Direct Marketing Your Beefalo - Nuts & Bolts Part II
INVOICING THE CUSTOMER: I have a fill in the blank format for creating an invoice. I fill in the customer info, calculate the sale price based on hanging weight and price per lb. and then deduct the amount of their deposit to arrive at a final amount that each customer owes. Again, if email is available, I email the invoice to the customer otherwise I mail it out the next day.
PAYMENT TERMS: We only allow 7 days for customers to pay for their meat. Typically, they have known for months that this expenditure is going to be coming and they have had a week’s notice (via the appointment reminder notice) to get their money together, so paying within 7 days should not be a problem. We require payment in 7 days for just one reason. We need to make sure that the payment clears the bank BEFORE the meat is ready for pickup. The usual processing time for a beefalo by our butcher is about 14 – 18 days. By depositing the payments within the first 7 days, it gives us another 7-11 days for the check to clear the bank.
CASH, CHECK OR CREDIT CARD: There are several ways for customer to make payments. The easiest ways are cash or check. Credit cards are also another way to take payments, but you will need to do some research as to what the costs of providing this payment method are and evaluate whether those costs will be worth it. In an effort to keep our costs down and our profit up, we only accept personal check or cash. We have looked into credit or debit card setups, but have found that the fees and other charges can really add up and take a big bite out of our bottom line. We have never had a quarters customer who had a problem with paying by check or cash. And we have had only a couple of people over the years that came to our farm store with only a credit card. In one case, they actually went home and returned with cash. The other instance, they did not return. But if you factor in all the charges and fees that you would pay to a credit card processing company over the years, we are still way ahead even without that one sale.
THIS IS YOUR BUSINESS: Remember, this is your business and you set the terms and conditions; not the customer. If they don’t like the way you do business, they are free to go elsewhere. Generally, honest people will have no problem with adhering to your terms. It is only the ones that may be looking for an easy way to get some “free” meat that will object to things like putting down a deposit and paying within 7 days. And you don’t really need those kinds of customers anyway.
PROCESSING FEES: When selling your Beefalo by quarters, there are several ways you can work it. The easiest way is to charge the customer for the meat only and have the customer pay the processing fees direct to the butcher. That way, you get paid for your part of the transaction, the butcher gets paid for the work he performs, and the customer ends up with exactly what he wants. You could include the processing fees in your sale price, but you would then be wise to specify that it is only for the basic cut/wrap/freeze that would result in burger, steaks and roasts (and put it in writing!). If a customer wants more than the basics, such as sausage or jerky, the cost of those types of items could literally be six times the basic processing cost. Our butcher, for example, charges $3.69 per lb. beginning weight to make jerky on top of the base price of .60 per lb. hanging weight for cut/wrap/freeze.
MEAT PICKUP: When we sell by quarters, we always specify to the customer that pickup of the meat will be at the butcher shop. (For first time buyers, we provide them with a map and directions on how to get to the butcher.) This method works well for both the butcher and us. It eliminates us having to transport hundreds of pounds of meat to our farm and storing it in freezers. The butcher simply goes to his freezers and hands the meat to the customer who then pays by cash, check or credit card. This also gives the butcher the opportunity to sell additional products to our customer. And in many cases, since our butcher is located closer to a large metropolitan area, it is usually easier for the customer to go there rather than to drive to our rural farm for pickup. When notifying the customer that their meat is ready for pickup, make sure that you remind them that pickup is at the butcher shop and include their store hours. I usually email this info to the customer or leave a message on the answering machine.
NO PAYMENT – NO MEAT!: We have established guidelines with our butcher about meat pickup. The butcher contacts us by phone when the meat is ready for pickup. If the customer has paid and the check has been in the bank for 7-11 days and we have not heard anything from the bank that it has bounced, then we “release” the meat, by telling the butcher it is ok to let it go out their door. We then contact the customer to let them know it is ok to pick up their meat. If for some reason we do not release the meat either because the check bounced or the customer has not paid us, the butcher is instructed to HOLD the meat and not release it to the customer if that person comes to pick it up. The butcher will then wait for us to “clear” the meat before releasing it. We have also established the fact that the customer is totally responsible for paying the butcher for the processing fees and our butcher requires payment in full upon pickup. This method has worked perfectly for us for several years. You may think that it is a lot of work, but it ensures that we get paid for our meat and it is a lot less hassle than spending up to 6 months in small claims court to try to get our money after the fact. For the most part, we have had no problems with this and once you get the “fill-in-the-blanks” format set up, it really doesn’t take very much time. We have only had a couple of people over the past 8 years who have tried to get the meat without paying and this system has prevented them from doing that.
A WORD ABOUT DISCOUNTS: A word of caution, do NOT offer quantity discounts or any other type of discount. This sends a message that you don’t value your product. If you don’t value it, the customer certainly won’t value it. Discounts will not get you loyal customers. It will only get you bargain hunters that are never loyal! If the customer can be made to understand the quality and value of your product, they will buy without discount incentives. We have had customers who think that if they buy a half instead of a quarter that they should receive a discount. The truth is that if that customer doesn’t buy the other quarter, I can always sell it to someone else who will pay the exact same price, so why should I discount it for him. The amount of work needed to put two people on a side of animal is not that much more than having just one person buy it. Over the years, you will loose some customers and gain others. You should expect some turn over without being concerned. If you are consistently loosing customer, then there may be a problem and you should try to figure out why this is happening and correct it if possible.