Reader “ang” left a good question in the comments of yesterday’s Small Farm Business post, regarding collecting payments from customers. This is a really important piece of direct marketing, so I thought I would throw it out to the SCF readers.
This isn’t a problem for us when selling meat retail. The customer comes to the farm, or the farmers market, tells us what they want, gives us money and we give them their meat.
But when we sell beef & pork on-the-hoof, our customers pick up their meat right at the locker. They pay the locker for the processing costs at that time. We let the customer know how much they owe us for the meat, and they either drop a check in the mail or come out and pay us in person. So there’s the potential there for things to get dicey. The locker only requires payment for the processing before letting them have their meat. They could pick up their meat and then stiff us.
It’s never happened, knock on wood. But there have been a couple of times when we’ve waited a long time for payment. In that case I usually just send them a reminder in the mail about once a month. That’s about as confrontational as I get. Once Matt made a phone call to somebody that hadn’t paid yet, a couple of months after getting their meat. They did pay, another month later.
We’re very willing to work with our customers that need special payment arrangements. If they need to wait on their income tax refund, or their end-of-the-month paycheck to pay us, we’re fine with that. Those customers that talk to us ahead of time about how and when they’re going to pay have never been a problem. It’s the ones that you don’t hear from, and don’t hear from, and don’t hear from that get worrisome.
What are some things we could do? I’ve considered having the customer leave a check for us at the locker when they pick up their meat. Or I could give the locker a list of those customers that have paid us, and ask them not to let meat go to those that haven’t paid. But I hate to inconvenience our locker folks. They’re busy enough.
One thing we probably should be doing is collecting a deposit when somebody places an order. When someone recently cancelled on us we were wishing we’d had a deposit from that person. It would presumably make people less likely to cancel, provide us a bit of “insurance” if they did, and give us a small advance to help cover the costs of raising the animal. Part of me thinks this is perfectly reasonable, part of me thinks I’m not placing enough trust in my fellow human, and part of me thinks the extra time keeping track of such things isn’t worth it.
So maybe I’m a lazy pushover.
How do you (or will you, for those just beginning) handle collecting payments from customers?