Alright you Trick or Treaters. Get those pillow cases ready because we have some awesome stuff coming your way. Last week’s newsletter covered some really important stuff, so I need to run it one more time for our every-other week customers to get their eyeballs on it.
One other slight change up for the week is the day we do billing. I hate to do this, but we need to start billing for deliveries before we send them out. This has never been a problem for us in 14 years, but recently we have been having way too many unpaid invoices. We are losing too much money a week and need to change that up. It is unfortunate some bad apples can spoil the bushel.
So please make sure that your credit card info is up to date on your account. Also, if you have an additional cooler charge, that will hit your account the day after your delivery. And if you have a cooler credit, you will see that reflected in your next order.
We have thought through a bunch of different solutions and this is the one that seems the best/easiest.
Heads up that we just got some amazing beef brought in. As always, Locally raised, grass-fed, Locally processed. Truly a difference that you can taste. Steaks, roasts, and ground all available.
We have seriously cool news coming your way next week. So stay tuned.
We have some truly amazing members. After last week’s newsletter examining the idea of support for our local food network, I got flooded with emails. The root of all the emails was basically the same; how can we better help local suppliers? So I want to lay out an opportunity for you to chew on and about two changes that we are implementing.
But to begin the festivities this week, I want to look at our Cooler Deposits. We get a lot of complaints and frustrations around the cooler deposits. People don’t want a bunch of money sitting around in deposits. I get it. And we hear from people, “Dude, Farmer M., I am home when the order gets delivered, why the hairball do I need a cooler??” Again, all good suggestions and I get it. So no worries, I have a plan.
All orders will continue to Default into Coolers with the associated deposit. If you do Do Not want your order that week packed in a cooler and would rather have a cardboard box, simply add the “Cardboard Box” product to your order. This will alert our pack team to use cardboard. Again, All orders will Default to Coolers, so you will have to add the cardboard box to your order weekly or set it as a Recurring item. We’ll leave how you want your order delivered to you!
Next up, a financial opportunity for you. As I look at various grassroots community support models for small businesses, I realized that we have already offered a similar strategy in the past, the Prepayment Incentive. The idea is really simple. For any amount of money over $500 that you prepay onto your Skarsgard Farms account, we will add a 10% bonus to your prepayment. So prepay $500, get an extra $50 added to your account. Easy. Check the web site for more details.
We will run this throughout the fall as a win-win for you and for us. In the past, I have seen folks use this 10% bonus that we add to try new items out and actually increase their order size which helps all of our producers. And looking at order sizes is a good transition into my next point that I need to bring up, which is a change in our delivery structure.
As you know, we have not changed the delivery structure of our home delivery model in a long time. Well, actually since January of 2015 to be precise. And with all of the changing tides in the food market right now, I have been dissecting our model to see where we are winning and where we are losing. As part of this self-audit, we came up with a very important number, $9.25. Now you are asking “What the heck is that?”
$9.25 is the average cost that it takes us to buy a truck, insurance, gas, hire a crew to prep/pack and deliver your order. So leaving out any fixed costs (rent etc.), it takes us $9.25 to stop the truck and bring an order to your door. And I might add that we are extremely efficient at our deliveries and so there is not a lot of fat in that $9.25 to cut.
So then I started looking at our delivery cost incurred compared to our order size and something jumped out that made me get a little queasy. Our delivery cost is 37% of our minimum free delivery order. And that is before there is even any food cost associated with the delivery. Way too much.
The conclusion that we easily reached looking at all of these numbers is that we currently lose money on orders under $30 and make a tiny bit of money on orders $30-36. And I have to tell you that we receive No subsidies, No grants, and No gifts. We are socially-conscious, environmentally-friendly, for-profit business. But…we cannot afford to run a philanthropy. Each of our deliveries has to help support the greater good.
So effective immediately we will be adding a $5 delivery (sustainability) fee to any orders under $36. We will keep minimum orders at $25 but we can no longer offer free delivery with our smaller orders. Let me say this though, I would rather feed you than charge you a delivery fee. Enjoy more local items that we have to offer and the delivery fee will be a moot point and then everyone is happy and fed!
Thanks for your understanding on this issue. And if you still need reassurance that we bring amazing value for your money, please check out Instacart’s delivery policy– $10 fee for orders less than $35 and a $6 fee for all orders over $35. Even with a small delivery fee, we still offer the best value.
Thank you for your support, Farmer Monte