Why Do Farmer's Markets Fail?
Why Do Farmers Markets Fail?
Farmers markets and fresh local markets are growing in both popularity and quantity. As more and more people discover the benefits of eating not just healthier food, but fresher foods these markets will continue to thrive.
Even so, a surprising number of them fail or are forced to close up shop.
According to one study, new markets are at their most vulnerable state in the first year of operation, with 24% of surveyed markets having to do so. Worse yet, that statistic only represents half of all market failures in the state for the survey year.
So, what happens? What causes these markets to fail or suffer problems?
1. Limited Number of Vendors
When markets have a limited number of vendors, or that number declines considerably a market will run into issues. It makes perfect sense when you think about it, considering the vendors - or farmers - are the sole reason the market is being held.
Customers may choose to visit another market that has more goods or a better variety. Maybe their favorite vendor stopped participating and so they want to find another elsewhere? Or, maybe the market is too small and doesn’t generate enough revenue to warrant being open.
Whatever the case, small local markets are most susceptible to failures and financial problems and it’s no mystery why.
2. Limited Selection of Goods
The two most common goods you’ll find at local markets are fruits and vegetables. But they aren’t the only products offered. You may also find fish, meat, cheese, bread, flowers, seeds and growing supplies, and more.
Of course, some markets don’t have the appropriate size or number of vendors to stock this many different items. And since fresh farm goods are constantly changing with the seasons and most recent harvest, it’s possible to attend an event that doesn’t have what you’re looking for.
This isn’t such a big deal if it’s every once in a while, but if it’s every time you attend, you’re going to start looking for another market.
3. Little to No Administrative Revenue
From a customer standpoint, it might be strange to hear that local markets and events need additional revenue specifically for administrative operations. These are funds used to pay market employees and administrators. To secure a location for the market, which could be a lease or purchase. This revenue is also used to pay maintenance and operating costs like electric and more.
If there’s not enough revenue coming in to pay for some of the extra factors, which are a natural part of running a local market, then it’s just not sustainable.
4. Market Manager Status
Some market managers - these are the people directly responsible for organizing and jumpstarting the local market - are paid meager salaries or wages, while others aren’t paid at all, if they are volunteers.
There are grants and financial programs to help provide a bit more pay, but they’re not something that’s going to bring in hundreds of thousands of dollars for a market manager. This may seem irrelevant to a customer or folks who simply want to attend an event.
But imagine a market manager that barely makes enough to support their family. Needless to say, they’re probably not going to be associated with the local market for long, unless they have another source of sustainable income.
That survey we shared from earlier, revealed that there were a handful of market managers making about $1,000 to $2,000 per year. Keep in mind, that there are markets that run once or twice a week, some even less, but there are also markets that are open all days of the week. Imagine working long hours only to bring in that much money for your troubles?
It makes sense why local markets would lose their market managers, and in essence their number one administrator and organizer.
5. High Manager Turnover
Piggybacking off the point above, a high turnover rate among market managers can also cause problems for a market. There’s not much else to say about this point that hasn’t already been said.
Market managers are responsible for the organization and day-to-day operations of a local market, without them it’s reasonable to assume the event would fail.
Managing Supply and Demand for Local Markets Is More Difficult
Farmers markets are in an unusual position when compared to grocery stores and retailers. It involves a complex and highly-engaging relationship between supply (which is the vendors) and demand (which would be the customers).
This is because a successful market must have both enough vendors to attract customers and sell goods, and enough customers to attract vendors. In other words, it’s nearly a 1:1 ratio in most cases. Without enough customers and revenue potential, local farmers and entrepreneurs will refuse to participate. Without enough vendors and goods, customers won’t want to attend the market, which will translate to less revenue all around.
If a healthy balance cannot be maintained between the two sides, then the market will fail.
Of course, there’s also an argument to be made for “anchor vendors” which are regular sellers that carry various products for an entire season. For example, if a particular crop yields less goods or is troubled, the vendors may not have as much to offer visiting customers. If this happens often, it’s going to throw the market out of balance.
Keeping Fresh and Local Markets Afloat Is a Tricky Affair
Don’t mistake being tricky to mean that it’s not an enjoyable or worthy experience, it certainly is. The thing to remember is that it’s a complex system and without the necessary components the machine will fail.
Market managers and vendors must be willing to keep the market they attend afloat in numerous ways. Adversely, providing support also falls on the shoulders of the customers and locals who regularly attend. This is not the type of business or world where revenue is always flowing in from another source. Retailers and grocery stores, for examples, are spread so far and wide if one store has a poor revenue stream it can still remain operational. Local markets are wholly separate and depend on the customers and vendors equally.
That’s why it’s always a great idea to support your local market whenever you can.