Let’s start with the producer; next week we’ll talk about the market agent. Choosing the right agent is crucial to the long-term success of the relationship. It will probably take time, and trial and error. Only as you interact with each other will you develop a ‘feel’ for whether the relationship is ‘right’ or ‘wrong’. Your judgement will be based on the service they’ve delivered, prices achieved, selling abilities, stock control, communication, product knowledge, and loyalty to you and your brand.
Don’t forget to consider what sort of buyer base the agent has. Some agencies tend to have more large buyers than smaller ones, while the opposite could apply to other agencies. These relationships will influence the ability of your market agent to move volumes. Other factors that need to be taken into account include climate, supply and demand, competition from other producers, impact of direct sales by-passing the market and, above all, the quality of your produce along with your consistency of supply.
Obviously, assessing all these requirements takes time. Some producers might not have the patience to do this, but not doing so means not making a sound judgement call on a crucial business decision. The market agent is handling your produce, valued at many thousands of rands. Can you afford to be nonchalant about this relationship? How much effort do you put into making other financial decisions? Why should your choice of market agent be any different?
Professional producers investigate a new market agent in great detail before making the appointment, for good reason. That market agent and agency will be entrusted with products over a year, which will have a value running into millions. One doesn’t make those decisions lightly. The smaller guys should have the same approach. Being smaller doesn’t mean being inferior, it just means you shouldn’t use it as an excuse for not marketing your products correctly. Every producer can make the fiduciary relationship work.
Contact Mike Cordes at [email protected]. Please state ‘Market floor’ in the subject line of your email.