It won’t surprise anyone today, but food industry is getting adjusted to remote working environment and goes digital to upscale and, in some cases, to survive. The world food industry is estimated to be worth around $12.24 trillion, and the growing tendency of selling food online will quickly increase these numbers. Over recent years, there has been intensive growth in the number of food startups as well, and the popularity of companies like Deliveroo can be compared to the popularity of social media apps.
Even though the online food business started to be mainstream a long time ago, the 2020 pandemic year skyrocketed online food sales. In fact, the demand for online food delivery has risen by up to 700%, so the online food market is extremely attractive now. If in the past, only large stores or restaurants offered food delivery, today even a small local bakery kiosk is willing to sell food online.
Whether you are planning to start a food business or scale it by going online, here is the full guide on how to sell food online.
5 ways to sell food online
There are different business models for selling food online. You can create social media accounts, use delivery services, sell on marketplaces, or set up an online store. Let’s look at all of these channels in more detail.
This is a place where you can express all your creativity. Today, social media equals online stores, and some stores only have Instagram, for example. But social media is not an online store by definition. Your main goal here is to communicate with your customers.
Here are some tips to run your online food store on social media:
- Pay attention to visuals.
Pictures should be of good quality but still bring the atmosphere. If in the store, the main goal is to show your products in all details, on social media you sell the magic. In the case of food, the main purpose is to induce appetite. Placing your bakery on the table with a cup of coffee and your favorite book is a good idea. Here are some great examples of attractive social media posts about food.
- Content creation is crucial.
The new trend is not to overload with text, social media is more about visuals than text. But you need to catch the attention of the readers, and make readers ‘feel the taste’ as you are writing about food. Highlight ingredients you include in your products or write something inspiring as ‘Good morning should start like this’ (in case you sell products internationally that people can eat for breakfast).
- Don’t overuse hashtags.
You can still use them. Use searchable hashtags, but not too generic. e specific. For example, #onlinebakery is…
- Add Stories to make your accounts alive.
For example, in the Stories you can add some unboxings or TikToks videos to show your products in real-time. In the Stories, you can add announcements, video message, and more images of your items.
Food delivery services
Uber Eats, Deliveroo, Domino Pizza – our beloved food delivery services that became an integral part of our life. Selling food using food delivery services is on the rise due to the popularity of such services and a large number of users. The platforms usually charge between 10-30%, but it’s still worth it. Even if you are not getting enough profit, the promotion of your store will be effective.
How to sell food online using marketplaces
The first thing you need to know is that in many cases selling food is prohibited on such marketplaces as eBay or Amazon. So, you will need approval from the relevant government agencies and in relevant departments of the marketplaces itself, like the Health and Beauty department in Amazon.
Read more: How to open a beauty supply store
You will need to create your account and choose a plan (you can always start with a free individual plan or try a free trial for other plans). The next step is to choose your Distribution Model (especially on Amazon, different marketplaces offer their own options). For example, you can sell handmade products or work with suppliers. Marketplaces bring you the opportunity to reach a wider audience and more online presence. In a few words, marketplaces help you promote your shop and make more sales.
Your own online store
With your own website, you’re in total control of the way your products are seen and displayed. You are in charge of feedback, customer support, and promotional activities. It’s much easier to advertise and track customers’ behaviors.
Today, there are many ways to set up your online store. And, you don’t need to be a programming guru. Setting up an online shop is the foundation of your business. If you want to succeed in ecommerce, you need to invest in the development of your own website. With your own store, you don’t depend on any third-parties like Amazon or food delivery services. You can still use social networks and marketplaces to promote and sell your products, but your online store must be your main sales channel. It will set you apart from your competitors and give you the power to control how your store looks and how the customer gets to experience it. .
To start building your food store, you need to choose an ecommerce platform. There are various options. You can use Shopify, WooCommerce, Magento, and so on. Magento is a leading platform for building online stores. Most of your favorite brands like Nike, Fred Perry, Aldo (and more) are built on Magento. This ecommerce software has various competitive advantages. It is fully customizable, scalable, and feature-rich. And, Magento is also SEO-friendly, which means it has everything you need to promote your products on search engines.
How to start selling food online
There are some crucial steps to start selling food products in your store. You will need to:
1. Find your niche
Sounds simple but it’s crucial to understand what you are going to sell and who is supposed to buy it. Finding your niche to sell food online, includes good research of the market and competitors. However, for all businesses, the main rule is to sell what you know. So, if you are cooking the best brownies that rocked at your last Halloween party, the good news is you can start selling baked goods online. The point is that you know how to bake it, and have already gotten some ‘potential customers feedback’, so you can fit into the market of bakery products.
On the one hand, when trying to choose your niche, you want to be outstanding and offer something unique, on the other hand, don’t forget about market size. Selling rare sugar-free matcha-cookies seems a good idea, doesn’t it? If your city has around 10 hipsters – it’s not.
2. Do market research
Market research helps you understand your target audience, competitors, and market you are going to enter. After clarifying your niche, you should draw a picture of your customer. What interests, tastes, and lifestyle do they have? What kind of food do they prefer?
Then, identify your target market, outlining your strengths, weaknesses, threats, and opportunities (well-known as a SWOT analysis). Market research also includes deep research on trends and competitive analysis.
The target audience is wide as we all love to eat. But those who are more likely to order food online are people of a young age and likely on-the-go consumers. Busy people order food online more often. However, you can add to your target audience family feeders, healthy lifestyle lovers, vegans – it all depends on your niche and the products you want to sell.
3. Pay attention to food trends
People always choose something trendy. Today, the biggest trend in the food market is healthy food, and smoothie bowls are more welcomed than sweet deserts in many cases. Even though trendy products are competitive, you still can do better and get a big profit from something people want.
Here are some of the recent food trends for 2020:
- Low-sugar products (especially chocolate)
- Healthy products
- Vegan products
- Asian food (our favorite bowls)
- Fresh vegetables and fruits
- Pizza (is more classic but still trendy)
4. Do a competitive analysis
Conducting competitors’ analysis is a very important and risky part as at this stage you can lose the idea of selling food online. Competition in the market and the quality standards are very high. It’s tricky to create another Willy Wonka store because of its evident competitive advantage (unless your brand has its own movie starring Hollywood star), but if you sell outstanding bakery or tasty pizza (pizza is always a good idea!) – probably you are someone people have been waiting for.
5. Set up food production
After understanding your niche and target audience, a very crucial step in selling food products online is a production setup. If you own a restaurant or store, you already have a production setup, but for those who are only starting a food business online, finding the right place for cooking and getting all the needed equipment is a big challenge. Here are a few options on what you can do:
- Sell food from home. In this case, you need to get a special license to sell food online from your domestic kitchen. In the US, you need to register your home-based business as a facility at FDA.
- Rent a co-op kitchen space. You can rent a space for your food business. The main benefits are affordable rates and reduced paperwork.
- Establish your own commercial facility. This will give you full autonomy and comfortable conditions of work but make sure you registered and possess all necessary licenses.
- Order from a manufacturer. This is a good choice if you would like to focus on the business side rather than production. This is a great option for newcomers as well.
6. Study the laws and licensing aspects before starting selling food online
This is the most important and the trickiest step in setting up your online food business. The main challenge is that these regulations vary in different regions. In the US, those who sell food online need to follow the state’s Cottage Food Laws.
Here are the main regulations you need to follow to sell food online:
– Legal production
– Proper storage (cold and dry)
– Have a state license to sell food online and permits from the local government
– Zoning clearance and kitchen inspection once per year
7. Do marketing online
Once you’re ready to sell, don’t forget about marketing. You need to promote your store through different online channels such as search engines and social media Invest in SEO, run ad campaigns on Facebook and Instagram, conduct email marketing – do whatever it takes to make more people aware of your brand and your products.
How much does it cost to start a food business?
A very difficult question to reply to in a few sentences, as an investment can vary depending on the business model you choose. Opening a physical restaurant or food store may cost you $200,000. But selling online can drastically reduce costs. Small online food businesses don’t require an expensive place for food production. Because you don’t work with customers offline, you can rent a kitchen in the suburbs, for example. However, you will need to spend money on online promotion and website development.
An ecommerce website can cost you around $50,000, but at the start you can fit into a few thousand dollars. As you are running an online store, you will need to invest in good photoshoots, packaging, and products.
Starting or scaling your online food business is hard but this comprehensive guide will help you to understand the basics. We live in new times and the world will never be the same again. The most positive thing about these changes is the boost in innovations and digital transformation. Starting selling food online requires many aspects to consider: production side, online promotion, and laws. Due to high competition (but very high demand as well), your online food store should be outstanding and very functional, as online food stores today are not just places where you add product items.
Frequently Asked Questions
Can I sell food online?
If you’ve always wanted to sell food online, you definitely can! But, some efforts will be required, such as obtaining a license, packaging, logistics, an online store, and so on.
What is the best way to sell food products online?
The easiest and the best way to sell food online is to start your own small online store.
How can I market my food online?
There are several ways to do this. Create an online store, place your food products in one of the marketplaces, use online message boards or sell using social networks.
Why is it worth creating an online store to sell food online from home?
This is the best way to make your business independent and in full control of it. No one will demand payment from you, the fulfillment of certain conditions, and other things.