I’m keen to be able to sell online and this week I’ve registered with Farmhouse Direct to set up an online stall (not live yet, need to sort out a couple of things…) It’s an initiative from Australia Post to form an online farmers market, and has a great layout, focused on the needs of farmers and producers. Getting set up has however focused my mind on the costs associated with selling anything, anywhere. Everyone wants a bit of the action. Fair enough, they’re all running businesses too and have costs of their own, but it really eats into the bottom line!
The costs are relatively high for a small business like us at the moment, partly because it’s not really practical for our cash flow to buy the quantities of various items needed where you really start to get costs down. Australia is a big country, with pretty low population density especially in Tasmania (which I like!), but it makes it difficult to be in close geographic proximity to lots of people who might be interested in buying our olive oil. By looking at an online model we can increase our range considerably.
The standard cost of postage for a 375ml bottle of our oil is $15.35 (glass bottles are heavy!) And there’s packaging on top of that – box, bubble wrap, sticky tape, packing paper or peanuts… Farmhouse Direct have slightly better postage prices, and the payment side is handled on the site by PayPal, but they both take a percentage. 7.5% for Farmhouse Direct and 2.4% + $0.30 per item for PayPal. The postage still isn’t really really cheap either. $11.70 for flat rate postage in a medium box which can weigh up to 3kg. (Our bottle doesn’t fit in the small box!) But the box has to be an AusPost one, $2.40 if bought singly, down to $1.75 each for 20, or $1.16 for 200+. But you do get to sign up to be able to buy postage online and print at home, so packages can be posted out of hours, without having to stand in line – invaluable when I’m doing a regular job as well!
There are obviously costs associated with attending a market. There’s the time – for prep, travel, set-up, actual market, and clearing up. There’s stallholder fees (variable, perhaps $50-200 per time), insurance, table, gazebo, stuff to make the stall look attractive, cups for tasting… A huge plus of course is the opportunity to talk to potential customers, guide them through tasting, and tell them how fab Australian extra virgin olive oil is. An online community allows me to engage with my readers, which I love, but I can’t do tasting online! Although I’m wondering if it’d be possible to post small samples out somehow…
Other online channels have similar costs with varying structures. Ebay looks as if it would be more expensive, although they also have the preferential pricing with AusPost. And payment is still through PayPal, so there’s still that fee. Etsy is an online marketplace for handmade items, and has lower percentages, but a small listing fee. And it would still be PayPal. It’s also less well known in Australia. Another option is to sell directly through this blog / website, but we’d have to upgrade our bank account, and frankly it seems easier to have someone else responsible for that side of things!
I’d be really interested to know if any of you buy food online? Have you heard of Farmhouse Direct or anything similar? FFx