WEBVTT 1 00:00:02.490 --> 00:00:05.310 Hello and welcome to the video lecture 2 00:00:05.310 --> 00:00:07.563 for place, part one. 3 00:00:08.670 --> 00:00:13.670 This will talk about both where do you sell 4 00:00:13.950 --> 00:00:17.490 and where do you buy those things that you need 5 00:00:17.490 --> 00:00:21.633 to run your business or organization. 6 00:00:25.620 --> 00:00:29.370 So first we're talk about where do you sell 7 00:00:29.370 --> 00:00:31.830 and what are the sort of market channels 8 00:00:31.830 --> 00:00:34.080 and supply chains that you might use. 9 00:00:34.080 --> 00:00:38.760 We'll talk about direct markets versus indirect markets. 10 00:00:38.760 --> 00:00:41.040 And then we're going to talk about 11 00:00:41.040 --> 00:00:44.820 where do you buy the inputs that you need? 12 00:00:44.820 --> 00:00:46.140 Where do you get them? 13 00:00:46.140 --> 00:00:49.560 Which ones do you have to make for yourself 14 00:00:49.560 --> 00:00:51.660 and which ones do you have to buy 15 00:00:51.660 --> 00:00:56.040 or do you choose to buy from another business? 16 00:00:56.040 --> 00:00:57.840 And finally, for those of you 17 00:00:57.840 --> 00:01:00.120 who have a service-based business, 18 00:01:00.120 --> 00:01:02.793 what are the implications of place for that? 19 00:01:06.480 --> 00:01:07.830 So we'll start with thinking about 20 00:01:07.830 --> 00:01:12.830 how does the good get from you to the consumers? 21 00:01:13.800 --> 00:01:16.230 And we can think of in terms of a pipeline 22 00:01:16.230 --> 00:01:20.613 that takes it there, the market channel, 23 00:01:21.750 --> 00:01:23.730 the organizations, the individuals, 24 00:01:23.730 --> 00:01:28.730 and the processes of getting it from you to the consumer. 25 00:01:31.920 --> 00:01:36.420 So we talked a few weeks ago about the difference 26 00:01:36.420 --> 00:01:40.410 between business to consumer and business to business, 27 00:01:40.410 --> 00:01:44.220 so here it's the same thing. 28 00:01:44.220 --> 00:01:48.112 Are you selling directly to the consumer? 29 00:01:48.112 --> 00:01:52.260 Are you sort of interacting with them? 30 00:01:52.260 --> 00:01:57.150 Or is there one or more other businesses, organizations 31 00:01:57.150 --> 00:02:00.660 that are acting as intermediaries 32 00:02:00.660 --> 00:02:03.663 to help you get it from you to them? 33 00:02:06.300 --> 00:02:08.670 So we'll start with direct markets. 34 00:02:08.670 --> 00:02:13.670 So here's a farmers market stall. 35 00:02:13.770 --> 00:02:15.750 Many firms start with this. 36 00:02:15.750 --> 00:02:20.750 They start with selling direct to consumers. 37 00:02:21.300 --> 00:02:23.160 And there's a lot of benefits to this. 38 00:02:23.160 --> 00:02:25.650 First you have complete control 39 00:02:25.650 --> 00:02:30.270 over how it is being presented, how it's marketed, 40 00:02:30.270 --> 00:02:33.390 how it's labeled, that's all on you. 41 00:02:33.390 --> 00:02:38.390 It gives you the direct contact with your customers. 42 00:02:39.870 --> 00:02:44.870 Maybe the opportunity to create relationships and loyalty, 43 00:02:47.700 --> 00:02:48.810 build your brand. 44 00:02:48.810 --> 00:02:53.070 As well as, when you interact, you can learn. 45 00:02:53.070 --> 00:02:54.540 You can learn well, what do they like, 46 00:02:54.540 --> 00:02:55.410 what do they don't like? 47 00:02:55.410 --> 00:03:00.000 Well, what are the features, what are the processes and such 48 00:03:00.000 --> 00:03:03.540 that they want more versus what's not working 49 00:03:03.540 --> 00:03:04.923 for them and why? 50 00:03:08.520 --> 00:03:12.750 So one key thing that those are the upside. 51 00:03:12.750 --> 00:03:16.650 So you retain ownership all the way through. 52 00:03:16.650 --> 00:03:21.650 You collect the money. You have to do any customer service. 53 00:03:21.720 --> 00:03:24.990 So this is, when you're in the direct market world, 54 00:03:24.990 --> 00:03:27.390 you have to do it all yourself. 55 00:03:27.390 --> 00:03:32.220 Yes, you control it, but it's just so much more work. 56 00:03:32.220 --> 00:03:35.283 Every task is on you. 57 00:03:40.170 --> 00:03:43.080 So one way to think about it, 58 00:03:43.080 --> 00:03:45.300 some examples in food and agriculture, 59 00:03:45.300 --> 00:03:48.480 which is of course my specialties, 60 00:03:48.480 --> 00:03:52.410 of ways that a consumer can buy directly 61 00:03:52.410 --> 00:03:55.860 from a farm is through a farmers market, 62 00:03:55.860 --> 00:03:59.070 such as our own Burlington for farmers market. 63 00:03:59.070 --> 00:04:03.660 You can be part of a Community Supported Agriculture Share. 64 00:04:03.660 --> 00:04:05.100 You can go to the farm, 65 00:04:05.100 --> 00:04:07.830 whether it's a farm stand or a farm market, 66 00:04:07.830 --> 00:04:10.890 where they sell their things on their own farm. 67 00:04:10.890 --> 00:04:13.980 There are U-pick where you go and walk down the rows 68 00:04:13.980 --> 00:04:17.910 and pick them yourself. 69 00:04:17.910 --> 00:04:19.563 And there are other examples. 70 00:04:22.320 --> 00:04:25.680 When you're thinking about indirect markets, 71 00:04:25.680 --> 00:04:29.640 so what if you want to use somebody else? 72 00:04:29.640 --> 00:04:33.933 So there's a number of possible intermediaries, 73 00:04:36.840 --> 00:04:40.950 and here's a list of who might help you move it 74 00:04:40.950 --> 00:04:42.243 from one to the other. 75 00:04:43.290 --> 00:04:46.890 Distributors, wholesalers, and retailers. 76 00:04:46.890 --> 00:04:51.700 Note that the top two in red, agent and brokers, 77 00:04:52.620 --> 00:04:55.350 tend to not take possession. 78 00:04:55.350 --> 00:04:59.460 They just make the deal where the ones at the bottom, 79 00:04:59.460 --> 00:05:02.130 they actually take your good 80 00:05:02.130 --> 00:05:05.280 and sort of physically transport it, 81 00:05:05.280 --> 00:05:08.820 and in many cases, they take ownership of it. 82 00:05:08.820 --> 00:05:11.523 So they buy it from you or they resell it. 83 00:05:15.150 --> 00:05:19.900 So when you're thinking about farm produce, 84 00:05:20.940 --> 00:05:24.450 say a farm that grows vegetables, 85 00:05:24.450 --> 00:05:28.980 there's a continuum of options that they might have. 86 00:05:28.980 --> 00:05:32.760 So first, they can buy it right from you, 87 00:05:32.760 --> 00:05:33.810 which we talked about, 88 00:05:33.810 --> 00:05:36.570 sell it at a farmers market or on farm. 89 00:05:36.570 --> 00:05:39.210 They could sell it direct to an account, 90 00:05:39.210 --> 00:05:44.210 like a small restaurant, like a farm-to-table restaurant. 91 00:05:44.280 --> 00:05:49.280 They can sell it to a health food co-op, 92 00:05:49.380 --> 00:05:50.910 to a school, or a hospital. 93 00:05:50.910 --> 00:05:54.870 And this is so-called farm to school farm institution. 94 00:05:54.870 --> 00:05:57.060 Next there are food hubs, 95 00:05:57.060 --> 00:06:02.060 which are specialty local food distributors 96 00:06:03.060 --> 00:06:06.210 that have a specific mission 97 00:06:06.210 --> 00:06:09.360 of supporting local food and agriculture. 98 00:06:09.360 --> 00:06:13.680 And they sell to many of the same ones that we see above, 99 00:06:13.680 --> 00:06:18.090 but rather than in direct accounts, 100 00:06:18.090 --> 00:06:21.090 the farm has to drive their stuff here. 101 00:06:21.090 --> 00:06:25.770 Here the farm could drive it to the food hub 102 00:06:25.770 --> 00:06:29.370 so that these food hubs buy from many farms 103 00:06:29.370 --> 00:06:33.210 and then they resell to many buyers. 104 00:06:33.210 --> 00:06:36.810 And then last is through a distributor 105 00:06:36.810 --> 00:06:40.860 who tend to have much more of a larger regional 106 00:06:40.860 --> 00:06:43.680 or even national scope. 107 00:06:43.680 --> 00:06:47.250 In many cases, they sell not only food, 108 00:06:47.250 --> 00:06:50.460 but they'll sell like napkins and plates 109 00:06:50.460 --> 00:06:54.240 and lots of other things, many times to food service. 110 00:06:54.240 --> 00:06:59.240 And in this case, it very likely leaves the region. 111 00:07:01.560 --> 00:07:06.560 The farmer will probably not know where it ends up. 112 00:07:07.380 --> 00:07:12.380 But this is a model for sort of selling larger volumes. 113 00:07:14.640 --> 00:07:16.173 That is the end of part one.