Honey Money Part Two – Honey Distribution

Getting your Honey Into People’s Kitchens. Different ways of selling honey come with different costs. Some ways mean you’ll need to share your profit with others. Each method (in marketing, that’s called a channel), comes with different pros and cons depending on how much honey you can supply. If you want to know more about […]

Getting your Honey Into People’s Kitchens.

Different ways of selling honey come with different costs. Some ways mean you’ll need to share your profit with others. Each method (in marketing, that’s called a channel), comes with different pros and cons depending on how much honey you can supply. If you want to know more about the honey business distribution channels, take a look below. If you can think of another one please just email me! How far up the ladder have you climbed?

Stage 1. Family and Friends

Word of mouth, free advertising! It works well for those starting out. I don’t like selling direct to the family though. I always feel a pressure to discount my product. Then you’ll get messages and emails asking for more honey but not everyone is central, so its hard to get to everyone in a timely fashion. Even if you manage all of that, unless you’re a super popular person who knows a bunch of people, there is only so much honey you’ll be able to move you fill your entire family’s pantry. Its a good place to start, especially if you add social media to sell your wares, but don’t depend on family and friends if you want to make a mountain of honey money.

Profitability: Low (You’ll end up giving a lot away)
Sales Volume: Low
Customer Engagement: High (You see these people a lot)
Effort: Low (You’ll commit little time to this channel)
Competition: Usually low (unless your in a family of beekeepers!)

Stage 2. Your Workplace, School or Club

Work, schools or clubs are a great place to sell your honey. You can leverage off the people you already know and you get a few more degrees of separation through friends of friends. Look for free advertising like noticeboards or the corporate intranet. That way you can reach a lot of people with your message for free and distribute through a  centralised point which makes it easy to deliver your honey, pick up empty jars and collect honey money.  You can usually sell one season’s bounty to your workplace with no trouble.

Profitability: Higher (People will still expect a deal)
Sales Volume: Low
Customer Engagement: High (They’ll walk past your honey sign on the noticeboard every day and have a personal relationship with you)
Effort: Low (You’ll commit little time to this channel)
Competition: Usually low (typically first in best dressed, people don’t like stepping on others toes)
Branding Requirements: Low to None

Stage 3. Direct to the Customer

Going direct to the customer with online, e-commerce sales is the most time effective way of taking orders, but can be time consuming delivering them.  You have two options, by delivering yourself locally, or by post and then you can either do it on-demand (when the person runs out) or by subscription at a regular interval.

If you are delivering yourself I suggest you choose a day of the month to do a regular delivery run. We can help you with an online stall on Hiveshare.net (Hiveshare.net plans to launch this service early 2019), or get another e-commerce platform like Shopify, eBay, or Etsy. They’ll take a cut of your profit, but when the orders come through you can bank them together, plan your delivery route and deliver everything in one hit.

You can advertise to your social media networks, or free places like Facebook Marketplace, Gumtree, Craigslist, Kikiji, or your Hiveshare.net listing.  You can also roll friends and family and workplace into this model as well so when they order from you they do it online. A Hiveshare storefront will allow you to geographically restrict purchases so your not driving from one side of the country to the other!

You can ship honey via post as well, but it is a more expensive proposition because honey is really dense. This works best for smaller quantities, rare varietals, medicinal honey or honey blends that have special qualities above and beyond table honey.

Profitability: Higher (People will still expect a deal)
Customer Engagement:  Medium (They’ll ask many questions)
Sales Volume: Low
Effort: High (You’ll spend a lot of time negotiating delivery and pickups and will have to deliver small volumes of sales to many different places. )
Competition: Medium (Lots of people sell using online marketplaces)
Branding Requirements: Low to None

Stage 4. Market Stalls & Farmers’ Markets

The most genuine & authentic vibe for local honey sales is the farmers market. It also has concentration of customers who not only want to buy local but also are obsessed with quality. You’ll get to meet people in your neighbourhood and they will pepper you with questions about beekeeping! You can charge a healthy price too because the farmer’s market shopper shops to reward the quality and local effort of the local maker. There’s likely a stall charge you’ll have to pay and you’ll need to sacrifice early mornings on Friday, Saturday or Sunday on a regular basis. For the sacrifice you’ll build lasting relationships as you get to tell your story, one to one. This method is definitely one for the early risers and hard workers! Look up your local farmers’ market below.

USA http://www.localfarmmarkets.org/
Australia https://farmersmarkets.org.au/find-a-market/
UK http://www.farma.org.uk
Canada http://www.localfarmmarkets.org/CNONfarmmarkets.php
New Zealand https://www.newzealand.com/au/feature/farmers-markets-in-new-zealand/

If you’d like to add another country please let us know in the comments and I’ll update the form.

Profitability: Very High (Farmers Markets are there to encourage bespoke and artisan products, this is the highest margin market)
Sales Volume: Medium (Depends on the market)
Customer Engagement:  High (They’ll ask many questions but once they know you, will become advocates)
Effort: High (Set up and break down of your stall on weekends is a pain in the bum, if the weathers bad and people don’t turn up, well that just plain sucks for sales! )
Branding Requirements: Medium (The strength of the relationship at Farmers Markets is more important than the look of the brand.)

Stage 5. Specialty Stores

Now we’re getting serious. If you have a lot of hives (20+) and can meet an increased demand, maybe you can pitch to your local delicatessen, health food shop, gift store or local green grocer. They will require you to give them a wholesale price (which is about 30% discount off their retail price.) While that seems like a big cut,  they can sell a lot more honey than all the previous options and you only have to deliver in bulk once a month or so. If you have enough honey, you can consider this. You’ll need artwork that has a barcode on it and you’ll also need to visit them regularly to make sure their stock levels are okay. They have so many products they wont call you when they run out, so you have to stay on top of the game here. Also, you won’t be their only supplier, so you’ll need to give them a reason to buy from you. Customer service is the game here.

Profitability:  Medium (Specialty markets will need to make 30% of the total value of that product. That’s how they survive, and that has to come off the price of your product.)
Sales Volume: Medium to High (Depends on the success of the specialty store)
Customer Engagement:  Low (Your customers now become the specialty stores, you can typically visit them once a month, so that’s not too much effort.)
Effort: Initially Very High (You’ll need to visit the stores regularly and provide service, but once relationships are set up it becomes easier  )
Branding Requirements: High (People will be selecting your product from others on the strength of the brand, they have nothing else to go off when making their purchase.)

Stage 6. Independent Supermarkets

Supermarkets are only viable for bigger part-time producers of full time producers. Some independent and more gourmet focused supermarkets may accept your product, but they’ll want it at a competitive price. You’ll need to match or at least be in the middle range of prices if you want to sell a decent volume. Honey pricing is commoditised and demand is elastic (Which means the more you stretch the price, the more you’ll sell.) I don’t visit a store unless they can generate $100 invoice each visit because by the time you get there, invoice them and chase the money you’re not making much profit. Supermarkets expect free delivery, for you to absorb the cost of any stock that is damaged or crystallized and to visit on a regular basis. They’ll ask for specials in bulk and you’ll be competing against some very rich and powerful people and some super experienced beekeepers too! It’s okay, authenticity still sells even at 3 times the price and even on a shelf full of knock-off honey that’s full of corn syrup! *Cheeky*

Profitability:  Low (Supermarkets will take  30% of the total value of that product but their prices are generally lower than specialty stores)
Sales Volume: Very High (The majority of honey is sold in supermarkets)
Customer Engagement:  None (Your customers now become the specialty stores, you can typically visit them once a month, so that’s not too much effort.)
Effort: Initially Very High (You’ll need to visit the stores regularly and provide service, but once relationships are set up it becomes easier  )
Branding Requirements: Very High (People will be selecting your product from others on the strength of the brand, they have nothing else to go off when making their purchase.)

Stage 7. Through a Distributor

For the real power players, you can strike an agreement with a distributor. These companies have relationships with many stores across a range of industries. Distributors can specialise in food service to restaurants and cafes, specialty grocery, supermarkets and more and are usually state or country wide. They’ll handle all the logistics for you (at a cost). If you can get your hands on enough honey supply you need to look for a distributor to match your product offering. Someone who distributes artisan or local products is ideal. This is BIG business though. The distributor will take 15% of profits from you from your wholesale price and may require your items to be boxed and warehoused. You’ll probably be looking to trade honey in bulk with other commercial beekeepers. You’ve also started to specialise, you’ll be a honey packer, not really a honey maker in this game.

Profitability:  Very Low (Supermarkets will take  30% of the total value of that product but their prices are generally lower than specialty stores)
Sales Volume: Maximum (The majority of honey is sold in supermarkets)
Customer Engagement:  None (You now only have one customer, the distributor and they do much of the heavy lifting.)
Effort: Low (You’ve started to specialise here. You’ll be packing more and probably beekeeping less. )
Branding Requirements: Extreme (People will be selecting your product from others on the strength of the brand, they have nothing else to go off when making their purchase. Also the distributor will only pick products that look like they can sell, so you have to be totally on point here, or they won’t choose you to represent their product. )

Stage 8. Export

Unlike stage 7, you’ve probably specialised in honey production rather than honey packing. We’re talking thousands of beehives and a very large and continuous supply of honey. You’ll need both the money and the skill to find international markets that demand quality and don’t have access to honey.  If you’re targeting the export business, you’ve already probably got this worked out and not looking to a blog to work out how to do it! : )

Profitability:  Variable (Depending on the market you choose and the product you have)
Sales Volume: Maximum (The majority of honey is sold in supermarkets)
Customer Engagement:  Specialist skills (Finding international export markets can be challenging.)
Effort: High (You’re now running a major international business.)
Branding Requirements: Variable (Exporters may want to buy bulk or may wish to see a country of origin.)

Happy Beekeeping and Selling,
Adrian.

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