March 2007
Featured Articles

Marketing Can Be a Matter of Convenience

By Robert Spencer

Anyone that has been "in the goat business" for any amount of time knows that marketing goats is one of the biggest challenges faced as a goat farmer. Healthcare and profitability are the other two big challenges, but that is another article or two.

Many people enter the goat business with little forethought or planning concerning marketing their future product; they assume if they raise goats, people will buy them. It is always important to research marketing opportunities and options prior to engaging in a new venture. In the situation of goat production I believe it is more important than ever.

Two primary forms of marketing are direct and indirect marketing. Direct marketing, as we know it, occurs when a goat farmer sells their goat/s directly to a buyer who also plans on raising goats or the farmer sells his goat/s directly to a consumer. In either situation the money from the sale goes directly from the final buyer to the seller, and there is no middleman involved in the transaction. Direct marketing generally allows the seller to earn a few extra dollars due to the fact there is no middleman involved who receives some kind of financial compensation for their involvement.

Direct marketing is probably the preferred transaction for most goat producers. It may involve extra effort/s, but the financial gains should be worth the extra initiative. With this being said, let’s move on to indirect marketing.

The primary difference between direct and indirect marketing is the involvement of an intermediary between a seller and a buyer. This could be in the form of a consignment or production sale, an auction or even a sales barn situation. In all these situations there is either a person who "assists" producers with the sale of the animal/s in exchange for a fee; or there is a person who purchases a goat or goats from a seller, then turns around and resells the animal/s. This describes the circumstances of an indirect marketing transaction.

In some situations, indirect marketing is more convenient for the seller rather than being involved in a direct marketing situation. It can be easier for the goat farmer to drop off the animal/s at the site of the sale; let someone else assume responsibility for the sale; then receive a check on site or know a check should be arriving in the mail. All the farmer had to do was to make the basic effort to deliver the goods and then pay some kind of transaction fee – plain and simple. In this type of situation the money received may be less than when participating in a direct sale, but sometimes simplicity is more convenient. After all, there is the old adage "money is not everything."

Just about anyone that has been raising goats for a while has had the opportunity to take a few animals to a local livestock sales barn. Their reason for doing so may vary; but it is generally fairly convenient and the closer, the better in many situations. I’ve seen too many producers drive an extra sixty miles for an extra twenty or forty dollars. When they share the news of their good fortune I always ask two questions: (1) how many miles did you drive to receive that extra money? and (2) did your take your family, where did you eat, and how much did that cost? Many times I will see a look on their face when they realize the extra money came at an unconsidered cost.

During my visits to sales barns I have noticed these activities are much like a social event. The whole family comes along, food and drinks are purchased, and everyone gets to socialize. With this perspective I guess it is difficult to put a value on a social experience.

Livestock sales barns are found all over Alabama. I have visited the ones in the following counties: Escambia, Clay, Randolph, Marshall, Lawrence and Lauderdale; all of them sold goats and cattle. I know there are plenty more out there, but those are just a few that I had the opportunity to visit. Just to the north of Alabama there are quite a few goat sales barns in Tennessee.

In Northwest Alabama there is a high concentration of goats. People had a choice of sales barns where they could sell their goats. Some had a reputation for bringing better prices than others. I say all this in past tense because something suddenly changed. Two of the more popular sales barns suddenly closed. Both of them had a reputation for moving a large number of goats during each sale. Now producers are left in a quandary; they suddenly have to identify alternative markets. Fortunately, other sales barns in the area have absorbed the animals for sale, but the market is not what it once was. However, close vicinity is always a convenience and people only have so much spare time.

Each goat producer has their preferred choice of marketing. More than likely they have utilized several options, depending upon the quality of the animal, marketing options, available time and convenience. Opinions will vary but each producer knows what works best for them. Knowing your options when it comes to marketing is a good idea. Knowing which situation is most practical and profitable is even better!

Robert Spencer is the Urban Regional Extension Specialist in the Urban Affairs and New Nontraditional Programs Unit & The Urban Centers in North America for the Alabama Cooperative Extension System.