Last Updated: 01 May, 2024
Selling farm produce the traditional way puts numerous middlemen between farmers and customers. While this business model remains highly profitable for retailers and local grocery stores, it cuts off a substantial portion of the farmers’ profit margins. Thus, to resolve this problem, many farmers are transitioning to online marketplaces and websites to sell organic produce.
By selling online, farmers are able to eliminate the middlemen to a significant extent and increase their profit margins by selling their produce at reasonable prices to customers. The Direct-to-Consumer (D2C) approach also means farmers can market their own produce and enter direct competition with retailers. As per records, the Direct-to-Consumer farm sales were $2.9 billion in the US alone and this number is expected to grow with the increase of online farmers marketplaces.
To help farmers willing to take the digital route for business expansion, you can launch online farmer marketplace and generate revenue via a well-devised revenue model. The various benefits of selling farm produce through online marketplaces and insights into business model and revenue model are discussed below in this article.
Below are some prominent reasons why farmers are registering on online marketplaces to sell their fresh produce.
By launching online farmer marketplace, you are providing farmers with a large audience base. Irrespective of their geographical location, farmers can sell their farm produce to customers located in far-off localities. Having a wider market reach will help them earn greater profit and enhance their business revenue. They can also send push notifications to make their customers aware of festive deals and discounts available on their products.
Farmers can effectively market their shops and products via an online platform. It’s easy to promote products that are available online as compared to items available in brick and mortar stores. Farmers can advertise their products via ad campaigns, SEO (Search Engine Optimization) practices, email marketing, and social media platforms. Thus, you can launch online farmer marketplace to help farmers build a solid brand presence.
Opting for an online marketplace would reduce farmer’s expenses. For example, they don’t need to rent a brick-and-mortar store, nor need to hire personnel to attend to customers or do inventory. The online marketplace automates these operations and drastically reduces operational costs. Instead, the money saved could be invested in strategic marketing campaigns or research and development operations for overall business growth.
On a farmers marketplace, customers shop conveniently with features like curbside pickup, digital, contactless deliveries, delivery scheduler, and discount coupons. All these factors encourage customers to shop online and require zero in-person interaction. Moreover, to launch farmer marketplace, you also aren’t necessarily required to interact with vendors to onboard them, instead, you can utilize digital marketing to gain your first few vendors.
To launch an online farmer marketplace, you can take inspiration from various existing players. Not only are these following businesses reaping the aforementioned benefits, they are also able to keep pace with the digitally maturing markets.
OurHarvest is an online farmer marketplace that sells locally grown fruits and vegetables, dairy products, bakery products, meat & seafood, and poultry items to New York-based residents. The platform is designed to help farmers, fishermen, and cheesemakers sell products directly to consumers at remunerative prices. The company works with a goal to deliver fresh and nutritious food to its customers at affordable prices. For every order confirmed, OurHarvest donates a meal to a local person in need.
FarmBox Direct is a renowned online farmer marketplace founded in 2014 by Ashley Tyrner. From organic fruits to vegetables, the company delivers a wide variety of locally grown food items to its customers’ doorsteps. In 2020, FarmBox Direct partnered with “Capital Blue Cross & Vibra Health” and started a “Food as medicine” service. The sole purpose behind starting this service was to provide boxes of fresh produce to customers so that they can easily overcome chronic diseases and diet-related illnesses.
FarmDrop is a UK-based online grocery store that provides farm-to-table food to their customers across Greater London and surrounding cities. The platform also offers pet food, deli products, household items, dairy products, and food items for kids & babies. FarmDrop delivers fresh groceries from a network of farmers, fishermen, and sustainable food producers. The company was founded by Ben Pugh in 2012 with a mission to become the most reliable and healthiest online grocery delivery service in the UK.
Headquartered in Australia, DoorStep Organics is an online grocery delivery platform that sells fresh organic fruits and vegetables, eco-friendly cleaning products, artisan groceries, gourmet products, dairy products, meat & seafood, among other items to their customers across New South Wales. The marketplace was started to serve people with special dietary needs. DoorStep Organics also offers convenient delivery options to their customers so that they can schedule product deliveries as per their requirements.
Below listed are some commonly consumed food products that you can sell on your farmers marketplace.
Fresh fruits and vegetables are a must buy for every house and consumed on a daily basis. Buying and selecting fresh vegetables from the local market is always a time-consuming task. Farmers can sell locally grown fruits and vegetables to those who don’t have enough time to visit local shops.
Like fruits and vegetables, dairy products, be it in milk, cheese, butter, or curd, are consumed by many people on a daily basis. Considering this consistency in demand, farmers can also sell dairy products on their marketplace to earn huge profits.
In the last year, many offline meat retailers shifted online to improve their sales. As per statistics, the online meat & seafood e-commerce market in the US alone is $8 billion in 2024. Thus, you can also launch online farmer marketplace to sell meat & seafood products.
Consumer demand for whole wheat, additive-free and nutrient-rich bakery products has increased over the past few years. According to Globalnewswire, the global bakery products market is estimated to grow at a CAGR of 2.6% during the forecast period, 2021-2026. Europe accounts for the largest revenue share in the online bakery business. You can sell bakery products in countries where the bakery market is expected to rise in the coming years.
Factors like the health benefits of consuming organic food and rising per capita spending on organic food items are expected to drive the global organic food market in the near future. As per a report by TechSciResearch, the global organic food market that was valued USD 129 billion in 2019 is estimated to grow at a CAGR of 11% by 2026. You can tap into this thriving market by selling organic products via their marketplace.
In order to launch online farmer marketplace, it is important to understand its business model. Business owners who may or may not be farmers can launch an online farmers marketplace to provide benefits to both vendors (farmers) and customers.
They can tie up with farmers from varied regions who will set up their stores on the marketplace and sell their farm products. An online platform helps farmers manage inventories, sales reports, product deliveries, among other business operations.
Buyers will register on the platform, add food items to their cart, and make payments to place their order. This process allows buyers to easily order healthy and locally grown food from the comfort of their homes. Delivery staff will deliver products at the customer’s location. The shipping of products will be conducted by either the admin or third party delivery service. Here’s a flowchart depicting how various users work in an online farmer marketplace.
Marketplace owners can generate revenue by charging commission fees to farmers on every order placed through the platform. When an order is approved, the marketplace owner receives his share of commission, and the rest is transferred to the farmer’s account by the system.
The marketplace owner charges the delivery commission from the buyer and the delivery staff on every order delivered.
Marketplace owners can earn money by helping farmers advertise their shops and products on the platform through banner ads. The advertisement fee will be charged based on the ad size, running time, and position of the ad on the marketplace.
You can also launch farmer marketplace where farmers can purchase a monthly subscription plan to list their shops and products.
Following are some key features that you must include in the admin (marketplace owner) panel, buyer panel, farmer panel, and delivery staff panel of your online farmers marketplace:
The marketplace owner can check the overall performance of the platform, analyze sales reports, and measure growth rate on a regular basis to create effective marketing plans and future strategies.
This feature helps the marketplace owner define and manage various categories of taxes such as seller level taxes, product level taxes, and global level taxes effectively.
This feature enables the marketplace owner to add various types of currencies to the marketplace. It would be easy to capture buyers from varied locations as the feature would help them shop in their local currency.
Marketplace owners can accept or reject approval requests considering shop details and authenticity proofs shared by farmers. After accepting approval requests, the admin can help farmers set up their store and manage product listing as per the subscription plan.
Farmers can add or update the details of their store such as name, products, address, prices, shop timings, and more with this option.
This feature enables farmers to set up the date and time of delivery slots along with other details of the store like packaging time, operational hours and working days.
Farmers can view transaction history, manage order payments and virtual credits, and send withdrawal requests for transferring money to their registered bank account.
It would be easy for farmers to handle order cancellation/refund requests with this feature. They can easily initiate full or partial refunds depending on buyers’ requests.
This feature facilitates farmers with easy inventory management by helping them track inventory status and monitor stocked goods. They can export or import data files in CSV format to save their time and resources.
Buyers can select varied products from multiple stores and add them to a single cart to complete the payment in one go.
This feature helps buyers track the real-time location of their orders. From dispatch to delivery, buyers will receive timely updates regarding their order status.
Buyers can make order payments through the payment method of their choice. Options like digital wallets, cash on delivery, credit or debit cards, and net banking will help them complete their order payment conveniently.
Buyers can place an order and opt for self-pickups as per their comfort. They can schedule an in-store pickup and collect their order from the selected location.
This feature delivers an app-like experience to buyers across all platforms that are integrated with standard-compliant web browsers. Buyers can install a PWA from the browser on the home screen of their smartphone and access web content in offline mode.
Delivery boys can view wallet balance, manage transactions, check payments history, send withdrawal requests, and keep track of their earnings with this feature.
This feature allows delivery boys to accept or reject order requests as per their availability. They can mark their availability status as active or inactive. The active personnel will receive new order requests.
Delivery boys can manage current, upcoming, and overdue orders with this feature. They can check order requests, number of orders delivered, and delivery history.
This feature will help delivery boys find shorter routes to farmer’s and buyer’s places. They can get a detailed view of the route, check route suggestions, and select a shorter route to deliver orders on time.
Delivery boys will receive timely notifications for orders assigned to them. The feature will keep them aware of new order requests, canceled orders, platform updates, among other information.
With the easy availability of the internet and the convenience of smartphones, everyday users now prefer to shop for products and place orders from mobile apps. Here are some mobile apps that you can utilize to grow your business.
Via the customer’s mobile app, they can easily browse the entire product catalog of your farmers marketplace and directly check out. They can also access order history and track existing orders. For further assistance, the app can have multi-lingual support. This will enhance the browsing experience for diverse audiences.
Mobile apps for delivery staff will notify them of any new orders. This app can also navigate the delivery personnel to pick-up points and delivery locations. With added features, such as geofencing, direct calls and status updates, your delivery personnel can easily manage deliveries and mark real-time updates on the marketplace.
Launching an online farmers marketplace that drives growth demands investment in terms of both time and money. Entrepreneurs looking to start their online marketplace quickly should opt for a readymade marketplace solution to gain speed to market.
Growcer, a grocery ecommerce platform, is equipped with all necessary features that help entrepreneurs launch their online farmers marketplace conveniently. It is a fully customizable solution that comes with ready-to-launch web portals and mobile apps.
Freshcartz is a grocery delivery marketplace that provides fresh produce and thousands of quality ingredients right at your doorstep. Its product catalog ranges from farm products and dairy items to bakery goods and frozen food.
Customization capabilities, seamless mobile apps, ready-made web portals, and COVID-19 features offered by Growcer make it an ideal solution to set up an online farmer marketplace. Additionally, as Growcer is also fully scalable, you can easily grow and expand your business without buying recurring pricing for additional listings and transactions.
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Harmeet is a content marketing professional, currently working with Fatbit Technologies. He is a creative writer and a wordsmith with a flair for writing on topics that fascinates him. He is a tech enthusiast and enjoys learning about the latest trends in technology. Outside of work, he likes to spend time exploring the internet and is an avid reader.
