If you’re passionate about food, a sweet way to pursue your passion is learning how to sell food online. You can sell everything from pickles, kombucha, cookies, candies, homemade spice rubs, sauces, and so much more.
Like any food business, you’ll need to pay attention to local food regulations, but technology has made it easier than ever to start an online food business. You can leverage social media, build your website on user-friendly platforms, and get in touch with other business owners.
This guide covers the essentials for starting a food business online. Let’s get into it so you can start making some dough!
1. Know your local laws
Before you do anything, it’s important to start by researching the laws in your state regarding selling foods online or from home. You will want to look into cottage food laws, and these vary state-by-state, plus municipalities can add their own regulations to the law.
Most states have basic requirements like:
- Kitchen inspections
- Permit or zoning clearance from the department of health or agriculture
- State business license
- No pets in the house, or in the kitchen if it’s a home kitchen
However, it depends on where you live. For example, I live in Texas, and there are very minimal requirements. Texas doesn’t require permits, licenses, or inspections to start a cottage food business.
You’ll stay in good standing if you know and follow the laws in your state and municipality. Understanding all of the laws can feel overwhelming at first, but don’t hesitate to reach out to local commerce offices for help — that’s what they’re there for!
2. Decide on a niche
Whether you want to learn how to sell food online or start a blog, everyone needs a niche. Of course, you can branch out some once you’ve established your business, but leaning into a specific niche can help you stand out.
Do you want to sell candy, fancy iced cookies, pickles, pies, etc? You can take any of those ideas (and more) and put your own spin on the concept. For example, what about a pickle business using your grandma’s state fair winning recipe? Or fancy iced cookies that also happened to be vegan?
Here are some tips for finding a niche for your food business:
- Pay attention to food trends: This can give you an idea of what’s played out and what’s going to be hot.
- Do some market research: Research will be a huge part of your start. Check out whether or not the market is saturated, are their supply chain issues, if shipping is a problem for your niche, and so on.
- Most profitable niches: Some of the most profitable niches are baked goods, baby foods, jams and jellies, sauces, pre-packaged snacks, meal kits, and organic foods.
3. Find suppliers
You need to have a steady supply of raw materials and ingredients to keep your business running smoothly. So once you have an idea of the kind of food you want to sell online, you’ll need to start sourcing ingredients.
FoodMaster is a website that can help you source suppliers that specialize in the different ingredients you’ll need. Draw up a list of suppliers and begin to check for credentials and references to make sure they’re credible.
Many small food businesses start with Costco because it is reliable and trustworthy.
Besides the ingredients you’ll use to make the food, don’t forget about packaging! Think about the kinds of paper or plastic products you might need, like bags, envelopes, wrappers, etc.
4. Food production
Starting a food business means you’ve got to decide what you’ll do for production, and you have a few options:
Producing food at home
This is where many new food businesses begin, and remember that some states and municipalities have restrictions for home kitchens.
Shared commercial kitchens
Some restaurants might be up for renting out space as a commissary kitchen. The benefit is that you get to produce food in a commercial kitchen that’s already been registered, and it can be a massive help if you don’t have a lot of space at home. The downside is the additional cost.
Work with an existing manufacturer
Here’s an option for anyone who wants to learn how to sell food online but wants something much more hands-off. You can find local and nationwide companies with a quick Google search.
Set up your own commercial kitchen
Not the route most newbies will go, but it’s still worth mentioning. You’ll have full autonomy in your own commercial kitchen, and there’s the possibility of passive income renting your space out as a commissary. However, this is a considerably more expensive option.
5. Branding and packaging
Product design and packaging is an incredibly important part of starting an online food business because it gives customers a taste of your products without actually tasting them.
Things like photography, package design, website, product pages, and copy — these all need to work together and tell a story that lets your customers imagine what your products taste like.
Branding is your identity, and you need to create a cohesive and clear message. You’re telling potential customers why they should take a chance and give your food a try.
As you’re working on your brand image, there are obvious needs like packaging and logo, but don’t forget about promotional materials. Do you want stickers, business cards, or signage? Even though you’re starting a food business online, you may want to do some pop-up events at local farmer’s markets to get the word out — what will you need for in-person events?
Canva is an easy-to-use design platform that you can use to create logos and promotional materials for yourself. Or you can hire a freelancer through a platform like Fiverr or Upwork.
Another consideration is labeling requirements, and each country has its own set of requirements. These may include:
- Allergen warnings
- Best-before-dates
- Nutritional information
- Country of origin
And if you plan on shipping out of the country, make sure you know the destination country’s requirements.
You can check out the FDA Food Labeling Guide for more information on U.S. guidelines.
6. Pricing your foods
Not going to sugarcoat it — pricing is hard. There’s not a super simple formula or one-size-fits-all approach and that’s because there are so many different ways to start an online food business.
Here are some questions to help you approach pricing:
- Does this price cover my labor costs and overhead expenses? Does it also leave room for markup?
- Am I getting to the point where my wholesale price leaves room for profit?
- Does my pricing offer more value than its cost?
- Are my prices competitive with others in my niche?
- Will this price help me achieve long-term profit?
Seasoned veterans will tell you this: know your costs, and keep adjusting your prices until you get it right.
There’s a good chance that you won’t get the costs right on the first try — even an adjustment of a dollar or two can have a big impact — so don’t hesitate to mix things up and find what works for you.
7. Market your business
Here’s where you get to put your plan into action. It’s time to build a website and establish yourself on social media, so you can get your name out there.
Let’s walk through it all:
Build a website
There’s no shortage of website-building platforms, but I strongly recommend Shopify because it has robust ecommerce capabilities. My Shopify guide will help you get started.
Etsy is another option if you want a quick set up, but there are no real options for customization. However, Etsy could be a good way to test the market.
One of the reasons I recommend creating your website for online selling is that you can easily start an email list. Email marketing is highly effective, and it’s how you’ll let people know about new products, sales, and updates.
Get started on social media
Facebook, Instagram, TikTok, etc. — find out where your target customers are and start there. Social media is a great way to engage your customers and get them excited about the start of your food business.
Here are some strategies to leverage social media:
- Host a giveaway or contest
- Use videos and photos to take users behind-the-scenes
- Follow other accounts in your niche
- Engage your followers by asking questions
- Create content around trending topics
- Use social media to drive email sign-ups
- Spotlight your vendors
- Be direct, and tell customers how to support you
Host local in-person events
Just because you’re selling food online doesn’t mean you can’t attend local festivals and farmer’s markets. You may even want to sell your products in a few select stores. You can start to get your name out there and establish a customer base, while focusing on a broader audience online.
How to sell food online – the final word
Starting an online food business is a great way to make extra money or start an entirely new career. In addition, the flexibility of running an online business means you may be able to start on the side of your day job and build a sweet business of your own.
The key ingredients for success are paying attention to your costs and listening to customer feedback. Take your time, do your research, and the proof will be in the pudding!
FAQs
Selling food without a license depends on your location because the laws vary by state and municipality. You can research local cottage food laws or contact your state’s revenue or commerce office.
There’s a good chance you will only need an EIN (employer identification number) and business license to get started.
You can sell almost any kind of food you can think of, as long as you follow local and state guidelines. Some people make extra money selling cookies or dog treats that they cook in their homes and sell online.
Most places allow you to make food at home and sell it, but you’ll want to research your local and state guidelines to find out the requirements for starting a food business at home.
The most cost-effective approach is to start making food out of your house and selling online. Things like baked goods, jams and jellies, and baking mixes are all relatively inexpensive to start with.
If you’re looking for a larger food business, food trucks are an affordable alternative to opening a restaurant. You can also research to see if there are restaurant incubator spaces in your city.
1. Know your local laws: See what regulations you need to follow in your city and state regarding the kinds of foods you can sell and what you need to set up your kitchen.
2. Decide on a niche: Determine what type of food product you’re going to sell and what will make it stand out.
3. Find suppliers: You’ll want to find reliable and reputable suppliers for ingredients and packaging.
4. Start producing your products: Decide if you’re going to prepare your food in a home kitchen, commissary, or set up your own commercial kitchen.
5. Branding and packaging: You’ll need a logo, marketing and promotional materials, packaging, and so on.
6. Price your foods: There’s no one-size-fits-all pricing model, but the goal is to pay attention to your costs and adjust your price over time.
7. Market your business: Your food business needs a website and social media presence, but you can also get the word out doing some local, in-person events.
About Millennial Money Man
Bobby Hoyt is a former band director who paid off $40,000 of student loan debt in 18 months on his teaching salary and then left his job to run Millennial Money Man full-time. He helps other Millennials earn more through side hustles, save more through budgeting tools and apps, and pay off debt. He is a personal finance expert who has been seen on Forbes, Reuters, MarketWatch, CNBC, International Business Times, Business Insider, US News, Yahoo Finance, and many other personal finance and entrepreneurship media outlets.
