Because of the small size of our flock, 3 birds, my wife and I eat almost all the eggs they produce. When we occasionally build up a small supply, 6 eggs or so, we’ll give them to a friend or a neighbor. We haven’t sold a single egg and don’t have any intention of doing so. Despite this, we’ve been asked if we’ll sell eggs by a number of people – there is a strong interest in buying farm-fresh eggs.
I’m very interested in personal finance and, despite never having sold eggs, I can clearly see the mistakes some people are making when they try.
Adam Smith, the father of modern economics, expressed the sentiment that goods are worth what someone is willing to pay for them in “The Wealth of Nations”. There are some interesting implications to this. As much as people look for it, there isn’t an absolute “fair price” for anything – it’s a function of how willing people are to buy or sell that thing. Despite this, we all develop what WE FEEL is a fair price for something. It is important to recognize that this is arbitrary.
I come across posts where people write about selling their eggs and they’re clearly making a mistake. In both the links in the last sentence the writers sell their eggs for $2.50 a dozen, which many years ago (when they were posted) was a small premium over what they sell for in the grocery store. In one of the posts, they bemoan that they “barely covers the feed cost”. Well, duh!?!? You’re competing with factory farms without their enormous operations and economies of scale!
In another post, the writer tells about turning away people because she didn’t have enough eggs to sell to all the people who wanted to buy. This is an enormous flashing sign sayings “you aren’t charging enough!” In an ideal market, the price should be set such that there are exactly the right number of buyers to purchase the items you’re selling.
I’m an academic, and there is a strong culture at universities that it’s incredibly crass to make money. This causes people who leave the university for industry massive problems as they’re uncomfortable charging for their work and end up doing it almost for free.
For both academics and people selling farm fresh eggs, they absolutely need to get over this issue.
Farm Fresh Eggs Are a Premium Product
I think the biggest misconception sellers have is they view their eggs as identical to the grocery store’s eggs (in economic parlance, they are a commodity). THIS ISN’T TRUE! You have reasons for raising chickens and enjoy eating the eggs – knowing how they were raised, providing a more humane environment for the chickens, avoiding pesticides, etc. People who want to buy farm-fresh eggs value the same things.
To expect farm-fresh eggs to sell for the same price or less as factory-farmed eggs is analogous to going into a Porsche dealership and saying you want to pay the same price for a 911 that you would for a Toyota Yaris “because they’re both cars.” That would be silly, right?
Setting Your Price
Ideally, you’ll be selling eggs such that you sell your last egg(s) to the last person who wants to buy from you. In practice you can’t be constantly revising your price, adjusting it up and down as you go.
If there is someone else selling farm-fresh eggs where you are, match their price or make it $0.25 cheaper for a dozen. If you have no idea where to start, try charging 2 or 3 times what your local grocery store charges.
I would suggest that any time you sell out of eggs, raise the price by $0.25 / dozen the next time you’re selling. Any time you are unable to sell all your eggs, drop the price by $0.25 the next time you’re selling.
If you feel awkward always changing your prices, you can continue selling to established customers for the price you originally charged them, but increase the price for new customers. You should, annually perhaps, still revise prices for these existing customers.
The idea of price discrimination is that you charge different prices to different customers for the same thing. The ultimate example of this is airline travel, where it sometimes feels like everyone on the plane is paying a different price!
Selling at a higher price to new customers is an example of price discrimination. Charging more at the farmer’s market or for deliveries compared to people picking up eggs at your house would be another example.
You absolutely can and should do this. If you find there’s one way where you can sell more eggs at a better price – try to sell as many of your eggs this way as possible!
Obviously, you should know your local laws and make sure any way that you’re selling them is legal. These vary widely, so you’ll have to research them yourself.
Dealing With Meanies
There are people out there who feel continually entitled to criticize everything anyone else does. One of our neighbors has criticized my chicken coop 3 times and how I mow our lawn twice. I’m fairly sensitive, and things like this bother me as much as they bother anyone, but you can’t yield to it!
I loved this article about a teenage poultry farmer in the Denver Post a few years ago. People will try to haggle with her about her price constantly, from the article:
People all say words like “farm fresh,” “sustainability,” but they don’t want to actually pay for what it actually costs me to make it. Almost everyone tries to talk me into lowering my price or asks me to give my eggs away for free.
Why should this teenager give away eggs to people? If that seems ridiculous (it does to me!), why should she cut her price when other people are willing to pay what she’s asking?
I would recommend having a set response to people who try to haggle and politely and nicely saying it to them. If you let people bully you into selling at a lower price, then decide selling eggs isn’t worth it for you and get out of the egg business, everyone loses.
One idea might be something like “This is the price that has been determined by my costs and what people are willing to pay. If they aren’t worth it to you at that price, no problem, but there are other people who are happy to pay that.”
Do you sell eggs? What has your experience been like? How much do you charge?