Testing a Shared Market Model for Ozark Producers
The Wright County Farm Stop will test a 75/25 consignment model designed to create a low-barrier retail pathway for local food producers.
The basic idea is simple: The producer produces. The Farm Stop sells. The customer buys local.
Under the proposed model, the producer receives 75% of the retail sale and the Farm Stop retailer retains 25% for providing the shared retail pathway.
The pilot will determine whether that arrangement creates enough value for both sides to become a sustainable local market model.
The Model
Producer share: 75%
Farm Stop retailer share: 25%
Rather than the Farm Stop purchasing inventory wholesale before it sells, products are placed at the Farm Stop on consignment. The proposed model assumes the producer retains ownership of the product until it sells, subject to confirmation that this structure complies with applicable requirements for the specific product and transaction.
Once a consumer purchases the product, the Farm Stop records the transaction and the producer becomes entitled to the producer share.
Product Flow
Producer → Farm Stop → Consumer
Money Flow
Consumer → Farm Stop Retailer → 75% Producer / 25% Farm Stop
Example
If a producer's product sells for $10: Producer receives $7.50 and the Farm Stop retains $2.50.
If a dozen eggs sells for $6: Producer receives $4.50 and the Farm Stop retains $1.50.
If a product sells for $20: Producer receives $15 and the Farm Stop retains $5.
The percentage remains consistent while the dollar amount changes with the retail price.
Producer Responsibilities
Participating producers would generally remain responsible for:
• Producing the product
• Meeting applicable production requirements
• Maintaining required licenses or permits
• Food safety
• Packaging
• Labeling
• Delivering retail-ready products
• Establishing or agreeing to retail pricing
• Providing required product information
• Maintaining applicable producer records
• Removing products that can no longer legally or safely be sold
Requirements may vary significantly by product. Eggs, meat, produce, baked goods, mushrooms, dairy products, value-added foods, and artisan products may follow different regulatory pathways.
Farm Stop Responsibilities
The Farm Stop retailer would generally be responsible for:
• Receiving products
• Recording inventory
• Providing retail space
• Maintaining required retail conditions
• Refrigeration or freezer storage when applicable
• Product display
• Customer service
• Processing transactions
• Point-of-sale systems
• SNAP transactions when authorized and eligible
• Tracking sales by producer
• Calculating producer payments
• Maintaining retail records
• Remitting producer proceeds
• General market operations
The pilot will clarify which responsibilities legally belong to the producer and which belong to the retailer for each product category.
Pricing
A central question is who determines the retail price.
The preferred model should preserve producer control while ensuring the Farm Stop can operate sustainably.
A potential approach is: Producer proposes retail price → Farm Stop confirms market fit and operational feasibility → Agreed price is entered into the retail system.
The 75/25 split is then calculated from the final retail selling price.
Producer Payment
Producer payments should follow a predictable schedule. The pilot will determine whether payments should occur weekly, biweekly, or monthly.
Each producer should receive a sales record showing:
Beginning inventory → Units sold → Retail sales → Farm Stop share → Producer share → Remaining inventory
The goal is a system simple enough for small producers to understand without creating excessive administrative work for the retailer.
Unsold Inventory
The consignment agreement must establish what happens when a product does not sell.
Questions include:
• When must products be picked up?
• Who monitors expiration or sell-by dates?
• Who determines when a product can no longer be sold?
• Can products be discounted?
• Who authorizes the discount?
• How does a discount affect the 75/25 split?
• Can qualifying food be donated rather than discarded?
These policies may differ by product type.
Product Loss
The pilot must establish responsibility for spoilage, breakage, theft, refrigeration failure, customer damage, product recalls, and products delivered in unsellable condition.
The goal is to make responsibility clear before a loss occurs.
SNAP Transactions
If the Farm Stop retailer receives SNAP authorization, qualifying consigned food may create an important test of the shared market model.
The question becomes: Can one authorized rural retailer provide SNAP market access for products from multiple independent local producers?
The pilot will verify applicable SNAP requirements before relying on this structure.
If permitted, the transaction flow would be:
Producer → Farm Stop inventory → SNAP customer purchase → Farm Stop EBT transaction → Producer payment
The producer would still receive the agreed share of the retail sale.
Why Consignment Instead of Wholesale?
Wholesale requires the retailer to purchase products before knowing whether consumers will buy them. That places inventory risk on the retailer and may require significantly more working capital.
Consignment distributes that risk differently. The producer retains an interest in the inventory while the Farm Stop provides the marketplace.
For a small rural market working with small producers, this may lower the financial barrier to stocking a broader selection of locally produced products. The pilot will determine whether that theoretical advantage holds up in practice.
What the 25% Supports
The Farm Stop's 25% is not simply profit. It may need to support:
• Facility costs
• Electricity
• Refrigeration
• Freezer capacity
• Insurance
• Licensing
• Point-of-sale fees
• SNAP processing
• Bookkeeping
• Inventory management
• Cleaning and sanitation
• Marketing
• Customer service
• Product loss
• Administrative labor
• Shared market infrastructure
The pilot needs to determine the actual cost of providing those services.
The Economic Question
The model has to work for both sides. If the Farm Stop percentage is too high, producers lose too much value. If it is too low, the retailer cannot maintain the market.
Can 75/25 create enough producer return and enough market revenue to sustain the shared retail pathway?
What We Will Measure
Producer revenue: How much money returns to producers?
Farm Stop revenue: How much does the 25% generate?
Operating cost: What does it cost to provide the retail pathway?
Product movement: Which products sell and how quickly?
Inventory loss: How much product goes unsold or is lost?
Administrative time: How much labor does each producer account require?
Payment processing: What do transaction fees cost?
Producer experience: Is the system understandable and worthwhile?
Consumer response: Does the shared market increase access to locally produced food?
Scalability: What happens when the market grows from five producers to 20 or 50?
Questions the Pilot Must Answer
• Is 75/25 financially sustainable?
• Does the producer retain enough value?
• What does the Farm Stop's 25% need to cover?
• Who controls pricing?
• Who owns inventory before sale?
• Who assumes loss?
• How often should producers be paid?
• What records are required?
• How should discounts be handled?
• How should SNAP purchases be reconciled?
• What changes by product category?
• How many producers can the system support before additional staffing or technology becomes necessary?
What Success Looks Like
A successful model should be:
Simple enough for a small producer.
Sustainable enough for the retailer.
Transparent enough that everyone understands where the money goes.
Flexible enough to accommodate different local products.
Structured enough to meet regulatory and accounting requirements.
Accessible enough to help more producers reach local consumers.
The Bigger Idea
The Wright County Farm Stop is testing whether shared retail infrastructure can lower the cost of market entry for small rural producers.
Instead of asking every producer to build a store, buy refrigeration, create a point-of-sale system, develop customer traffic, pursue benefit-program access, and manage retail operations independently, the Farm Stop may be able to provide those functions collectively.
The producer brings the product. The Farm Stop builds the pathway. The community gets more ways to buy local.
