10 Questions To Find the Right Business Solution for Your Farm
In this episode, we sit down with James and Zoe from Barn2Door to discuss the 10 most common questions Farmers ask when evaluating business solutions for their business.
Listen as James and Zoe discuss the nuances of Farm software and business solutions – and what Farmers should be aware of when considering general Commerce companies.
You can also check out the accompanying blog: Farm Commerce? 10 Key Questions to Ask Before Deploying for Your Farm
Resources — BARN2DOOR
-
[00:00:00]
James Maiocco: Hey, welcome to the Direct Farm Podcast. I'm James, your host for today's episode, and I'm real excited, 'cuz today we've got a great conversation for you. I'm sitting side by side with one of my colleagues, Zoe, who's with been with us for what, almost three years now, right?
Zoe Pappas: Yeah, a little over three years.
It's been crazy time flies.
James Maiocco: And she is now managing our sales team, and she's been with us for several years. She has a lot of experience. She's literally talked to thousands of farms across all across the country. And today we're gonna be diving in with her to, to learn a little bit more about what types of [00:01:00] questions you should be asking as a farmer before you deploy e-commerce for your farm.
And there's 10 key questions in particular that we're gonna dive into. So there's a blog that, you know, you can go download or read online at some point, but for today's podcast, we're gonna be having a discussion cuz there's a lot of like, nuances that may not be necessarily covered in the blog.
And so we're gonna, we're gonna dive in a little bit further. Uh, but before we get started, Zoe I'd love to just, you know, take a little bit of a backgrounder with you and talk a little bit about your evolution here. Growing from sales to becoming a sales manager. First off, you know, you've, like I said, you've talked to thousands of farms,
Zoe Pappas: Literally thousands.
Yeah. I think the cool part about being here for so long, too, is I've been able to have the opportunity to talk to farms literally across the country, from New York to California, even to Florida, right? So I think there's some things that are different in every state, but there are definitely some things that just run through and through from what we see our most successful farms doing across the board.
James Maiocco: Yeah. And it's, it's pretty cool to see the diversity of farms we work with. Yeah. [00:02:00] Clearly lots of proteins, produce and dairy, but yeah, everything from fiber farms to coffee farms, fisheries, like you, you name it.
Zoe Pappas: I love it.
You work that far. It's, yeah, so many different creative options out there. And I think the cool thing is just the demand is so high for people wanting to buy local. It's like 94% of people would just prefer it. So as far as if you're thinking about farming, go for it.
James Maiocco: Yeah. It's a, it's a big market opportunity. Well, there's a lot of complexity out there, lots of different solutions that a farmer can evaluate.
And this is not a pitch about Barn2Door. This is much more about like, kind of the 10 big questions that we see come up consistently, uh, because we're not gonna pretend that Barn2Door's a panacea. We don't solve all world problems. Right? And there is no perfect solution out there. Yeah. Uh, but we do, you know, come across some reg competitors regularly.
But more importantly, there's a consistent set of questions that we see farmers asking, uh, before they deploy e-commerce. So, uh, I'd love to kick off this first question. First and foremost, you know, does a solution support online and [00:03:00] in-person sales? Zoe, why is that so important for farmers specifically to ask that question when thinking about other e-commerce options?
Zoe Pappas: Yeah, I mean, I think it's a great question and I think especially when you're selling product from a farm and you're, you're really looking to sell it locally, cuz that's what people are looking for. They wanna feel like they know you, they wanna feel like they can follow your story as. So when you look at some of the different places that it's important to be able to sell from, whether it be the market or you're doing on-farm pickup or delivery locally, it's just that much more important to really be able to collect that customer information and turn that first time potential purchaser, potential customer into an ongoing buyer.
Mm-hmm, because that's really the difference between a one time purchase at the farm market. You might make 20 bucks there to transitioning them into an online buyer or somebody. , you know, getting in front of your story on a frequent basis that makes them, I think, on average of a, an $88 per sale in that case.
So huge lift to your potential income. And then really from there you can [00:04:00] make that person a subscriber to your boxes.
James Maiocco: Yep.
Zoe Pappas: Which is always the goal.
James Maiocco: Yeah. We hear this pretty consistently, don't we? Like people who are the farmer's market. People don't attend farmer's markets very frequently.
Zoe Pappas: No
James Maiocco: Less than 1% of Americans do.
Zoe Pappas: Yeah.
James Maiocco: But more importantly, you know, they spread their money across a farmer's market.
Zoe Pappas: Right!
James Maiocco: Right, they don't necessarily spend all their money, but when they convert online, there's an opportunity to do more, correct?
Zoe Pappas: Absolutely. I think that's something that's important to know, right, is if you're going to a market, it's great for getting your feet on the ground.
But, you know, long term, the most important thing you can do is capture that buyer with a QR code, capture that buyer with pos, for example. So being able to make sure you can swipe their card and then own that customer information because most people are really busy, right?
So going to a market every week is a huge chore for a lot of people.
James Maiocco: Yeah. So that's a very big deal cuz the POS it enables you to capture the in-person sale online, obviously with e-commerce, but most importantly it's all in a single merchant account.
Zoe Pappas: Mm-hmm.
James Maiocco: one, one set of inventory. Cool. Well, let's talk about the second one, which is, we know a lot of, [00:05:00] a lot of farmers are asking about the ability to support multiple price lists, right?
And this is a pretty unique nuance for farmers. Specifically, why is this so important? Cuz this is something most e-commerce solutions don't address.
Zoe Pappas: Yeah, yeah. It's a big one for farming, right? You know, you do wanna be able to sell just directly to folks in the local community. But a lot of our farms are also selling to restaurants, to chefs, to wholesale buyers.
And I think looking at the healthiest way to grow your farm business, it's also about diversifying your customer base.
James Maiocco: Mm-hmm.
Zoe Pappas: So when you're thinking about an e-commerce for the operation, you really wanna be able to make sure that you can capture on the, the chef buyers of the world, right?
James Maiocco: Mm-hmm.
Zoe Pappas: Because their average age is like 35 years old. They're generally really, really tech savvy, and they also end up buying at really weird times. You know, they're cooking dinner late at night and their average buying hours are like, 11:00 PM to 1:00 AM or something crazy like
James Maiocco: That's correct. That's correct. Yeah.
Zoe Pappas: So we really need to make sure that you're offering that those same capabilities for them to be able to set up things [00:06:00] like standing orders on their own with separate pricing and separate product availability.
James Maiocco: Now a lot of, lot of farms are concerned about their wholesale prices being available online.
Zoe Pappas: Yeah, I get that.
James Maiocco: Talk, talk a little bit more about that. Cause that's a big one, right? First off is the ability to support multiple price lists. But also the ability to make sure that your wholesale prices aren't just available to retail buyers. Correct?
Zoe Pappas: Yes, exactly. So the the nice thing too, and, and when you're looking for different options is just being able to offer different price sheets, different price options for more bulk product as well, which oftentimes chefs want to choose, or even a lot of operations that we work with wanna offer like a private buying club.
So they wanna be able to, you know, give a positive to those folks who maybe are loyal buyers and been purchasing from them for a long time. Or friends and family pricing as well. So you never wanna be able to put that pricing public otherwise. Then all of your other retail customers start to wonder why they're not getting [00:07:00] that kind of a deal.
Yeah, that's a. Yeah. I think an important piece there is inviting, being, being able to invite those people in, whether it be a chef or whether it be a loyal buyer. They need to have the option, you know, for you to choose if you wanna have access or give them access or not.
James Maiocco: Yeah. I know we see a lot of people, particularly in states where herd shares are required legally for selling, uh, beef or any type of livestock or herd share for a, for instance, like a raw milk group, right?
Yeah. Being able to have that set up privately is, is obviously a very big deal, right?
Zoe Pappas: Yeah. And I think, I mean, that allows farms to protect themselves as well. You know, they, there's certain products that you just can't publicly market to everybody and, and everyone. And so you really wanna be able to pick and choose those folks who are loyal, who are gonna be getting product from you on a regular basis and just invite those folks into that store.
James Maiocco: So this is a really key aspect available with Barn2Door. But that many other e-commerce solutions, if you're looking at that type of diversity of priceless that's generally something not [00:08:00] available with general e-commerce.
Zoe Pappas: Yeah.
James Maiocco: Let's talk about the other aspect of this, which is fulfillment, right? Being able to have multiple fulfillment, because most people think today when they buy online, Hey, I'm gonna have something shipped to my door by, uh, UPS or FedEx, right?
Zoe Pappas: Yep.
James Maiocco: Um, that's not necessarily the case with food, right?
Zoe Pappas: Yeah.
James Maiocco: Wanna share a little bit more about that and why, you know, designing or thinking about e-commerce and having more diversity is important.
Zoe Pappas: Yeah, yeah. Shipping is expensive and I think one of the things that we all have fallen guilty to is, for example, like ordering a hamburger and then spending more for the delivery of the hamburger than for the hamburger itself.
And so when you think about selling your farm food locally, you wanna be able to make sure that you can play on that convenience that people want, right?
James Maiocco: Yeah.
Zoe Pappas: Everybody is really busy. Buyers have gotten kind of lazy as well, and so it's so important as you're thinking about what e-commerce option you're gonna utilize, that it allows for you to do things like deliver to certain zip codes.
You don't wanna, for example, like be a California operation and [00:09:00] only able to deliver across the country. You really wanna be able to limit to one or two or three zip codes so that way you're not driving, you know, hundreds or thousands of miles, even though you're doing in-state delivery. So yeah, there's some real intricacies there, both for delivery, for offering pickup options.
You really need to be able to offer unlimited pickup, right? Yeah. Sometimes you wanna do like pick up in a more populated downtown area. Sometimes you wanna do pickup, you know, at a coffee shop or something like that, right?
James Maiocco: Yep.
Zoe Pappas: So you can drive them customers and they can drive it for you. But if you ever get into a situation where you feel like you can't offer another form of fulfillment, then you're just limiting potential customers that could be finding you and buying from you.
James Maiocco: Yeah. And you, you, you covered a lot of nuances, which are super important for food specifically, because again, generally horizontal e-commerce is shipping focused.
Zoe Pappas: Right.
James Maiocco: It's very mo It's very much focused on consumer product goods, like a water bottle or pair of swim trunks, right? Whereas we see 98% of the products that are bought from [00:10:00] Barn2Door Farms that we work with are delivered or set up for pickup, right?
Zoe Pappas: Yeah.
James Maiocco: Because you don't ship food across the country generally, unless it's a, a very geographically unique product.
Um, so let's, let's, let's move on cuz this gets into one of the other really great parts of food, which is people keep eating right, and they're always gonna keep eating.
Uh, and so if you build a relationship with, uh, your buyers, which we know many farmers are proud to do, one of the big questions to ask is, does a solution support subscriptions? Why is this so important for farmers?
Zoe Pappas: Subscriptions are massive. I think for, for farming specifically because once a customer knows they like your farm product, it's really easy for them to purchase from you ongoing if you offer subscriptions.
And if you don't, like I said before, people are pretty lazy. So, we need to be able to offer them what they're used to getting from other places like the Netflixes of the world, right? Or, the, the Spotifys of the world where [00:11:00] folks can autopay because we are such creatures of habit.
I think if you look at options that don't offer subscriptions for you, you really put yourself in a position where you might get a one-time buyer, but then you're doing so much legwork trying to find your next customer.
James Maiocco: Yeah.
Zoe Pappas: So subscriptions really allow you to own your customer base and give your customers just another level of convenience. And convenience at the end of the day, is always gonna be the tipping point from, you know, your farm winning that customer. Right.
James Maiocco: Yeah. And, and I certainly know for myself, like 90% of what I purchase every week, and I know it seems true even for restaurants. It's the same thing. It's proteins, produce, and dairy.
Right? Like I wanna have a dairy subscription. Mm-hmm. , I wanna have a protein subscription. I wanna have a produce subscription. And I want it to either just show up at a pickup or I want it delivered to my door. Right. Because to your point, we're all creatures of habit and we've become increasingly lazy.
Right? Yeah. Can you talk a little bit about some of the trends there? Cause I know like pre covid purchasing food online was a, was a novelty. Yeah. You wanna talk about what [00:12:00] you've seen now? Because you did before and after, right?
Zoe Pappas: Yeah. I mean, the average American owns nine subscriptions, which I wanna say wow. But then the other piece of me is like, I think I'd bring that number up. I've gotta have like 15.
So people have just really gotten into the habit of wanting one, just an easy, easy food delivered to their door on an ongoing basis. I, I believe that number is like three and five Americans have food delivered directly to them on a weekly or monthly basis.
So that's something customers are definitely looking for. And then on the flip side too, when you look at demand for a lot of food products, Whether it be proteins or eggs, right? We're oftentimes, as consumers going to the grocery stores and the things that we want are sold out, and so all of a sudden now we're kind of scrambling to figure out how we're gonna feed our families.
So more and more of these busy families want to be able to subscribe to their product, and they wanna know that they're actually gonna get it, and that the cost isn't gonna jump up on them astronomically, you know?
James Maiocco: So you mentioned two things. One is food security and the other one [00:13:00] is inflationary concerns, right?
Yeah. So if I'm on a, on a budget as a family or as a, as a chef running a restaurant, I just wanna subscribe for and know that I'm gonna get a given product, whether it's ongoing indefinitely or for a given season, right?
Zoe Pappas: Mm-hmm.
James Maiocco: The other thing too is, I know, is that subscriptions, as you mentioned earlier, is generally not native to to many other e-commerce platforms. So people really need to do the research on this. Uh, and I won't go into all the details, but look at the cost of subscriptions with Barn2Door, there's no additional cost to use subscriptions, but with the other solutions that are out there, they have to use like a recharge chargeify, charge B, et cetera.
What do those costs look like, Zoe?
Zoe Pappas: Yeah. So we see a lot of different cost for competitors. I think the, the number one thing to look out for is just cost per subscription. I see that a lot. Um, so that's gonna be a couple dollars for every subscription that you sell, that you sell, or even a percentage of that overall Percentage or about?
James Maiocco: Most of ' em are about like 1%. Plus 10 cents for every percent.
Zoe Pappas: Yeah. That's something too. [00:14:00] As you look at scaling your operation, that can be a huge chunk of money. Yeah. Every single month that you're spending just to pay for offering subscriptions alone.
James Maiocco: Well, absolutely. I know we have farms that do well, uh, you know, well above a million dollars a year in subscriptions. If they had to pay 1%, that'd be 10 grand just to have a subscription.
Now with obviously with us, there's no cost for that, right. That's just something they can get ongoing. So whether your, your farm has an ambition to do a hundred grand or a million dollars in subscriptions, that's a real, uh, amount of money that you, you know, you'd have to pay out for a third party solution, versus it being native with Barn2Door.
Uh, the one last trend I just wanna share with folks too is that we've seen the number of people, uh, opting into subscriptions has increased 250% over the last year.
Zoe Pappas: Wow.
James Maiocco: Right. And so now 40% of all volume going through Barn2Door is subscriptions, like you said.
It is a hot topic, not only for farm, for, for buyers, but for farmers that means recurring revenue, which is awesome.
Zoe Pappas: Right. Yeah.
James Maiocco: Well, let's, let's, let's shift to this next one. Cause this is very, Farm [00:15:00] specific too, and I know this is kind of one of the areas where we got our start at Barn2Door, but we still see this as a really big differentiator, which is does the solution support sell by weight and or fixed prices?
Why is this such a big deal for food, Zoe?
Zoe Pappas: You don't wanna lose money, right? This is such a big topic when I chat with farmers, too. People are so surprised that that's something that, that we can do. It's a really amazing thing to be able to offer because every time that you offer a flat cost for a product that should be charged at a variable weight, you're losing dollars.
James Maiocco: Yep.
Zoe Pappas: So that should be money signs in your eyes. Um, and it's something that's, again, it's really unique and it's going to matter whether you're offering like, you know, quarters, halves and wholes when we're talking beef or you're Thanksgiving birds, right?
James Maiocco: Oh yeah.
Zoe Pappas: You really wanna be able to make sure that you're actually getting you know, you're $85 A should be for the bird instead of charging a flat rate at $60, for example. So those are things to think about and it goes across the board from like a really high end cut of meat, all the [00:16:00] way up, like I said, to birds that you might be offering for different times of the year.
James Maiocco: Yep. And I know we've got a patent around this capability. Yeah. Which is pretty cool. Where you know, someone can place a for that bird or for that side of beef, but then they can reconcile the, the final payment and the payment's tokenized, which is pretty cool. So they don't have to ask the person for to pay again.
That's like they can just charge the customer specifically, right.
Zoe Pappas: I think that's a huge point and something so many farmers come to me and they're so, so thankful for, because. I know, right? You guys are out there farming. You're super, super busy and it's, it's an uncomfortable conversation to have with a customer when you know that you've provided them this high end product and you've provided them probably a high end service and stayed in communication with them there as well, and then all of a sudden you feel like you need to chase them down and ask them for.
You know, if it's a couple thousand dollars for a whole animal, that's an awkward conversation and it takes time out of your day too. And I think just looking at what we know from the, the stats is, it's like [00:17:00] a, an average of seven to nine touches back and forth in conversation, whether someone's buying over social media or if you're just chatting back and forth in person to make an order.
And we don't wanna extend that anymore. I mean, that's a big reason why people deploy e-commerce in the first place is to limit that to one or two touches and make it easy for the buyer.
James Maiocco: Yeah. I don't think I've ever talked to anybody at Cabela's or Amazon or Target, like when I purchase online, I just make a purchase.
Yeah. But with food, the ability to be able to, uh, place a deposit and then when that product is eventually harvested. The farmer can literally, like you said, they don't have to chase down the payment. They can just put in whatever the final weight or whatever the final price is and it'll just charge 'em on the spot.
So this is a big one. If you have products as a farmer and you're looking to sell by weight, and as Zoe said, maximize your earnings, you need to make sure you're looking at e-commerce solutions that will support the ability to sell by weight.
Um, let's talk, let's shift over to number 6. Like many of the farms we work with have a variety of other business tools and solutions that they're using, [00:18:00] whether it be for email or for managing their finances or taxes.
Uh, talk to me a little bit about this. Um, you know, does a solution integrate with existing business applications? Why is this so important for farmers?
Zoe Pappas: Yeah, I mean, think about scalability, right? As you continue to access more customers and continue to grow the farm operation, there are a lot of different tools that you're gonna really want to utilize that you don't wanna utilize outside of the e-commerce.
So, , I'll even mention delivery cuz we've talked a lot about that to start. But we've got a really great integration with Routific that allows folks to take orders and then be able to actually see their route that they're going out and driving, you know, based off of right turns so you don't have to wait at stop lights.
And that's one of those things that if you're not using an integration or it's not built into your e-commerce, then all of a sudden, I'm sure many of you have been through this, you're sitting there writing out, or trying to manually map out the plan that you're gonna drive for that day, which is very time consuming and takes up a lot of money on gas.
So, um, I think another one [00:19:00] to look at too is just any email communication tool. So we're integrated with MailChimp. You never wanna be doing tasks outside of where all of your customers are. Because it's a lot of manual effort. You're probably missing out on different customers that you're, you could be communicating with or that could be buying from you, and then it's more steps for them to make a purchase.
So when we talk about email communication there, you wanna be able to link the store link products in so customers can actually add add-ons. Otherwise you're using a whole separate tool and you're just sending out nice newsletters. But customers can't take an action and they're not gonna make a purchase from there.
James Maiocco: So the real key here is being able to have these business tools, like you said, routing, email communications, uh, and even obviously your, your general ledger, like QuickBooks, having it all integrated, so to your point, they can save time, right?
Zoe Pappas: Yes.
James Maiocco: Like it's just all bits and bites, right? So to have all that data just to flow seamlessly from one place to the next is gonna save a ton of time.
And number two, it's also gonna remove errors, right?
Zoe Pappas: Yeah.
James Maiocco: Because this is the [00:20:00] other beautiful part about it, right? Like if you're trying to go through and you have hundreds of emails in MailChimp and you have hundreds of orders in Barn2Door, who wants to first off, manually enter those two bits of data?
You'd much rather just press a button, and have it work seamlessly, right?
Zoe Pappas: Yeah!
James Maiocco: Uh, and I know particularly routing is a big one, right? Having the routing capabilities directly linked with not only your pick pack list. But more importantly, your delivery schedule itself, right? So your drivers know where to go and you're saving a ton of time.
Huge, huge time savings. Please, as you think about your business, if you are a farmer that is very keen on delivery, I know we work with a lot of, dairies, in particular who have heavy delivery, routes, a lot of CSAs, CSA subscription, produce boxes. Anybody who's doing delivery, this is a huge time savers and also a big fuel saving, as well.
Can you talk, talk a little bit about that? I can't remember the stats right off the top of my head about fuel savings when you use a delivery, uh, app.
Zoe Pappas: It's like 35% that you save in terms of money there. And [00:21:00] everybody knows that we're spending a lot on fuel right now. So that's a, that's a lot of money.
To be added, I think time there as well. So something that will even allow you the option to just only do right turns instead of sitting at red lights.
That sounds so small. Something that that FedEx also uses, right? Because they're doing lots of deliveries, but it actually ends up getting you so much time back and also really allowing you to not spend as much on gas.
So those are things that, again, as you look at scaling or you know, wanting to make sure that you can make more money from the operation with something like delivery, you really need to be able to have set up for long term, even if it's gonna happen in a year or five years from now.
You just wanna be able to hit the ground running instead of feeling like you need to choose a option right off the get-go and then end up making a change later on.
James Maiocco: One thing I also wanna add in here too, and we have some other resources on that, is that many of our farms make delivery quite profitable.
Yeah. Uh, cuz people are willing to pay for delivery. But secondly, it's also ecologically an [00:22:00] advantage. It's actually a lower carbon footprint when a farmer does deliveries where, you know, it's much easier to just have one truck run out to do a hundred deliveries in pickups versus having a hundred customers driving to your farm or driving to a pickup location.
Zoe Pappas: That's a good point.
James Maiocco: I know, I know that many of our farms are very concerned ecologically too, and just wanting to actually do the right thing for the environment, but also be able to do it profitably.
Now, uh, let's move on to the next question. This is a big topic that I know many of our farms today who primarily sell with cash and check, if they've not sold online before, have apprehensions about, uh, accepting credit card, right?
Zoe Pappas: Sure.
James Maiocco: You know, we charge 2.9% percent plus 30 cents. That's pretty standard in the industry today. It's generally set by, uh, big banks, et cetera. But what, what has been your experience with this?
Like how, how can farmers potentially cut their processing rates down, or how should they be comparing their processing rates across different e-commerce solutions?
Zoe Pappas: Yeah, that's a good question. And I think one thing to remember too is like 93% of people prefer to pay with card. [00:23:00] They wanna pay with debit or credit. It is so much easier. People have their cards saved to their phones, all of that.
So when it comes to convenience, just offering card alone is going to first of all, you know, win you quite a few more customers, and make sure that customers keep coming back and buying from you ongoing. Um, some of the things to think about though would be just looking at ways to help manage processing fees. Cuz it is a, it's a real fee, it's a cost of doing business.
Um, and so what you should look at is, does the solution. For like a custom tipping feature. And does the solution have the ability for customers to cover the processing fees for you? So those are two things a lot of our firms see a ton of success with.
Because as customers are buying locally, again, they feel connected to your operation, they're buying from you really intentionally. People want to be able to tip you and help cover those processing fees. So look for ways in which the system can help you mitigate those fees without you needing to go out and ask the customer to do it, right?
James Maiocco: I know about a [00:24:00] quarter of the farms we work with today who offer tipping pay nothing in processing cuz people opt in and graciously give a tip. And particularly if you have somebody that has a, you know, let's say your average order is $25 right. People give you a $5 tip. Well that's, that's 20%.
Zoe Pappas: Yeah. Right, that more than covers the processing fees.
James Maiocco: Yeah, exactly. Yeah. So it's, it's pretty cool to see farmers have success with tipping. Um, and I think on the flip side of it, like you said, because the vast majority of Americans prefer to buy with a credit card now, uh, you know, if you price your products with the expectation that people are going to be paying by credit there should be no margin in impact anyhow. Right? Yeah. So, yeah. Uh, that's a good point.
Well, let's, let's move on, uh, to, to talking a little bit about some of the things that we see across other solutions. You know, many farmers today work with like marketplaces or regional food hubs, et cetera, uh, who either mark up or take a percentage of sales.
How should farmers be thinking about this when they're looking at available [00:25:00] solutions online? What have you seen in terms of range of percentages and then talk about what Barn2Door does there.
Zoe Pappas: Yeah, so I mean, we do see, right, a lot of farmers who will come to us who maybe already use a marketplace or some kind of food hub and on average rate of marketplace is gonna be about 40% that they're taking out of your pocket.
Um, Amazon, right? Sometimes get farmers that ask me about Amazon is about 40%, so it's a big number. But more importantly that that marketplace or that hub, just like a market, right, they own your customer base.
And so really, when we're kind of chatting about what the future of your farm looks like, you wanna think about, do you wanna own your brand? Do you want to have customers be able to come back to you and find you? And remember you. And continue to buy from you.
Um, and so those are things to think about, right? As you look at the differences between say, like a marketplace and then really being able to have e-commerce specifically. And that's, that's our goal at Barn2Door is to give you ownership over your customers because you [00:26:00] want people subscribing to products.
You want people coming back and buying from you on an ongoing basis rather than, like I was saying before, putting in the legwork every single time you wanna make a sale.
James Maiocco: Yeah, and I know uh, one of the big things when I look at marketplaces is that, you know, a farmer's brand, their product becomes a commodity.
Zoe Pappas: Oh, yeah.
James Maiocco: And you know, then there's a lot of price comparison, and then that becomes a race to the bottom. Versus a farmer who really owns their brand and people are paying a premium for their product and paying for the relationship with the farmer, right.
You know, unlike with e-commerce, when they're selling direct, they get to control their own pricing, right?
Zoe Pappas: Yeah. Yeah, that's a really good point. I think anytime you look at a marketplace, right, it's the customers looking up a certain product and then they are just price competing. So they're deciding exactly what to buy based off of what is the least expensive.
When you look at owning your brand and owning that customer base, you get to charge premium pricing cuz people truly respect and trust and want to buy directly from [00:27:00] you. So it gives you such a big lift on potential earnings from the operation as well.
James Maiocco: Yeah. Now there's a couple of other solutions out there that are not marketplaces that are kind of like niche solutions just for like proto CSAs, right? Yeah. What do you see the range of percentages those folks are charging, uh, on average as well?
Zoe Pappas: Oh gosh. Yeah. I think, I mean, I, I get farmers that come to me all the time that are like, I'm paying $30,000 - $40,000 a year for, you know, just for added percentages that are coming out on a monthly basis. But I've seen between, I would say like 5% and 10%. I would say 7% is kind of the, the number one percentage I've seen taken out of sales, which is a lot, right?
So when you look at earnings, when you look at scalability and where you wanna go, that really cuts into your ability as a farm to continue to grow the operation. And oftentimes makes you kind of worry about maybe I don't wanna sell as much, maybe I don't want to expand cuz I'm getting this big chunk taken out of my potential earnings, right?
James Maiocco: Yes. Seven, 7% is a pretty significant number. Yeah. Uh, I've seen as low as 2%, [00:28:00] but essentially, you know, anywhere between 2% and 7%, that's still a pretty significant margin. Cause if you're selling a product and your net margin's 20% and somebody's taking an additional 2%, they're taking 10% of your profit.
If they're taking 7%, you're talking like 35% of your profit is being paid to a solution that's just offering software. Now, in the case of Barn2Door, what about us? Are we taking any percentage from a farmer?
Zoe Pappas: No. No. Percentage of sales, and farmers are always so surprised when we hit that part of the conversation, but, I mean, I think that that goes back to to showing like, we're really looking to help our farmers grow.
We wanna help you scale, help you reach more customers. And I just in terms of like fairness for how much respect and pride you put into your product, you know, we don't wanna take a percentage of sales, we just charge that base subscription. You know, you can do it monthly or annually, but really wanting to help you grow.
And that's a big piece of why we offer all the support that we have in place.
James Maiocco: And that's the beauty of being the size we are. I know some of these other niche solutions are quite [00:29:00] small, but you know, in our case, we serve thousands of farmers. So we don't have to make a profit off the back of any one farm, right? So it gives us a little bit more flexibility with our pricing.
Let's talk about support. Cause I know this is a really big one. Many folks who work with big name e-commerce solutions, they, you know, really struggle with support. Um, because, you know, farmers are farmers, they're smart people, but they just don't have the time necessarily to try to spend trying to resolve technical issues, resolve an integration, if there's confusion about something or need some asssistance, you know, can you talk a little bit about the importance of support when evaluating a solution for your farm?
Zoe Pappas: Yeah, yeah. And I think, uh, again, this is a really big one because I see a lot of farmers that will come to me too.
And the first topic of conversation is it, you know, is it something that I'm going to be able to actually talk to real people with? You know, and, um, that's a really big thing to think about. So I know some of the just name brand e-commerce is that are more general out there might have support that is not local to the [00:30:00] US or that might only be able to respond within a three day to a week long period.
And so you really wanna be able to have someone that you can talk to, you know, same day that you can ask questions to or chat to directly. And that's a big piece to the puzzle as well, is that as you guys scale, it is one of those things that you wanna be able to connect with someone off the bat and not wait multiple days in order to figure out what the solution is.
James Maiocco: Yeah, I know this is a very big distinction for us at Barn2Door. At much like very large enterprise companies who have like entire teams dedicated to what they call success. Yeah. At Barn2Door, I think we're the only, um, solution in the entire market that has an entire success team.
Yeah. Fully dedicated seven days a week. There's support available to farmers who need assistance. Right. And I love the fact that, you know, many of our farms know the name of their account manager, Right? And have a personal relationship with 'em. Right. And they don't have to start over every time cuz they know their business.
And [00:31:00] can you talk a little bit about the importance of our laser focus on working with farms, and why that matters in terms like best practices or coaching or guidance with that account manager?
Zoe Pappas: Yeah, and I think, I mean, when you think of support, it can be twofold as well. Our team has an onboarding manager as you get started, for actually building out the e-commerce and learning the logistics and understanding those best practices, and then having an account manager for long-term support and the ability to set up some go-to-market strategy and understanding what other farmers are doing to be successful as well.
So, uh, something to think about as well when you're getting started with any e-commerce. Will I have support actually setting this up? Because that's such a big piece. If you don't get it set up, then you never end up really get rolling. So, um, yeah, from there I would say you really wanna be able to understand or have a, a team or an individual person that's there to back you up.
Um, when you're looking at what customer buying trends are , that's a big piece, right? Subscriptions, box sizes. There's some intricacies. [00:32:00] If you don't know, you can kind of miss the pedal on that. And then customers don't end up purchasing, for example, like if those boxes are too big.
So having a farm specific individual that knows the market and that knows what it looks like to be successful can do a couple things for you.
One of which is just help save you time so you don't make those mistakes that they've seen happen in the past, but then also just help set you up to be successful long term. Cuz that's the goal is figuring out where you're at right now as an operation and looking, you know, five years, 10 years in the future, being able to see what you can do to actually grow and expand.
James Maiocco: Yeah. Tons of content, tons of resources. So look, when you're, when exploring the options for your farm, make sure you're looking at like what's available specific to farming, farming best practices. One last thing I'll ask on the success side. I know this is something we debuted a about a year ago, is also a community of other farmers for people to connect with.
Can you share a little bit more [00:33:00] about the Connect program? Cause I think this is something I encourage you when you look at other solutions, ask yourself, is there a program where you can connect with other farmers that are gonna help you be successful? Can you share a little bit more about the Connect program and what that means?
Zoe Pappas: Yeah, and I think, um, you know, diving into how it can help a farm specifically is you wanna be able, like I said, to have an onboarding manager and an account manager. So people that are there to help you long term, but you also wanna have a community of farms who have been through it and who can give you tactics and advice for say you, you're wanting to get into delivery or you need to talk a little bit more about pricing and packaging.
The Connect program is really great cuz all of these farmers might have started out, you know, at at one point or thinking this might be a hobby operation, and now so many of them are in that six figure, even seven figure size.
So, being able to chat with somebody who's done it themselves and who has seen success, whether it be attending markets or doing just delivery, is such an amazing and really invaluable [00:34:00] resource. As you may be looking at growth or again, just overcoming or missing out on making any premature mistakes because, you know, many of them maybe have made those mistakes and are now looking at growing forward and moving forward and kind of showing you those best practices as well.
James Maiocco: Super, really great feedback. Well, let's end here with our last question, which is, you touched on this a little bit earlier. Uh, many e-commerce solutions that are out there or marketplaces that are out there, you know, take ownership of the customer relationship.
Can you come back to this one and talk a little bit more about why owning the customer relationship is so important in terms of a long-term business strategy and more importantly around resiliency for a farmer's business?
Zoe Pappas: Yeah. So if a farmer, or if your customer, excuse me, knows you and is following along with your journey and is buying from you intentionally, they will be your customer for life. Right. So they are gonna do things like subscribe. Their cart size is gonna continue to go up. [00:35:00]
They're really married to buying from you. So then as you communicate with them via email, as you, you know, post on social, making it really easy and convenient for those folks who already know you to continue to make purchases from you, helps you scale. So when you look at owning a customer and even offering subscriptions, right?
Our farms on average are making up to about 80% of their revenue month to month from offering subscriptions to a loyal customer base. So there's a couple pieces there, one of which is just having regular sales, but the other of which is having a premium brand out there allows you to charge premium pricing, right?
And so many of our farms actually have the capability to continue to increase prices for products, you know, every six months or every year because customers respect them and trust them so much that they want to and are willing to pay more for the product as well.
James Maiocco: Yeah. What I also love is that these types of loyal B buyers oftentimes are eager to amplify the relationship with their farmer, right?
Can you talk a little bit more about that, because [00:36:00] that's effectively a form of free marketing for farmers to expand their, their reach.
Zoe Pappas: Right, yeah, and I think that's a great point. The best way to continue to grow sales is organically, I would say, for food specifically.
So a lot of customers wanna be able to share out your information and without having a premium brand in place they can't do that. So I know just putting the branding in place, building out a site, having the capability for people to shop from you in all these places, it increases sales on average by about three times.
It also brings customers back, so it keeps your retention rate up. So three times as many referrals as well, which is really what builds community and gets people again, excited about coming back to you. Mm-hmm. and excited about the fact that you're growing to raising locally.
James Maiocco: Well, well said, Zoe.
Well, I want to thank everyone for joining us today and listening in, and a special thanks to Zoe for putting years of her time and professional development here at Barn2Door, working with many farmers like you across the country.
Perhaps some of you who've even talked to Zoe in the past, certainly probably talked to some of our [00:37:00] colleagues, but
I want you to know that Barn2Door we're really humbled to serve thousands of farms all across the country in all 50 states. And we're really dedicated exclusively to farms that implement sustainable agricultural practices and more importantly, support their local communities.
If you would like to connect with farmers and learn more, including the opportunity to speak with some of the farm advisors that are a part of our Connect program, and hear their stories about how they've been able to grow their business to six and seven figures, we'd invite you to become a part of the Barn2Door family, right.
And we encourage you to come to Barn2Door. You can go to our website and click to watch a demo or hit contact for reaching out to and speaking with someone like Zoe or someone on our team. We'd be happy to hear your dreams for your farm and how we might be able to support you.
Thank you so much for your time and we look forward for you to join us next time on the Direct Farm Podcast. We wish you the best and have a wonderful day. Take care.
[00:38:00]