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How to Become a Small Retail Produce Distributor
According to Agribank, the number of farmers' markets in the country increased from 340 in 1970 to 4,500 in 2009. Starting a small retail produce distributorship is one way to tap into the enthusiasm for local and organic foods that has fueled the phenomenal growth of this movement. A retail produce distributorship buys produce in bulk and distributes it directly to end users, either by delivering it directly to customers' homes or by setting up neighborhood drop points where customers can pick up their orders.
Write a business plan for your retail produce distributor business. Describe the type of customer you will serve, the geographic area you will cover and the types of produce you will distribute. Provide details about the ordering system your customers will use, such as whether they will be able to choose from a list of available items or whether they will each receive a standard box consisting of whatever is available that week. Provide details about how you will market your produce distributor business and how much you will spend on advertising and promotion. Include financial support information detailing the funds you have available and whether you will be applying for loans, as well as how much you expect to earn during your first few years and the sales volume you will require in order to break even and earn a profit.
Obtain the business licenses necessary to become a retail produce distributor. Contact your city and state revenue departments and ask about retail licensing requirements. Also contact your local health department and ask about specific permitting requirements for storing and distributing produce. Register with the IRS as an employer to receive an employer identification number, and also register with your state unemployment insurance and industrial insurance divisions.
Visit local farmers' markets and get to know small-scale farmers in your area. Tell them you are starting a small retail produce distribution business and ask them about prices, terms and availability. Speak to a range of farmers so you will be able to provide a wide variety of fruits and vegetables to your customers.
Lease warehouse space and install a walk-in cooler. Also set up a packing area with conveyor belts so you can move boxes easily from one end to the other, stocking them with produce items.
Set up a website that introduces potential customers to your retail produce distributor business and provides a form for them to sign up for your services. Provide a changing weekly list of available produce. Include fields for customers to specify their preferences, as well as space for them to provide directions to their homes.
Buy a truck or van large enough to hold the number of boxes you anticipate delivering in a day, or multiple trucks if you will be serving more customers than a single vehicle can accommodate. Buy commercial liability insurance for your fleet, and set up delivery routes based on the geographical distribution of your customer base.
Devra Gartenstein is an omnivore who has published several vegan cookbooks. She has owned and run small food businesses for 30 years.