In this guide, we will cover the legal and practical aspects of starting an online food business. From researching food laws and obtaining necessary licenses and permits, to creating a website and marketing your products. We will provide you with the information and resources you need to successfully sell food online.
So whether you’re a seasoned chef looking to expand your business or a home cook with a passion for creating delicious meals, this guide will help you take the first steps towards selling your food online.
Step 1: Research food law and get legal license
Food laws are a set of regulations and guidelines that govern the production, distribution, and sale of food products. It is designed to protect consumers from harmful food products and ensure that food products are safe, wholesome, and accurately labeled.
What are the types of food law?
There are various types of food laws, such as federal and state laws, each with their own specific focus and responsibilities.
- At the federal level, the Food and Drug Administration (FDA) regulates the sale of food products. This includes ensuring that food products are labeled correctly and are free from contaminants. Additionally, the FDA has regulations in place for food products sold across state lines.
- At the state level, laws and regulations vary. However, most states require that food businesses be licensed and inspected. This may include obtaining a food handler’s permit, a food establishment permit, and/or a food processor’s license. Additionally, states may have specific requirements for the sale of certain types of food products, such as cottage food laws which allows the sale of certain non-potentially hazardous homemade foods.
What is a food license?
A food license is a permit issued by a government agency that allows a business to operate in the food industry. It is a legal requirement for businesses that prepare, package, serve or sell food products to the public. The license is usually granted after an inspection and review of the business’s food safety practices, to ensure that they meet the standards and regulations set by the agency.
Do you need a license to sell food online?
To legally sell food online, you will need to research and comply with both federal and state laws. This may include obtaining the necessary licenses and permits, as well as ensuring that your food products meet labeling and safety requirements. Additionally, you may need to register your business and obtain any required insurance. Apply for license on SBA website.
It’s important to note that laws and regulations can change over time, so it’s important to stay informed and up-to-date with any changes that may affect your business. Consulting with a lawyer experienced in food law can also be helpful.
Step 2: Find your niche and business model
Finding your niche and business model is an important step in creating a successful online food business. A niche is a specific market or target audience that you will cater to, and a business model is the way in which you will generate revenue from your food products.
What is a food niche and why it’s important to choose one?
A food niche refers to a specific segment of the food industry that caters to a specific group of consumers with specific dietary needs or preferences. This can include organic and non-GMO products, gluten-free options, and plant-based alternatives.
The importance of food niches lies in the fact that they provide options for individuals who may have dietary restrictions or prefer certain types of food. For example, individuals with celiac disease or gluten intolerance can find products that cater to their needs in the gluten-free niche. Similarly, those who follow a vegan or plant-based diet can find options in the plant-based niche.
What are the types of food niches? 19 examples
Food niches refer to specialized or unique segments of the food industry. Here is a list of some examples:
Kitchen-based food niches:
- Ethnic cuisine (e.g. Italian, Chinese, Mexican)
- Regional cuisine (e.g. Southern, New England)
- Specialty cuisine (e.g. vegan, gluten-free)
- Gourmet cuisine
Diet-based food niches:
- Vegetarian and vegan
Service-based food niches:
- Meal delivery
- Food truck
- Pop-up restaurant
- Fine dining
Group-based food niches:
- Senior citizens
How to choose own food niche?
Choosing your own food niche can be a great way to tap into a specific market and provide unique products or services to consumers. Here are some steps to help you choose your own food niche.
Start from food ideas for inspiration. Think about your own personal tastes and interests, and consider what kind of food products or services you could offer that would be unique or different from what’s already available.
Check food trends. Pay attention to current trends in the food industry and see if any of them align with your interests or ideas. For example, are there any popular diets or food movements that you could tap into?
Do market research. Research your target market and see what kind of food products or services are in demand. Look at what similar businesses are already out there and see what they’re doing well (or not so well). This will give you an idea of what kind of niche you should choose, and how you can differentiate yourself from your competitors.
Once you have a good understanding of the market, it’s time to validate your ideas, you can conduct a survey or focus group, reach out to potential customers, or use online tools like Google Trends, social media, and online marketplaces to gauge interest in your food niche.
(As you can see, vegan food market is still on demand. Source: Google Trends)
Finally, make sure that you have the knowledge and skills to create and market the food product or service that you have in mind.
Step 3: Determine production model
When starting a business in the food industry, one important step is to determine the production model that will be used to create and distribute your products. There are several options to choose from, including self production, manufacturing, and reselling. Each model has its own advantages and disadvantages, and it’s important to consider which one is the best fit for your business.
This model involves creating and producing the food products yourself, using your own kitchen and equipment. This can be a good option for small businesses or entrepreneurs who are just starting out, as it allows for flexibility and control over the production process. However, it can also be time-consuming and costly, and may limit the scale of your business.
This model involves outsourcing the production of your food products to a third-party manufacturer. This can be a good option for businesses that want to expand their product line or increase production, as it allows for greater efficiency and scalability. However, it also means giving up some control over the production process, and may require a larger investment upfront.
This model involves buying and reselling food products that are already produced by other companies. This can be a good option for businesses that want to focus on sales and marketing, as it allows for lower production costs and less investment in equipment and facilities. However, it also means less control over the quality and consistency of the products and may limit the uniqueness of your offering.
Ultimately, the production model you choose will depend on your goals, resources, and target market. Be sure to consider all the options and weigh the pros and cons before making a decision.
Step 4: Find ingredients suppliers
When will you have determined the production model for your food business, the next step is to find ingredients suppliers that can provide the raw materials you need to create your products. There are several options to choose from, including grocery stores, local suppliers, and warehouses. Each option has its own advantages and disadvantages, and it’s important to consider which one is the best fit for your business.
“Let’s face it: if you and I have the same capabilities, the same energy, the same staff, if the only thing that’s different between you and me is the products we can get, and I can get a better product than you, I’m going to be a better chef.”
– Thomas Keller, Chef.
Buying ingredients from a grocery store can be a convenient option for small businesses or home-based entrepreneurs, as it allows for easy access to a wide variety of products. However, it can also be more expensive than other options, and may not offer the same level of quality or consistency as a specialized supplier.
(Source: Fresh Thyme Market)
Buying ingredients from a local supplier can be a great option for businesses that want to support the local economy and ensure that their ingredients are fresh and high-quality. Local suppliers may also be more flexible and willing to work with small businesses. However, local suppliers may have limited selection and higher prices.
(Source: Adobe Stock)
Buying ingredients from a warehouse can be a cost-effective option for businesses that need to purchase large quantities of ingredients. Warehouses often offer lower prices than other options, but they may not have the same level of quality or freshness as a local supplier.
When selecting a supplier for your ingredients, it’s crucial to carefully evaluate all options and their respective advantages and disadvantages before making a choice. Whether it be a grocery store, local supplier or warehouse, take into account all the factors that can impact your decision. Make sure to conduct a proper research prior to finalizing your choice.
Step 5: Set your business location
Once you have established the production model and sourced your ingredients, the next step in starting a food business is to set up a location to sell your products. There are several options to choose from, including selling food online from home, renting a commercial space, and setting up your own facility. Each option has its own advantages and disadvantages, and it’s important to consider which one is the best fit for your business.
Sell food online from home
This option allows you to operate your business from your own home. It can be a cost-effective and flexible option, as it eliminates the need for a physical storefront. However, it may limit your ability to reach a large customer base, and may not be allowed in all areas.
(Source: Retail Insider)
Rent commercial space
This option involves renting a space in a commercial area, such as a shopping center or downtown street. This can be a great way to attract customers and increase visibility for your business. However, it can also be more expensive than other options, and may require a long-term commitment.
Another option to consider when setting up the location for your food business is using a shared commercial kitchen. A shared commercial kitchen is a facility that is available for rent by multiple food businesses, typically on an hourly or daily basis. This option can be a great way to start a food business with a lower cost and less commitment than renting or owning a facility.
Using a shared commercial kitchen allows you to use professional equipment and facilities that are already in place, which can save money and time on setting up a kitchen. It also gives you access to commercial-grade equipment, such as large ovens, industrial mixers, and walk-in coolers, that may be too expensive to purchase for a small business.
(Source: The Hankyoreh)
Additionally, working in a shared commercial kitchen can also provide an opportunity for networking with other food entrepreneurs, you may be able to share resources, ideas and strategies. This can be a great way to learn from others and gain valuable insights into the industry.
Set up your own facility
This option involves building or buying a facility specifically for your business. This can be a great way to have complete control over your business and ensure that it meets all necessary regulations. However, it can also be very costly and requires a significant investment.
Step 6: Create your brand
As soon as you established the production model, sourced ingredients, and set up a location, the next step in starting a food business is to create a brand that will help you stand out in the market and attract customers. This process involves several key elements, including setting a name, creating a logo, choosing colors, and designing packaging.
The name of your brand is one of the most important aspects of your business. It should be memorable, easy to spell, and easy to pronounce. It should also be unique and not already taken by someone else. The name should also reflect your brand’s personality and the products you offer. It’s important to conduct a thorough research to see if the name is available as domain name, social media handles and trademarks.
Create a logo
The logo is the visual representation of your brand. It should be simple, memorable, and easily recognizable. It should also be versatile enough to be used in different mediums and formats. A good logo should be able to communicate the essence of your brand in a simple and effective way. It should also be designed in such a way that it can be used in different sizes and contexts.
The colors you choose for your brand can have a big impact on how your customers perceive your business. They should be consistent with the overall design and should be able to evoke the emotions and feelings that you want your customers to associate with your brand. It’s important to research color psychology and choose colors that align with your brand’s message and values.
Packaging is the first thing that customers will see when they encounter your product. It should be eye-catching, informative, and consistent with your brand. The packaging should be able to convey the information about your product, such as ingredients, nutritional value, and contact information in an easy to read and understand manner. It should also be designed in a way that it’s easy to open, close and store. It’s important to consider the packaging material and its environmental impact, and make sure it’s food safety.
Creating a strong and consistent brand is crucial for the success of your food business. By putting thought into each of these elements, you can create a brand that resonates with your target market and helps you stand out from the competition.
Step 7: Create your offer
Once you have established your brand, the next step in starting a food business is to create an offer that will attract customers and generate revenue. This process involves several key elements, including creating an offer, pricing your offer, and using food photography.
Create an offer
Your offer is the product or service that you will be selling to your customers. It should be unique, high-quality, and aligned with your target market’s needs and preferences. Consider creating a unique selling proposition that highlights the benefits of your offer and differentiates it from your competitors.
Test and iterate: Don’t be afraid to test different versions of your offer and make changes based on feedback and results.
Keep it simple: Keep your offer simple and easy to understand. Avoid using jargon or technical terms that might be confusing to your customers.
Always be up-to-date with food regulations: Make sure your offer is in compliance with the food regulations and laws of the area where you’re operating.
Price your offer
Pricing your offer is an important step in determining the profitability of your business. It should be based on your costs, competition, and target market. It’s important to conduct market research to see what similar products are being sold for, and to make sure your price is competitive.
Food photography is an essential element in marketing your offer. It should be visually appealing, consistent with your brand, and able to convey the quality and taste of your products. It’s important to invest in good quality photography and use it on your website, social media, and other marketing materials to showcase your offer and attract customers.
Creating an effective offer and pricing it correctly is essential for the success of selling food online. By putting thought into each of these elements, you can create an offer that resonates with your target market and helps you stand out from the competition. Food photography can help to capture the essence of your food business, and make it more appealing and appetizing to potential customers.
Step 8: Build a website with an online ordering
At this point, you’re probably asking yourself: how to sell food online? The next step in selling food online is to build a website with an online ordering feature that will help you reach customers and generate sales. This process might be sounds complicated, but don’t worry, we will help you walk through the website building and get you started selling food online. Here you can find a full step-by-step guide of how to create a restaurant website.
Build yourself or hire a professional
Building a website can be a daunting task, and you have to decide whether to build it yourself or hire a professional. Building it yourself can save money, but it can also take more time and effort. Hiring a professional can be more expensive, but it can also save time and ensure that the website is of high quality.
We have prepared a table comparing costs depending on which model you choose so that you can make a decision quickly and easily.
|Total||~ $13||~ $5153|
(Source: Report from WebsiteBuilderExpert)
With UpMenu you have everything you need to start selling food online. No matter that you are a small food business that just getting started or a big company with thousands of clients. Our system is tailored to the needs of businesses that sell online food products, facilitating sales, management and marketing.
Choosing a template for your website is an important step in determining the overall design and layout. There are many pre-designed food website templates available in our library that you can use as a starting point and customize to fit your needs. It’s essential to choose a template that is visually appealing and consistent with your brand.
Once you have chosen a template, you can start designing your website. This includes adding your logo, colors, and other visual elements that are consistent with your brand. You should also think about the overall layout and user experience, and make sure it is easy to navigate and use.
Creating content for your website is an important step in attracting and engaging customers. This includes writing product descriptions, creating blog posts, and adding customer reviews. It’s important to create high-quality, informative, and engaging content that will help to convert visitors into customers.
Step 9: Create online store
Once you have built your website, the next thing to start selling food is to create an own online store and set it up to sell your products. In below instructions, we will show you how easy and fast you can make it with UpMenu online ordering system. Read also our step-by-step guide how to set up online ordering system.
In order to sell your products and reach customers, you have to add your products to make them available for purchase. This includes adding product images, descriptions, and pricing information. It’s important to make sure that your offer is clearly presented and easy to find in your online store.
Provide business details
Providing business details in your online store is a necessary step in building trust with your customers. Add your business name, address, phone number, and email address. It’s also important to include information about your business hours and any other relevant details.
Setup payment methods
To enable customers to make purchases, you need to set up secure payment methods in your online store. This includes adding online payments, that you can easily set up with built-in Stripe integration in our system.
Having a functional online store is essential for the success of own food business. By putting thought into each of these elements, you can create an online store that is easy to use, and that helps you reach customers and generate sales.
Step 10: Setup shipping
Shipping and delivery are an important part of any businesses that selling food. By putting thought into each of these elements, you can create a shipping strategy that ensures that your customers receive their orders in a timely manner, and that you can handle your shipping and delivery needs efficiently.
Setup delivery zones
To ensure that your customers receive their orders in a timely manner, it’s necessary to set up clear delivery zones for your business. This includes determining the areas that you can realistically deliver to, and any additional costs that may be associated with delivery outside those zones. By setting clear delivery zones, you can ensure that your customers know when they can expect their orders and avoid any confusion.
Pickup or delivery
As a food business, you have to decide whether to offer pickup or delivery service, or both. Pickup service can be more economical, but delivery service can provide more convenience for customers. Consider your target market and their preferences when making this decision.
Self delivery or external courier service
Decide whether to handle delivery in-house or outsource it to an external courier service. Self-delivery can help you to have more control over the delivery process and build customer relationships, but it can also be more time-consuming and costly. External courier services can be more efficient, but it can also be more expensive and less personal.
If you don’t want to deliver yourself, use recommended external couriers such as:
- Jelp Delivery
Step 11: Promote your online food businessMarketing your online food business is crucial for reaching new customers and driving sales. In order to effectively promote your business, you will need to utilize a variety of marketing strategies, such as social media, offline marketing, paid advertising, and more. Each of these methods can help you to reach a specific audience and achieve your marketing goals.
Social MediaIt’s a powerful tool for reaching customers and promoting your business. Platforms such as Facebook, Instagram, and Twitter can be used to connect with customers, share information about your products, and build a community around your brand. It’s important to choose the platforms that are most relevant to your target market and to create a consistent and engaging presence.
Offline marketingThis can also be an effective way to reach customers and promote your business. It includes methods such as flyers, brochures, and business cards. It’s important to choose methods that are most relevant to your target market and to make sure that your marketing materials are consistent with your brand.
Paid advertisingPaid advertising can be a quick and efficient way to reach customers and promote your business. Platforms such as Google Ads and Facebook Ads can be used to target specific audiences and to promote your products and services. However, you should know that this type of advertising is one of the most expensive. If you’re just starting out, try other marketing methods.
Other marketing examples
- Email marketing
- Influencer marketing
- Content marketing
- Good reviews on Google and Yelp
- Asking for recommendations
- Marketplaces (Amazon, DoorDash etc.)
Key Takeaways to start selling food online
- Understand the regulations and requirements for selling food online in your area.
- Create a visually appealing and easy to navigate website or online store.
- Establish relationships with local suppliers to ensure a steady supply of fresh ingredients.
- Use social media and other online platforms to market your business and reach potential customers.
- Offer convenient payment options and fast, reliable delivery or pickup options.
- Continuously gather customer feedback and use it to improve your offerings and services.
- Be aware of the competition and strive to differentiate your business with unique selling points.