Produce distributors come in many shapes and sizes, from a one-person operation to a fleet of 18 wheelers. While there may be no shortage of potential distributors, finding the right one for your produce wholesale business is a critical component to your success. Therefore, in addition to securing an iron-clad MI Produce Wholesaler Insurance package, consider the following.
According to the USDA, distributors sell to a range of customers, from individual restaurants to institutions such as hospitals and schools. Since local food has come into higher demand, some distributors have made the effort to focus their business on providing local produce to their customers. In terms of risk management, using a distributor can greatly impact your business. First, distributors have access to a variety of markets and can buy your product in huge quantities. Further, they can create a contract with your wholesale business and buy a certain product for the whole season, reducing your risk of unwanted or spoiled product.
While there are plenty of benefits of using a distributor, bear in mind that they may take up to 60 days to pay for your product. Because of this, managing cash flow is critical. Further, distributors have USDA standard pack and grade requirements that you will need to follow, which include clean, new boxes, says the article. This means that you must stock the proper packing materials at all times and keep a detailed log of invoices and money owed to your business.
The USDA states to contact the distributor to see what products they are looking for as well as volume, price, pack and grade preferences, delivery or pickup schedule, and liability insurance and GAPs (Good Agricultural Practices) requirements. It is also important to be ready to offer a discounted price as they are likely going to be purchasing plenty of volume.
Further, if you want to earn more money, consider offering squash blossoms of novelty items such as green garlic to earn more for your crops.
At Capital Insurance Group, we specialize in protecting the wholesale and distribution sector. With over 35 years of expertise, we have served Southeastern Michigan businesses with quality and affordable solutions. To learn more about the products you need to mitigate risk and protect your employees, contact us today at (888) 296-0418.