Charge restaurant more than locals

paulns(NS zone 6a)July 31, 2007

That's what a friend here advises. She says the restaurant, which is in a high-end resort that is making an effort to support local organic seafood and produce, and advertises this on the menu, is reselling my produce and making a mint off it, so I should charge them more than I do local people.

I have a very good working relationship with the chef at the resort. He's been one of our best and most reliable customers, and most times comes to pick up the produce himself.

I don't want to have two price lists, but despite everything it's tempting. The chef is happy to pay city prices for our produce, which is organic and excellent quality, always picked same day. He's willing to pay me what I think our produce is worth. Local people on the other hand find such prices shocking and will go miles away to stock up on cheap non-organic.

There are also locals and summer residents who are glad to pay a good price for organic, quality produce.

As you can see, I'm confused. This spring I charged 2.50 a pound for asparagus, which people happily paid, and which I thought was cheap, but charged the chef $3/pound, which was closer to what I thought the aspargus was worth.

I suppose my question is, is my soul damned.


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The only justification you might have for charging more to the restaurant is if they expected a "sorted" product which would require more time. Otherwise, I would set prices for everyone at whatever you feel necessary. In reality the restaurant may not be making demands of your time as other customers are since they probably purchase in wholesale (larger)quantities.

I've heard of pricing schedules that lean in either direction so you need to determine your own situation. Just consider that the chef could just as easily find another supplier if he wanted to. That happens more often than we'd like to imagine.

    Bookmark   July 31, 2007 at 2:57PM
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First of all, you need to do whatever makes you the most comfortable. Personally I wouldn't want different price lists either. Your friend is assuming the restaurant is making a mint off your produce. Unless she does their books she doesn't KNOW how much money they are making. Just because a business carries high ticket items doesn't mean their pockets are stuffed with money.

Quality will always sell a product faster than the price. But your price needs to be realistic or your buyers will find it elsewhere.

The bad news is that you will have to deal with this problem for the rest of time. Market value on products (including produce) is always changing. Just when you think you've found a solution something new will come along and you will be back at square one trying to come up with an easy to do pricing structure.

Your goal should be to get the most profit out of your hard work and not to "stick it" to the perceived rich guy, nor to give it away for free.

    Bookmark   July 31, 2007 at 5:25PM
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paulns(NS zone 6a)

It's true - just because there's a big markup on the produce doesn't mean he's making a big profit. But the money for the produce also is not coming out of the chef's pocket. It's the manager's decision to buy local, organic whenever possible and he's given the chef free rein.

I may never get comfortable with this...The lady who was supplying the restaurant before us, and who gave the resort manager our name when she decided to quit the business, said that in ten years local people never bought from her - they thought her prices were too high.

'The chef could easily find another supplier if he wanted to' - not really; we're the only organic grower in a two-hours' drive radius. He can get some decent, but not organic, produce from the truck that does deliveries from the city.

We may just stop making an effort to sell to more local people and concentrate on the chef and our local and summer resident regulars, bringing those prices in line, even though I feel our mandate was to supply everybody in the area with good quality organic produce.

    Bookmark   August 6, 2007 at 7:24AM
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Some restaurants want a discount off of retail, thinking they are buying kinda wholesale.
I'd set my price for everyone, then charge them the same, or if they get really big, give them a 10 percent discount because you can drop a bunch at a time.
Don't get greedy. You may lose the restaurant account. Even if you are the only game in town (200 miles), if you charge too much they may feel it isn't worth it to either buy from you or stay in business. That doesn't help anyone.
Rather than charge more, you could ask that your farm name be mentioned in the menu as supplying fresh, organic produce for the restaurant, thereby making it a referral type benefit. The people that go to the upscale restaurant are the same people that might be potential customers and buy produce from you.

    Bookmark   August 7, 2007 at 8:57AM
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ole_dawg(7 UpCountry SC)

I am just trying to get started up. a new highend market with attach restaurant has just opened up.They are the only game in town for a very wealth, upscale group of gated subdivisions. The lots in most of them run from 1/2million up. To give you an example, I bought a as in ONE beer and it cost me $6.00. I could have bought a 6 pack of the same beer for $9.00 in town. Get the picture? When the flyer came in the paper I cut a few head/bunches of lettuce (I only grow greens) and drove up there. Their produce was all organically grow, like mine, but from a big supplier some distance away and both the produce/cheese manager and the chef really liked what I took them. They know that I am a start up, but they say they are commetted (SP) to helping the local little guys. The thought we talked about was that my lettuce would be their GUMA lol lettuce and that we would keep the supply small and both charge more. The problem is I have no idea WHAT TO CHARGE TO START WITH. This is sort of a hobby with me, but I would like to be able to pay for my garden toys. He was sell lettuce, several type, for $1.99/lb. I told him that I would guess he was making about 100% and he smiled so maybe he is and maybe he is not. Any ideas out there. It will be about a year before I could come close to suppling him all, but I would like to at least pay for my materials.
1eyedJack and the Dawg

    Bookmark   August 9, 2007 at 9:51PM
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ole dawg, $1.99 for a lb of lettuce seems awfully cheap. The bags of lettuces you get in the grocery store are between $2.99 - almost $4. and you're really only getting half a bag - the rest is air. I started selling mixed salad greens in gallon bags at market for $4 /bag this year and no one has complained. And I live in a small rural community. If this area is as upscale as you say $1.99 per pound is ridiculous. lettuce is light weight and it takes a lot to make a lb.

    Bookmark   June 1, 2008 at 1:21PM
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