9 Business Lessons from the Roadside Stand

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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Roadside stands pop up during spring and summer in my town, as I imagine they do in many communities. On a regular basis, I buy and enjoy fresh produce and fruit from gardeners, farmers, and third-party sellers who set up temporary stands in their driveways and alongside busy roads. On occasion, I patronize permanent stands that operate seasonally along highways with plenty of traffic.

These roadside enterprises may not become business empires that will one day be purchased by Google for billions of dollars. But they do provide insights into important marketing and operational truths.

Limited time offers of in-season products drive demand.

Fresh fruit, in particular strawberries, blueberries, and cherries where I live, sell quickly because of a limited window for ripeness and goodness. Sure you can buy frozen or shipped-in versions year-round, but the flavor and texture is never the same as recently picked fruit. Customers know that they have to make quick purchase decisions, not because of a company-manufactured deadline but because of a natural one.

Customers crave convenience.

The inherent nature of the roadside stand is that customers drive (or walk or cycle) by on a regular basis. It’s much simpler to stop by a stand while commuting to work or running errands than to plan a trip to the grocery store, supercenter, or warehouse club, or spend your Saturday morning at the farmer’s market. Being so accessible and top-of-mind, without being intrusive, is a marketer’s dream.

Customers appreciate quality over mediocrity.

People prefer high quality food available at roadside stands, instead of mediocre stuff at the grocery store (with all due respect to my local chain, where I get good – but rarely amazing – produce and fruit).

Tourists tend to pay higher prices.

Stands on busy highways command higher-than-usual prices compared to their driveway or regular side-of-the-road counterparts. The highway stands attract travelers, who are generally willing to pay more for convenience than local customers are.

Increasingly, customers enjoy buying directly from the original source.

Buyers love to have a relationship with those who are truly connected to their work; that is, they long to know the artist, the farmer, gardener, grower, craftsperson, inventor, etc. Having been shunned by businesses that seem to be so out of touch with their customers, hiding behind voice-response systems and impersonal contact forms, buyers take pleasure in meeting owners in charge of a business and who take pride in their work.

An intriguing back story sells.

Customers want to hear the story of how the product came to life, whether cultivated in a family garden or inspired by a global event. They want to learn about techniques for growing, nurturing, producing, and bringing to market an idea or product. Such details elevate the perception of quality, influence future buying decisions, and increase word-of-mouth referrals.

Lower overhead means higher profits.

Typically, the roadside stand has very low overhead as expenses for sales floor space are minimal, compared to a traditional retail environment. Paying more for space that can generate higher traffic makes sense only if merchants have excess inventory (or, unlimited inventory in the case of digital content), and sellers have the operational capacity to support higher volume of sales (e.g., retail staff or server capacity to complete sales transactions efficiently).

A well-located roadside stand typically draws a large enough crowd to sell through its available inventory. An even better location with higher traffic will not generate more profits if there is a limited amount of product to sell. Finding the right level of exposure to attract the right number of prospects (no more, no less) is an art, but whatever cash you save in overhead, you can pocket in profits.

Attention to inventory management benefits profitability.

While it’s true that some roadside sellers are simply profiting from extra yield (and feeding their families on most of the bounty), many actively manage inventory and determine the appropriate mix of pricing/distribution to yield the greatest profitability.

Sales direct to consumers at roadside stands may command premium prices but not sell through all inventory. Sales to third parties, such as grocery chains or independent markets, may garner lower prices but move a higher volume of product. Allocating inventory effectively to various distribution channels, then, reaps the highest possible profits.

Profits are more important than market share.

In my corner of the world, the availability of locally-grown food has skyrocketed over the past few years. The numbers of roadside stands, farmers’ markets, and businesses specializing in locally produced vegetables, fruit, eggs, meat, and even packaged foods (prepared in small batches in licensed home kitchens) have increased. The roadside stand operators – focused on selling and expense control rather than dominating a constantly-changing market – are thriving.

Sure, market share is a key metric for many businesses and critical to strategic planning, long-term growth, and valuation. But profits matter most.

If a business can marry quality with convenience along with a compelling back story for a limited-supply item that people love, then customers will stop … and buy.