Farmers Markets a Venue to Test Business Viability

If you happen to work in a corporate setting just like me you might be familiar with the concept of test market - a geographic region or demograph...


If you happen to work in a corporate setting just like me you might be familiar with the concept of test market – a geographic region or demographic group used to gauge the viability of a product or service in the mass market prior to a wide scale roll-out. In most cases, the outcome of test markets dictates your next steps.

Unfortunately, test markets are quite expensive and if you’re just starting up it’s not a practical route to take. That’s why I find the article in LA Times quite interesting where people se farmers markets to test if a product will appeal to target customers. Here’s the highlight of that article so you don’t have read everything.

For many start-up food or craft businesses, landing a spot at a farmers market can be a way to test the waters for their products and try out their business skills without committing the resources needed to open a traditional store or sell to a distributor.

A major downside is that it can be surprisingly difficult to get into a market. “Waiting lists can be a year or more, depending on the market,” said Lee Ostendorf, market manager for the Long Beach Local Harvest farmers market and half a dozen others.

As for arts, crafts and food vendors, state law requires them to be in a separate area, and some markets don’t allow them at all. Beverly Hills, for example, has only one, a local soap maker. Others ban nonfarmers from selling food. Market managers, who are hired by the nonprofit organizations and cities that operate the estimated 550 state-certified farmers markets in California, differ in what mix of products they want…

…At the popular Hollywood farmers market on Ivar Avenue, officials say many of the 100 produce stands take in about $400 on Sundays, while a few make as much as $2,500. Farmers pay 6.5% of their sales to the market. Twenty artisans bring in up to $500 each, spend $20 for a market stall and pay a 5% market fee. Sales for 30 food vendors range from $100 to $1,100, with 10% going to the market.

Farmers markets in California were formally launched in 1977 when state regulations were changed to allow farmers to sell directly to consumers at state-certified farmers markets. Farmers must be certified by the state, which is supposed to verify that they sell only their own local products. California is one of the few states with these requirements.

Please note that this small business strategy may not be suitable for all and depends entirely on the product/service you’re offering. Do a little more research and compare the demographics with your target market.

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