Washington State is one of the few fruit-producing regions in the United States where the marketers are paid a fixed sum, rather than a percentage of the sales price.
Robert Kershaw, president of Domex Marketing, Yakima, Washington, said his company switched to a percentage basis a year ago, and he thinks other marketers should be doing likewise in order to maximize their growers’ returns.
Domex Marketing is the sales arm for the growing and packing operation Kershaw Fruit Company. Kershaw said because his company is involved in growing as well as marketing, it has always been focused on grower returns, but working on a percentage basis has helped keep its marketers focused on strategies for improving returns.
Though there’s not much that marketers can do to influence day-to-day pricing, the percentage commission does encourage them to look at longer-term ways to improve pricing. For example, by doing some homework on the size of the Southern Hemisphere or European crops, a marketer can figure out whether it’s best to sell all the Galas before competition from the Southern Hemisphere crop comes in or whether to stretch out the season, hoping for higher returns at the end. Higher prices mean more money for both growers and marketers.
Marketers need an incentive to focus on strategy, because strategy is the way to make more money for the growers, Kershaw said during the Washington State Horticultural Association’s annual convention, and he urged growers to make sure their marketer is paid based on the amount he or she sells the product for.
But it takes good information to develop a sound strategy, and Kershaw said there’s a need for better estimates of crops, both in the United States and around the world.
For example, Washington State’s 2004 crop, initially forecast at 89 million packed boxes, ended up being 103 million. It’s also important to predict the size and condition of the fruit.
In addition, part of the sales strategy should be to get buyers interested in other aspects of the fruit, rather than just price.
“Make sure that the markets are focusing on nutrition and taste,” Kershaw urged. “If not, we’re missing the wave and leaving money on the table.”