Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu
Whether it be produce, meat, or value-added products, marketing costs are incurred when selling direct-to-consumer. Marketing expenses can vary significantly between market channels, with some being more profitable options than others. It is important to analyze each market and determine which ones are more profitable and which ones are not.
University of Delaware Cooperative Extension has developed a direct-to-consumer market analysis Excel spreadsheet that can help producers determine which direct-to-consumer market avenues are most profitable, relative to marketing expense. This workbook is designed to be updated very easily. Enter the name of the market channel you are selling into (roadside stand, farmers market, corner store, etc.) next to the market 1, 2, 3, etc. You can also update the Excel sheet name in addition to reflect this market. Type in your sales and marketing expenses into the associated marketing channel sheet and the workbook will automatically update. Be sure to update this workbook periodically and mark the date of the revision when saving the file. When you download the Excel file, there is a sample market given in the first sheet (Market 1).
Net returns, or profit is determined after subtracting marketing expenses from sales in each given market sheet. In addition, the number of net returns (whether it be negative or positive) per marketing expense dollar is also given. Lastly, the percent return over marketing costs is also determined. Sometimes there are reasons to stay in markets that are not always profitable such as if it is a new market or if it is hyperlocal with low transportation expenses.
You can download the direct-to-consumer market analysis spreadsheet here:
https://sites.udel.edu/weeklycropupdate/files/2023/04/Direct-to-Consumer-Market-Analysis.xlsx
Additionally, the spreadsheet will be added to the University of Delaware Cooperative Extension website on a new farm business management webpage section.
If you have any questions on the spreadsheet and using it as a template for analyzing your own direct to consumer sales, please contact me at by email at nsbruce@udel.edu or by phone 302-363-7619.