If you have a passion for food and want to build a business around it, there are many ways to accomplish this. Whether you want to sell coffee subscriptions, sell wine online, baked goods, or start selling liquor online, modern technology makes it easier than ever.
It doesn't hurt to know about 2022 food trends and beyond, too. Let’s look at what’s essential for creating a successful online food business.
Selling Food Online
When thinking of the vibrant eCommerce food empire you want to establish, it’s easy to be thrilled. In order to shift all of that energy into selling cookies online or selling coffee online, like some of the best coffee roasters, you need to give yourself the right foundation.
Here’s what you need to know when learning how to sell food items online:
Know Your Local Laws
To protect both consumers and business owners, there are laws every online food business must adhere to. All small food business regulations are based on cottage food laws. These laws guide the types of food products that can be sold out of home-based businesses, and the manner in which they can be sold.
State-specific cottage food laws differ, but they all include some variation of the following:
- You must have a state-issued, valid business license.
- The kitchen in which your food is made, whether home-based or commercial, must be inspected annually.
- Both cold and dry food storage methods must be appropriate and up to code.
- The location in which your food products are made must adhere to all permits and zoning laws.
- There are no animals allowed in the kitchen at any time.
Select a Niche
Food businesses are relatively inexpensive to start and emotionally gratifying--big parts of what makes them so appealing. However, you still need to identify a niche that hasn’t been flooded with competition yet.
If you’re the 45th small business owner to sell brownies, it will be difficult to get noticed. If you sell keto vegan brownies or sugar-free brownies, however, you’ll have less competition and people will be lining up to buy your desserts. The same principle holds true whether you want to sell beer online, sell whiskey online, or any other commonplace product that is much-loved.
Find a Supplier
Keeping your business running smoothly includes having the raw goods you need at all times. The best way to do this is to build relationships with suppliers early on.
A supplier is any business that sells raw materials inventory to other businesses. The type of supplier you need will depend on the foods and/or drinks you sell. You may find everything you need from one supplier, or have to tap into multiple suppliers.
It’s good to learn how to find vendors so you know what to expect in the industry. If you’re selling wholesale, make sure to browse a wholesale directory that provides food products. Here are some leading directories to help get you started:
- Ingredients Inc.
- Roundeye Supply
- Wholesale Central
- Specialty Food Magazine
- Wholesalers Network
Create Your Branding and Packaging
One of the most exhilarating parts of launching your business is developing brand imagery and packaging. This is no less true with food businesses, which, if anything, depend on the packaging itself to attract new customers.
There are more than 400,000 food-related small businesses in the US. In order to stand out, you need eye-catching branding and a sense of personality. Most consumers are highly visual, meaning they’ll judge your products simply based on their appearance.
It’s worth investing plenty of time and a good amount of money into quality, durable, and product-appropriate eCommerce packaging. If customers appreciate what they see on your website, they’re more likely to love the final product.
Establish a Storefront
Speaking of websites, every online food business needs an eCommerce storefront. This is essential not only for your customers to find you, but to streamline all of the work you’ll be doing as a business owner.
Each eCommerce platform will offer different features. At a minimum, your platform should offer the following:
- Simple website navigation
- Items that are in stock
- Easy-to-find shopping cart and checkout buttons
- Full website and payment-specific security features
- Social proof, e.g. reviews and ratings
- High-quality photos, videos, and product descriptions
- Multiple accepted forms of payment (credit card, PayPal, crypto, etc.)
- Frequently Asked Questions (FAQ) page
- Contact page with multiple options (contact form, phone, chat)
Price and Market Your Goods
Pricing is one of the most difficult aspects of any business to get right. Too low and you won’t be making a profit, but too high and you’ll be scaring customers away. Thankfully, there are strategies you can use to determine if your pricing is effective.
Ask the following questions in regards to your food products:
- Does this price cover labor cost and overhead expenses while leaving room for markup?
- Am I getting a good enough wholesale price that leaves room for profit?
- Will this price achieve long-term profit, especially for costlier niches like selling alcohol online?
- Is this price comparable to competitors’ products of a similar nature?
- Does my pricing offer more in value than it asks in cost?
Marketing is closely associated with pricing, as pricing can only be effective if it has drawn in new leads. Whether you’re creating one new dessert or an entire meal, your marketing approach should always consider who your target audience is.
Here are some simple yet effective strategies for marketing food products online:
- Know where your ideal audience hangs out, and market there. If you know of a popular food website that offers ad units, see how your budget can match their offerings. Using an eCommerce marketing strategy to speak to customers contextually is always wise.
- Post recipes and pictures on Pinterest. The social media platform Pinterest is responsible for over 2 billion visits every year and it largely became popular as a recipe sharing site. A mouthwatering picture with a relevant call to action in your pin is all you need to get started.
- Offer early customer benefits. One of the hardest parts about launching a business is generating a customer base early on. If you provide a free bonus product for your first 100 customers, this generates momentum and makes it easier to keep producing new goods.
- Start local. You can scale your brand globally if you want, but first, you should focus on local success. Look for both B2B marketing and DTC marketing opportunities in farmers’ markets, food events, and other avenues that put your brand on the map.
- Connect with customers on mobile. If your business doesn’t have at least a mobile-friendly website, customers aren’t going to be interacting with your business as much as you thought. Today’s shoppers demand convenience and speed--two hallmarks of the direct to consumer business model. If your business isn’t catering to these needs, people will go elsewhere. Mobile usability is also conducive to a subscription box business, which is easy to start with food.
- Sell your goods wholesale. There are many retailers, shops, and restaurants looking for quality materials to use for their own businesses. Put together a wholesale marketing plan that can help you reach relevant decision-makers.
- Leave room for profit. The food industry is known for its small profit margins, but that doesn’t mean your products should lack markup (see markup vs margin). Add enough markup to your products to be profitable without causing customers to turn their noses up at your business.
Can You Sell Food Online: License to Sell Food Online
If you’re wondering about whether you can sell food online, the answer is yes! However, you need certain types of licensing, packaging, and logistics in place to get things running.
Anyone selling food online needs to acquire an eCommerce business license. It’s also useful to learn how to get a wholesale license, online liquor sales, and how to sell wine legally. Completing these steps is especially important if your business is growing quickly or you plan to expand soon. Even if you're turning your offline business into an online one (o2o), make sure you have all permits and documents needed.
You can get your online business license by contacting your state’s revenue or business office and completing all relevant paperwork. The business license fee depends on the state you live in but is about $25-50 on average.
How to Make Money Selling Food Online
Food may be your true passion, but it’s understandable that you’re in business to be profitable. In order to know how to sell products online, there are a few best practices to follow.
Begin implementing these strategies today:
- Start small. Running your own business is exciting because you get to be creative and make a living off of it. While you likely feel tempted to make as much money as possible right away, this is rarely a good idea. Take time to understand which products of yours that customers like most. This will give you a much better understanding of how to grow your business in the long haul.
- Offer bundles and bulk order deals. It can be frustrating putting effort into multiple products, only to see them sit in your inventory, which raises your inventory carrying cost. Instead of letting that money go to waste, create a bundle product. Customers who love one product of yours will have an incentive to buy complementary goods at a cheaper overall price.
- Assign reasonable prices to your products. When starting a new business, you need to demonstrate the quality of your product to brand new people. If your prices are too high, your cost of goods sold (COGS) may be too high. A large price will only create mental resistance from customers. Read up on psychological pricing strategies and use this ethically to your advantage.
- Create a customer loyalty program. For those who love your products, there’s no sound sweeter to their ears than knowing you reward repeat purchases! Thanks to the advances of modern technology, in most cases, a loyalty program can be installed as a website plugin. There are also small businesses that provide premium features for a cost.
Selling Homemade Food Online
Thinking about selling your own homemade food online? Congratulations, that’s an exciting decision! You can build a successful brand from the comfort of your own home, all while having the freedom to creatively experiment. There is a lot to be aware of, so let’s dive right in.
First, the laws and regulations that apply to your business will be similar to those of other food businesses. Second, you need to be familiar with the types of food you can sell online and if your state has any limitations. Third, you’ll need to set up a storefront and list your goods in relevant marketplaces, if desired.
Food Products to Sell Online
There are numerous types of food products to sell online. The niche you choose may depend on your personal interests, culinary trends in your area, or anything else. It’s important to have an understanding of the best foods to sell online so you can generate momentum for your business early on.
Top-Selling Food Items Online
Want to skip all the guesswork right away? You’ll want to review the top-selling food items online. Here are some of the foods and drinks with strong, year-round sales in the US:
- Produce (especially fruits, berries, potatoes, and onions)
- Baked goods (brownies, cupcakes, cookies, etc.)
- Soft drinks and sweet beverages
The food catalog you create will look different depending on whether or not you sell pre-made items or homemade food. There are pros and cons to both. Selling pre-made food products requires less planning and creating, whereas making your own edibles usually provides greater profit and flexibility.
Where Can I Sell Homemade Food Online?
Now that you’ve perfected your recipes and completed your marketing plans, it’s time to set up shop. Whether you’re tech-savvy and want to create your own headless eCommerce website or don’t know the first thing about Internet technology, there are multiple options available to you.
Deciding where you want to sell homemade food online will depend on your preferences, sales goals, and individual business needs. Many platforms offer the opportunity to sell homemade food, as long as you’re compliant with all local laws.
BlueCart is a comprehensive eCommerce storefront through which you can sell your homemade food. Schedule a demo with our team today to learn more about how we can help your business.
Here are some other platforms for selling your own food:
Food for Thought
There’s plenty to think about when you’re creating your own food or beverage products. It’s easy to believe people will simply buy your creations because everyone loves food, but remember that branding is often what makes a sale. As you grow your business and learn how to sell baked goods online, examine your repeat customers’ purchases to elevate what makes your business different.
Frequently Asked Questions About How to Sell Food from Home
Since you’re passionate about selling food from home, chances are you’re thinking about how to get your business started. It helps to have additional industry info on how to move your business forward. Check out our answers to these commonly asked questions:
Are you allowed to sell food without a license?
Selling food without a license depends on the state and local laws that apply where you live. You can find out which laws apply to your type of business by consulting your state’s revenue or commerce office.
In some cases, you only need an employer identification number (EIN) and business license to sell food. In other cases, you may need a shipping license, a retail license, or whatever paperwork your state requires. Request a copy of your state’s cottage food laws for all of the details that apply to your situation.
What food can I sell to make money?
You can sell any kind of food or drink that’s legal to sell where you live. In nearly all cases, this includes any kind of food product that can be safely packaged and shipped.
Many people have built thriving businesses selling baked goods from home and selling cookies online. As long as your kitchen has been professionally inspected, you’ve completed relevant paperwork, and you have the equipment you need, there’s no limit to financial reward.
If you want to sell beer online (or any alcoholic beverage), make sure you have an alcohol manufacturer’s license and know how to ship alcohol. The government prosecutes anyone who is illegally selling products and the penalties can be particularly severe for consumer-sensitive products like beer.
What is food safety program?
A food safety program documents a business’s food, food preparation, and food handling practices for maximum safety and cleanliness. Most states require food businesses to provide this type of written plan as part of the licensing process.
There are several components to any food safety program, including sections for allergens, supplier safety, sanitization, consumer complaints, and environmental monitoring. You can learn more about your state’s requirements for food safety programs by contacting your state’s commerce office or website.