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As food hubs and multi-vendor markets grow, managing logistics becomes more complex. What once seemed like a simple task can quickly spiral into a logistical nightmare. One of the most critical decisions in scaling up operations is how to handle order fulfillment. Should the vendors handle their own orders, or should the hub take on the responsibility of centralizing packing? In this post, we’ll break down the two primary models of aggregation: vendor fulfillment and centralized fulfillment, and help you determine which approach is right for your food hub.
As your food hub or market grows, so do the complexities involved in getting products from your vendors into the hands of your customers. Whether you’re running a farmers market, a food hub with delivery options, or offering food hub subscription boxes, your process of order fulfillment will need to be organized, streamlined, and scalable. But how do you approach packing and fulfillment? Who handles the logistics: your vendors, or do you centralize the process at the hub?
The answer depends on several factors, including your resources, staff, customer expectations, and the capabilities of your tech platform. Let’s break down the two models and explore their pros, cons, and best-fit scenarios.
In the vendor-fulfillment model, each vendor is responsible for fulfilling their portion of the order. This means that after the customers place their pre-orders, they will receive a list of vendors they need to visit to pick up their items. This could involve customers physically going to each vendor’s booth or a designated pickup point for each vendor.
Low labor for the hub organizer: Since the vendors are fulfilling the orders themselves, the hub organizer or market manager has significantly less work to do when it comes to packing.
Vendor-customer interaction: This model encourages customers to directly interact with the vendors, which can be a great way to build trust and loyalty. Customers may appreciate the opportunity to learn more about the products, meet the producers, and ask questions.
Can be confusing for customers: Managing multiple vendors in one order can be challenging for customers, especially if they are unfamiliar with the process. The more vendors involved, the more complex the experience can become for your customers.
Higher risk of missed items: Since customers are picking up from multiple locations, there’s a higher risk that they might miss an item or forget to visit a specific vendor's booth.
Vendor organization required: This model works best when all vendors are organized, responsible, and tech-capable. Vendors will need to be able to track and fulfill their orders accurately, and the hub will need to communicate clearly with vendors and customers.
This model works particularly well at established farmers' markets where vendors are already familiar with the process, and customers expect a more DIY experience. It’s also effective when there are relatively few vendors involved and the hub doesn’t need to handle the logistics of packing.
Mali Plac, which translates to "Little Market for the Future," is a thriving food hub in Slovenia dedicated to connecting local farmers with consumers in an innovative way. Founded by Ana Ljubojević in 2014, Mali Plac operates with a unique vendor rotation system, direct farmer-to-consumer delivery, and a commitment to seasonal food offerings.
At Mali Plac, Ana wanted to keep the connection between customers and farmers as close as possible. To achieve this, all farmers are responsible for their delivery to 30 pre-defined pick-up locations, providing opportunities for connection and education at least once a week. Here is their schedule:
In a centralized fulfillment model, all vendors drop their products off at a central location or delivery hub. Once the vendors deliver their items, the hub team or market manager packs all customer orders into one box or bag. This model centralizes the fulfillment process, ensuring a streamlined experience for customers and greater control over order accuracy.
Seamless customer experience: Centralized packing provides a unified customer experience. Instead of navigating multiple vendor booths, customers simply pick up their pre-packed order from one central location. This is particularly helpful when customers expect a higher level of convenience.
Easier to track order completeness: With the hub responsible for packing the orders, it’s easier to ensure every order is complete before it goes out. The risk of missing items is minimized, and any discrepancies can be dealt with in-house before the customer picks up their order.
Centralized quality control: The hub can control the quality of the products before they go out to customers, ensuring consistency and reducing the likelihood of customer complaints.
Higher labor and infrastructure needs: This model requires more labor and resources from the hub. Staff members or volunteers need to be available to handle packing and quality control. In addition, there’s a need for storage space to house the products before they’re packed and distributed.
Requires refrigeration or organized space: If your products are perishable (e.g., meats, dairy, or fresh produce), you’ll need adequate refrigeration or a well-organized space to store these items before they’re packed.
Needs a dedicated team: You’ll need a reliable and efficient team to manage the packing process. This can be a challenge if your hub is small or doesn’t have enough staff to handle the volume of orders.
Centralized fulfillment is ideal for rural deliveries, subscription boxes, or situations where customers need to pick up their orders quickly. It’s also a good choice when you have a large number of vendors and need to minimize the risk of errors. Additionally, centralized packing is useful when you want to offer a more polished customer experience that doesn’t rely on customers hunting down each vendor.
Eat Local Huron’s story begins in the heart of Huron County, Ontario, a region rich in agriculture but lacking a centralized way for residents to access local food year-round. What began as a pandemic response quickly evolved into a vital food network supporting over 50 local producers and serving countless customers across Huron County.
Each week, producers log in to their Local Line accounts to update inventory, manage orders, and prepare products for delivery. Their ordering schedule goes as follows:
When deciding which fulfillment model is right for your food hub or market, consider these factors:
Access to delivery vehicles: Do you have a delivery vehicle, or will customers be picking up their orders themselves? A delivery vehicle is necessary for centralized or hybrid fulfillment models, while a vendor fulfillment model works best when customers are responsible for picking up their items.
Staffing or volunteer capacity: How many people do you have on hand to manage the packing, storage, and distribution? If you have a small team or are relying on volunteers, vendor fulfillment might be more manageable.
Customer expectations: Are your customers willing to pick up items from multiple vendors, or do they expect a more convenient, pre-packed experience? If convenience is a priority for your customers, centralized fulfillment may be a better option.
Physical space and cold storage: Do you have enough space and refrigeration to store perishable items? A centralized or hybrid model may require additional cold storage and organization to ensure your products stay fresh.
Order volume: How many customers and vendors are involved? Large-scale operations may benefit from centralized packing to keep everything organized, while smaller hubs or markets might be able to handle vendor fulfillment.
Food hub software: Does your tech platform (e.g., Local Line) provide features like centralized packing lists, vendor-specific order reports, and order tracking? These tools can make managing either fulfillment model easier and more efficient.
Tip: Using vendor-specific reports and packing lists through Local Line can help streamline either model. Whether you go for vendor fulfillment or centralized packing, these tools will ensure smooth operations and reduce errors.
The right order fulfillment model depends on your specific circumstances—there is no one-size-fits-all approach. Whether you choose vendor fulfillment, centralized packing, or a hybrid model, it's important to remain flexible and experiment to see what works best for your food hub or market. Take into consideration your resources, your customers’ needs, and what your team can handle.
Need help setting up your fulfillment flow? Set up a call with our team to find out how we can support your order aggregation and fulfillment process, making your food hub run smoothly.
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