Online farm foods marketplace

[Wantinglegaladvice]

Just after a bit of advice to see if the idea is viable.

I’m looking at developing an online farm foods marketplace where produce suppliers and farmers can list online.

It’s not really been done from research by operating as a marketplace, as farmers and produce suppliers usually supply to the ‘online farm shop’ retailers and they sell it on under their brand. That’s more of a traditional supplier retailer model whereas we are offering an Etsy style marketplace where they can list their products in relevant categories, some info about their business, traceability etc and we take a simple commission. They handle delivery and orders using the portal.

I’ve discussed the basics…Thoughts?

 

[Mark T Jones]

One has just gone spectacularly bust. Which isn't to say it can't work, but there are several hurdles such ad

Shelf life
Consistency
Provenance
Storage

Plus of course marketing!

 

[Wantinglegaladvice]

One has just gone spectacularly bust. Which isn't to say it can't work, but there are several hurdles such ad

Shelf life
Consistency
Provenance
Storage

Plus of course marketing!

Yes Farmdrop which ironically spurred my interest.

They operated more as an Ocado style business, shipping being limited to certain areas and they delivered it themselves.

My model is an Etsy style marketplace. Farm shops and produce suppliers sign up, list their products and we take a % commission. They’re responsible for delivery (usually courier next day so we can cover a good chunk of the UK) and all of the items you list such as shelf life, storage etc. as they are handling incoming orders via our supplier portal. The customer can leave ratings on the seller profiles too.

 

[fisicx]

Your biggest cost is going to be marketing. To attract sufficient sellers is going to be difficult, time consuming and expensive. You then need even more cash to find buyers.

You need to rethink delivery. If I buy 20 products I want them all to arrive in one box. I don’t want to have to pay 20 different couriers and wait fir 20 different deliveries.

 

[AstEver]

Start-ups with platform business model are usually resource/investment-intensive because they must scale up quickly. The problem in launching such a business lies in 'onboarding' enough both sellers and buyers to get the momentum, so you can imagine the marketing effort required to achieve it. But they are extremely attractive.

I would focus on investment, additional investment, and marketing.

 

[Wantinglegaladvice]

To attract suppliers and sellers to the platform I was going to directly contact the suppliers with poor web shops or sites of their own (shows they already deal with customers) and offer no setup fees. One of the benefits for onboarding is that any commission is only charged when they get an order so there’s probably not a lot for them to lose, with the opportunity to grow sales! Initially to bring them on we can even list any products.

 

[Mark T Jones]

Pretty much the above

You will he responsible for marketing - talking million

You will need solid contracts

Irrespective of contracts, you will carry reputational risk for delivery, quality, provenance and consistency

 

[intheTRADE]

I am almost certain I seen a pitch on Dragons Den for this - or at least something very similar. They didn't get investment but I remember thinking at the time it was a great idea and a place I would definitely shop

The problem as stated is attracting enough consumers to the site to make it worth while for the suppliers create accounts and keep their listing updated

One route to quick sales is Google Shopping, as Etsy do. Whilst you may run this at a loss for the first few months the idea would be to raise awareness and secure returning consumers from there on in

 

[fisicx]

I’d shop there as well but it’s the delivery where it all falls down. If each supplier needs to sort out their own courier and charge per delivery the consumer costs are going to be huge. I would have to pay multiple delivery charges if my order involves more than one supplier.

 

[Wantinglegaladvice]

I’d shop there as well but it’s the delivery where it all falls down. If each supplier needs to sort out their own courier and charge per delivery the consumer costs are going to be huge. I would have to pay multiple delivery charges if my order involves more than one supplier.

I think the solution would be to create a company account with couriers the suppliers can use with negotiated lower rates (the volume would be there as it’s used across the sellers). These savings can then be passed on to customers. With it being a marketplace there’s probably no way around the multiple deliveries unless it was shipped to our distribution centre first and then all sent out together but that would impact quality.

The majority of orders would be sent next day delivery anyway and if the suppliers used our one courier account then we could eat a good chunk of the delivery cost, lower prices for shipping and hopefully the shipping company would deliver the majority of it together.

 

[Wantinglegaladvice]

I am almost certain I seen a pitch on Dragons Den for this - or at least something very similar. They didn't get investment but I remember thinking at the time it was a great idea and a place I would definitely shop

The problem as stated is attracting enough consumers to the site to make it worth while for the suppliers create accounts and keep their listing updated

One route to quick sales is Google Shopping, as Etsy do. Whilst you may run this at a loss for the first few months the idea would be to raise awareness and secure returning consumers from there on in

I’ll have to have a search for that episode as it’ll be interesting to see where they failed to get investment.

Yes, I actually own a digital and marketing agency so the expertise is there. It’ll be a case of putting it into action and making use of the relevant channels.

 

[Wantinglegaladvice]

I’ll have to have a search for that episode as it’ll be interesting to see where they failed to get investment.

Yes, I actually own a digital and marketing agency so the expertise is there. It’ll be a case of putting it into action and making use of the relevant channels.

Here’s a mock-up of the branding and design if anyones interested

EB3-C3-E3-A-6-A8-B-4-A4-E-B736-C22982106798 hosted at ImgBB

Image EB3-C3-E3-A-6-A8-B-4-A4-E-B736-C22982106798 hosted on ImgBB

ibb.co

 

[fisicx]

I think the solution would be to create a company account with couriers the suppliers can use with negotiated lower rates (the volume would be there as it’s used across the sellers). These savings can then be passed on to customers. With it being a marketplace there’s probably no way around the multiple deliveries unless it was shipped to our distribution centre first and then all sent out together but that would impact quality.

The majority of orders would be sent next day delivery anyway and if the suppliers used our one courier account then we could eat a good chunk of the delivery cost, lower prices for shipping and hopefully the shipping company would deliver the majority of it together.

The customer won’t see it as a marketplace. They will want to buu a load of products and get them delivered the same way they do with Tesco or even Amazon. One payment and one delivery.

 

[fisicx]

Here’s a mock-up of the branding and design if anyones interested

That looks like a shop not a marketplace.

 

[intheTRADE]

I can't find the exact pitch from DD but this is the website https://lamb2ewe.co.uk/

It seems they use a number of different farmers and suppliers but it's not quite a marketplace like you describe

 

[Wantinglegaladvice]

I can't find the exact pitch from DD but this is the website https://lamb2ewe.co.uk/

It seems they use a number of different farmers and suppliers but it's not quite a marketplace like you describe

I’ve just taken a look. They’re actually much different in that they make their own produce. They also just sell lamb. They’re actually the sort of supplier we’d look to onboard.

 

[intheTRADE]

It says as soon as you land on the homepage they do much more than lamb - beef, pork, poultry etc

And on this page it explains they sell other farmers produce https://lamb2ewe.co.uk/meet-our-farmers/

 

[BusterBloodvessel]

As well as the issues mentioned above...

The Etsy model works because generally it will be for gifts (I imagine this is a huge chunk of Etsy purchases), or at the very least one-off purchases. It's to find something different/unique/unusual. Not to do your weekly grocery shop where people tend to stick to what they know. People either go to the same supermarket each week, and/or the same butchers, the same veg stall on the market, etc.

So once people have their preferred supplier, why use your platform? Is it really that often that people are looking for something outside of their usual chicken/lamb/beef/carrots/potatoes? Are they going to browse and see what unusual cuts of meat are available that week?

I am also not sure if I'm honest that we have mainstream acceptance of ordering groceries for courier delivery. I know people are big on supermarket deliveries, but they know they are getting the same produce with the same freshness as they would get if they drove down and picked it off the shelf themselves, and that the guy from Asda who they probably get used to seeing each week is nipping a mile up the road with it. Not something that could be getting battered and bashed about and stuck in transit as it makes its way across the country with DPD or whoever.

Sorry if that sounds negative - my honest first reaction is that I would love to love the idea. It just seems to have too many barriers to me. And I'm not sure how you overcome them without either going down the Farmdrop model (look how that turned out!) or the monthly "surprise box" model (we pick £100 of produce from the best independent suppliers each month) - and there's that many monthly box subscriptions available, it wouldn't surprise me if that's already been done too.

Also - I know it's probably just a quick mockup with some stock graphics, but that example doesn't shout "marketplace for quality, independent produce" to me. It says "a shop".

 

[Ryan Paul]

I think it is a good idea with inevitable challenges. Trying to convert interest into regular sustainable trade will be difficult . I envisage it as an Interflora type model however savvy customers will eventually cut out you and trade directly with the market.

 

[JEREMY HAWKE]

I cant understand why farmdrop went bust when farmers and fish mongers here in the South West are successfully shipping fresh produce to homes all over the country .

There must be a way to make this work and it would be interesting to have more info on why they failed . !
The only thing I can think of is that some farms have managed to optimize and promote their own sites successfully

Award-Winning Online Butchers | Edenmoor (formerly Pipers Farm)

Voted the UK’s best online butcher, delivering free-range chicken, grass-fed beef and properly sourced British meat nationwide. Trusted by 8,000+ five-star reviews.

pipersfarm.com

There is a massive market for fresh produce

 

[IanSuth]

The issue i can see has sort of been touched on above

Etsy works as most purchases are one off or infrequent so not an issue for them

Once a customer has come to your marketplace and found they can get fresh Cornish lamb from Cornishlambdirect (made up name) via you, why would they continue to get it via you and not set up a regular order direct with the supplier (who by your own admission you say will have already been selling direct via the web anyway)

To make back your marketing spend you will need long term custom via your site but the incentive for you suppliers (who will be paying you a commission) will be to convert those indirect customers into direct ones where they don't need to continue paying that margin to you. Incredibly hard for you to construct any form of contract that will eliminate that or for you to even prove it is happening in a way the supplier can control when they already have their own existing direct route. (I used to work in recruitment and agencies have spent decades failing to stop companies converting introductions into direct contact, and have been involved in court cases to try and recover lost fees)

The only way around that is to make it easier for the customer to stay with you - as in single delivery from multiple suppliers which you don't want to do

 

[Mark T Jones]

I cant understand why farmdrop went bust when farmers and fish mongers here in the South West are successfully shipping fresh produce to homes all over the country .

There must be a way to make this work and it would be interesting to have more info on why they failed . !
The only thing I can think of is that some farms have managed to optimize and promote their own sites successfully

Award-Winning Online Butchers | Edenmoor (formerly Pipers Farm)

Voted the UK’s best online butcher, delivering free-range chicken, grass-fed beef and properly sourced British meat nationwide. Trusted by 8,000+ five-star reviews.

pipersfarm.com

There is a massive market for fresh produce

They were burning £10 million of investors' cash each year - which is OK if you can convince your investors that there is a clear turning point - which there wasn't.

The challenge I see on this thread and I believe applied to FarmDrop is lack of clarity on what the actual business was - marketplace/distibutor/subscription etc.

There was also a sub-text that they rode a wave during lockdown, but things dropped afterwards,.

 

[Wantinglegaladvice]

The issue i can see has sort of been touched on above

Etsy works as most purchases are one off or infrequent so not an issue for them

Once a customer has come to your marketplace and found they can get fresh Cornish lamb from Cornishlambdirect (made up name) via you, why would they continue to get it via you and not set up a regular order direct with the supplier (who by your own admission you say will have already been selling direct via the web anyway)

To make back your marketing spend you will need long term custom via your site but the incentive for you suppliers (who will be paying you a commission) will be to convert those indirect customers into direct ones where they don't need to continue paying that margin to you. Incredibly hard for you to construct any form of contract that will eliminate that or for you to even prove it is happening in a way the supplier can control when they already have their own existing direct route. (I used to work in recruitment and agencies have spent decades failing to stop companies converting introductions into direct contact, and have been involved in court cases to try and recover lost fees)

The only way around that is to make it easier for the customer to stay with you - as in single delivery from multiple suppliers which you don't want to do

It’s not necessarily something I wouldn’t want to do, but I’m not sure how it’s really feasible using a multiple supplier marketplace format. It would need to be shipped to a central warehouse, adding at least a day impacting freshness.

 

[Lucan Unlordly]

Take a look here: https://www.clickitlocal.co.uk/brentwood/#

Lots of local fresh food deli's and farm type shops mixed in with other business types, presumably helping to cover website and development costs?

 

[fisicx]

It’s not necessarily something I wouldn’t want to do, but I’m not sure how it’s really feasible using a multiple supplier marketplace format. It would need to be shipped to a central warehouse, adding at least a day impacting freshness.

That may not be how you want it to work but your potential customers do. They don't want a marketplace, they want a shop. Even better, they want a local shop. We get a load of local produce from a farm shop. You go to the website place and order and click and collect or get it delivered.

Can't see the benefit in using your site to order a lamb joint from Cornwall and get it delivered to Aberdeen when I can buy it locally. If I want potatoes and mint sauce as well I don't want three packages - I want it all in one box.

Whilst I applaud the idea I just can't see it working without a lot more thought to the distribution model.

 

[Wantinglegaladvice]

Whilst I applaud the idea I just can't see it working without a lot more thought to the distribution model.

I agree the model needs work. What, in your opinion, would be the solution. Altering the model to a traditional shop and stocking items from the suppliers?

 

[BusterBloodvessel]

I hate to say it....I'm not sure it needs a solution? You've had an idea. There's numerous barriers as to why that idea (probably) won't work. I would be putting the idea to bed rather than trying to find a solution to a problem that only exists within your idea.

Or at least, go right back to the very beginning. What did the initial idea stem from? What consumer problem or complaint were you trying to solve or do differently?

 

[fisicx]

I agree the model needs work. What, in your opinion, would be the solution. Altering the model to a traditional shop and stocking items from the suppliers?

Go local. Don't even bother looking for suppliers. Partner up with a local store/garden centre/farmer's market and set up the app so people can shop online with click and collect or delivery. If the model works you offer it up to other retailers. This way the store does all the marketing for you. All you need to do is sort out integration to make sure people can't buy some smoked kangeroo steaks when the last one was sold this morning (something you would have to do on your marketplace anyway).

Building the app is the easy bit. It's the backend stuff that takes all the time to do.

 

[IanSuth]

If the issue is that a lot of really very good food producers can't design a website or market themselves properly- then offer that service. Create an aggregator site that is a portal to their sites for a small fee and create a simple templated site that new suppliers can sign up to cheaply adding extra functionality/marketing for additional spend as they grow with you.

To give an idea there is a company called pitchero who do the websites used by most rugby clubs (and i believe cricket, netball and football) the basic site for a couple of teams is free but if you want more teams on it you pay more per extra team. They now also sell gps trackers and do many other things, but they started off as a simple website template that allowed team managers to easily manage registrations and ask for player availability.

Or look at Indeed, simple job adverts are free but you can pay for sponsorship to get your ad higher in the searches or for screening tests etc.

 

[UrbanRetail]

I like the idea and I think testing the waters certainly has some merit.

Not saying it's the best way forward, but personally I would base it on JustEats model of entering your postcode at the beginning. Being able to see available products from local suppliers, this would also ease the burden of delivery.

 

[BusterBloodvessel]

I like the idea and I think testing the waters certainly has some merit.

Not saying it's the best way forward, but personally I would base it on JustEats model of entering your postcode at the beginning. Being able to see available products from local suppliers, this would also ease the burden of delivery.

Interestingly I tried the site suggested above (ClickItLocal) which starts much the same way. However it then seems to deliver a load of retailers who are based hundreds of miles from me, and I assume offer National delivery. So it then becomes a hodge podge of retailers I've never heard of and am unable to click and collect from, and in fact I'm not "clicking it local" at all!

 

[Lucan Unlordly]

Interestingly I tried the site suggested above (ClickItLocal) which starts much the same way. However it then seems to deliver a load of retailers who are based hundreds of miles from me, and I assume offer National delivery. So it then becomes a hodge podge of retailers I've never heard of and am unable to click and collect from, and in fact I'm not "clicking it local" at all!

In fairness to them they do not claim to cover all areas so unless you reside in one of the handful where they are active and offer their own delivery service, you will not be a targeted customer.

That said, when they launched down these parts the first flaw I noticed was that local, to the borough council they were in cahoots with, which was determined by postcode area, does not exclude businesses based miles across the county line.

 

[IanSuth]

In fairness to them they do not claim to cover all areas so unless you reside in one of the handful where they are active and offer their own delivery service, you will not be a targeted customer.

That said, when they launched down these parts the first flaw I noticed was that local, to the borough council they were in cahoots with, which was determined by postcode area, does not exclude businesses based miles across the county line.

A lot of local searches really depend on the database used as well.

Years ago we used to use a recruitment website decided to update the search model to offer county or towns rather than just a postcode and radius, I believe over an argument on the cost of the postcode look up

Unfortunately what they bought and implemented couldn't not cope with the fact that Berkshire does not exist in authority terms, there are instead 6 unitary authorities West Berks, Reading, Bracknell Forest, Wokingham, Windsor & Maidenhead and Slough. Reading (the town) itself is bigger than Reading the authority containing bits of Wokingham and West Berks so any search for a job in "Reading" would even miss jobs in those parts of town (which includes several big business estates), they lost vast amounts of business before they gave up and went back to their old tech and had to refund large amounts of money (in form of discounted following year) to the customers they kept.

Postcodes were developed for the use of postmen and authority boundaries for political reasons - neither is perfect for working out transport times and a mix of both is often the worst of both worlds

 

[Chris Hanson]

The main reason why any middle business is starting to feel the pinch is that people want greater control and that means cutting out the salesman in the middle. Dyson, Shark are some examples of companies selling direct. It's not hard for farm shops to set up their own market places.

 

[intheTRADE]

The main reason why any middle business is starting to feel the pinch is that people want greater control and that means cutting out the salesman in the middle. Dyson, Shark are some examples of companies selling direct. It's not hard for farm shops to set up their own market places.

Dyson and Shark are products and not physical premises dealing with walk in trade and working on site such as farmers and farm shops. Its not hard for them to set up marketplaces themselves but it is time consuming to learn how to do it and then manage it.

Part of the reason JustEat, Deliveroo and UberEats have taken off massively as its more of a convenience for the takeaway and restaurant owners who are busy with in person customers and cooking

 

[fisicx]

Part of the reason JustEat, Deliveroo and UberEats have taken off massively as its more of a convenience for the takeaway and restaurant owners who are busy with in person customers and cooking

All of those are local services. You don't order something from Dover and get it delivered to Doncaster.

The only reall way this idea could work is if it focuses on local suppliers. You can then tap into the Deliveroo network and get those fresh lamb shanks, potatoes, mint sauce and craft beer from just down the road. Solves so many logistical issues.

 

[Mr D]

Back when amazon started doing its grocery delivery service it had a major problem. I'd do an order at say 7am for delivery next day. Then get a dozen deliveries through the day, at considerable cost - from a dozen different companies.

What you need is one source of food. We buy from the supermarket because they can supply what we want. We buy from particular websites because they can supply what we want.
You need to find out what your customers want.

Its never about what you want to do. Its finding out the customers problems and figuring a way to solve those problems. If that solution works out as an online farm shop marketplace then great. However it may well work out as a very different solution.

If I order online from a farm shop (there are plenty now) I expect to get certain goods and certain quality.
Your idea would not add value to my shopping, merely cost for the farm shops. Which they'd have to pass on to others, like customers.

Don't be the person setting up a business then looking for a problem to solve. Generally doesn't work out.

 

[Mollyron]

That will be stressing to say the least, dealing with fresh produce is tricky. Don't forget they are perishable.