Wednesday, December 8, 2010

Buying on Value rather than Price

For new or prospective buyers out there – how do you decide on low price versus value in today’s alpaca market?

Today’s alpaca market presents a variety of unique opportunities and pitfalls.  The new breeder has to be able to navigate the waters and decide if alpaca that are low in price are “cheap” or are simply the result of an economy trying to stay afloat.  Some people have discounted alpacas considerably in order to reduce expenses of care or to disperse their herd.  Others (like us), have decided that the prices were inflated and we need to come to a more reasonable level.  Economics 101 – something is worth only what someone else is willing to pay for it.

At Alma Park, we lowered our prices years ago, ran specials and tried to attract new breeders into the industry.  Along the way, we have had some prospective buyers think that are animals were of lesser quality or value because they were below the inflated market prices seen all over the Internet.   Pricing is a critical aspect of any business.  Not all buyers shop on price and maybe Wal-Mart type items is sold on price alone, in an industry such as alpacas, most folks are looking for value, mentorship and a solid underlying business plan with profit motive. 

I have been told by many new folks who came for a farm visit that we were the only farm/breeder they visited that actually does something with their fiber.  That we are the only ones that can answer the question “can you make money from the fiber?”.  I find that disheartening but not surprising. 

Remember, you are not just buying an alpaca, you are buying access to the breeder.  You are buying that breeders knowledge and you are buying "business assets" or "inventory" for your business.  You want the breeder to be able to give you "value" for your purchase, not just in terms of a great animal, but also on what they can offer you in terms of knowledge!!  If you simply want to purchase an alpaca, there are a lot of "cheap" ones out there that will be dumped at your doorstep with no support or future knowledge transfer.

Because most new folks coming into the industry do not know exactly what they are looking for in an alpaca (other than maybe color), there has to be a certain degree of trust in the first person they purchase from and they have to feel that there is "value added" services that go along with their purchases.  My first purchase had none of those services and I felt quite alone with my new purchase of my animals.  My husband and I vowed that this would not happen to our clients.  Of course we try to help each new person and give them as much info as they want and they can handle, sometimes, people are resistant to our advice, feel they can do it better etc, and those are folks that I typically do not forge a long lasting relationship with.  While this is a rare occurrence, it does happen and the old adage is "you can't please everyone", and for my sanity, I have stopped trying to !!

My advice to new breeders out there or people who are looking to enter into the alpaca market is simple.  You must ask these questions or observe these value added items for yourself:
1 – Is the farm you are visiting doing ANYTHING with their fiber?
If they aren't, you have to wonder why not and what they are actually breeding the animals for !

2 – If they are – do they readily have products available from their own animals or from a co-op that they can show and sell to you?
Unless they are sending all their fiber to a co-op and do not want any products back to sell (this is rare), I find it hard to believe that they have nothing to show you IF they are processing their fiber. Also - having products SHOWS what these animals are bred for! Having no example product, to me shows no faith in the future of a sustainable industry.  They should at least have on a pair of socks, a scarf etc!! If the weather is hot, then can they show you a rug, blanket or other items they might use in their home, that perhaps they do not sell? Do they have ANY yarn from their animals ?

3 – Are the products in the farm store North American Made or are they all Peruvian imported?
If all the products they sell are imported from Peru, and they have nothing from the 3 main co-ops in the US or their own yarn etc, I again find it hard to believe that they are doing anything with their fiber.  While many people sell Peruvian products in addition to NA products, having ONLY Peruvian products to me shows a lack of faith in the future of the NA fiber market. 

4 – Can they offer you marketing advice?
Will they help you get set up with advertising sources, website advice, etc or do they want to keep all that "good info" to themselves?  My opinion is that my customers ARE NEVER my competitors!  I WANT them to succeed as they will be the best advertising for me in the future! I want to help them in any way I can.  I want the animals I sell them (that are breeding/show stock)  to go on and win many ribbons for them! I want the fiber and yarn I help them prep take many ribbons as well!

5 – Can they help you get your fiber prepped for showing and/or the mill?
This is one of my niches.  I think that being able to learn from your fiber, prepping it for show and the mill is the most important aspect of the fiber side of the business.  

6 – Do they know how to skirt, sort and grade fiber or do they simple think taking a single animal’s fiber and sending it to the mill is good enough for a quality product?
same answer as #5

7 – Can they talk to you about what histograms mean and represent (all the numbers), and not just the average fiber diameter (micron count) ?
It is NOT all about micron count!!  SD and CV show consistency in an animal's fiber.  These items (in my opinion) are much more important than micron count alone.  Having a fine animal that is REALLY inconsistent is not going to be easy to skirt or sort and will bring less money in the long run on the fiber side and may not produce consistent offspring.

8 – Can they help you show your animals?
Do they show halter? Fleece? Spin-Offs?  Can they help you with this? Can they help you determine which animals should go to which level shows? Can they help you prepare for a show?

9 – Can they help you train your animals ?  Are the animals that they are selling you calm, easy to work with and around and handle? Are they trained with kindness and a proven method such as Camelidynamics?
As a Apprentice Practitioner with the Camelidynamics program and working with Marty for several years, all of our animals are easy to work with, helping teach others how to work with their animals is another value added service !!  To me this is one of the most important items regarding animal care!

10 – Do they have detailed health records on their animals? Do they do things such as fecals? Can they teach you how to do them?
Detailed health records should be available for any animal you purchase.  Some farms are better at this than others.  Fecals and weights are the most important health related items in my opinion!  Doing fecals on site and being able to share that knowledge with you is a wonderful value added service!! 

11 – Can they talk to tax advantages?
Of course with the added caveat that  you should speak to your accountant, can they explain section 179 and depreciation? Can they tell you what items are tax deductible ? 

12 – Can they help with a business plan?
Once you decide which direction you would like your business to take - can they help you sketch out a business plan to help you get there?  Can they show you S.M.A.R.T. goals and help you map out a reasonable time frame to get there? 

13 - Can they provide you a list of items to have on hand when you bring your first animals home?
Common items such as first aid supplies and not so common items.  

14 - Will they train you on routine care (such as shots, toenails, identifying a sick animal) prior to you taking delivery of your animals?
To me this is a MUST for each new owner to learn.  

Not every breeder/farm will be an expert in all the points above.  We all have "niches".  You need to decide which items are most important to you.  There may be items that other farms do that I am not aware of - so if you are a breeding farm and have a suggestion - please let me know.


richardbrandt said...

I agree Rose, when you buy an alpaca your buying a package that ideally includes everything you mention. If it's a bred female you need to include who she is bred too as well. It's all part of what your paying for.

meriweather28 said...

Rose, as always, you are on the money, succinct & insightful. (and constantly reminding that there is soooo much I need to learn!) I think I received tremendous value in my group. I have 3 rock-stars, a baby on the way & potential studs in 4 color groups. Even my non breeding aunties are an integral part of balancing my herd! (and you know who is stuck leading me thru all of the special ed I will need as time goes on!) I can't thank you enough for everything you & Joe have taught us! Fiber Fiber Fiber!

Joyce Calderwood said...

Rose, great article. You go far beyond just selling your aplacas. You have given us so much more. We have and hope to learn so much more in the future from both you and Joe. Thanks,