Billions of people shop for their goods online. In 2019, there were over 1.8 billion people who purchased goods online. And the numbers can only increase due to the coronavirus pandemic. As more households are forced to sit at home and diners remain shut, Americans spend more money on online food shopping. It’s estimated that about 70% of American shoppers could buy their groceries online in 2020.
As the number of delivery companies rises, customers are seeing little sense in driving to their favorite restaurants to pick up food when they can simply order and have it delivered. Selling food online is a profitable endeavor when done correctly.
This guide explains some of the key ingredients required to set up and launch an online food business.
- 1 1. Find Your Niche
- 2 2. Legal Regulatory Framework
- 3 3. Get a Supplier
- 4 4. Labeling, Branding and Packaging
- 5 5. Set Up Your Online Store
- 5.1 Online Marketplaces
- 5.2 Packaging Requirements
- 5.3 Creating Your Online Store
- 5.3.1 Shopify
- 5.3.2 BigCommerce
- 5.3.3 Squarespace
- 6 6. Marketing: Leveraging on Existing Channels to Power Your Business
- 6.1 Social Media Marketing
- 6.2 Digital Marketing
- 7 Conclusion
1. Find Your Niche
You need to discover your niche. Whether you sell food in person already or you have an idea that you think can work, this is the first step.
You can start by checking out prevalent food trends. Carry out thorough research to identify the type of food that interests your audience. You can check on social media or consult with food bloggers. Once you’re done with the product research, you’ll have to conduct an audience and competitor research.
The food market is crowded, and you need something that sets you apart from the next vendor. Are you a gourmet luxury food store? Is vegetarian food your thing? When you define this and embrace it, you’ll find it easy to attract customers.
Understanding your niche provides direction for your marketing and branding efforts. These include the tiniest detail from how to reach out to your market, the color cues and copy will be influenced by the niche you pick.
2. Legal Regulatory Framework
Now that you know what you’ll be serving and whom you’re marketing them to, the next step is adhering to local regulations in your jurisdiction. For instance, food regulations in the United States are different from those in the European Union.
American food vendors need to be familiar with the Cottage Food Laws, which regulate the production and sale of processed foods. Cottage Food Laws vary between states, but you will need to know some essential requirements to get approval. These include:
- An annual kitchen that will be inspected by your state health department
- A clearance permit from the state health or agriculture department
- A valid state business license
- Proof that your kitchen and storage locations meet the hygiene requirements in the space
- No pets in the cooking space — whether at home or in a kitchen
With food regulations, you can’t plead ignorance. You have to check with your local authorities and adhere to the laws that govern the food business.
3. Get a Supplier
When choosing a food supplier, you should consider delivery schedule, cost, MOQ and the quality of their products. As a food vendor, partnering with the right supplier could save you heartache down the lane.
With sites like Food Master, you can find suppliers that specialize in your required ingredients. Browse through the marketplace, compile a list and then ask for references and certificates where necessary.
4. Labeling, Branding and Packaging
Your company’s visual appeal is critical to its success too. At this point, you know what you want to sell and your production method. A well-branded food business makes it easy for your customers to notice your food products and purchase. It gives them options and grows customer loyalty. What I love, I buy and become loyal to in the long-run. Here are some essential aspects of branding:
The ideal business name is memorable and easy to spell. You can be creative if you want, so ask for opinions and be creative. Some pointers to follow is to pick a clear and simple name that is unique and memorable.
The brand color communicates with your customers. Generally, food companies tend to go for bright colors. They’re clear and warm, and they can encourage people to purchase impulsively. Colors like green depict healthy food, white and pink for sweets, and yellow and orange for indulgent foods.
You need to consider local laws for your packaging too. For American companies, the National Institute of Standards and Technology (NIST) requires that your packaging include the following:
- Your company name
- The name of any additional supplier
- The package’s weight
- The ingredients used in the product
- Expiry dates
This information should also be available on your online product descriptions. If you want, you could include additional nutritional information too. This way, people know the product’s health benefits.
5. Set Up Your Online Store
Now that you’ve got the right product and you’re ready to make it, it’s time to set up your online store.
This is perhaps the most important step in the food selling process. You can go about this in two ways — you could either choose an online supplier or create one yourself.
Several online marketplaces are available for you to hop on and leverage their existing infrastructure to grow your food business. The first platform that comes to mind is Amazon.
Setting up a food seller account on Amazon is not straightforward. You need to qualify for this category.
Selling Food on Amazon
Amazon is one of the world’s leading retailers. The company purchased Whole Foods in 2017, increasing its share of the grocery and food market.
Data from Statista shows that gross merchandise sales volumes for food and beverages on Amazon should reach $23 billion in 2021.
On Amazon, food sellers are classed under the “Grocery and Gourmet Food” category. Given the importance of food quality, Amazon places some significant restrictions on products that you can list here.
Below are some of these restrictions:
- Your product should be correctly packed and sealed to prevent contamination or spoilage
- The packaging you choose should protect the food’s safety and quality
- The packaging should include product information — dietary claims, net weight, expiry dates
Shelf Life Requirements
Amazon allows you to sell products with expiry dates through its Fulfilment by Amazon (FBA) service. As a food seller, your products should be sent to an Amazon fulfillment center with at least 105 days remaining on its shelf life. Amazon is notorious for removing products from its shelf once they reach the 50-day mark without being sold.
Temperature-sensitive food items should be able to withstand at least 50 degrees and a maximum of 100 degrees all through their shelf life. Amazon also only accepts these products between October 1 and April 30 annually.
Page & Listing Requirements
Amazon also polices your listing format and available information. For products in the food category, consider the following:
- Your product page should include an image of the product’s nutritional information and ingredients
- Images should be at least 300 dots per inch (dpi)
- The image should only contain the product to be sold on Amazon. No extras
Generally, online marketplaces are suitable for people who want to get their businesses up and running quickly. You won’t have to build your website from scratch or start a marketplace, and you have the tools to begin selling at your fingertips.
You can also choose to sell on more than one marketplace to improve your reach. If you have the funds, you could create an account on Amazon and Etsy, so you target people who shop on both platforms easily.
The downside of selling food items on popular online marketplaces is that you’re selling on highly competitive platforms. As of 2018, over 50 percent of sales on Amazon came from third-party sellers. You have to compete with these vendors for sales — a process that is much easier said than done.
You also have to consider these platforms and their rules. Selling on a place like Amazon isn’t the same as selling on your dedicated store, and you need to follow their regulations or risk closure of your account.
Creating Your Online Store
The second route is to create your online store and go about it by yourself. This process guarantees more personality and freedom to run your business how you would want it, although it takes more work to set up.
Thankfully, you can use some services to get a jump start on this. Below is a review of some top e-commerce platforms and how they can help to improve your online food business:
Shopify is a top e-commerce platform powering some of the world’s biggest online stores. The platform allows customers to build their stores without touching a line of code. Shopify is a hosted solution that runs on the company’s servers. It’s quite easy to set up and affordable for small food vendors.
As a food business owner, here are some of Shopify’s top features that would supercharge your online business:
Abandoned Cart Recovery
It’s normal for you to visit a site, put products in the cart and then exit due to one reason or the other. This happens to millions of ecommerce sites.
There are so many reasons why shoppers abandon their carts. In 2018, about 75.6% of shoppers abandoned their checkouts in the U.S.
With abandoned cart recovery, your Shopify store sends customers targeted emails to remind them that they have products waiting to be checked out.
Auto-calculate Shipping Rates
Another delicate section of running an online store is logistics and how to calculate the precise cost of shipping.
To avoid inaccurate estimates, you can leverage the real-time carrier shipping rates on Shopify. This feature calculates the cost of shipping for your customers based on their location and the weight of their order.
Shopify Payments and POS
Shopify has integrations with different payment processors for your customers to make payments seamlessly. These include Stripe, Square, PayPal, and much more.
If you plan also to sell food in-store, you could activate Shopify POS, which is a reliable option. The app allows you to receive payments from customers through a card reader. POS sales are linked to your online Shopify Dashboard, making it easy to manage your inventory, bookkeeping and taxes.
BigCommerce offers you a personalized storefront with the necessary tools. Like Shopify, you don’t need programming knowledge to use this service.
Some of the top features available on the platform include:
BigCommerce also allows you to integrate your store with various sales channels simultaneously. The platform has an “Omni-Channel” that connects your digital and physical stores together. It enables you to connect and sell your food across different marketplaces.
In a nutshell, BigCommerce allows you to sell on:
i. Marketplaces (Google Shopping, eBay, Amazon, and others.)
ii. Physical stores (ShopKeep, Square and Springboard Retail)
iii. Social media (Pinterest, Instagram, Facebook)
Abandoned Cart Saver
This feature is also available here. It has the potential to increase your revenues from unpaid products in the customers’ carts.
Customizable Promotion Rules
BigCommerce allows you to create coupons and send them to customers you would like to reward. So, you could offer free pizza toppings to people who purchase more than one order in a week.
Customers always want comfortable payment methods when they’re shopping. With BigCommerce, you can access over 40 pre-integrated payment methods for customers. These integrations span over 100 countries, giving you an incredible reach.
Some top payment integrations include Square, PayPal, Stripe, Adyen, and Authorize.net.
Like the other two services, Squarespace allows you to create your website from scratch and start selling.
Unlike the other two, however, Squarespace functions as a section-based website builder — not the usual drag-and-drop model. This layout makes it a tad more straightforward, as what you see is what your website will look like when you create it.
As for how it helps your food business, here are some of its top features:
Social media integration
Social media is a must-have for anyone who plans to move into the food business. With Squarespace, you can link accounts from over 20 social media platforms — including top options like Facebook, Instagram, and Twitter. Sync with Dropbox to access photo collections or import content to your site from any social media platform.
All third-party domains on Squarespace come with free Secure Sockets Layer (SSL) certificates. These certificates ensure that all the data that flows through your website is encrypted.
If you plan to allow payments on your storefront, SSL certificates are essential to protect your customers’ credit card and financial information.
Squarespace also has in-house anti-malware systems that fend off malicious bugs and Distributed Denial of Service (DDoS) attacks.
SEO & marketing
Higher search results on Google are what SEO is all about. All Squarespace pages follow Google’s SEO guidelines, so you have a natural advantage. The platform also gives you some SEO best tools as well as helpful guides on its support page.
6. Marketing: Leveraging on Existing Channels to Power Your Business
The next step to establish your food business will be to create a marketing strategy. This step is vital and will help you to reach new frontiers and grow your business exponentially. Regardless of whether you’ve got clients already or not, you need a marketing strategy to supercharge your business to the top. Here are some ideas that can help:
Social Media Marketing
Social media marketing has become a necessity for any business. As of December 2019, the global population was 7.8 billion. Social media users across the world in the same period were numbered at 3.725 billion.
The number of social media users grew by 328 million between October 2018 and 2019. This is about ten new social media users a second.
Social media has also been influential in getting people to purchase items. The Q3 2016 Sprout Social Index showed that 75 percent of people who bought products did so because they saw it on social media. Of that number, 61 percent had to see a post at least twice before moving to the final stage of the sales funnel.
We could go on and on about the stats that show the significance of social media for small businesses, but we’ve got to keep this short.
Social media has become a necessity for any business owner. If you want to grow fast as hair, this is where to be.
Social Media Marketing Tips
Setting up on these platforms is pretty explanatory, so there’s no point in going into the details. However, there are some handy tips that could be beneficial for your growth.
Create Proper Profiles
Since you sell food online, the first thing you need to do will be to create a compelling set of profiles on all platforms.
A proper profile includes all relevant information about you — opening and closing hours, payment options, contact details, possible locations, website, and others. You could also add a short bio to let people get to know you more.
Content is king on social media. You can’t attract anyone to your food business if you post shabby or subpar pictures.
If you have to, get a food photographer to help you out. Remember that you’re selling to people who can’t see or taste your meals without buying them. Your pictures have to be attractive or nothing. There’s no middle ground.
Posts Relevant Updates
It’s easy to fall into the trap of posting regularly and hoping that people will come to you. However, this isn’t the appropriate growth strategy. The Sprout Index mentioned earlier showed that brands tend to annoy users with promotional, incessant posts.
These posts are those in-your-face type posts that users come in contact with almost every day. They usually advertise discounts or other company developments, but aren’t as effective as most account administrators think.
Instead of just being promotional, try to be engaging. You’re trying to meet new people, and they’ll get irritated when you talk about yourself alone.
Consider engaging and relevant posts as a means of drawing attention. Engagement posts focus the conversation on your prospective customers and help them talk to you.
Here are a few tips you might want to try:
- Ask your customers questions
- Throw opinions to them and let them weigh in
- Get user-generated content and incorporate it into your strategy
Optimal Posting Times
You should also know the best times for you to post on social media. To do this, you need to understand your core audience. Try to analyze the traffic for your business and find when you make the most sales. Then, you can understand when your customers are most active and when you can send posts.
Alternatively, you could post content that customers can see and engage with at any point in the day. Things like customer reviews, product shots, general food items on sale are good for starters.
Use Location-Based Advertising
With location-based advertising, you will be able to filter the people who see your ads based on where they are. Facebook allows you to target people at specific locations, serving people ads when they walk by a predetermined location.
In 2015, a Mobile Audience Insights Report showed that mobile ads gave the highest performance levels when served within 2 to 5 miles of a location.
Social Media Analysis
While pushing content is great, knowing what works is smart. There are several tools that can collate and interpret your data for you. Some even make recommendations to aid your content strategy. With a data-driven social media marketing strategy, you will know what works for you, what you need to tweak, and how you should optimize your operations.
While social media marketing will focus on people far away, digital marketing efforts will primarily help you to reach people who are in your locality.
Some of the top suggestions under this category include:
Get Listed on Food Apps
Food apps have become quite popular recently. They take the hassle out of having to flip through boring directories or go on the internet for long to find somewhere to eat.
While they list mostly restaurants, some also have listings for online food services. You can capitalize on this wave of technology and get your business out there.
Email marketing can help you out too. It is one of the oldest forms of digital marketing, but it’s still as productive as you can expect today.
You can add a section for customers to fill their emails when they place orders, or you could ask them to do so in-person (perhaps when they’re about to get their deliveries. Collate all these emails and use them to your advantage.
Send emails periodically, informing your customers about promotions, new arrivals, and other updates to your menu. Kind of like what Domino’s does every once in a while. The point is to get your existing customers to come back.
The website builders listed above all have support for email marketing. You can take advantage of any of them to grow your customer list and keep in touch with them.
While Yelp isn’t as popular as it used to be, the service still has much pull in the food business. Every business benefits from a strong review base on Yelp.
You should understand that you will get Yelp reviews even if you don’t set up an account. So, you might as well get it over with and set up your profile. To get the best out of Yelp, take the social media approach. Add as much information as possible into your profile, including the following:
- Photos (many food pictures)
- Your opening and closing hours
- The menu
- Price ranges
- Additional services you might provide
You will also need to know how to handle feedback. If you get any negative reviews, answer them politely and professionally. Be as gracious as possible.
If you’re making a public response, start by thanking the reviewer for the feedback. Then, explain what could have gone wrong and promise to be better. If you can offer any remediation efforts (coupons, discounts, gift cards and more), do that. This strategy always gets people to come back again.
Nothing good is easy to build. There are so many hoops to jump through before you get to the promised land. Given the convenience that the internet provides, you can follow the steps outlined below to harness the tools you need and get online quickly. There’s a lot of planning and strategy that goes into online food sales. By following our comprehensive online food business guide, it becomes easier to know what to focus on and what to ignore on your journey to business success.