Navigating the fresh produce markets can be a daunting task for any farmer, especially if you have little experience of the formal market structure. Deon van Zyl of the RSA Group demystifies the process, offering practical advice on how to choose a market agent, find the right market for your produce, transport your goods, and much else. Here’s how to achieve successful sales at the market.
1. Choose an agent wisely
Before selling produce at one of South Africa’s fresh produce markets, you must find a reputable agent. Conduct your business only with agents and agencies registered with the Agricultural Produce Agents’ Council.
This is a regulatory body that governs the conduct of market agents. Both the agent and agency must have proof of accreditation, which you may request to see.
Choose a knowledgeable and professional agent. Visit the market floor where he trades before entering into an agreement, and evaluate how he conducts sales, interacts with buyers and farmers, and how the produce is displayed.
“Many farmers don’t come to the floor, but it’s essential to meet the agent to build a relationship. Remember that the agent is the source of your income and you have to know you can trust him,” Van Zyl says.
2. Get to know the costs
If you’re new to the market, ask your agent about all the costs associated with the sale of the product. Discuss the agent’s sales commission, which ranges from 5% to 7,5%.
Your agent cannot claim a higher rate without first consulting you. Other costs, such as cold storage or ripening fees, can also be deducted from overall sales earnings.
Finally, provide valid banking details. After the sale, you should, by law, receive payment within five working days.
3. Find the right market
Avoid the mistake – made by many farmers – of sending your produce to the nearest market simply because it’s close by.
This market may not be the best one for you. It could, for example, have relatively few buyers or there might be a low demand for your particular range of produce.
“You run the risk of having the product dumped as it might not sell. Ask your agent about the segmentation of that specific market,” Van Zyl stresses.
Do your research on as many markets as you can to determine their respective size, number of buyers and the demand for your produce.
Transporting to a market further away will add to your delivery costs, but may result in greater overall profitability.
4. Talk to your agent
Regular communication between you and your agent is essential for establishing a good relationship and staying informed of market developments.
“Your agent is your ally. This person provides feedback on sales, product quality, shortcomings of packaging, what buyers are looking for and if the product meets expectations,” Van Zyl explains.
What to do when you have a consignment for the market:
- Inform your agent in advance: Don’t simply arrive at the market with a truckload of produce. Confirm your intention to sell, and provide details of the product, quality and grade.
- Establish with your agent the volume of produce that can be accepted that day: “You can send any quantity, but if you deliver 32 pallets of cucumbers, it will flood the market, the price will drop and you’ll lose money,” Van Zyl says. If a particular market cannot accept the full consignment, consider approaching other markets.
- Confirm the current and expected prices of your produce: “Although you should have already checked expected and current prices, confirm these again closer to the time you intend to sell as they could have changed.”
Finally, ask the agent – well in advance – if your product packaging complies with industry requirements and consumer expectations.
Packaging is extremely important as buyers tend to make visual purchasing decisions. “Cauliflower packaged in a white bag might fetch a lower price than the same product in a green bag. It’s all about consumer perception,” Van Zyl explains.
5. Get it there in the best condition
If you do not have your own transport, choose a reputable transporter. Begin by checking on the suitability of their vehicle.
For example, perishable produce that requires refrigeration cannot be transported on an open bakkie. In fact, produce should not be exposed to the sun at all, as this increases the risk of spoilage.
Provide the transport company with a detailed delivery note containing a description of the product, as well as the quantity and grade.
Theft of produce may occur when using an external transport service, and this document reduces the risk.
When the consignment is received, your agent must check and reconcile the produce with the delivery note, and inform you of any discrepancies.
It is important to deliver produce consistently and establish a strong brand at the market. “Keep in mind that the buyer comes to the market for a large variety of products, and prefers a trusted, reliable brand that he can buy at any time,” Van Zyl says.
6. Post-sale procedures
On conclusion of the sale, the farmer can expect a verbal and written sales report from the agent.
This should provide an overview of prices achieved, volumes on the market, leftover stock, commission charged, and any other deductions.
At the same time, the farmer can collect unsold produce.
“The market agent never owns the product. It remains the property of the farmer until it’s sold,” Van Zyl concludes.