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Availability for January 22
A couple weeks ago, I promised I’d get into the details of how the market sustains itself financially. Many of you have asked about that, and I’m happy to oblige.
First off, we’re legally a sole proprietorship, and the market is just an extension of my wife’s and my small farm. We file a Schedule F in addition to our regular tax forms. When the market started in 2002, it was named “Locally Grown Cooperative”, but it was never legally organized as a co-op. Dan & Kris Miller, the founders, were always sure to run things in a cooperative spirit, and when they handed the business to my wife and I in 2004, we’ve tried to do the same thing. I’ve renamed it to “Athens Locally Grown”, but you’ll still hear a number of people refer to us as “the co-op”.
We’re not a non-profit, either, but we’ve structured things so that over time the market can cover its own expenses. When things are good, it covers ours too. Just like all of our member farms are sustainable growers, the market itself needs to be sustainable. I mentioned last week that I thought we’d fall short this year, and on paper we did, just a little. The cash flow was just right, though, and we have the same amount in the cash box as we started 2008. My wife and I do not get paid, but if the market were to turn a profit, that’d show up on our personal tax forms. I was ok with it even if the loss on paper had been a lot larger, because we had unusual expenses last year. We bought quite a few new coolers (at about $100 each), all the lights we needed after we moved locations, some improvements to the truck, and so forth. We shouldn’t have so many expenses like that this year.
So how does the market cover its expenses? One small way is through the memberships you pay. The $25 a year you give to the market is enough (to put it bluntly) to cover the costs of having you as a customer: banking fees from depositing your checks, paper and ink for printing invoices, web hosting fees, and that sort of thing. What’s left over goes to helping fund farm tours, food donations to like-minded area groups and events, etc. We currently have 506 paid members out of the almost 1600 accounts on the website.
By far the bulk of our funding comes from the growers themselves. They generally pay a 10% commission on their sales through the site. This money covers the many coolers we use, the tables and cots used to spread out and organize your orders, the truck we bought at the end of 2007, gasoline, the food allowance we offer our volunteers, etc. During the winter, the sales are not enough to cover our weekly costs, but in the summertime there is extra. Last year, it pretty much all evened out in the end.
The growers get paid out of the shared cashbox when they drop off their sales, during the hour before we open the market. Then, you arrive and pay into the cashbox for our order. We then rush to the bank to deposit the money to cover the checks we just wrote to the growers. As explained elsewhere on the website, you are really ordering directly from and paying the growers yourself, but our shared cashbox system makes things convenient for you and them. (Imagine if you ordered from ten growers having to write ten checks when you picked up your items!) This shared cashbox system has so far satisfied the tax man, but it does mean that if you place an order and then never arrive to pick it up, we’re left holding the bag. For that reason, you are responsible for paying for orders not picked up, and that amount is automatically added on to your next order for your convenience. Last year, there was about $700 of produce ordered but never picked up and then never paid for at all (or paid for with bad checks). That might seem like a lot (and it is), but considering that the market had $308,000 in sales total, that’s not much at all. In fact, it’s less than a tenth of the US retail industry’s “shrinkage” rate.
So, in probably far too much detail, that’s how we operate. Our market might be more expensive to run than a traditional “booths and tables” farmers market, but that price buys a system that’s simple, time-saving, flexible, and in my opinion, just better. There’s no money in the bank, but the market is paying for itself, and that’s all I could ask for.
Now, on to the food! My wife and I will be in Tennessee this week for the SSAWG conference, but the market will go on as normal, thanks to my wonderful volunteer crew of workers and Michael McMullan (of McMullan Family Farm), who will be making the dairy run. They’ll see you on Thursday from 4:30 to 8pm at the old state farmers market on Broad Street. Thanks from all of us for all of your support!