No compete clauses
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  1. #1
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    Jan 2003
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    Default No compete clauses

    I'm often called upon to provide guidance and consulting to new beekeepers who are struggling with various aspects of beekeeping. Also, I routinely teach multiple beekeeping courses annually on a wide range of topics and in the past I've always gladly contributed my experience to help out. However, as time passes a few of these newbees are now getting to the point of being serious sideline beekeepers and I've even had some of my "students" come into my established retail outlets and undercut me on price. When confronted they make comments like "...it is still a free market economy.." and insist that they have every right to step on my accounts, regardless of my past goodwill. Its getting to the point where I'm gun-shy to share anything with new beekeepers. I know this sounds horrible, but I've worked hard at building my business and dedicated a lot of time building my stock over the past 10 years. Certainly FORD doesn't invite GM engineers into their R&D labs to "borrow" their best ideas.

    BTW, when I'm approached by a perspective customer, one of my initial questions is: are you working with another beekeeper? If they say yes, I ask them who it is and why they are not meeting their needs. I will call the beekeeper and talk over the situation to see what they are comfortable with.

    How do you commercial guys suggest that I deal with this situation? Do I simply stop giving out advice/teaching? Do I stop selling my queen stock locally? Do I force beekeepers who want to benefit from my efforts to sign some type of "no compete clause"?
    Horseshoe Point Honey -- http://localvahoney.com/

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  3. #2
    Join Date
    Jan 2005
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    Hamilton, Alabama
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    Default Re: No compete clauses

    That is one of the toughest questions I've seen in years.

    IMO a no-compete clause would run afoul of laws specifically prohibiting just such manipulation. It is after all a "market" economy for a reason. The best I can suggest is to attempt to teach ethics to those you work with. A really good ethical point to make is that undercutting prices is bad for all concerned because it depresses the price of honey for all beekeepers. Point out that it is in the beekeeper's self interest to maintain good relationships with customers and other beekeepers.

    There will be a day when you are gone from the local scene. How do you want others to remember you? As the person who was always willing to help where you could? Or would you prefer to be like the originator of the Gilfeather turnip who cut the tops off his turnips before selling them just so nobody could grow one to produce seed?
    NW Alabama, 50 years, 20 colonies and growing, sideliner, treatment free since 2005, 14 frame square Dadant broodnest

  4. #3
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    Jan 2006
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    Lee\'s Summit, MO
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    2,514

    Default Re: No compete clauses

    I'm a sideliner who's helped/is helping more than a couple get started as well. I've wondered the same thing. When I was wholesaling I intentionally stayed out of accounts that were being serviced by beekeepers I knew/worked with. But, that's an unwritten code in my books that I'm certain not everyone follows. I don't see any way to effectively get a non-compete much less defend it ($) in a court of law for advice given. Non-competes usually have substantial money exchange hands (i.e. the purchase of a company) not advice given.
    Ninja, is not in the dictionary. Well played Ninja's, well played...

  5. #4
    Join Date
    Nov 2015
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    Sacramento, CA
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    22

    Default Re: No compete clauses

    Unfortunately this is the world we live in now. This is especially true with the newer generations. It seems like they are looking for the fastest, easiest way to make a buck. In doing this, they burn bridges to the point where other beekeepers get burned by them and are unwilling to help when they actually need it. In nearly every industry, companies send out secret shoppers whose only job is to price shop the competition so that they can undercut where they can afford to. That's just become part of the "competitive" market. Many college business programs have even pulled Business Ethics from their curriculum or made it an elective and not mandatory.

    I see that you are east coast so you may not have the same experiences as us in California, but there are certain groups of people that base themselves primarily over her that make their living undercutting, "watering" down their honey with syrup, stealing pollination hives, etc. Unfortunately it has become the nature of business anymore. Should it be that way? Definitely not, but it has become something that everyone has to account for.

  6. #5
    Join Date
    May 2012
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    Sacramento, CA, USA
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    5,460

    Default Re: No compete clauses

    Most non-competes involve employers and employees so not sure how it would pan out in a teacher-student type situation as described. It does suck that people you help come back to bite you in the rear, but that is the nature of a free capital market at times. Perhaps I would approach your outlets and discuss why they let other's come in and undercut your established prices.

  7. #6
    Join Date
    Dec 2005
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    Brasher Falls, NY, USA
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    Default Re: No compete clauses

    Do what brings you the most joy.

    As far as keeping accounts, just because you got an account with a store doesn't mean all you have to do is keep the shelf full. Not saying that's all you do, just for others. Build a relationship with the store owner or grocery manager and the person who checks you in at the back door. Chat a while. Make sure they still remember that you are dependable. Not that someone else might not be, just that you are. Ask your customer, the person you wholesale to, what you need to do to stay on the shelf.

    Do not lower your price to meet the price that undercut yours. Unless you can afford to undercut their price enough to move them off the shelf and only if you can afford to weather the loss long term. Not a good idea to start a price war with someone who doesn't know the true value of their own product and only sees price as a means of getting their foot in the door.

    Your selling points should not be dependent on price. Your selling point is Quality and Service. If people want cheap they should go to WalMart. If they want Quality Consistently, they should buy your honey. Your quality is a nice looking, clean, locally produced product. Your service is dependability. Your honey is always on the shelf. It never runs out. 365 days a year I should know that I can find your honey where I shop.

    The new guy has no track record. Be sure you maintain yours. Otherwise, take the hit. If there is only room for one Local Honey Producer's Honey tell the store that you will be glad to come back when the other guy runs out. Part on good terms, but walk away.
    Mark Berninghausen

  8. #7
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    Dec 2005
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    Brasher Falls, NY, USA
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    Default Re: No compete clauses

    I checked your bio. How many hives do you run? For how long? How much honey do you pack and sell each year? Do you really have much competition for shelf space? Can you keep your customers supplied all year round?
    Mark Berninghausen

  9. #8
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    Jan 2003
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    Suffolk, VA
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    Default Re: No compete clauses

    Quote Originally Posted by sqkcrk View Post
    I checked your bio. How many hives do you run? For how long? How much honey do you pack and sell each year? Do you really have much competition for shelf space? Can you keep your customers supplied all year round?
    I've been keeping bees for well over a decade and have been in local wholesale for about 7 years. We're a very small operation by commercial standards. My hive count for the past 5 years hovers around 60. Given that we have two distinct flows (spring and cotton) we yield roughly 3000-4000 lbs per year. We try to take on only enough customers that we can reliably keep stocked all year long, which currently is about 10 retail establishments. Some places move a lot of honey, while others not so much. The number of beekeepers in this area is rapidly expanding and competition has increased in the past 3 years.
    Horseshoe Point Honey -- http://localvahoney.com/

  10. #9
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    Aug 2012
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    Barrie, Ontario, Canada
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    Default Re: No compete clauses

    I think Mark has it right. Nobody wins a race to the bottom. Be easy to do business with.
    Adam - Zone 5A
    www.adamshoney.com

  11. #10
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    Jan 2016
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    Waco, Texas
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    12

    Default Re: No compete clauses

    I don't even have any bees yet but I do understand where you are coming from, I'm a taxidermist and the undercutting by the new guys is constant. Mark hit the nail on the head - service and quality!

  12. #11
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    Aug 2011
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    KC, MO, USA
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    Default Re: No compete clauses

    Beekeeping is a growing market for supplies, classes, bees and honey. If you did not teach them would they find beekeeping classes elsewhere? Probably.

    The beekeeping fad is full blown right now. They're all so eager to get in the game sell there honey and make some tons of money, if they don't do it some one else will.

    Teach them what they need to know about beekeeping, basics that they would get from any class. And what they do after that you can't control.

    I suspect in a few year this fad will fade as most realize it's a lot time and work to produce honey year after year.

  13. #12
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    Nov 2008
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    Grand Rapids, Ohio
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    Thumbs Up Re: No compete clauses

    I put in a cent or two now and then. Not worth putting the farm up for everyone to take their piece of it, just to be put out of business by those that help them selfs. I've been in the business for over 30 years and still have a few tricks up my sleeve.

    Like Mark said. Have good business relations with you dealers (customers). Should be more worried about your service then the guy coming in the back door.

  14. #13
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    Apr 2005
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    Salem, Oregon
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    Default Re: No compete clauses

    When I am mentoring new and up and coming beekeepers (which is increasingly rare) the "beekeeping ethics" sermon comes first, not last.
    Anyone wanting to enter our industry should proceed with a thorough understanding and appreciation of what being a part of our agricultural community is all about.
    They are not going to pull this information out of the clear blue sky.
    WE have to pound it into their head's right from the get-go.

    And Mark is right.
    Our relationships and position in the agriculture community extends to our growers as well.
    If you have a grower that is ready to jump ship for a couple of bucks per hive, something is haywire.

    When I have used my apprentice's hives to fill out contracts, I have always introduced them to the grower, asked them to give the grower their card (just in case of problems) and asked the grower if they can direct bill so that the money does not flow through.
    Am I worried about any of that?
    I can tell you for sure; if one of them would have approached any of my growers to undercut, I would have gotten a call from the grower immediately warning me about the person's poor ethics.

    Two years ago an out of state beekeeper approached one of my cherry growers and offered to drop in a truck load for free.
    My grower told him, "Thank you. But I have been down that road and don't care to ever go there again!"
    The solution to this thread is twofold:
    1) Build strong healthy relationships.
    2) Teach solid beekeeping ethics FIRST, not last.
    I have exactly ONE more hive than you.
    That makes my opinion beyond dispute!

  15. #14
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    Jul 2013
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    Pleasant Shade, TN
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    Default Re: No compete clauses

    I'm 28, and fall into that younger crowd I guess. BUT....I have never wanted to get into bees for the money...lol, I have yet to find it anyways but that's besides the point! I have had a couple folks teach me SOME of what they know (like HH said about the tricks up the sleeve). Even so, I would never try to undercut them because I have the utmost respect for those individuals and I love the fact that I can go visit them at anytime I please. I can do this because there is no bad blood between us. Why would I want to give that up? Unfortuneately, many of my peers don't put value into those kind of relationships. It will catch up with them in the long run. My only advice to you is be VERY careful who you take under your wing. Beat around the bushes by asking them questions as to why they even want to keep bees. Test how bad they want to learn. You'll be able to recognize the signs of someone wanting to get into it for a quick buck if you do. I've even had folks call me about advice on getting a sideline operation started. The first problem with this is that they are asking me, their competition, to teach them the ropes. There is something wrong with that picture! Those kind of people don't know the sacredness of what it is you are doing. I'd much rather teach a 10-year old kid who just shows up at my doorstep with an eagerness to work and learn the bees. If they aren't willing to work, then it's not even worth fooling with them. It's unfortunate how many people are selling themselves for the almighty dollar and miss the real values in life.
    A man is worth just as much as the things about which he busies himself- Marcus Aurelius

  16. #15
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    Brasher Falls, NY, USA
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    Default Re: No compete clauses

    Well, young man, lol, I got into bees to support my family. Altruistic reasons are nice, but they don't put bread on the table or pellets in the pellet stove. But if I didn't enjoy keeping bees there are other more lucrative means of generating income.
    Mark Berninghausen

  17. #16
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    Jul 2013
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    Pleasant Shade, TN
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    Default Re: No compete clauses

    Quote Originally Posted by sqkcrk View Post
    Well, young man, lol, I got into bees to support my family. Altruistic reasons are nice, but they don't put bread on the table or pellets in the pellet stove. But if I didn't enjoy keeping bees there are other more lucrative means of generating income.
    I agree completely!
    A man is worth just as much as the things about which he busies himself- Marcus Aurelius

  18. #17
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    Dec 2011
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    Default Re: No compete clauses

    Competition is always going to be around, but to go and try to sell your goods in your mentors market is a sure sign of either desperation or lack of good character. Somehow education placing high emphasis on self esteem I think does not bode well for the development of good character.
    Johno

  19. #18

    Default Re: No compete clauses

    In my veiw it called respect . I amight I am serious sideliner. There is about five Beekeepers that are my area that is as big as I or bigger than me. I have a talking /working relationship with all of them. Some of us compare notes more to make sure no one is leaving money on the table. Meaning not a state secret on the dollars. I have learn something from all of them. Witch become more valuable to me and what I can still learn from them. If you want a cut throat bus try being a painting contractor. Every one can be a painter.

  20. #19
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    Dec 2008
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    Menomonee Falls, Wis.
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    Default Re: No compete clauses

    My father "gave away the farm". He would show anyone all of the tricks we worked so hard to develop. How to manage bees, fill label and cap jars, etc. He even invented the bee blower and gave it away. The place went nearly bankrupt.

    I am much more like the Honey householder. It is OK to teach a neophyte everything he knows, but not everything you know. Be polite, be honest, but keep food on the table.

    Crazy Roland

  21. #20
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    Jan 2003
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    Miami, Manitoba, Canada
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    Default Re: No compete clauses

    Yay but how much success can you teach someone in this business? ...
    Most don't listen and the ones who do get slammed just as we professionals do. I've learnt free advice only get them so far, then everything else needs to fall into place. I was taught from good will and I will always pass that on. My best lessons are from the school of hard knocks!

    Astrobee, your teaching too complete of a lesson

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