Carrot Cashflow: Building Systems for Efficiency (CC18)

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Episode Summary

In recent years, there has been a steady increase of younger people interested in local food. And in this digital age, that same younger demographic is used to purchasing what they need online, straight from the comforts of their home. That said, why should purchasing nutritious, local food be any different?

In this episode of Carrot Cashflow, Robert Arnold of Pleasant Valley Farm talks about how they were able to take their farm business online after decades of solely relying on farmer’s markets. Robert talks about the process behind how they built the front and backend of their online business to run it more efficiently.

Today’s Guest:Robert Arnold

Robert Arnold is a second-generation farmer at Pleasant Valley Farms in Argyle, New York. After decades of selling at farmer’s markets, Pleasant Valley Farm has now transitioned to selling online thanks to his technological and systems expertise. Apart from constantly improving the efficiency of their operations, Robert also consults with other farms on how to build out their own systems that make running their businesses easier.

Relevant Links

           Pleasant Valley FarmWebsite | Pre-Order Store | Facebook

            Smart Farm Innovations

In this episode of Carrot Cashflow:

  • Diego introduces the episode’s guest, Robert Arnold (00:36)
  • Robert Arnold and doing farmer’s markets growing up (01:19)
  • The trend of Pleasant Valley’s farmer’s market customers and setting up an online store (03:54)
  • An aging customer base and catering to a younger customer base (08:39)
  • Robert Arnolds thoughts on selling online and selling at market (10:25)
    • Long-term strategy to engage customers (12:07)
  • The challenges of setting up and running an online farm store (13:20)
  • Scheduling when the online store opens and closes and when to do deliveries (15:51)
    • Sending out reminders for chronically late customers (21:22)
    • Text reminders happened to be more effective than email reminders (23:53)
  • How Pleasant Valley Farm assembles and packs their orders (26:25)
  • Stowing orders according to the delivery route (32:39)
  • How long does it take to pack a week’s worth of orders? (37:46)
  • Building prices into the backend logistics (39:38)
    • Where the bulk of the work behind online orders lies (41:03)
  • The work that goes into running an online store and the work that goes into selling at a farmer’s market (43:58)
    • A technology manager and a key point person (47:01)
  • Combining resources, skills, and talents for a wider reach (48:10)
  • Revisiting how farm life is going after making the transition to selling online (50:29)
  • Robert Arnold and database management consulting (52:08)

Check Out My Book: Ready Farmer One: The Farmers’ Guide to Create, Design, and Market an Online Farm Store (2022) by Diego Footer & Nina Galle

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CC18 - Robert Arnold

[00:00:00] Diego Footer: Carrot Cashflow: profitable farm business starts here. Today, we're talking about creating systems to make order fulfillment more efficient.

[00:00:27] Welcome to carrot cash flow. I'm your host Diego, DIEGO. Today, I'm joined by farmer Robert Arnold of Pleasant Valley farm. In this episode, Robert's gonna talk about how they set up systems to make order fulfillment for their online store, more effective and more efficient. One thing a lot of people struggle with when they start an online store is the fulfillment side of things.

[00:00:54] It's really easy to create a store. And start selling where it gets hard and where a lot of work gets involved is on the order fulfillment side, having systems in place and having trained people in place makes fulfillment a lot easier. I think you're gonna get a lot out of this one. So let's join the conversation with Robert Arnold.

[00:01:19] Robert Arnold: Hi, my name is Robert Arnold. I grew up in Argo New York, which is about 30 minutes from the Vermont border in Washington county, New York, or about 30 minutes from Saratoga and Glens falls, New York from like 2006 on, so AF in my teen years and on essentially, we only did three markets a week. One, one was on a Wednesday afternoon and then two were on a Saturday.

[00:01:42] So I would say, from my perspective that Saturday was necessary. It was the culmination of the week's work. And you had to go to market because otherwise, the week's work meant nothing. And then I personally don't mind working markets and selling things and that kind of stuff, but. It most certainly it's exhausting, especially to someone who doesn't gain energy from being with people.

[00:02:10] So it definitely, Saturdays are like you get home from market and it's, you're done. And I could always see that with my parents. They were exhausted by come Friday. And my dad had to get up at three 30 in the morning on Saturdays to load trucks and get ready after working all. Mostly long hours, especially in the summer, he'd be working till nine o'clock at night, usually some years, depending on how many people we had helping.

[00:02:33] So I don't. I know it, it was the thing that just had to be done. There was no real, other good option. There wasn't as strong a markets than any other day of the week. Of course, later on, the local area started having Sunday markets, but that just somehow seemed worse. And we never really wanted to do a Sunday market. But Saturday mornings, I guess� Now I, I think we had it pretty easy.

[00:03:00] There's some farms that go to New York city on Saturdays. They leave. Two three in the morning drive to New York city. And those are all-day markets. So they don't get done until the evening. And then they have to drive home, or they have a hotel and stay overnight. I know a lot of the, as farmers got older, they started going towards the hotel route, but the younger ones, they drive back.

[00:03:23] And that's, that's a day like our market's only four hours long and then here done. So I always looked at that as man, I'm glad we don't have to do that because that's a lot of work. And I did, I wrote with some farmers down New York city when I was younger, had some friends and we'd make a day of it.

[00:03:39] He didn't do markets, but he did wholesale drop offs, which was a bunch of stuff. And then we'd have some time. But I, that, I think knowing that some farmers. Made what we look, what we did easy and I didn't mind it.

[00:03:54] Diego Footer: Do you think being a farm that was so entrenched in farmers' markets and enjoying it, it sounds like, for all those years, that if COVID didn't happen, you guys would've gone the route of setting up online?

[00:04:10] Robert Arnold: So we had, as a� We had discussed things along these lines prior in the last I'd say year or two before COVID it, it just seemed, from my parents' perspective, 30 years going to farmer's markets, interacting with the same customers almost every week, I mean, my parents, we did a survey recently. Our average customer has been coming to the farmer's market at least monthly for about 15 years.

[00:04:43] That's the average customer we have. And we've had some that obviously are twice as long as that some have been going to farmer's markets, their whole lives for 40 plus years to the local community. And we started seeing changes, probably over the last five years where regular customers didn't come as often.

[00:05:00] We had a lot of customers, the sales were steady ish, sometimes increasing as of late, but the reliability of customers. And when they came was very scattered, especially in the summer, it just seemed that people were busy. They had more trouble finding time on a Saturday morning to stop by the market as opposed to a grocery store, a different day of the week, that was more convenient to their schedule.

[00:05:24] And we started just seeing more and more inconsistency and, and some markets were. Really busy and some were not, and it was hard to nail down. We started tracking market sales. About the time we started introducing technology and we started taking credit cards. We had a point of sale basically, and an iPad, and then not long after that, we started logging every sale on the iPad cash check doesn't didn't matter.

[00:05:47] Our goal was to see how many customers we serviced and what the average sale was. And when they came during the market, which would help us influence how many people at the staff, the table, what, where we what's generally seen with that kind of stuff. And when did they come? And there was definitely a pretty major shift on when people came.

[00:06:04] It used to be when market bell went off at, you know, nine o'clock on Saturday and Saratoga that the table would be three people deep all the way across. And we have a 25-foot table. That's a lot of people that's like 20, 30 customers that are just there when the bell started. Take care of, and we had to make sure we were set up.

[00:06:24] We had to make sure we had enough people and then you just, you're just going. And then certain markets come in waves. Some are trickles. Some are like, you get slammed every 20, 30 minutes. And that just started disappearing. People just weren't there at the beginning of the day, they would come a little bit later and some markets there'd be like, nobody there, like the market would be almost empty some days when it used to be like packed around our stand at opening, even on the Wednesdays, the 3:00 PM start, it started changing as well.

[00:06:51] And then, so we started discussing wouldn't it be interesting if we could get almost pre-orders from customers to say, Hey, I'm busy. This is what I want. Can you just bag it and keep it there? And then I'll drop by and pick it up sometime on Saturday morning or I'll send somebody because now I don't have to actually be there to pick stuff out.

[00:07:09] The whole wife sending the husband thing, and then him coming back with the wrong type of lettuce and which is fairly common. His husband's on the phone talking like, oh, which, which type I don't have that type. What about the, so we were always like, how can we get customers to be more consistent that they wanna be there, but their lives just get in the way, because the market's schedule to these four hours, and there's no way to change that effectively.

[00:07:35] Cuz there really isn't the better time that is the best time of the week mainly. So we discussed that. I don't know if we would've moved to that. We certainly would never have moved to that. That. That was a forced move. I think it would've been a slower adoption. I think it would've taken more effort marketing, talking to customers, walking them through, getting on the system to think about doing it.

[00:08:01] And then I don't know if they. If it would've been as effective, COVID forced customers to basically move online without us doing anything. All we had to do was create a website and say, here you go. And then they wanted to figure it out. They had a reason to, and they had nothing else to do, and they didn't really wanna go to a grocery store.

[00:08:20] So all of a sudden, like we were basically handed a perfect storm, you might say in terms of moving to this kind of situation, and it has resulted in exactly what we had originally talked about, where customers put it in exactly what they want and then they come pick it up. Yeah. Or we deliver it to their house.

[00:08:39] Diego Footer: Do you think that three deep wall at the beginning of the market, that the dissipation of that over time was that customers aging?

[00:08:51] Robert Arnold: Sure. This is not local to just launch all Saratoga. However we saw steady consistent customers that started to become� They're less often just the same as anybody else, but I think it was certainly it, the younger generation was generally busier they're you know, that definitely is a factor.

[00:09:12] The older generation that was consistent in there every week, they started passing away, moving away, moving to retirement homes to different states, whatever the case may be. But that's definitely, we had that transition. We started seeing newer, younger families coming, but not as often. And there was a dip overall in, in the whole local food movement somewhere close to 10 years ago, I wanna say.

[00:09:38] And we started like sales started to dip in general and we saw a bit of a resurgence, which I think really captured that next generation, as you were saying�and we saw a lot more interest. It was always a whatever article came out, like people would come around and ask me for, there was a time when like cat grass and stuff was a thing.

[00:09:59] Like everyone wanted to make these like horrible tasting smoothies that were supposedly healthy. And so people were farmers were growing this stuff because it was a in demand and people were buying it because it was like the in thing to do. And, but I think that in general, people found that there's high quality stuff at a market.

[00:10:17] It tastes better. It's better for. And it's a nice environment, you know, and you see all your friends and neighbors at the market and it's this real social thing.

[00:10:25] Diego Footer: And what are your thoughts now being an online seller? Primarily, I know you still do some wholesale, but selling online now versus having to go to all those markets, having done this for a year, plus what are your thoughts?

[00:10:41] Robert Arnold: My thoughts are from the perspective of what I see and what my, where my parents are at with their career, and I, sort of retirement, which basically means slowing down, they wanna get the farm to a manageable location where they don't have to rely on as many people and it's easier and they can choose.

[00:11:02] There's a lot more flexibility, I think, in what we're doing now, but I see the systems we're doing now is a lot easier to essentially rinse and repeat, have other people do it besides yourself as the main farmer. Some of the, I'd say the major difference is farmer's market were always for us more successful if a family member was present at the market.

[00:11:25] It was amazing how much difference it would make. If we left a vacation, we left workers in charge of the markets. You could pretty much expect there'd be a decrease, maybe 10, 20% in sales, just cuz we're not there. Not cuz of change in product, not cuz of change in anything, but just because one of our, of the four of us, my sister, myself, or my parents were not outta market present talking and engaging customers.

[00:11:48] But this online platform has taken that and it's somewhat unfortunate, but eliminated that need to have one of us necessarily be there for it to be successful. We could answer an email from anywhere and the customer feels like they're connected to us. So there's that. And I think our longer-term strategy for this is to have on-farm events, to get people, to come out to the farm and interact with us there and make it feel like they're part of something.

[00:12:17] As opposed to on the week to week, it's a lot more flexible. You can hire someone to do a delivery driver to drop stuff off. You can hire someone to be at a pickup location and that kind of thing. And then on the farm, a lot more stuff happens on the farm. You don't have to leave as much, all the packing, everything happens there.

[00:12:33] And then there's only one person that goes out to do a delivery driver job or to do the pickup location. So it's created a lot more flexibility, and it's kept my dad on the farm a lot more, which means that things can be better taken care of. So that's where I see things are right now. There's definitely a learning curve in the technology and running the sales platform.

[00:12:54] And we're seeing in sometimes incredible consistency from people ordering week to week because it's easy, and it comes to their door, or they just go to pick up location. It's already done. They can send a friend and, and we offer more on our store than we ever have beforehand. And we buy and sell stuff from other local vendors to round out the offerings, make it a place you can get almost all of your weekly groceries at right from our store.

[00:13:20] Diego Footer: What have been some of those challenges that you guys have tackled moving online?

[00:13:29] Robert Arnold: I think one of the biggest ones that's always on my mind is customers were used to being able to pick stuff out directly on the table. They look, they'd see stuff they'd, you know, go, oh, I could use that. You get some of that with an online store in some cases more because there's no social pressure from the guy standing next to you to pick up your stuff quickly and leave so that your spot becomes available at a table.

[00:13:59] I definitely think we've seen increased sales because of that particular thing where people don't feel the pressure to choose and leave when there's a lot of people at the stand. Because it's online, they can take their time and really look through stuff and go, oh, interesting. Cool. I'll, I'll try that.

[00:14:14] And it's a lot easier to click a button too. The same online shopping thing that everybody experiences where people do tend to buy more because it's easier to buy more. But beyond that, for me, it's about making sure that the quality is always there. Because when someone clicks that button, they're not clicking that actual thing they're getting necessarily like they would at a farmer's market stand where they can look at the lettuce heads and say, okay, that size is bigger this week.

[00:14:43] I like the looks of that. When someone's picking a lettuce heads, you be like, what do you think? No. What about little bit? Yeah. Okay. That one. Exactly. And you can't get that from an online store. So having in working with the crew and maintaining quality is I think is paramount and there's�you need to do whatever you have to do to ensure that whatever goes on that customer's create is the best of what you have.

[00:15:07] At the expense of harvesting too much, or they're not using something that just isn't quite up to quality because they have to sight unseen purchase produce, which is probably one of the most volatile things you could sell online site on scene. And we've always had a high-quality standard at the farmer's markets.

[00:15:28] That's a key to my parents' success is making sure that there's consistent high-quality stuff that you know, that customers can trust. They can send someone that picks something out and know that whatever they're gonna get is gonna be high quality. But I think the online game, you have to up your game for that because people don't see it and they're not gonna buy it again if they get a bad one.

[00:15:51] Diego Footer: What do you have? You guys arrived at that works in terms of here's when we open our store?

[00:15:56] Robert Arnold: Yeah. So hands down, the most impossible task in the world with running an online store with a farm, at least the way we do it, is knowing what to put on the store for availability. You harvest strawberries and you pick baskets on, on a Thursday or Friday, and the store opens on a Monday.

[00:16:14] How many baskets are you gonna pick? Like you�there's almost no way to know exactly what you're gonna get of a many crops by the end of the week. So, so my dad had to change how he thinks essentially and how he grows. And what is he thinking about for availability and how much is needed?

[00:16:33] And that's for sure, like it's a near impossible task to be accurate at that kind of job. And it definitely takes experience. So anyone just starting out, you're gonna have to lowball the numbers to a certain extent, probably have a 10, 20% margin in your numbers just to make sure you don't oversell things.

[00:16:55] By the end of the week for us. For us, we do it, the store opens late Monday. Probably we, we try to get it open Monday afternoon at some point. And then we send out the note that, Hey, the store is back online. Here's the new things for the week. Here's the sales here's whatever. And then the deadline is Thursday at 9:00 AM.

[00:17:14] Which is a bit of a soft deadline. So we really take orders till 10, but the 9:00 AM is the one we put forth and you cannot do this without reminders to customers because of the nature of it, because they don't really know what they need, even on a Monday for what they need for the week for food, because they're still eating stuff that they just got two days before on a Saturday. All of our deliveries on a Saturday, although we do�

[00:17:42] Orders in, in stores that we have drop off locations in coolers so that they can drop by on a Sunday, Monday or Tuesday, depending on the location and pick those orders up if they weren't available on a Saturday. So we try to accommodate people with changing schedules and a lot of customers have appreciated that and taken us up on that.

[00:17:59] We've kept a hundred dollars a week customers by having a Sunday option. And, and that just helps cause the goal almost the goal for us is to keep the consistency in the summer and to keep the customers so that in the wintertime, when they have nowhere else to go, they're going to us every week. So our sales from way back have flipped.

[00:18:20] Wintertime is our busier sale time, and we have more sales every week more customers with consistency and in the summertime, things wane a little. Which I think for us is actually better. It gives us more freedom in the summer to grow and spend time on the farm. And then the wintertime, we just have to for rinse and repeat each week, and it's not growing as much, cuz it's just inside high tunnels and stuff from a root seller.

[00:18:45] We chose this schedule because we found Saturday was the best day to. Handle deliveries and job stuff off there's customers that aren't available on Saturdays. There's customers that preferred us to actually do deliveries on Thursday, which last year we did home deliveries on Thursday because we replaced the Wednesday market with home deliveries and just to make things work with the crew.

[00:19:09] But the crew unanimously decided that it was too much work to harvest twice a week. Because of the work it takes to wash and pack and then pack orders. There's a lot of set up time involved. So we move to just doing that one day a week, and we actually harvest most of Thursday and then harvest the remaining stuff Friday morning and then do all the wash pack work and final bagging of stuff that needs to be done Friday morning.

[00:19:33] And then Friday afternoon is when we actually pack all the orders. So used to be just a one day wash pack for, for Saturday, but because of the extra needed time to pack orders, we had to back into Thursday, which meant the deadline got pushed to Thursday for orders to be done by so we could harvest otherwise.

[00:19:51] If we were able to get it all done in one day, then the deadline would be Thursday night. So that's, what's dictating the times and why it's so early on, on a Thursday, that's when we need stuff by vendors have to have time to get stuff to us and they need to orders on Thursday to get to us on Friday anyway.

[00:20:05] So that's how that's dictated. And we don't open on Monday because we don't have time between Friday and Saturday to figure out what we have available for next week. Until Monday morning and, and running around, checking things, counting stuff is left over, figuring out what might grow, looking at the weather reports, talking to those kinds of things and double checking.

[00:20:24] We have a couple vendors here and there. So that's why sometimes it gets pushed later on Monday is figuring out all these information. So it's, we are, we have given customers as much time as possible to order from our store every week as we can, without cutting into our ability to update numbers and run it.

[00:20:43] So we see a lot of our customers know that if they want stuff like sugar, snap, peas, they're they come in short supplies. Sometimes it's a short window of time when they're harvested flex strawberries. And if you wanna get in on that, you better be ordering when that alert goes out on Monday, that the store is open.

[00:21:01] And we tell customers that they're welcome to edit their orders anytime up until nine, 10 o'clock on a Thursday and change stuff, add stuff for new stuff, whatever, we, we we're open to anything up until that deadline. And then after that, like your order is locked in, we've already sent orders out to our vendors to supply stuff.

[00:21:17] So like you can't change stuff after that. For a while we took late orders. Customers had to learn when the time was when to remember we had some chronic late customers. It, it was pretty funny. We'd be, we have to call them stuff like that, but we do a combination of email and actually text reminders to some customers between we do send out another reminder about six, 7:00 PM on a Wednesday night, says, Hey, don't forget to order the deadline�s tomorrow morning at, you know, nine, 10:00 AM.

[00:21:47] And then if there's anything that's changed during the week, we include it then too. So I think the majority of our orders, about half of our orders will be in by say Wednesday night by 7:00 PM. About half of them will come in. And then after that half the three quarter, somewhere in there. And then after that you get a bunch of them after you send that reminder out and then the remaining that's come in Thursday morning, and then we send another round of emails to anyone that hasn�t ordered still.

[00:22:18] The other two blasts go out to everybody, everybody that's already ordered and ihasn't ordered. And then Thursday morning at seven, 8:00 AM. In the morning, we send out a final email and text reminder to people that have not ordered yet and say, Hey deadlines at X time. And some of this comes from asking customers, do you wanna be reminded Thursday morning because you haven't ordered yet.

[00:22:39] And they all, a lot of them say yes, absolutely. And pretty much every week. There's a couple customers that send us a thank you note for our reminders.

[00:22:47] Diego Footer: So you send text reminders too.

[00:22:49] Robert Arnold: Yes. I have an integration with one of our pieces of software. We use that sends text reminders out to, to people and it's fairly low cost. And then you're talking about couple cents to send someone that may place a $50 order. Is it Twilio? Yes. So, okay. Through Airtable, there's an integration with Twilio so that you can assign account to it. And then from there, you basically use a filtered view of Airtable records to then say, Hey, I wanna send a text message to all these customers.

[00:23:23] Because I've imported the order list from that week, at that time, early Thursday morning. And then it filters out only the customers that haven't ordered yet that are usually consistent. And then it sends them all a text message that says, Hey, deadlines, this time here's a link. Ff you didn't need to order this week, have a great week.

[00:23:45] Some people order every other week. And then, yeah, that's pretty effective for some customers more than an email. And, and I.

[00:23:53] Diego Footer: I was gonna ask you on that in terms of text versus email, for me reminder, I much rather get a text than an email. Do you find that has really helped having that feature?

[00:24:04] Robert Arnold: It it's really helped with the people that are chronic� Chronically forgetful for the deadline, which is a hard thing. It's a hard thing to remember, to put a deadline in for a produce order every week, by a certain time. A lot of people Thursday morning is, you're always pushing to that Wednesday to remember. And then if you forget Wednesday because you're busy.

[00:24:25] So I think it's a pretty big deal for people to have that. At the reminder in text messaging, we've certainly seen a much greater reliability from certain customers. If we send a text reminder, and many of us thank them for us. Thank the thank us for the alert every week. And I, we, haven't done a very good job of, I think really.

[00:24:47] Polling people and asking if they wanna be added to that. But what happens is if someone doesn't order and then they say, Hey, forgot to order last week, I say, do you want to be put on the text reminder list and someone go, oh yeah, that would be awesome. And then, you know, like, I think if you say no, some like the emails we generally cater to, I would say an older generation, still a lot of our home deliveries are retired.

[00:25:14] Older folks and emails are fine for them. They're checking their email once or twice a day, regardless, usually early in the morning. And that works. I would definitely advise you to know your customer, know what type of customers they are. And if you have a more younger crowd, text messages are gonna be far more of reliable than email reminders.

[00:25:36] They work well for us. Not everyone has the same customer group, depending on how you market. And I think if you were a CSA farm, you're generally working more with family. And then text messages are gonna be more important than necessarily emails are. I think emails are good to give information out, but text messages are a great way to remind people and it, it Airtable costs for an account that we run 20 bucks a month.

[00:26:03] And then the text messages are pretty inexpensive on top of that. And even if you do a lot of 'em, you're only talking about maybe five bucks a week to send a whole lot of text messages. Like we're talking like a hundred or more so it's a fairly low cost reliable way and easy. I just click a couple buttons and the text messages are sent. I have a preconfigured note, and I just click done.

[00:26:25] Diego Footer: What system have you guys arrived at to say, okay, we have the orders. We know what each customer's getting. How do you assemble the totes for each order in an efficient way?

[00:26:42] Robert Arnold: It's been over a year process working that out. And as we work things out and figure stuff out, we, of course are increasing. We're adding more vendors, more products, more things to the store. So even what we were doing in the beginning was efficient for what we had at the time, but then as you add more things, you have to find better ways to handle more stuff.

[00:27:02] I would categorize what actually we do�if it were to be explained in its full detail, it's probably massively complicated, but because Airable is essentially a tool you build out and then once you build it out, that's the way it is.

[00:27:23] So when I download all the order information on a Thursday or Friday morning, and I import it into Airtable, I have preset filters and tools and reports and all that stuff that just all of a sudden gets auto-populated. All I have to do is change a filter date to this week. And then I have the information at the ready to make labels to download for.

[00:27:48] Delivery route planning to give a certain type of pick list for the crew for certain stuff. For example, certain things they like to know what are duplicates of and they'll pre-make the duplicates for those. Orders such as cucumbers. If someone wants one pound cucumber, then they make up that one pound for the customer in a basket, and then they make up 20, 30 of 'em, whatever.

[00:28:10] And then they want D doubles. They put the doubles in a basket. So the, we call 'em like the duplicates list, but there's a couple crops. They, the crew actually does the. the amount four based on how many are ordered in doubles or triples, quadruples, whatever strawberries, they pre-make bags of five strawberries or four strawberries or three strawberries to the number we've actually sold exactly.

[00:28:32] So that when they're packing out that stuff is pre-done, you don't have to grab, remember to grab two cucumbers, you already grab the double that's already made, so those kind of reports are built into the system.

[00:28:43] Diego Footer: Okay. So let me just pause you there to recap, to make sure I'm on the same page. So in the harvest crew, they'll get a list of unitization I'll call it, of a particular crop. So let's just say there's 10 customers. There's five singles on the table, four doubles and one triple. They have five singles on the table. They have the, the, the four doubles and, and the one triple all sit in there. Yes. Okay. And then, okay, so now we're at that stage, we've packed it all. We've divided it up, then what?

[00:29:13] Robert Arnold: Yes. So the crew packs everything to the exact quantity that's required for the store in crates, they get put on rollers that creates are labeled. We have a tagging system, and then it goes in the cooler throughout Thursday and Friday, everything gets packed that way. And then there's, we have set up within our system a pack order.

[00:29:40] So when it comes back out of the cooler into the wash pack area, where we then pack the orders. There's a very specific order to every single crop that goes out. And then every order has that same order of crops on it as to how it gets packed and handled. You could say for example, this is alphabetized. So then carrots would come before potatoes.

[00:30:08] Diego Footer: Right, so carrots come out of the cooler, and carrots are also first on the pick list. So that way you go through all the carrots divide 'em up amongst all the orders, and then you pull the next carrot.

[00:30:19] Robert Arnold: So everything then gets brought out of the cooler. And it gets laid out in its entirety as much as possible.

[00:30:25] If you have one, if you have 10 crates of a certain crop, you're only putting one out at a time. Yeah. Like a farmer's market table where you lay everything out, and then you stock from back stock. In this case, though, everything is counted. Exactly. So everything is laid out in a great big circle for all of what we have to do for the store.

[00:30:43] And then that includes all the vendor�s items, and everything else like that. We keep. We have to be careful about how long we put stuff out for, because of temperatures and stuff. But the wash stations generally kept cool. And then we'll bring stuff out of the cooler as needed to restock, but there's a very specific pack order because when you pack a crate, you have to put the heaviest stuff in first and then it has to move towards the lightest stuff so that you don't crush things when you pack stuff.

[00:31:10] So preset in our system, in AirTable, we have a number of systems that ranges from, I, I think it's, I forget if we started a hundred and then we go up to a thousand or 999, and then everything is mixed in between in separate groups. So, you know, all other thing that has to go on the bottom is first the lower numbers and there's separate groups for different categories.

[00:31:34] So as we add crops and remove crops during the year there's numbers in there, and we can tweak. That's preset. Pre-one everything is pre-ordered by that number. And then there's a view that is given to them that they would print off or view on an iPad that shows them exactly what order they need to lay stuff out in the wash dish is from start to finish.

[00:31:53] So someone will be there and be like, all right, gimme this crap. And then they get that from the cooler and they roll stuff out and they go that's first that's second that's third. And they just keep going along, lay it all out. And then from there, They're ready to essentially start packing into our crate and bins to go to home deliveries and customers and pickups at that point.

[00:32:17] We have labels made for every bin or crate or bag, which is basically just our own internal number. The delivery route has been set, which influences the order that's packed. So we packed the deliveries first, which is one through whatever could be up to 80 deliveries and we pack 'em in order of the delivery.

[00:32:39] So everything is packed from the first drop point. The first person we drop an order to based on the delivery route that's set is packed first and then stacked into the cooler such after the crates are packed. So then when you load into the truck, it's all ready to go. And it's in the right order for drop off reverse order for drop off.

[00:32:59] Diego Footer: Reverse order, so farthest away is gonna go in the truck in the back of the truck?

[00:33:02] Robert Arnold: Right? Cause if you pack the first order, first it's in the back of the cooler. And then the last order you deliver is first. So when you pack the truck, the last order you deliver goes into the truck first, and then you go count down to one, essentially.

[00:33:15] Yes. And different problems have different ways of doing it. We number and keep track of stuff very specifically, simply because. We do different stuff. Some farms I've seen that do deliveries like have a method, like boxes are always stacked, left to room. And that same thing goes into the truck exactly that way.

[00:33:37] And they don't even have labels and stuff. They just always move boxes in the exact same way. So the order never changes. We focus on labels. And making sure things are visually correct. More so than having a, a process like that, just because we things get weird. You add a order in here, you change something.

[00:33:54] It, we couldn't do that without having screw ups. But back in the boxes, we have generally four to five people working and one person carries the crate. One person picks the stuff and then one person reads off the screen. What is supposed to be harvested per order. So on a screen, I have another air table functionality is a pre-made document.

[00:34:18] You could say, or a slideshow of all the orders, and some things are packed later, even at time of drop off or delivery such as frozen items, fresh fish. And a couple of like flowers or things like that. Things you can't pack in the crate at that moment, either because of cooling or because of how fragile they are or because of when we get them, like you just can't throw a bunch of flowers in with the crate and not have it be destroyed or not fit in the crate.

[00:34:45] So there's certain things we have to drop off later is an extra, and we have a whole tagging system for those kinds of things, but basically there's a great big screen in the washing station and people have iPad. They can read off that and that's to ensure that there's double checks and balances in place.

[00:35:04] So the person reading says, put two of this in, put one of that in the person carrying the crate is keeping a second eye out for what the person that's picking from the table is putting in. Making sure there are no errors made. and so there's at least two people keeping an eye out for what's going on every crate, because we have upwards of 200 different items that go into the bins each week, generally around 1 75, I think is probably more.

[00:35:30] And so that's a big deal making errors and every week there's always one thing, one or two things that get missed or there is a wrong count in the washing station. There's a lot of double counting. We do. That's the process. They go around and they pack a crate and they pack the next crate. And then there's someone that receives that crate puts any other items that need to go in that crate from a separate list in the crate there, pack in the cooler.

[00:35:55] Diego Footer: So essentially if, if one customer got all 175 items, they'd be all listed on your, on their pick list. In the order you set, which is based upon really weight, heaviest stuff at the bottom, and then matching that exact list in the pack room. You'd have those 175 items laid out in that line. Yep. And the picker would just move down line. They're carrying the box. The products are fixed in one location and they're just going from crop or item to item down the line and then that's it.

[00:36:27] Robert Arnold: Yep. It's in the exact order on the screen that it is in the actual layout of the benches.

[00:36:31] Diego Footer: How do you factor in the doubles? So somebody's already prepacked a double strawberry, a triple strawberry. If you have three totes or three trollies of strawberries, where do the doubles go, on the first one?

[00:36:47] Robert Arnold: Some of these things that are doubles are done in paper bags. So strawberries go in their own paper bag and then the bag would have a number put on it.

[00:36:55] Two, three, whatever, when it's made up sweet potatoes are the same way people buy 1, 2, 3, 4, 5 pounds of sweet potatoes. It's written on the bag. And so there there'd just be two boxes. One has all the singles. One has all the doubles. One has all the triples and then, and other random ones. Got it. But it would be numbered.

[00:37:12] There are certain things we put in baskets, open top, like plastic baskets and. The person picking just has to know which bin contains the doubles, which bin contains the singles. Maybe they'll put a note on it. And then some things you can tell by looks, and then if you get into things like there's medium cabbage, large cabbage, small cabbage, and then it's just a sizing thing and usually lay it out.

[00:37:37] They just small to dig. However they want to do that in, in the pack order. Usually that's at that point based on alphabetical, medium, small, large, that kind of thing.

[00:37:46] Diego Footer: What's an average week in terms of total orders?

[00:37:50] Robert Arnold: In the wintertime, we pushed pushing over 180 a week is common.

[00:37:57] Diego Footer: Okay. So let's say you had 180. How long does it take a crew to go from? I arrive and like, nothing's been done. Nothing's been pulled out of the cooler till everything has been pulled and put back in the cooler. How long is at that time to do 180?

[00:38:13] Robert Arnold: Probably four hours. For three people? there's usually less people setting up than there are actually packing out two to three.

[00:38:21] People can easily set up the whole system, pulling everything out of the cooler, lining it up anymore, becomes chaotic. Cuz you really just one thing after the other, you're just moving around in a circle. So you don't really need a lot of people to set that up. At that point, people are probably finishing up stuff in the wash pack that has to be done before orders are packed.

[00:38:40] So they'll be gathering things around the farm gathering wherever if we have some stuff stored, like we have soap and honey and syrup in place on the farm from different vendors. So they'll be gathering what's needed for that. Bringing that in double counting some of the stuff from vendors. Meanwhile, two people are probably putting out the produce all lined up and then.

[00:38:59] The actual everything's all laid out, ready to go. That's when you have the four to five people there, depending sometimes you have two people helping with the packing side of stuff and then two or three people in the center actually packing in one's reading. So the actual packout, which is what we call it.

[00:39:16] Once people start packing, the crate is probably an hour and a half to, to two hours at the most to pack 180 orders in terms of dollars. We figure it costs somewhere around 75 cents to a dollar in labor to pack an order.

[00:39:38] Diego Footer: Have you raised prices at all to account for that? I've talked to a vendor who did, like they said, okay, Hey, it's gonna cost a 75 cents, so we raised every item, a dime or something.

[00:39:46] Robert Arnold: So we have always been focused on making the farm more efficient and not raising price. But we have kept everything almost exactly the same with pricing and how we do stuff from our farmer's market to our online store. Every order there is a dollar fee tacked on.

[00:40:09] Got it doesn't matter if it's home delivery. Doesn't matter if it's pickup, it's all, it's just a dollar. So that's why I say 75 cents to a dollar. And from there, we don't charge the customer anymore. Even for home deliveries, there is no extra fee for a home delivery versus a pickup that's all just included in the cost of running the system to put it in perspective�

[00:40:30] Have you ever been to a farmer's market where a farmer charged you to walk up to their stand, to buy from them before you even bought produce? Now, does it cost the vendor nothing to be at the market? No. So why would we charge for a home delivery? When it's the same thing as going to a market and paying someone to set up that stand paying someone to man it, paying for the booth, which can be expensive depending on the market you go to paying for the truck, all that stuff was already built into the cost of the produce and running the farm home delivery.

[00:40:59] We just had to make sure it was as near efficient in terms of cost as the farmer's market was. So we ran numbers for months, calculated everything, and it came down to the fact that with a little bit of extra resold goods added on to the store that we sell, which is about 30% of the gross, usually, cuz it's built up over time.

[00:41:20] We have 15 plus vendors now supplying things, that the extra, the real extra cost of running the store was not the home delivery. It wasn't the packing, it wasn't the, the pickup locations or paying for the labor. It was simply the administrative work of running the store. That was the extra cost. Right.

[00:41:39] Compared to doing a farmer's market, all the reports, my work, which is sometimes 10 hours a week of managing the digital aspect of everything, making sure the store was updated, adding photos, changing systems, building stuff, out, making all that stuff work. And. Was more than covered by the extra profit from reselling items on the store, which in turn, helped keep the consistency of people ordering every week because of the variety on the store. Our vegetable sales remain constant versus the farmer's market.

[00:42:10] The only difference being we sell to in some cases, a quarter or a third of the customers we did before, they just buy more. The average sale used to be nine to $11 per customer, and we'd see maybe three, 400 customers out a farmer�s market on average. And now we've moved to 130 to 180, depending on the time of year.

[00:42:35] And the average produce aspect sale is more like 25 to $28 per customer. So if they're buying more, produce less customers, and then they're buying all the resale goods on top of that. So we don't, we do�tips are our thing on the store. We have an item on the store, that's a tip. And if people wanna leave a tip for the home delivery or the pickup, they're welcome to, it's not required.

[00:43:04] And we just tell everyone the dollar is the fee. That's the labor packing fee that we normally would not have had. And the supplies that go into that, the bags and the labels and the all that kind of stuff. So that's the only fee we do is the dollar, because that's the thing we felt that was like the addition, the convenience of us prepack the bag for you as opposed to the farmer's market.

[00:43:25] And even then, I don't know if we really actually need the dollar or not to remain profitable. Probably not. It's not, it's not a huge deal. The tips do add average of a couple bucks per order, probably across all customers, some leave tips, some don't some add a lot of tips. So we had one customer who would always do 20% in tips, no matter what, it didn't matter if he had a $50 order or a $200 order, it was always 20% in tips were added on.

[00:43:51] That's just what he did. Everybody does their own thing. We don't require any of that though.

[00:43:58] Diego Footer: Hearing what goes into this, do you think this is a fair statement: running and managing and fulfilling orders for the online store�it's probably the same amount of work as the farmer's markets. It's just different work?

[00:44:17] Robert Arnold: Yes, it is different work. So that's why I go back to saying that the benefits that we decided for this system were that we'd be on the farm more. It would free my dad up more being on the farm. Wouldn't have to go someplace necessarily. We'd be flexible. Right?

[00:44:38] Diego Footer: It's assignable more assignable. It's you're not as key person dependent.

[00:44:44] Robert Arnold: Not as key person dependent, but also not as dependent on, we have to be at a market at this time. We're late for a delivery. We're late for delivery. If a giant blizzard occurs on a Saturday, we deliver on a Sunday. You don't lose any sales, everything gets moved around. You can change and morph with what your customers want.

[00:45:07] You can do exactly what your customers want, the time that it comes there's no, we're now in complete and utter control of our entire system from when we plant the crop to when it arrives in the customer's doorstep, and they have that freedom and flexibility of.

[00:45:24] That they don't have to be home when it arrives. They could put a cooler out with ice or they could have a neighbor come by and grab it or we could deliver to their neighbor or their son or daughter in a different part of the town. And then they get it later. So lots more flexibility, lots more easier for us to leave.

[00:45:42] And go away on vacation for my parents to leave and leave people in charge of running the system, because it's just something you gotta rinse and repeat, and the customers are used to it. And it's all digitally managed. I set up this system, trained someone how to run it. It's a rinse and repeat. They didn't really have to understand how the system was created or what went into all the thought and processes behind why and how they just have to do.

[00:46:05] Diego Footer: Or like you said, they don't have to be a family member that if you go to market, that's affecting sales like that, that all doesn't matter. You become a little bit faceless.

[00:46:13] Robert Arnold: Right. And I would say that we definitely don't treat it like it's faceless. We emails come from my mom or myself, pretty much to customers.

[00:46:21] And we interact with them. We call 'em on the phone, we're referencing each other and other team members. And you know, so, and, and, and Kim goes to the pick up location, my sister, herself, and one of them, so that there is a family member there to see people. And the other one was a, was a long time worker, but we sometimes just go occasionally and just be there when customers arrive to greet them and say hello.

[00:46:43] And we have very personable home delivery drivers that customers really like to interact with each week as they see 'em. And you don't really see many of them when you're dropping off and delivering, but we maintain a very friendly, interactive, and engaged digital front, I would say, yeah.

[00:47:01] Diego Footer: So a farm thinking about this, hearing you, this is my impression. You need a couple roles that you wouldn't have had previously, you need a technology manager, the person who's gonna manage the online store, all these systems, and then you need a key person who's like the packing point person, because that seems like an area that you absolutely don't wanna screw up. Would you say that's fair?

[00:47:31] Robert Arnold: Yeah, it's that's the, the part I think I struggle with is that this is all quite complicated to set up, and my role has been required and most farms don't have someone that can work through all the digital space and making sure that a system is made that fits the farm and the style of harvesting and washing, packing that farm requires to ensure that whatever a customer orders gets in their bag.

[00:48:07] That's probably not a common skill a lot of places have, especially for the variety, of course, you would tailor your farm to the skills you have available and what you offer. And if you can't do everything that we do, partner with another business or another farm and say, Hey, I grow this. You grow that. Let's find a bunch of people and then combine resources and sell it together as a group.

[00:48:30] There's a large co-op farm called three rivers Alliance over in New Hampshire. And it's three farms that were larger wholesale farms that got together and said, Hey, let's create a wholesale distribution that we run so we don't have to rely on another company. So they have facility, they have all the trucks, separate staff, and then they pull from farmers beyond those three kind of founding farms and then have a direct wholesale distribution. That turned into last year, full home delivery to almost a thousand customers.

[00:49:07] Direct retail. They totally flipped the business and went direct to customers instead of wholesale because all the restaurants and all that industry dropped out. So now that business is pulling from all these different farms has its own staff, its own everything. The farmers don't have to do anything other than harvest wash pack and deliver what's ordered.

[00:49:30] And then this company manages the rest of it. So. You know, teamwork helps with that kind of thing. If you can't do all those things individually on your own farm. And also, I think there's a lot of benefit to having just an on-farm store, bringing people to your farm. And we've seen a lot of farms with a lot of success doing that and becoming more engaged with their customers to drop out to the farm building.

[00:49:56] Sometimes state-of-the-art facilities to. That store in and depending on your location, proximity to your customers, we're gonna a location that it wouldn't work that well for that, which is why we haven't, we really need to get a separate facility closer to town, cuz we're 30 minutes out in a way that people would never really travel.

[00:50:14] And that's just probably too far for someone to drive every week. Yeah. Just for fun 15 or 20 minutes is okay. But beyond that it starts coming too far. So that's what I would go. Does that answer the question?

[00:50:27] Diego Footer: It did. And I think it's a great answer. And what do you think about farm life now from the perspective of you and your parents? Not business, but just farm life now that the farmer's market transition's been made and you guys are doing this all online.

[00:50:45] Robert Arnold: There's definitely been� There's been less stress in some areas, more stress in other areas, but I think it's the kind of stress you can work out. So goes away that, that stress of having to go to a market every Saturday morning and make sure everything is ready and get in that truck.

[00:51:05] And you have to be there a certain time because they won't let you into the market. That was something that I think as my parents got older, Was starting to drain them and they didn't want, my mom didn't want to do them as much anymore. Cuz it was, it's a lot of physical work. It's demanding. If it's hot, it's more difficult.

[00:51:22] If it's cold, it's more difficult. So now there's a lot of areas of the farm I'm seeing where things have become smoother. There's less, less pressure. And we're making the same amount of money. Customers are happier than ever. And it's easier for us to get away if they need to leave almost everything on Saturday happens without them doing it.

[00:51:48] Besides loading a truck in the morning, they have their entire weekend to themselves. Now there's a push on a Thursday and a Friday. Yes. But now they have essentially a two-day weekend where before they had a one after being exhausted. And I, I think for them, it's made a remarkable difference in, in their quality of life.

[00:52:08] Diego Footer: One thing you mentioned that's really tough to do on this is set up all the technical side of things. The database management. Is that something you consult on and help farms with?

[00:52:18] Robert Arnold: Yes, I've definitely helped and consulted, given advice to many farms. I'm part of some Facebook groups. I'm always chiming in on stuff as I can.

[00:52:28] I consult, I help people set stuff up. The challenge is always that every farm is entirely unique. And size is unique. Us spending a hundred dollars a month on software is sometimes too much for some farms and some of them have a different process or a different thing, a different that. But I definitely, when it comes to software, I'm happy to assist and consult and help you build a platform for that. So you could reach me at robertsmartfarminnovationsdotcom, and my website�s smartfarminnovations.com, which has a contact form on there.

[00:53:06] Diego Footer: There you have it. Robert Arnold of pleasant valley farm. If you enjoyed this episode and you wanna learn more about selling online, check out my brand new book, ready farmer one, ready farmer. One is the farmer's guide to selling and marketing. It's a step by step guide to help you sell product, build a customer base, and then market your product.

[00:53:30] To that customer base. I'm confident that the steps in that book will help you get more customers and increase your sales. Learn more in the book, ready, farmer one, available on Amazon or use, or you can buy it using the link below. Thanks for listening to this episode. I hope you enjoyed it, but more importantly, I hope you do something with the information in this episode to make a more profitable farm business.

[00:53:59] I'm Diego. And until next time, be nice. Be thankful and do the work.

 

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