What is a bulk buy?

Thanks to Annette’s influence, I’m well on my way to becoming the neighborhood eccentric around my part of Seattle’s Ballard neighborhood. This year, people came or will come to my home to buy apricots, tomatoes, grains and winter storage vegetables. They drove up in their sedans full of kids, loaded boxes into the back and paid me with a check. Some of my neighbors are in on this action. But others wonder: what in the heck is he doing? Why are there 2000 pounds of tomatoes in his driveway? Is he running some kind of store?

"What the heck is going on in your driveway?"

The short answer is: no,  I don’t run a store. What I and others are doing is more akin to community organizing. There’s no profit in it, but it connects us with our neighbors, our farmers, and helps build something we call “food community.”

Why the farmers markets aren’t satisfying all our needs

Many of our friends and neighbors are preserving food at home – canning, drying, fermenting and root cellaring. They’re part of a trend, the same trend that has led more people to plant gardens and keep chickens.

These friends and neighbors of mine – they need large quantities of food all at once. They can buy it at the farmers market – but sometimes the farmers don’t have enough, and it’s difficult to carry 5 cases of tomatoes to the car by foot. We love the farmers market for buying a little of this, a little of that. But for major canning projects, we need another system of distribution. We need flexible pickup times – not just during the hours of the farmers market. People would love to drive up to my house after work and load their tomatoes right into the back of a car full of kids.

$2.10 a pound heirlooms, $1.10 a pound seconds (not pictured)

Group buys: Another way to get food

My co-blogger Annette developed (or discovered? I’m not sure) a system called “group buys.” When she lived in NE Seattle, she would regularly host group buys at her home. Now that she’s moved to Carnation, my home has become the more convenient pickup point, at least for people living in North Seattle. In a “group buy,” we combine our separate orders into one large order. In addition to the added convenience, this has some interesting side benefits. Because our orders are so large,  we wield some influence. We can direct our purchases to farmers who grow their crops responsibly – without polluting the environment, without using dangerous chemicals.

We tend to get much better prices by purchasing in this way. In fact, many of the activities we do – canning, pickling, drying – wouldn’t be affordable if we paid the prices you see advertised at the farmers market or at the grocery store. We are a wholesale operation, and we pass the wholesale price directly to the end consumer without any sort of markup.

Annette started by posting her group buys to a small, closed group called a “buying club.” But since then, she and I have begun posting buys to a larger audience: participants in the Seattle Farm Co-op’s yahoo group, and more recently, to the yahoo group serving my son’s elementary school just down the street.

From there, we direct people to a google spreadsheet online. There, participants just fill in their contact information and the number of 20 pound cases they want.

A typical Google spreadsheet for a "bulk buy" or "group buy"

A day or two before the delivery, we phone or email the farmer to give them the total quantity we need. We also give the farmer access to the spreadsheet so he can anticipate demand.

Driver Ted tallies our tomatoes

Why our farmers like us

We develop long-term relationships with our farmers, many of whom are not interested in staffing a stall at the farmers market. Art Heinneman, one of the three farmers who grows our tomatoes, prefers the wholesale market to farmers markets. He finds the markets to be a hassle – you never know how much of your produce you’re going to sell, and then you end up taking half of it home at the end of the day. In contrast, selling to a place like Whole Foods lets him sell produce in one lump, writing one invoice and being paid quickly. Our bulk buys fill a valuable niche for him – we help him fill up his trailer, so he’s always carrying a full load over the mountains when he comes to deliver to stores. And more importantly, we purchase lots and lots of “seconds,” blemished tomatoes for a much lower price. Whole Foods has no interest in seconds – they require visual perfection in their tomatoes – but as canners, we’re happy to take them.

Could group buys hurt the farmers market?

Some people have wondered if we’re undermining the farmers market system. I brought this up to Joel Wachs over coffee. He’s the past president of the Washington State Farmers Market Association, and he still works for them. If anyone would feel threatened by what we’re doing, I suspected it would be him.

“The way I see it,” I told him, “a resilient food system will have many different ways for people to connect directly with farmers.” Joel nodded in agreement. He mentioned CSAs, another form of food distribution that sometimes competes with the farmers markets. It’s all good, he told me. It all supports local farmers.

Do you make a profit?

Our License

No, we don’t mark up prices our food in any way.  At the beginning of the year, we levy a small fee to pay for our annual license as a produce buyer – usually 10 cents a pound. Once the license is paid for, we retire this fee.

Because we don’t have  a profit margin, finances can get kind of tight. If one person fails to pick up their case of produce, that means we’re on the hook, as we’ve already paid the farmer for the goods. If someone backs out, we have to scramble to find buyers at the last minute, or purchase the extra ourselves. Also, there’s a short period of financial tension between the time we pay the farmer, and the time when our friends pick up the produce and pay for it at our house. Some day, I hope to apply for a grant for a revolving fund that would eliminate this cash flow problem.

So it’s all legal, right?

Yes, it’s all legal, thanks to our state license. Because the license doesn’t allow us to purchase grains, we use a different legal structure for purchasing grains – each person writes an individual check directly to the farmer. While this would be burdensome for a tomato farmer, it’s part of the reality our grain farmer deals with every time he delivers to us.

There are limits on how much we can buy at one time, and limits on how we’re allowed to pay the farmer. But these limits don’t pose a major problem for us. By staying within these limits, we don’t have to report our finances to the government, nor do we trigger the requirement for federal oversight.

So what do people do with all that food?

In my family, we tend to open up a jar of spaghetti sauce once a week. Okay, so we’re not as creative with our meals as my co-blogger Annette. You work with what you have. When I buy a jar of pasta sauce at the grocery store, I feel a sense of disappointment. I don’t trust the ingredients, I don’t trust the manufacturer, no matter what percentage of their proceeds they give to charity. But when I open a jar of home-made sauce, I feel like I’m giving my family something special. So this fall, over one exhausting week, we canned tomato sauce every night after the kids went to bed. 52 pint jars. Enough for us to open a can of home made sauce once a week for a whole year.

canned tomatoes

Red sauce for pasta, stewed tomatoes for pot roasts

Then, we froze 26 pints of pesto – enough to open a jar every other week. We did the same with homemade berry syrups, which we use on pancakes we make 3 or 4 days a week from whole grains we also bought in bulk. Berries are one area where we’ve found bulk buys don’t make sense – there’s too much demand for organic berries for berry farmers to return our phone calls. Instead, I just visit the farmers market and look for that 3 gallon bucket of seconds under the table at Billy’s Gardens market stall.

In addition to canning for ourselves, we’re also bartering each fall with friends. Having bartered each fall for several years now, I’m confident that I may can things in bulk and trade away my surplus for something else I need, like honey from one of Seattle’s many urban beekeepers.

19 Responses to What is a bulk buy?

  1. We are thinking of starting one in eastern CT next year. Thank you so much for the info!

  2. Annette Cottrell

    Nice job Joshua. There are limits, and if you go over them you are required to pay sales tax. There are also reporting requirements, correct?

    The real reason I continue to do these buys is so that I can ensure that these small hand farmers who grow amazing food will sell all their crops, and expand them the following year. I try to make them as successful as possible. I’m choosing who gets my money, and driving a market to them. But the prices are nice too.

    • Joshua McNichols

      Kate: in Connecticut, you’ll want to find out if your state agricultural department requires a permit for you to buy and sell produce. We have a “Cash Buyers License,” the cheapest ($125) license available. You’ll want to check with your state’s department of revenue about taxes that may apply to you, but you’ll probably be exempted.

      You need to stay under 2000 pounds bought or sold on any given day or the Federal Government (USDA) will require their own ($900+) permit, under the Perishable Agricultural Commodities Act. If we ever approach 2000 pounds, we split the buy up into two days so as not to trigger this requirement.

      You can read more about these requirements in our book, of course!

  3. Wow, I appreciate my tomatoes so much more after reading this. Thank you guys!

  4. Thanks for the extra info, Josh. We will definitely look into getting your book. We may be coordinating bulk buys through an existing farmers market – not sure if that will change things. We will definitely be in touch, though. Thanks again!

    • Joshua McNichols

      Kate, I think that’s a great idea. We have chosen to focus on smaller farmers than are typically present at the market, but there’s no reason a larger farmer would not appreciate this additional service. Your strategy seems like a sound way to expand the usefulness of the farmers market for everyone. I suggest you put this function at the very end of the market so people can drive up to pick up their produce.

      Most farmers markets exclude produce brokers for good reason. This helps weed out “fake” farmers markets. The person there is supposed to be the farmer. If you pitch this idea to the market as a service to the farmers, rather than a brokerage service, then I imagine they would support it. You could facilitate payment and distribution, but because the farmers are present at the market, you are just really a porter, rather than a broker, so I’d think you could avoid the license.

      Please keep us posted as to the progress of your project! Take pictures too! I’d love to feature your experiment in a blog entry.

  5. Is there a grain buy coming up or did I miss it?

    • Joshua McNichols

      D’oh, you missed it – we advertised it on the Seattle Farm Co-op site but not here. If you need some, I’ll sell you a few pounds from my stash at cost. Just contact me next week about it to remind me! After the dust has settled and the grains are all picked up. What did you want? Emmer or spelt or something else?

      I’m also doing an Azure Standard buy for soft white wheat and hard red wheat, buckwheat, rye, dent corn and oat groats at the end of the month. If you set up an account with them you can use the same drop site I’m using. I’m already planning to meet the truck.

  6. Hello Joshua! I also live in Ballard. I’m very interested in this bulk buy program. How would one join this program?

    • Joshua McNichols

      Sign up for the Seattle Farm Co-op Yahoo group – that’s where we post group buys. You can join the group here:
      http://groups.yahoo.com/group/seattlefarmcoop/join
      A few other people are also starting to post group buys there. Amy Stevenson just hosted an Apple/Pear buy. There’s a squash/winter storage vegetable buy going on right now. We’ll have another whole grain buy in a month or two or at the beginning of the new year at the very latest.

      The group is also a forum where people discuss other things related to urban farming.

  7. Great post Joshua! I re posted on my FB page. I can’t tell you what a blessing it is to be a part of this group. I have met so many wonderful knowledgeable, inspiring people! And btw: I can’t put your book down. You and Annette outdid yourselves! So much wonderful information in there. I have so many pages earmarked for further research and implementation…like the “Annette” cheese, sounds fabulous!

  8. Love it! I just moved this year from Denver to rural Idaho. Chickens, cow, the works. Such a different life, but so many unique blessings as well. I would have loved something like you do if I was still in the city. Great job! Just discovered your site today and know I will be back.

  9. Pingback: Bulk Buys – Lessons Learned (Or Pitfalls to Avoid) | Sustainable Eats

  10. Hi, As a small-scale, direct-market farmer (in North Carolina) I’m curious about the potential for arrangements like you discuss here. Would you mind sharing the prices you pay as a group for tomatoes (or other things), and particularly how they compare to farmers’ market prices? Thanks!

    • Joshua McNichols

      Around here, my grocery store currently carries year 2011 end-of-season heirloom tomatoes for around 5 dollars a pound, compared to 4 dollars during the crop’s peak. Someone told me you can get California heirlooms at Safeway for less but that’s not where I’m at philosophically, so I haven’t checked it out. The farmers markets here rarely dip below 4 dollars a pound. In our group buy, we paid 2 dollars a pound for #1 heirlooms, 1 dollar a pound for seconds.
      I’m certain prices vary by region, but I’d expect group buy prices to be around half the cost of retail. Of course, price isn’t everything – but if you’re on this blog, I’m sure you’re taking the whole picture into account.

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