you don't just run down the street and start bargaining. How are you going to bargain when you don't yet know how to grow for a profit and do it consistently? You must first get your feet wet. And you have to prove you can consistently fill customer orders. In other words you must be able to project the future.
What crops will you have and how much 4-6 months from now? Will they be the crops the customer wants? After you've done your research and have made a crop decision, stick to one or two crops per season. At least for the first year or two. Gain a reputation for dependability.
YOU MUST GET YOUR PRICE!
You cannot stay in business without a profit. The only way you can get your price is to have the right crop available at the right time. If you are growing what everybody else is growing, your chances of making good money are slim. The large hydroponic operations will take it all away from you. Not to mention the average soil grower. This is very true with some foliage items such as ficus and croton. And it is particularly true with chrysanthemums which it seems everybody is trying to sell.
Why not try for the market items which aren't on everybody else's growing list? Why not research your market for those items which can give you that profit break? This is why I recommend growing certain kinds of vegetables, especially for winter crops. Because when you're dealing with your local market area, you can make deals on certain lettuces and other types of vegetables which will let you come out way ahead of growers in California, Mexico and Florida. Your produce will be fresh - theirs will be too long from the field.
It isn't difficult to do this. Most produce and store managers will be happy to listen to your proposals. After all they too are in business to make money. All they want to know is are you dependable, can you do what you say you can do? Just keep in mind the market can be very huge.
For example the Houston, Texas market is serviced not only by soil farmers throughout the country and abroad. It's also serviced by a whole army of hydroponic growers. All of them are trying to satisfy this one big market. Do they succeed in their efforts? Many times they don't. When I managed a large nursery in Houston some years ago, there were occasions when even all these suppliers could not keep up with the market's demand. There were times when we had to do without or else settle for something less in quality and risk not selling it.
When you start out small, you'll be more conscientious. You'll put out quality plants and do it consistently. As time goes by you'll gain a reputation for quality and consistency. When your operation grows larger, you'll find your hydroponicum's output will increase at a relatively constant rate. This will enable you to accurately forecast larger and more profitable markets. And by that time you'll start to have others on your payroll.
Before you start building anything make a complete market survey. Check out all of the following: home-owned stores, supermarkets, national chains, retail florists, nurseries, farmer's markets, even flea markets and county fairs. I know of one man who does nothing else but sell at flea markets and county fairs. How about those little shops in outdoor malls, convenience stores, fast-food restaurants, high-class restaurants? The list is endless - everybody loves food and everybody loves plants.
When approaching these people, be specific and make it short. Don't waste their time. Listen to their responses. If you're already growing and want to expand a little, take along some of your best samples. The prospective buyer will then have something more concrete to look at. Be certain you listen to what these people say. Make notes on the interview later - after you leave. Don't try to remember- write it down.
You may find the prospective buyer isn't interested in your African violets but would like to buy all the high quality fern you can provide. Try to determine for yourself the retail prices of these items - they are on display for everyone to see. For example, if a large specimen fern is priced retail at $40, you might be able to wholesale it for $20 to $27. Real quality fern will sometimes sell for more than that.
If your goal is to sell quality vegetables, check out the restaurants, such as Chinese restaurants for bok choy. Or check out the finer restaurants and ask the chefs if they'd like to have fresh, quality herbs. There are many ways to open a market. After you've finished your survey and found the soft spots in the market, go to the buyers you have in mind and get the best deals you can. Once you've done all of this you'll be able to proceed with some confidence. And you can place your hydroponicum into full operation.
It doesn't all end there. This is just the beginning to a long and enjoyable career. You still have a lot to learn because like in all businesses the markets are always changing. What's selling this season may not be so hot next year or even next season. But there are some predictables and you'll find them as you go along. If you keep your eyes open, you'll quickly see how your operation can mesh into a special niche of the market and hold its own in that niche. There are ways you can insure this. These will be our concern in future discussions.
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Last upate = 1-31-06