When browsing through online agricultural exchanges and many Facebook groups dedicated to the fruit and vegetable trade, one comes across many wholesale fruit and vegetables sales offers. Wholesale fruit and vegetable sales offers have their own characteristics that I would like to briefly discuss. My commentary is coming from the perspective of a buyer who has been paging through these offers for several years, trying to get some sort of reference point to determine the market situation.
Preparing a wholesale fruit and vegetables sales offers. What are they missing?
Firstly, the offers are mostly residual. „I will sell carrots, nice, full truck quantities” is very often all when it comes to the information contained. What variety, what calibre, what payment terms, whether it is possible to issue a VAT invoice, how this carrot is stored, what is the country of origin of the product – these are just some of the list of questions that appear in the mind of a potential buyer.
My perspective.
Working in a modern retail chains, I was used to each product having its own quality specification. It defined in a very precise way which product parameters were acceptable and what the specific requirements for freshness and product quality were (e.g. % tolerances for progressive and non-progressive defects). The quality specification saved a great deal of time in sales discussions. When buying a carrot, it was very clear to both parties what specific carrot was involved.
Quality specifications – Achilles’ heel.
In the wholesale trade outside of retail, quality specifications are virtually non-existent. This leads to many misunderstandings, for example in the context of quality rejections or sorting of already delivered goods. We have attempted to solve this problem on the defood.org platform, where it is possible to issue a sales offer with very precisely defined quality parameters. This avoids misunderstandings about what kind of carrot we are selling.
A second characteristics of the wholesale fruit and vegetables sales offer on the Internet is a matter of price. In most cases, the seller does not state his or her selling price proposal in the sales offer. Sometimes the seller only wants to discuss the price during a private conversation – the famous 'price priv’. And sometimes the seller expects the buyer to be the first to propose a price.
The latter situation is sometimes criticised in particular by farmers who are sellers themselves. Farmers point out that relying solely on the buyer’s proposal leads to a rapid fall in selling prices and a reduction in the profitability of their farms. Farmers should negotiate fiercely and aim to achieve the highest possible selling price.
I would like to start by pointing out at least 3 reasons why farmers do not quote a selling price when formulating an wholesale fruit and vegetables sales offers:
- Lack of knowledge of the market price. As I have mentioned many times before, not all producers are passionate traders who keep up to date with what is happening in the market, what the current prices are and how they can increase their profitability. Some specialise solely in production, do not like to trade and therefore do not have a broad knowledge of what is happening in the market. Not knowing what selling price to propose, they rely on the proposal of a few buyers, from which they draw some reasonably objective reference point.
- Internet „haters”. Wholesale fruit and vegetables sales offers with a price presented on popular groups on Facebiij often result in a wave of negative comments which can be summarised in two options: „too expensive” or „too cheap”. This does not help in fighting for better prices. On the other hand, the incompleteness of the offers tends to fuel unnecessary discussions. Sometimes a producer displays his product very cheaply – without informing, for example, that the goods are already several days old and he is actually selling so-called 2nd class. On the other hand, a price twice above the current market price without providing additional information, such as a selected variety or an above-average calibre, also causes a lot of misunderstanding.
- The popular view is that he who quotes the price first loses. This approach is often heard from home-grown negotiation experts. Under this negotiating strategy, it is believed that going first with a proposal is 'revealing your cards’, showing your sensitivities and could lead to an unfavourable outcome for you.
Exceptions.
Personally I agree that when formulating a wholesale fruit and vegetables sales offers, we should give as much information as possible, including price . It is important to remember that we can only actually talk about price when we have a product ready for sale.
Therefore
it is obvious that it is difficult to quote a price in so-called seasonal offers where the producer is looking for cooperation partners before the season starts, when the 'fruit is still on the bush’. However, it can be pointed out that a professional farmer, following the selling prices, can estimate with a margin of error the price he can achieve in the coming season.
However, if we are talking about a situation where the product is ready for sale and we have at least a minimal knowledge of what is happening in the market, I personally encourage everyone to come out with their selling price proposal. Why? For at least 3 reasons:
- The seller loses nothing. As long as the price we quote is within the reasonable limits of the market price, stating the proposed selling price in no way negatively affects our negotiating position. In the worst case scenario, the buyer will make his counter-offer. Some people fear that, after stating our selling price, the buyer will be offended and walk away from the negotiating table without a word. In my experience, this almost never happens, and even if it did, I would suggest to rething the point of working with such a buyer.
- By giving his price proposal first, the seller can apply the anchoring technique, whereby the first price is the reference point (anchor) for further negotiations. Any price reached below this point is more attractive to the buyer, even if it is still objectively above market. In other words, by giving the selling price first, we can try to play out the negotiation on our own terms. We are the ones who set the starting point from which we start to descend. By setting it a little higher, we can hope to close the negotiations within our goals.
- Sellers can shape the market in this way. All digital exchanges and FB groups are browsed by buyers from all over the country who are trying to form their opinions about market prices. The lack of offers with a selling price means that there is no objective benchmark for negotiation. When I was working as a buyer, I relied heavily on the prices offered by large suppliers – the intermediaries. In order to verify them, I often browsed online exchanges and Facebook groups. By knowing the price offered for the raw material and adding the additional costs, I was thus able to assess whether the price offered by a large intermediary was market-based or not. Unfortunately, very often establishing a price for the raw material was not straightforward and required, for example, ringing up adverts, which in the long run was impossible in terms of time. Therefore, any sales offer with a price is also an element of a certain propaganda, which can help to shape more favourable sales prices at many different levels – including the retail chains.
In conclusion, it has to be said that spending a few more minutes preparing a decent offer for wholesale fruit and vegetables can have a very positive effect – both in the short term on a micro level and in the long term on a macro level. I would encourage you to spend at least a few minutes researching the market before making an offer, to disregard biting comments on the internet and to get rid of the belief that by giving a price we are revealing our strategy.
By adding a selling price to a wholesale fruit and vegetable sales offers, there is little to risk and much to gain. It is not only about achieving a favourable selling price in a negotiated transaction but also about creating awareness of the commercial situation at every level of the fruit and vegetable wholesale trade.
Conclusion
If you would like to easily put up complete and attractive offers for wholesale fruit and vegetables, I invite you to Defood.org. Register and use the listing form, which will guide you step by step towards listing a professional wholesale fruit and vegetable sales offers.
If you would like to find out more about how to prepare a wholesale offer for fruit and vegetables to a retail chain, I invite you to get in touch!