Deliver Your Food Worldwide with our 7 Step Guide to Selling Food Online
It’s 2020, and the global food industry is estimated to be worth a whopping $12.24 trillion. Whether it’s joining your local wine club for a monthly batch of free samples, or getting all the ingredients for that perfect vegan meal sent straight to your door, it seems as though everyone’s in on the action. Isn’t it about time you got a piece of the pie?
Well, now you can! Have you tried MealsHub ? Its an online platform to buy and sell online food from a restaurant, cloud kitchen or Home made food.
Thanks to global marketplaces and ecommerce platforms, it’s now easier than ever to start selling food online. Our guide will walk you through everything from international food regulations, to choosing your perfect platform, and marketing your products.
By the end, you won’t just have a clear idea about how to sell food online – you’ll be able to put what you’ve learnt into practice, and create your very own online store.
So, now the entrée is out the way, let’s dig into the main course and find out how to make your dream a reality.
Further information
- 1Know The Law
- 2Find Your Niche
- 3Source Your Supplier
- 4Create Your Brand, Packaging and Labelling
- 5Price Your Products
- 6Create Your Online Store
- 7Market Your Products
- How to Sell Food Online: Summary
- How to Sell Food Online: FAQs
Know The Law
The first thing to know about food law is that regulations vary depending on where you’re from. Rules in the U.S are different from those in the E.U, for example.
If you live in the U.S, you’ll need to follow what’s known as the Cottage Food Laws. Again, these can differ slightly from state-to-state, but we’re going to run through some of the essentials you’ll need to be aware of, wherever you’re from.
To get legal approval, you’ll need a few things:
- An annual kitchen inspection conducted by the health department
- A zoning clearance/permit from the department of agriculture or health
- A valid state business license
- Proof your store meets sanitary regulations for all food storage spaces, cold and dry
- No pets in the kitchen, or in the house if it’s a home kitchen
Whether you decide to cook in your home kitchen or in a commercial kitchen, you’ll need to familiarize yourself with the local regulations that you’re expected to follow. If you decide to sell food online through a supplier (rather than handling the food yourself), you’ll need to research the supply chain to make sure your ingredients are up to standard.
Regardless of your plan, know that federal, state, and local authorities are here to help you! It’s their job to know the laws inside and out, so they’re a great resource to consult. Jennifer Irvine of the meal delivery service Balance Box explains how her business has made the most of these resources:
“When I first started, I was working from my home kitchen. But as the business has grown, we’ve moved to a commercial kitchen. In terms of the legal question, the first thing we did was call the Environmental Health Office and invite them to come in and see us, and advise us on what we needed to do – and they were brilliant.”
Of course, the requirements we’ve listed here are the minimum needed to run your food business. We’d be here all day if we listed everything, but we would recommend having a proper read of the Cottage Food Laws website for more details, and to find information on your specific state.
If you live in the E.U, there are separate rules and regulations you need to abide by. For more info on those, head over to the European Commission of Food Law General Principles.
Things to do before moving on to the next step:
- Read up on your national and local state laws
- Obtain the correct licenses needed to run your food store
- Undergo some form of food handling training
Find Your Niche
Some of you may already sell food in person. Others may just be set on a killer idea. But if you’re yet to nail your niche, allow us to help.
A good place to start is by researching food trends. Waste reduction is a hot topic at the moment, so advertising that you cook with misshapen fruit or veg could be a nice angle, for example.
Next, you need to know where you sit in a crowded market. Are you an affordable, everyday brand? Or a gourmet luxury? Is your focus clean-eating health? Or indulgent treats?
All of this will play into how you brand and advertise yourself. Everything from picking a company color palette to understanding what text and logo design to use will hinge on how you want your products to be seen.
After that, you need to set a budget and some expectations. How much can you afford to spend monthly? Are you planning on selling locally, nationally, or worldwide? Where do you see your business in three to five years time?
The answers to these questions will help you know how much money to invest in things like your online store, marketing, and ingredients – which ultimately dictate the prices you charge customers.
Finally, ask yourself – what are you bringing to the table? To stand out, you’ll need a USP (Unique Selling Point). Here’s an example.
JK Gourmet nailed its niche by producing grain-free products targeted at people who need help managing ulcerative colitis – a condition which affects 1.6 million Americans. Head of the business Jodi told Shopify:
“We’ve carved out our niche with grain-free products, which ensures we’re gluten-free as well. We also address the needs of the growing paleo community, and because we have always eliminated the use of refined sugar and artificial sweeteners, we’re appealing to a wider audience than ever before.”
Things to do before moving on to the next step:
- Research national and local food trends to find a gap in the market
- Decide where you want to position yourself in the market, and brand appropriately
- Come up with a USP to show customers why they should buy your products
Source Your Supplier
Whether cooking your own food or buying pre-made goods to sell, you’ll need to find a supplier. The tricky thing is knowing which ones are credible.
Using sites such as Food Master can help you source suppliers that specialize in the ingredients you need. Once you’ve drawn up a list, you’ll want to check for certificates, and can even ask for references.
This is all very common, so don’t be afraid to ask a supplier about its credentials. Remember, anything supplied to you will directly represent your company. If the supplier says its produce is organic, don’t just take that as gospel – look into it.
Top tip: A lot of small businesses start off by using Costco. It’s a reliable, well-known brand, and a trustworthy supplier.
Things to do before moving on to the next step:
- Spend some time finding a supplier that delivers what you need (ingredients or pre-made goods)
- Check that the supplier is reputable and has the legitimate credentials
Create Your Brand, Packaging and Labelling
At this point, you should have a clear idea of what food you want to sell and how you’re going to produce it. You’ll have also given some thought to your branding. Now, it’s time to put your decisions into practice.
Business Name
A business name should be three things: memorable, relevant, and easy to spell.
Sure, ‘Mary’s cupcakes’ is relevant and easy to spell, but will it stick in people’s minds?
Try and get creative. Think outside the box, and ask others for their opinions. If you’re planning on selling internationally, you’ll also want to make sure the name isn’t misrepresented or lost in translation.
Brand Colors
A color isn’t just a shade – it’s an emotion. The colors you choose make people feel certain ways. You can be bold and inspiring, heated and passionate, or cool and innovative, all through the colors you decide on.
When it comes to psychology, food companies tend to go for bright colors. They’re exciting, clear, and can encourage impulse purchases. Yellows, reds and oranges are all associated with indulgent food, while greens and blues typically express health and vitality.
Product Imagery
Your product images are a customer’s first point of contact with your food – and first impressions count!
Unless you fancy yourself as a skilled photographer, we’d recommend paying for professional product imagery. This can help make your food jump off your web page and into a customer’s cart.
Further reading
- How to choose a good color scheme for your website – Learn about the psychology of color, and how to choose colors that work well together.
- How to take product photos – These top tips could make all the difference to your sales.
Packing Regulations
This is an important one. By U.S law, your packaging must contain the following information:
- A full list of all the ingredients used in the product
- The quantity or amount within the package
- The weight of the product
- Your company name and any supplier you used
- ‘Used by’ / ‘best before’ dates
This should not only be on all your packaging, but in your online product descriptions too. It’s also good to include nutritional information as well, so people have an idea of the health benefits/concerns that come with your food.
Things to do before moving on to the next step:
- Invent a company name
- Choose your brand colors and font style
- Take (or pay for) high-quality product images
- Have all the legal information required on your packaging
Price Your Products
It’s all very well creating a cool brand with a great USP, behind which sits some tasty delights – but as the old saying goes, ‘money talks.’
However good your products are, you still need to know how to price them. Under- or over-valuing your food in the long-term could see your business tank. So, how can you work out the right price?
Well, Shopify has a brilliant step-by-step guide that helps you work this out, which we’ll give you a brief overview of below.
Calculate Your Variable Costs
First off, you need to know how much your food is costing to produce and sell. Things like the cost of ingredients, packaging, and shipping all need to be taken into account.
If you sell soups, for example, add up all the variable costs involved and find out how much you’re actually paying per carton.
Create a Profit Margin
Next, you need to know how much of a profit you want to turn. To do this, think of the amount of profit you wish to generate (e.g. 15% profit).
Once you have a percentage in mind, you need to turn it into a decimal. This is simply done by dividing it by 100 (e.g. 15 / 100 = 0.15).
Now you have a figure for your variable costs, and a decimal number representing profit margin. From here, calculate how much you should charge per product. This can get a little maths-y, but don’t worry – just follow Shopify’s simple equation, shown below:
Target Price = (Variable cost per product) / (1 – your desired profit margin as a decimal)
Factor in Fixed Costs
Other costs to consider are things like rental space for food preparation, cooking equipment, storage rental, insurance, licencing fees, and employee wages. All of these need to be factored in to ensure your business at leasts breaks even.
Top tip: Shopify’s break-even calculator can help you with this.
Trial and Change Where Necessary
You may find you hit the nail on the head first time around. Chances are, though, you’ll need to test your target prices and review them every month or so. It may take a little time to get right, but once you’ve found your position in the market, you’ll be on the right path.
Things to do before moving on to the next step:
- Work out your variable and fixed costs per product
- Decide on a profit margin
- Calculate the price of your products
Create Your Online Store
It’s the moment you’ve been waiting for… time to put your plan into action!
There are three effective plans for selling food from home. You can take advantage of online marketplaces (think Amazon or Etsy), create your own ecommerce website (with platforms like Shopify or BigCommerce), or sell curated products through a supplier.
Below, we’ll run through your three options, weigh up the pros and cons of each, and explain who they’re best suited to.
Selling Food Online Through Marketplaces
Pros and Cons
| Pros | Cons |
|---|---|
| Selling through a platform that attracts a global audienceNot responsible for managing your own websiteEasy setup process and automation | No creative control over how your products are displayedLess credible than having your own websiteAmazon will prioritize its own products over yours |
Online marketplaces, such as Amazon and Etsy, are established ecommerce websites where you can create an account and list your products for sale. Online marketplaces are best for those who want to start selling quickly, because there’s no website setup or personalization involved. And since you won’t be building a website from scratch, you won’t need to worry about driving traffic to an online marketplace – the audience will already be there.
That said, if you’re interested in selling food from home with an online marketplace, you’ll have to compete with all of the other sellers on the platform to attract buyers’ attention. This is easier said than done, especially when some marketplaces promote certain products over others. You’ll also need to be willing to sacrifice a little personality when using an online marketplace. If branding and flair matter to you, you won’t want to take this particular route.
If you decide to go for the convenience of an online marketplace, you’ll be selling on a website that’s not your own – so you’ll need to study that particular website’s regulations. Of course, these regulations demand the basics that you’ll need to have covered anyway, like legal documentation, licencing, and proper packaging.
But each marketplace also has its own specific standards. For example, Amazon requires the following performance targets from its sellers:
- Having an order defect rate of less than 1%
- Having a pre-fulfillment cancellation rate of less than 2.5%
- Having a late shipping rate of less than 4%
It’s best to study each online marketplace’s requirements before choosing the right platform for your business.
Selling Food Online Through an Ecommerce Website Builder
Pros and Cons
| Pros | Cons |
|---|---|
| You’re in total control of the way your products are seen and displayedThere’s help and support available to assist you with any issues you’re havingYou look more credible, and it’s easier to advertise | You have to attract shoppers to your siteYou’ll need to spend a little time designing your own online storeYou’ll be responsible for maintaining/updating the site’s layout |
Ecommerce website builders, such as Shopify and BigCommerce, allow you to create your very own ecommerce store, with no technical skills needed – you simply choose a website template, customize it, and start selling. Whether you’re selling baked goods from home or creating the world’s best keto meal plan, there will be tons of templates that fit your style.
These tools are designed for everyday sellers who don’t have tons of time, money, or digital expertise. Ecommerce website builders are best for those who want to give shoppers the full experience, from a beautifully branded website to a personalized checkout process, and who don’t want to deal with third party regulations.
These platforms help you create a customized, branded home for your products. The challenge of ecommerce website builders is attracting shoppers to your site in the first place – which is why we’ve written a website promotion guide to help. And once the shoppers do start coming, you won’t have to compete with any other sellers the way you would with an online marketplace.
If you decide to use an ecommerce website builder, you’ll have no shortage of options to choose from. For more information, you can check out our ranking of the best ecommerce platforms – or take a look at this quick summary of the top three providers:
4.7out of 5TOP CHOICESales Features
4.7 out of 5 starsWebsite Features
4.1 out of 5 starsEase Of Use
4 out of 5 starsDesign Flexibility
3.7 out of 5 starsValue For Money
3.5 out of 5 starsHelp and Support
4.1 out of 5 starsVisit SiteRead Full Review
4.7out of 5Sales Features
4.3 out of 5 starsWebsite Features
4.4 out of 5 starsEase Of Use
3.6 out of 5 starsDesign Flexibility
4 out of 5 starsValue For Money
4.5 out of 5 starsHelp and Support
4.7 out of 5 starsVisit SiteRead Full Review
4.2out of 5Sales Features
4.5 out of 5 starsWebsite Features
4.1 out of 5 starsEase Of Use
3.3 out of 5 starsDesign Flexibility
3.2 out of 5 starsValue For Money
3.7 out of 5 starsHelp and Support
3.2 out of 5 starsVisit SiteRead Full ReviewHeads Up! BigCommerce is currently offering up to three months free (in partnership with Paypal) when you sign up to a paid plan – no card details required. That’s one very generous free trial!
When it comes to payments and shipping, every platform will use different payment gateways. They all tend to use the big ones, though: think PayPal, Apple Pay, Stripe, and Square. Shopify even has its own payment gateway.
Once you’ve selected which payment methods you want to accept, you can tackle shipping. Again, these platforms have set couriers you can use: FedEx, DHL etc. You’ll have to look into which couriers can ship food first, though, as the FDA (Food and Drug Agency) has set regulations around things like speed and temperature.
Selling Food Online Through Suppliers
Pros and Cons
| Pros | Cons |
|---|---|
| You won’t have to manage a large inventory of (potentially perishable) food items by yourselfYou won’t have to do the packaging and shipping yourself | You still have to own up to any customer complaints, even if you’re not physically in charge of the process – so you’ll need to choose your suppliers carefully!Because this is a convenient way to start selling, there’s a lot of competition out there |
Selling food online through a supplier means that you, the retailer, don’t have to store or handle any of the actual food products. Instead, you’ll either use an online marketplace or an ecommerce website builder to create a space where you’ll take orders and communicate with customers. Then, you’ll alert your suppliers to each new order, and the suppliers will ship the products to each customer. Essentially, you’re running the show, without getting your hands dirty. Another word for this model is dropshipping.
Starting a dropshipping business is best for those who want a low-risk way to try selling food online. Dropshipping through a supplier means that you won’t have to worry about keeping inventory fresh, which is a major concern for anyone selling products in their home kitchen or a commercial kitchen.
This supplier model lets you spend more time on branding, customization, and customer service. It’s important to note that customer service is especially important with dropshipping – since you’re using third party suppliers as a go-between for you and your customers, you’ll want to make sure you’re always available as a point of communication and clarification.
Things to do before moving on to the next step:
- Decide how you’d like to sell your food online
- Sign up to a reputable marketplace or ecommerce website builder
- Upload your products, design your website, and sort out shipping and payments
- Start selling!
Market Your Products
Building up a relationship with your customers is one of the pillars of ecommerce success. Marketing is a fantastic way of not only getting your products into the public eye, but building a rapport with shoppers and making them feel like they’re part of your business’ vision.
There are many ways to get your message out there – too many for one section in an article, anyway – so we’re going to focus on some of the most impactful things you can do.
SEO
SEO (Search Engine Optimization) is the process of getting your site to appear on search engines, like Google and Bing. Google currently has over 200 ways of deciding how highly websites rank in its search results, but here are a few key points to be aware of:
- Keywords – You need to make sure the content around your products is related to what you’re selling. If you’re a Manhattan-based bagel company, you’re going to want phrases like ‘New York bagels’ in your product descriptions so it’s easy for Google to tell what your web page is about.
- Metadata – This is the text that appears in the search results. It needs to be an optimum length, include keywords, and entice the reader into clicking on your link.
- Backlinking – A way of showing Google your food is popular and well-respected. Other websites linking to yours is looked upon highly, kind of like a recommendation.
- Mobile Responsiveness – One thing search engines hate is sites that don’t work properly on mobile and tablet devices. Fortunately, all the ecommerce platforms we listed above are automatically fully mobile responsive, so it’s not something you need to worry about.
Social Media
Having a strong social following only adds to your company’s credibility. It’s also a way of interacting with your customers, and giving them a point of contact. If you include social sharing buttons on your website (which you can do with any of our recommended platforms), then shoppers can also share your food with their followers – it’s literally free advertising!
Shopify and BigCommerce take things a step further, actually allowing you to sell directly on social media and marketplaces. Whether it’s Facebook or Instagram, Amazon or Etsy, you can use your website as a hub while also tapping into other online markets.
Email Marketing
Ecommerce website builders have their own, built-in email marketing. You can fill in pre-designed email templates with your latest deals and offerings, before sending them off to all your subscribers.
Whether it’s tasty, free samples of strawberries or buy one get one free on donuts, email marketing is a surefire way to pique a customer’s interest and keep them coming back to your store.
Selling at Food Markets/Festivals
With all these fancy online ways to market your business, it’s easy to forget about good old-fashioned word of mouth. Get out there and advertise your food in person at local markets and festivals. After all, the best way to advertise your food has to be through letting others taste it, right?
Food markets and festivals also offer a great opportunity to test out new products and flavors. If you’re wondering whether a new product idea is worth launching, there’s no better place than a festival to gather as many unbiased opinions as possible. You can offer free samples of your latest creation, and even ask visitors to rate what they’ve tried on a scale of 1-5. Market research has never been more delicious!
Things to do before moving on to the next step:
- Develop a marketing strategy
- Optimize your online store for search engines
- Don’t limit yourself to a single website or marketplace – make use of social media
- Reach out via email or in person and interact with your customers
How to Sell Food Online: Summary
The food industry is booming like never before. There’s always a reason to put off getting online, but if food is the focus of your business, then there’s no time like the present.
By following our comprehensive, seven-step guide to selling food online, you’ll be able to turn your dream into a reality. To recap, here are those seven steps again.
7 Steps to Selling Food Online
- Know the law
- Find your niche
- Source your supplier
- Create your brand, packaging, and labeling
- Price your products
- Create your online store
- Market your products
These steps are not only the ingredients for getting your food business online, but also your recipe for success.
Unlike many of you, we won’t sugarcoat it – you will have to invest time into getting your online business up-and-running. Just like whipping up a soufflé, you can’t just rush your way through it – the proof will always be in the pudding.
Follow our steps, take a measured approach, and watch your very own online food business come to life. Trust us, few things will taste sweeter.
How to Sell Food Online: FAQs
Do I need a license to sell homemade food?
Unless you’re just baking cakes for the office charity fundraiser, the answer is yes. The commercial sale of any homemade foods will require a valid state business license. In order to obtain one, you’ll need to pass a health inspection by meeting your local health regulation standards.
How much is a business license?
Many things impact the value of a business license, with things like location and number of employees factoring into the overall cost. Generally speaking, this can be anything from $25 to $7,000. Most food startups or small businesses, though, will pay between $50 and $200.
What is the benefit of having your own food website?
First and foremost, you’re in total control of the display and advertising of your food. Using ecommerce website builders can also be of massive benefit as it makes website creation available to anyone. You can even sell across different channels, such as marketplaces and social media.
How much do ecommerce website builders cost?
All ecommerce website builders will offer a variety of different pricing plans. These range from totally free to bespoke quotes. Small food businesses can expect to pay a monthly fee of around $20 to $80. That covers the design, hosting, and security of your website, plus loads more.