Starting a Plant Nursery or Greenhouse Business
Richard Regan, Extension Horticulturist, Oregon State University
Chip Bubl, Extension Agent, Columbia County, Oregon State University
The region's mild climate, fertile soils and abundant water were the keys to the initial development of the nursery industry in the Northern Willamette Valley. Today, the industry's success hinges on the ability of local nurseries to market their products, particularly to residential and commercial consumers outside the state. The three largest markets are the Northeast, the Midwest, and the Atlantic states. Washington and California combined get about a quarter of the production. It is worth noting that Oregon also imports nursery and greenhouse materials for local sale, particularly from California.
The national economy, as it prospers or declines, influences the nursery market. Wages and unemployment regulate the consumer's buying power. Housing starts and other construction provide important outlets. National, state, and local governmental policies involving housing, highway construction, beautification and scenic programs, energy, the economy, and other issues can significantly affect the demand for nursery stock. The nursery industry can also suffer from overproduction of certain product lines. It can benefit or be hurt by weather events both in Oregon and in other production and market areas. Finally, there is increasing competition within Oregon and from other states for market share.
As a nursery owner or manager, you must be market-driven to assure that a market for your plants is ready and willing when you are ready to sell. Every aspect of your nursery business should focus on serving the needs of your customers. For the most part, nursery operations do all of their own marketing activities, unlike many other agricultural businesses. Remember that nursery products are not a commodity and you should avoid competing on price alone. To develop customer loyalty, it is advisable to develop a value-package using the specific elements of plant quality, price, and service your market demands.
The success of your nursery business depends on how well you listen to your market. It will tell you how and what to grow, and what services to offer. The nursery market is made up of very distinctive groups with each having its own characteristics and needs. These groups include: urban and rural gardeners, retail and wholesale nurseries, commercial landscapers, municipalities, government agencies, and others. You must do your homework to find out the attributes your nursery must provide for the targeted market. Some attributes to consider are: plants free of pests, post-harvest handling, availability, uniform size and quality, supplier knowledge, minimal shipping damage, shipments on time, descriptive catalogs, and regular customer contact.
Retail Nurseries & Garden Centers These are important markets for the small operation. Retail nurseries already have established relationships with growers but will make purchases from new growers providing in-demand plants of excellent quality. Volume Outlets These are the so-called "big-box" stores like Wal-Mart, Fred Meyer, and Home Depot. They sell a large volume of merchandise and are generally inaccessible to the smaller grower. They have a low-end pricing structure. Purchasing is done centrally for many stores. Direct Sales This method can provide good returns but there must be enough people in the market area to justify the time and labor invested. You have to have enough diversity of material to interest the customer or be so specialized that you attract the buyer. Some growers have access to farmers markets that allow the sale of nursery stock. Mail-Order Nurseries have used catalogs and mail-order for many years. Generally, most catalog nurseries specialize in particular kinds of plant. Some sell their "eye" for unique horticultural varieties. The Internet has broadened the potential audience for specialty growers and reduced some of the costs. Dealing with distant customers requires a specific set of skills and shipping expertize.
Promote your nursery so that customers in your market know what you have to offer. You should explain what your products are and what services you provide, and why they are important to a potential customer. Promotion does not end with a catalog, internet web site, or a trade show. It is a year-round task that involves everyone at the nursery who has customer contact. Remember, you must be able to deliver what you promised and every action you take reflects back on your nursery.
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