How to Optimize Your Ecommerce Value Proposition
By Tom Wintaugh
Online food merchants can thrive by being organized, agile, and creative.
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Changing customer habits have added new challenges and opportunities for food and beverage business to sell food products online. Whether it’s monthly snacks or custom baked goods, consumers are increasingly looking to the internet for their food and grocery needs. In the US alone, ecommerce sales of food and beverages are expected to reach $38 billion by 2023.
Shifting to a digital food and beverage sales model comes with certain considerations. Many shoppers are not accustomed to buying food products online without seeing them in person first. Sellers also need to navigate food safety, expiration, logistics and delivery issues. These challenges are further compounded by restraints caused by the ongoing coronavirus pandemic.
Despite this, food and beverage merchants can thrive by being organized, agile, and creative. In this article, we dig into how to sell food online and discuss what you need to succeed.
Selling food products and beverages online gives you the opportunity to stand out in a growing market. Your business needs to prioritize three things:
Whether you are cooking your own food or buying pre-made goods to sell, you’ll need to find a supplier as a food merchant. The key is finding a credible and reliable supplier that specializes in the ingredients. You’ll also want to ask for certificates and references. This will ensure you find a reputable supplier, as the ingredients they supply to you will represent your company, your brand image, and your offerings.
Food safety should be a top priority when selling food products online. You’ll need to comply with laws that govern how you make, package, and sell your products online. Depending on what you sell and where you manufacture your products, you may be required to register with the Food and Drug Administration and adhere to your state’s Cottage Food regulations (if you’re using a home kitchen instead of a licensed commercial kitchen).
In addition, you’ll need to get your permits in order, which can include a business license, food handler’s permit, and/or a food establishment permit. If you don’t plan to manufacture your food, you’ll also need to look for reputable suppliers to ensure safety and quality of ingredients.
To comply with regulations, you’ll need to conduct research on the following:
When purchasing food products online, customers expect to receive their orders quickly. The fragility and shelf life of your product(s) need to be taken into account when these orders are being shipped. This means you need to have in place a solid fulfillment process or a reliable shipping partner who can get your products safely to customers. Consider the distance between your facility and where you intend to ship when offering delivery options and advertising shipping speeds.
With the current strain on delivery and supply chains due to COVID-19, online food sellers need to be transparent with delivery times. This will help increase customer loyalty and generate repeat business—two success factors for food ecommerce brands.
There are different categories of food that you can sell that will also impact the shipping, including:
When shipping perishables, you need to protect your products from physical damage, contaminants, and unsafe temperatures. In addition to durable and smart packaging, you’ll need to meet labelling requirements including disclosing all ingredients and mentioning your preparation process. This is important for building customer trust.
If you’re producing your own food, you’ll need to familiarize yourself with the local regulations that you’re expected to follow as well as the type of kitchens you can use that will impact your product and supply chain. You’ll want to research different types of kitchen settings including:
There are different categories of food that you can sell. To build your brand, determine your sourcing process, and connect with the right customers, you’ll need to pick a category. Some examples include:
The model you choose for selling food online will impact how you build your business. If you’re selling retail only, you could create a spectacular brand experience and build a following of loyal end customers of your products. On the other hand, you could sell wholesale to other retailers and secure retail partnerships. Other retailers can become a powerful distribution channel for your products. In either model, you’ll want to ensure you provide both the quality ingredients and the customer service.
Good branding can be an online food merchant’s secret ingredient. Because online shoppers can’t sample your products in person, a compelling brand allows you to communicate your products’ value and story. You’ll need to determine your niche. What can customers get from you that they can’t get from other sellers? Do you provide affordable prices, gourmet offerings, or diet-friendly meals? With COVID-19 still impacting the market, you may consider developing a brand around providing in-demand items like snacks and frozen foods.
When selling food online, it’s all about the presentation. High-quality photography and detailed descriptions are essential, but sellers can take it a step further with videos, customization options, and eye-catching merchandising tools. You’ll want to show off the details and ingredients of your products and offer a well-designed site that brings it all together.
Whether you’re launching a new online food brand or you have an established business, marketing is going to play an important role in your success. Selling food online requires you to build an avid following of foodies and appeal to their cravings.
Social media platforms like Facebook, Instagram, YouTube are great for sharing appetizing images, videos and encouraging product discovery.
When it comes to food, first impressions count. Make sure you have eye-catching, quality imagery that shows off your products.
You can use email marketing to send hyper-relevant content like ingredient spotlights, holiday items, and limited promotions that drive shopper action.
Online marketing is effective, but so is good, old-fashioned word of mouth. Considering advertising your food at local markets, festivals, and pop-up events.
Find influencers that align with the type of food you sell and work with them to create content that extends your reach and attracts a relevant audience.
Pricing is vital to successfully selling food online. You want to maintain profit margins, while avoiding the image of low quality or too high pricing that alienates your audience. The right balance will determine the success of your business.
Inform your pricing by conducting research on your industry and looking at prices set by your competitors. If you want to market the value or uniqueness of your products, you may also consider pricing your items at a higher margin. The margins will also depend on the type of food you’re selling—some items give you more room to charge a premium.
Expiration dates are not only important for food safety and quality, but also for building trust with your customers. Ensure you are getting ingredients with a decent shelf life, so that your business is not shipping out foods nearing an expiration date. Inventory management can help you manage the freshness of your inventory.
Another way to elevate your food business by selling related products that you can upsell to customers. There are additional goods that you can offer through ecommerce and turn your site into a sales driver, including:
Recipes, cook books, and nutrition guides can invite readers to engage further with your brand.
You could also put your branding on merchandise like t-shirts, shoes, accessories, and kitchen supplies and sell these products to enthusiastic customers.
Once you figure out your branding, supply, and fulfillment, you’ll need to make sure your ecommerce platform is capable of adapting to your needs and scaling over time. Find out what ecommerce solutions you need for selling food online and making your website stand out.
This blog was originally published on August 28, 2020 and updated on October 29, 2021.
Miva offers a flexible and adaptable ecommerce platform that evolves with businesses and allows them to drive sales, maximize average order value, cut overhead costs, and increase revenue. Miva has been helping businesses realize their ecommerce potential for over 20 years and empowering retail, wholesale, and direct-to-consumer sellers across all industries to transform their business through ecommerce.