Friday, October 19, 2007

interesting observation

My business is not merely that of growing, and selling, but also in some cases of buying from other farmers and selling to my customers. I find it more meaningful and rewarding to buy direct from home gardens; namely fruit from the village and selling in my kade or on my home delivery. I do have some more well healed customers who live in Colombo and who have property and sell some of their produce. However the price they are asking for their produce hardly allows me to make a profit and is priced higher than either what my customers in the kade or even my well healed Colombo customers are prepared to pay.

I sometimes pay these prices and offer my customers at prices where I do not make a profit, just so that I have a choice of product and like to have something different occasionally. I make more money selling forest bees honey a product very hard to find than any of these products, because I can buy in bulk when the annual harvest is done and sell throughout the year, with only a holding cost of funds tied up.

For example I purchased nice good large and sweet pineapple from the farm gate at Rs 100/- but I can hardly sell this to make a profit taking into account the 10% wastage. Even the fruit stall I sell my King Coconuts was selling retail in Colombo for 110/- and they don't pay any more than 80/- to purchase this at the shop from the delivery van. Similarly I was offered 1000 Oranges at 15/- when I sell my jungle oranges at 8/- To make any profit I need to sell at between 20 and 25 and this is not easy to achieve unless I was selling at the Kollupitiya market!!

This is therefore a point worth considering when doing transactions with those whole income does not comprise just farm produce. They value their produce at more than is realistic. I guess I do too and that is why I sell direct to customer instead of to the wholesale trade!!! It is just that I am more realistic in what I can get from wholesale than these gentlemen. I am sure they can find a niche market to sell at those prices, but I am afraid I am not the niche!!

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