packaging and shipping to chew that up.” He notes sales to commercial growers have dramatically lower margins.
“Flower seed (ornamentals) and vegetable seed are
completely different segments with almost nothing in common,
so they must be dealt with separately,” says Stacey. “Any
commercial vegetable seed breeder would be disappointed with
average gross margins under 70% and many individual products
are as high as 90% plus. This is for seed of proprietary hybrid
products, which is the majority of the market in the developed
world. On the other hand, sellers of open pollinated commodity
(public) vegetable seed varieties would probably be very happy
with 20-30% in the normal course, although in recent years,
with seed production land scarce due to conversion by growers
to field crops (due to high commodity prices), many have been
enjoying gross margins of twice that. Vegetable seed dealers in
North America (the middle men) would be lucky to average
20% gross margins. In the ornamental seed segment, the major
breeders would expect their gross margin to range from 50%
to 90% for proprietary products, depending on the species and
the product’s uniqueness in the market place. Dealers would
certainly be pleased with 20-30% gross margin.”
The level and passion of the debate shows a shift towards
focusing on margin rather than just sales. This underscores the
point that today’s focus should be on profitability, not just growth.
It is not just what you sell but how you sell it that determines
your future viability in the seed business. Julie McNabb
What are the factors to achieving critical mass in the seed industry today? We asked, and you responded. answers like “experience, education and an entrepreneurial spirit,” are just part of the profile of what makes a company successful.
• Competent sales force
• Diversification and direct marketing in niche
markets go a long way toward helping small
companies
• The right people to increase sales
• Developing repeat business through
performance, service and value for your product
• Seed volume, price and cost
• Direct contact with the growers, competitive
pricing, understanding your products and
selection of product
A leader in the design and manufacture of packaging automation systems and equipment. Established 1969.
Robotic Palletizing Systems. Unmatched for reliability and consistent throughput. Experience and flexibility, engineered to meet your needs, now and for the future. Consistent yields with proven genetics.
Electronic Bagging Scale. The industry standard, improved for tomorrow. The original TE-100 now enabled with “Seed Calc”.
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www.taylorproducts.com / Toll Free 888.882.9567 / Phone 620.421.5550 / Fax 620.421.5531
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