A different type of Market (Stallholder)

[Gundini]

Has anyone here opperated a market stall?

And more importantly, did you have success, make good profit?

Do you know of anybody who has done well out of the markets?

The reason I ask is, I have run a market stall for about 12 months, both Farmers Markets and Lifestyle Markets, with moderate success, but what I have found is it's darn hard to make a quid! By the time you pay the rent, pay for your stock, and turn it over, there is not much change left in the pocket.

I know where my problem lies, and that is my margin... It's too small, averaging around 130% mark up. But when you take out rent and time, that margin gets eaten up bloody quick.

So, I guess my questions to the business brains of this forum is:

What margin do you consider to be a minimum to opperate a retail market stall profitably? Bear in mind I am a reseller, not a producer. Is there a formula?

Secondly, what products, as a reseller, do you consider to be a good mover, non perishable, with the highest possible margin in order to run a successful business?

Thirdly, do you go to markets yourself, and what do you buy?. Do you expect to get a bargain, or do you look to find something unique or unusual?. Do you just go to kill time?

I ask all this, as I am struggling to find a balance between work/risk/reward, but I see 1000's of people going through the markets every weekend, and if you can work out the secret formula, you could have a very nice lifestyle, lunching during the week by the water, with the profit you have made in 2 days work. Another benefit is you can travel around the country, doing markets on the weekends. I am considering doing just that in a Winnebago this year, if I can work out the secret marketeer formula.

Got any ideas?

 

[prawn_86]

Gday Gundini,

Im kinda thinking aloud here so i hope it makes some sense.

My father is actually a fruit and veg grower but he never bothered with a stall and stuff.

Since you have been doing it for a while, these are my suggestions:

Try working backwards on paper. IE - work out how much you would like to earn in a day (realistically) and then figure out what sort of volumes and markups are needed.
Perhaps a simple excel sheet would enable you to change different values and see the changes in the other items.

Look back through previous records and see if there are times(seasons)/things that sell better than others, and perhaps cut out the less well selling items.
In other words narrow your focus.

Try sourcing from different areas, or bulk rates etc etc


thats about it for now and apologies if this is simple sounding or you have already done this.

Can i ask exactly what sort of product you are selling?

 

[nioka]

Bear in mind I am a reseller, not a producer. Is there a formula?:

Therein lies the answer. Markets are for the small producer who wants to cut out the middle man. I know a lot of market sellers who look at it as a hobby which pays a little but is not a full time income. I asked one stallholder how things were one day at the end of trading and was told that she had a good day, she had taken $80. Some fruit and veg sellers do ok if they grow the produce but those who buy to sell lose out on unsold produce which is dumped.The cheap shops like Crazy Prices, have seen the end of markets selling cheaper " gadgets and stuff".
I guess that if there is a formula it is salesmanship. If you could sell fridges to eskimos then give it a go. Why not try it, you will at least meet a lot of people and you probably won't lose anything but time.

 

[Gundini]

Can i ask exactly what sort of product you are selling?

Yes, thanks for replying Ray,

currently, I am selling Chilli Relishes, Chutneys, and Sauces. You would be surprised at how many people love Chilli (I recon about 33% are big fans, including children) and I am lucky to have a great product, including Australia's Hottest Sauce, which is the top seller.

But, because I am a reseller, the margin is lowish, and although I have no competition really to speak of (High Quality), the price is fairly expensive at $7 for a 250gm jar, and $10 for the sauces. It still moves quite well at these prices, but they definately have to taste before they hand over their hard earned. Plus, being a discretionary product, the customers buy all the staples first, and only buy the Chilli if they have any money left. Also, here in Brisbane, it can be quite hot in the mornings at the markets, and who want's to taste Chilli in the heat of the morning. So it's all work, with little reward.

I also sell a little bit on ebay, but because of the weight, it's expensive to post, and they need to purchase 5 or 6 items to make it cost effective.

Not a bad tip working backwards on paper by the way, that makes sense...

PS: I am not trying to promote my product using this forum, that's not cricket!

 

[Gundini]

I guess that if there is a formula it is salesmanship. If you could sell fridges to eskimos then give it a go. Why not try it, you will at least meet a lot of people and you probably won't lose anything but time.

Some very wise words there nioka, thankyou...

I do consider myself a bit of marketeer, and enjoy having fun with it. I think you have hit it on the head about what attracts me to the markets, it can be fun, but does need to be profitable. There is a fishmonger at our local New Farm market, and he is such a showman, the funniest most entertaining guy I have seen, complete with a Cockney accent, and bejesus he sells some fish!

 

[Whiskers]

I was (still am a bit), in the horticulture growing business. I sold quite a lot privately at good profits. But as mentioned above, the idea was to cut out the middle man. In my context I was in an area where there was very little or no competition for my product's, so I had a market niche and had plenty of room to make my own price, which I struck just under the cost of importing in from other areas.

If you are wishing to just be the middle man then you need to achieve one or both of two things. You need market niche products and or high volume products.

When it comes to pricing I used normal retail price less a little, to keep the trade that I developed. At the end of the day Prawn's advice to work backwards is a good stratergy. Then you know how much you have to sell in advance and provided you select the right location, you might need to do some more individual promotion.

Another important factor for everyday consumables is continuity of supply. If your customers can rely on a regular supply (even home delivery for regular buyers) they will tend to patronise you than a fly-by-nighter.

PS: Just got your latest posts. Yes, I think you need to cut price and costs if costs drive your price. Volume sales may follow at a cheaper price. Just as a matter of Interest Austchille is a major manufactorer and exporter in Bundaberg.

 

[Gundini]

All very good advise, and thankyou Whiskers,

Have tried cutting price, and volume does pick up, but at the end of the day the profit is marginally the same, as it is almost impossible to cut cost as a reseller.

I suppose the only answer is to find a product that has at least 300% margin to give me flexibility in pricing, cover costs, and ensure a tidy profit.

They are around, I have thoughts on one now, but have to import from China, costs about $1 to land, and retails for $5 (Walk out the door). It's target market is Young/Middle aged women (Best market because they have the $$$, theirs, and what used to be ours ), and they will purchase around 10 at a time, say 10 for $40. So that gives me 300% less rent. Only problem is I have to purchase 3000 at a time, and there is 5 different types, so initial investment is around $20K with signage, website, incidentals, etc... so still a fairly risky venture. They all sound good on paper.

 

[dalek]

Hello Gundini
I suggest you have to address some economic fundamentals first up and take look at your customer/market potential.
I would be pretty certain the management of these markets will have attendance numbers and I suggest you use those as a starter.
Allow about 10% of that number as a notional customer base, then look at your cost of doing business (rent, etc.) when divided by the number of customers you will know how much profit per customer is required to break even.
Obviously from this you can extrapolate if your current product range is going to be sufficient on it's own, which I suspect may not be the case.
There are many strategies to either improve your customer numbers and/or increase the amount they spend with you but make sure you understand who these customers are and what motivates them first. e.g. most people go to markets for bargains in hardgoods or "unique" foodstuff they perceive as more natural or better quality.
Price points are also important and will create purchasing resistance if too high. You cannot successfully apply a single % margin across all lines, but that's a whole other story.
Remember one of the major retail goals is to increase basket size, that's where real $$ profit will come from.

Most importantly this is about your customers not your own preferences.
The largest % of failure in small business can usually be attributed to shop owners starting up because it's close to home or it extends their long time hobby. (Customers must love it because I do !?!?)

Minimum quantity is an issue from China but should not be a deterant if you choose carefully and it will certainly focus your sales efforts with 3000 units in the carport at home. (Might also test your commitment)
But it's only $3k at cost and let's face it we could have bought a dog stock more expensive than that.
I did last week
Best of luck

 

[Mouse]

Hi,

My Aunt sells homemade jams, preserves, cakes and biscuits at the markets and does really well. It's a lot of work though. I used to do the homemade biscuit thing and always sold out by 10am almost regardless of how many I made. I even had people ordering them a week ahead at one stage.

You need to check out the laws regarding selling homemade food though, they've changed since I did it.

cheers
Mouse