March 12, 2019
Some entrepreneurs are inspired by their backgrounds to develop marketplace solutions for agriculture. Market Wagon’s Co-founder and CEO Nick Carter grew up farming, but the enterprise couldn’t support him when it came time to choose a career. After seeing other small family farms go through the same ordeal, he realized there was an opportunity to help farmers get their products into the hands of consumers who want them. His company not only filled a personal mission, but also tapped into a great opportunity. There’s “a huge pent-up demand for local food,” Carter told PYMNTS in an interview. “And it’s an unmet demand.”
To meet that need, the company is taking an age-old concept into the digital age. “We’re an online farmers market that delivers,” Carter said. Through his platform, customers can order eggs from one farm and lettuce from another farm, and might also order bread from a local artisan, as the company aggregates orders on the fulfillment side. As Carter pointed out, an individual food venture or artisan does not have the stock-keeping unit (SKU) diversity to attract a buyer and get them to complete the checkout process.
Farmers bring their products to a centralized hub, where customers’ orders can be filled with products from multiple vendors and sent out the door. To make a purchase, customers can visit the website and select their market. The company has hubs in five locations, each with distinct local suppliers; the consumer’s hub determines her product selection. Consumers can search and browse by category or vendor, as well as find items on sale.
In addition to connecting buyers with farmers, Market Wagon also handles the last-mile business for farms that put their products online.
Grocery Delivery and Logistics
Consumers can build a cart with any of Market Wagon’s selections and purchase from an infinite number of farmers with one single checkout. Shoppers have to place their orders by midnight on Tuesday to receive delivery on Thursday mornings. (Carter said the scale of local food does not allow the company to offer next-day fulfillment on an on-demand basis.)
For home deliveries, the company uses a gig economy approach, with a system of insulated totes and ice packs. Alternatively, customers can pick up their orders for free at network of small artisan shops that have agreed to accept deliveries. Carter pointed out that cart abandonment rates are higher in eCommerce if companies don’t offer free delivery. Since the company is making only one stop instead of five or six, it can aggregate the orders and keep the marginal costs low. The shops accepting deliveries then benefit from the traffic. “It’s just a matter of exposure,” Carter said. “They get extra door swings they wouldn’t have gotten otherwise.”
For payments, shoppers can use credit cards or debit cards through Stripe. Market Wagon also offers PayPal as a payment option. Market Wagon then routes funds to the producers on the site, less a discount. Carter noted that many farms still receive checks, but the company also offers automated clearing house (ACH) through a bank.
Vendors must also accept the company’s return policy. When a customer receives a refund, it is paid through PayPal or Stripe and deducted from vendor payments. However, there are a few scenarios where the company will refund the customer and not reduce the vendor payment.
Going forward, Market Wagon’s processes and systems are designed to be repeatable. While the service is currently available in five locations in the Midwest, Carter said it could be replicated elsewhere in the future of online farmers markets.