Transparency is a core value in our community, and we also want to make life easier to new communities who would like to set up their own OFN instance in their local territory.
So in this wiki you will find different examples, commented, of the business model that some local OFN entities have built. Because if we want to really transform the food system, we need to find sustainable business models to do so. Don’t hesitate to ask questions, comment and share your own when you have built it up!
Our business model is based on 3 sources of income:
we take a 2% commission on the sales that are made through the platform. We consider that as a “crowdfunding”, in a way that all the users will finance together the work which is needed to maintain the platform and support the users. As the entity is a non-profit, we have a collaborative governance structure so the users are also very much encouraged to become members, so that they also contribute in the decision making process regarding the platform. To encourage that, we have added a monthly fixed cost of 300 NOK per month for users who are not members of the non-profit…when the annual subscription of the non-profit is 300NOK
we have a little revenue from membership fees, the member of the non-profit can be individuals/hubs (they pay 300 NOK per year) or institutions (they pay 1000 NOK per year)
the last part is the fee we ask to create a group on the platform, a one time fee of 3000 NOK. We consider that it can be a great tool for big groups and organizations as a marketing tool, and that the value added for the user can be important. But this cas be discussed, we have not used this yet.
All this is still in theory as for the moment we have no formal users, about the small informal buying group I run.
The team in Scandinavia is coming together and we finally have momentum. I was wondering if we could learn more about how the teams in both Australia and the UK work. How does one balance the volunteer vs. paid time, for both tech and non-tech members of the group who work on the platform above and beyond their own local business models needs.
Hey @CynthiaReynolds this question is worthy of discussion at the global hangout I think. It’ll be easier for @serenity and @Kirsten to tell you the journey they’ve had with volunteer/paid team members and how it’s set up now because they’re both running around like headless chooks at the moment and so have a miniscule amount of time to contribute on here. You’ll get their full attention at the hangout
thanks @danielle I have added it to the agenda for the next call.
Another quick question for everyone : We are going to be needing a membership management solution in Scandinavia
I have been looking into everything from open source solutions to wordpress plugins, but wondered what others are using? @NickWeir@lin_d_hop@sigmundpetersen@MyriamBoure if anyone has a tip, please shout out
I’m echoing your questions @CynthiaReynolds - thanks for putting this on the HO agenda. Related to the business models question, I’m wondering if any other instance is directly operating a food hub. Here in Canada, the way we set up or not-for-profit (Open Food Canada) is pretty flexible, so we can operate a hub as a fundraiser. Anyone else doing that?
My husband and I run a food hub here in Norway, have run over 30 cycles already - learning by doing is our motto . We also use it for fundraising, but maybe not in the same way that you do. We have 2% that goes to the OFN platform (set as an admin fee), but we also have 2% (set as fundraising fee) which goes to support local projects (maker days, kids beekeeping, open farm days…). Our community enterprise uses the food system as an economic engine to support other activities as well as our local producers.
@tschumilas as @MyriamBoure mentioned above, Norway takes a 2% commission to support the platform (plus very reasonably priced membership fees). I noticed yesterday in the UK Overview document that @NickWeir shared that in the UK they take 2% on non-profit and 4% on for-profit enterprises. I really like that approach
We are still trying to figure out how how we will be moving forward as a group when the money finally does come in either via platform fees and/or funding, and we also want to make sure that we plan our budget to support the global efforts. I look forward to next weeks call
I think we are thinking and working along similar lines @CynthiaReynolds. I’m just setting up a system of buying groups that draw curated products from a ‘central’ hub. OFN-CAN would operate this ‘central’ hub. The fee structure I’m thinking of is: 5% of hub transactions for OFN-CAN - basically to build a fund that we can leverage in future grant applications; 15% for sourcing/assembly of product (which OFN will ‘outsource’ to a CSA farm willing to do it at least for the winter. Most of our CSAs operate only in the summer, but they have great infrastructure (walk in coolers…) and offer some advantages if we can turn them into food hubs for part of the year at least. Farmers are happy to spread their fixed costs out over complimentary ventures. Since most food in hubs here is marked up 30%, that leaves 10% ‘room’ which the buying clubs the distribute the good curated by the hub can work with. (ie buying clubs at churches might use it to subsidize food for low in come buyers. Or, for buying groups at workplaces where people have money but not time, this 10% would go to a packing and delivery fee to compensate someone for that.) I hope to launch this pre-Christmas with some ‘gift hampers’, and then enroll 2-3 different ‘kinds’ of buying clubs (a church, a worksite, maybe a school) for January. Right now is a good time to experiment because the model doesn’t have to fully compensate my time (since I have another source of income for now.) . And I concur about ‘learning by doing’ - so I should become an OFN ‘power user’ after this
In yesterday’s global meeting I mentioned we are in the process of elaborating a business model for OFN Brazil, taking examples from other instances’ models. Lynne suggested we started a Discourse thread where each instance could share their own model and I took the task of starting one, but now I see there’s this one up already so - what do you think of updating it?
Then we could structure the all the information on the Super Admin Guide or other document you think is best suited. I volunteer to do that
Please help me ping all the instance managers who have a business model to share and / or people that might be interested?
Thanks @lin_d_hop ! I was wondering what information other than pricing schemes could be useful to describe the business models in more detail. For example, cost structure and other financing sources may be also important to evaluate each solution.
I think many instances share copies of funding proposals in the global drive. So that is a good place to look. I concur that there is a lot of thinking/discussion and even research behind our pricing schemes that is likely more useful than the prices themselves. For example - Canada struggled a lot with whether to go with a percentage of turnover or a percentage of goods supplied system, or whether to do a flat fee by size of hub. Then we struggled with billing in advance or retrospect? Then we struggled with how we handle seasonal sellers versus stores open all year. We are still now struggling with onboarding - do we offer it? do we charge for it? and ‘pop-up’ type shops - selling things in a 1 month period like CSA share sales, or seedling/plant sales… This is the kind of information that is tedious and granular to convey. I’m open with what best serves others? If this is a topic of general interest, maybe it is an item on our global agenda and we can dive in and exchange there? Or maybe its just a bi-lateral discussion – if you see a pricing model that intrigues you - set up a zoom with that particular instance?