“Harvie is not a cost, it is a pricing opportunity.”
-Robyn, Park Ridge Organics
I know a lot of farmers get hung up on the transaction fees for Harvie.
However, Harvie is not a fixed cost like a new tractor or labor. Harvie is a transaction fee that gets passed on to customers in margin.
In other words, Harvie is free for farmers. Members pay for Harvie.
Cost is mostly irrelevant when thinking about whether you want to adopt Harvie.
When you determine that Harvie is the best tool for your farm and for your members based on the functionality and service offerings, then it is a matter of pricing Harvie into your shares. It’s a win for your farm, for the farm’s bottom line, and for your customers!
So, how to price Harvie into your farm share?
There are four main levers to pricing your Harvie farm share:
The per share price that members pay
For a vegetable farm share (although the same principles will apply to any other type of farm share like a meat share), you might have three price points: Small ($18/delivery), Medium ($27/delivery), Large ($40/delivery).
Members have the option of purchasing weekly or every-other-week frequencies.
This determines the gross amount of money that is coming into the farm share program.
The target value of each share
The target value is how Harvie determines how many products should be put in each members share each week, based on the per-product pricing that the farm sets (see lever #4).
By default, this value is the same as the member pays so a $27 share gets a target value of $27.
I suggest that farms adjust the target value a bit lower to cover per delivery costs such as distribution (unless those are covered in lever #3), packaging, and packing labor.
In the spreadsheet example, a $27/delivery share gets a target value of $25.25.
The cost of transportation and distribution can be covered by a delivery fee. This especially makes sense for home delivery.
In the spreadsheet, I have set the home delivery cost to $10/delivery.
If distribution cost does not get covered by a delivery fee, for example in the case of group pickup locations, distribution cost should be figured in the target value of the share after calculating a “per delivery distribution cost”.
Per product pricing
Per product pricing is where the majority of the action is in this model. This is the retail price of each product that goes into a Harvie delivery. This is the price Harvie will use to determine the contents of each members share, based on each member’s preferences and the harvest estimate, to pre-fill each member’s share.
Setting prices in Harvie’s delivery estimate builder.
The spreadsheet model works back from a cost of production (let’s call that cost of goods sold or C.O.G.S.) to a retail price. The cost of production should include everything required to get the product ready to be packed into shares, including post harvest handling. This should include a fair salary for the farmer too!
On top of the C.O.G.S., we add the percentage costs of Harvie, credit card fees, marketing/administration, and a healthy 20% profit margin.
So on average in our system, farmers have listed potatoes at $2.23, based on this model, the target C.O.G.S is $1.12. Can you produce a pound of potatoes at $1.12? Your C.O.G.S. may be different on your farm so you can adjust this up and down to get your actual retail price that you should list in Harvie in each delivery.