Dairy is an ever-present part of many consumers' lives, whether that be in food service or a consumer end product (e.g. milk, ice cream). Due to this pervasive presence, many view dairy as a subset of the food group. As such, the everyday preferences of consumers impact the supply and demand for the product.
The dairy industry is a growing one. Statistics have shown that the market size of the dairy industry has grown at a rate of about 0.5% per year between 2017 and 2022 (IBIS World). Experts expect these percentages to compound at around 2.5% in the coming years (Grandview Research).
Accordingly, it's no surprise that many are looking to make their way into the dairy wholesale industry. For some, this looks like purchasing wholesale products including milk, cheese, or butter. For others, like bakeries, using a marketplace app like BlueCart is the only way to obtain wholesale dairy products conveniently.
Whether you're a full-scale bakery, or you operate from home, chances are you don't have a cow in your backyard that supplies your milk. Regardless, you'll need wholesale items to sell. In this article, we'll discuss how to manage a wholesale business, how to become a wholesaler, and how to find vendors.
Can I Sell Dairy Online?
The simple answer to "Can I sell dairy online?" is yes. You can sell dairy online and there is already a large and thriving industry of online dairy distributors. Now is the perfect time to sell online according to the aforementioned statistics. We have COVID-19 to thank for the recent surge in successful eCommerce marketplaces.
Even with the traditional brick-and-mortar shop still standing, a majority of patrons prefer the experience and conveniences online shopping provides. In addition, we're seeing D2C sales surpass in-store sales.
As you can see, starting an online dairy shop is a worthy investment. However, there are some important things to know before you jump in head-first. This includes knowing both the benefits and challenges of selling dairy online.
What Should I Know Before I Start Selling Dairy Online?
Before starting any online business, the first step to complete is to develop an eCommerce business plan and a SWOT (Strengths, Weaknesses, Opportunities, and Threats) grid. Both components allow you to analyze your current resources and are vital to the success of your business.
Consider the following when developing your business plan:
- What kind of dairy will you sell (milk, cheese, yogurt, or all dairy)?
- Will you sell non-dairy products like oat milk and eggs?
- Where will you market your dairy?
- How will you market your dairy?
- Will you need extra employees, or are you able to run the business on your own?
- How much money do you need to start?
Your business plan needs to be comprehensive and answer all the above questions and more. More than this, your business plan should include a cash flow plan.
This helps you set reasonable expectations for expenses and production costs. It's good to remember that the most expensive part of a business is starting it.
We suggest you conduct an eCommerce competitor analysis, too. This way you can scope out your competitors to see what they're missing so you have a simpler time differentiating yourself. The most successful businesses offer unique products or services, or in a unique way
Once you've answered those questions it's time to research these additional eCommerce fundamentals:
- Obtain your food handlers certification. Regardless of where you reside, if you handle perishable goods it is a requirement to have a food handler’s certification. This shows that you know how to keep your product consumption-safe and garner government and customer trust in your business. It's also a good idea to purchase eCommerce business insurance and get your wholesale license. For a lot of businesses, neither is required. However, they'll provide you with additional layers of protection.
- When obtaining your food handler’s cert, you'll learn that proper eCommerce packaging is required when selling online. You have to use specific labeling and packaging for your products; legal issues are sure to follow if not. Correctly packaging and labeling your products includes a comprehensive ingredient list, proper label sizes, and potential allergies.
- Finally, learn your state's sales tax requirements. Sales tax does vary by state, so you'll need to follow state-specific guidelines. However, if you use an eCommerce platform like BlueCart, sales tax is calculated automatically.
What Are the Benefits of Selling Dairy Online?
As with any business, there are benefits and drawbacks to starting. If drawbacks sway you to not pursue an idea, it's good practice to be aware of them beforehand. The more you know before you start, the less likely you are to backtrack and run into issues.
Let's start by discussing the benefits of selling dairy online:
Online Dairy Store: Easy Customer Access
Today, if your business is not available online, you're losing out on thousands of potential customers each day. The digital world is everything and it's an important tool to take advantage of. The Internet makes it easier than ever to conduct a quick search and find exactly what you're looking for.
This is no different for online dairy stores. A simple keyword search for "organic milk near me" will yield thousands of results for online dairy stores. So, if you move your company online, or start there altogether, you'll appear in search results. An effective eCommerce SEO strategy helps you rank higher on search engine results pages.
Cross-Selling and Up-Selling Opportunities
As a dairy business, it's not uncommon for customers to see you as a "milk only" business. Physical stores often limit customers' ability to explore a product line in-depth. So, they'll miss out on products that may have been a better fit. However, this issue isn't as common online.
Online shops provide customers with an easy-to-navigate catalog that's accessible wherever they are. Knowingly, you can expand, reduce, and sell your products as you wish. While a customer might not explore a better version of the same product in-store, they're more likely to do so online. This is one example of up-selling, which can increase your competitiveness and revenue ten-fold.
Availability Whenever Wherever
Traditional dairy stores get 90% of their sales during morning and evening rushes. During these periods, customers follow an in and out method--getting strictly what they need and leaving.
For the most part, dairy stores don't benefit from staying open all day. However, if you move your store online you no longer have to limit your business hours. Your customers now have the freedom to explore your shop whenever they want.
What Are the Drawbacks to Selling Dairy Online
With benefits, there are drawbacks and challenges. No business is immune. This is especially true when it comes to selling dairy, which is a unique arena in itself.
Once you own a business you're now responsible for handling multiple tasks. Even more so if you're an independent wholesale business owner.
These tasks may include, but may not be limited to:
- Handling farm productions
- Packaging and sorting
- Deciding pricing
- Keeping up with certifications and licenses
- Paying for certifications and licenses
- Animal health and safety issues
Each of these is a critical component of running a successful online dairy store. Even though your storefront is consumer-facing, your behind-the-scenes operations are not. More importantly, as a business owner you never truly get a day off.
Your online dairy shop may not ship products or interact with customers on the weekend, but chances are you're still thinking of what needs to get done. Lots of small business owners, like some of the best coffee roasters, find themselves working through the weekend to keep up with operations. So, keep all of these factors in mind before you make any final decisions.
How to Sell Dairy Online
Even after you've completed initial research, you're not in the clear to sit back and relax just yet. It's always better to get as much done as possible in the start-up phase as opposed to doing it once you've gone live.
Here's what you need to complete before publishing your online storefront:
- Finish and File Paperwork
If there's any paperwork collecting dust, now is the time to file it. Not only is it a potential legal issue to file after you've already started operations, but it's also more of a headache. Operating your business is going to keep you very busy!
- Test Your Website's Functionality
Everything from forms to checkboxes needs to work on your site. Trust us–it will be a nightmare to open shop and immediately run into functionality issues. This is an easy way to increase your cart abandonment rate.
- Start Marketing
You can begin researching marketing strategies before you open up shop. In fact, it's better that you do. Down the road, your strategies may need to get adjusted, but that's okay!
You'll quickly realize that marketing and SEO are ever-changing. While lots of strategies are tried and true, there will always be new ways to improve your efforts.
- Create Social Media Accounts
Social media is not required for any business, but it does help. Social media is one of the best ways to market your business. Of course, you'll need to find the right platform for your industry.
However, once you do the opportunities are endless. Social media marketing done effectively increases web traffic and sales.
Frequently Asked Questions About How to Sell Dairy Online
How Do I Sell My Dairy Products?
You can sell your dairy products in a traditional brick-and-mortar store, or you can sell dairy online. Either way, research what it takes to start a business first and use our tips from this article.
How Can I Promote My Milk Business?
You can promote your milk business by using proven eCommerce marketing strategies. These strategies might be social media marketing, ads, or SEO. Find out what tactics work for your business and build upon them.
Can I Sell Dairy From Home?
Yes, you can sell dairy from home. However, you'll want to explore your state's cottage food laws first. Selling dairy from home will look different for every business, so figure out what works for you.