How to Start a Food Business Online?

. 8 min read
How to Start a Food Business Online?

Opening a food business online has become one of the most trending online business ideas India will ever see. With unscaled advancement in internet connectivity and speed and peerless growth in technology, starting an e-commerce food business is not a new thing anymore. Launching a food business online is trending because it requires low investment, minimum manpower, and confined area requirements.

With numerous business ideas exploding in the e-commerce industry globally, it is expected to grow above 35 per cent in the coming years. From a dense forest of information and misinformation to increased risk of legal complications, from unstable supply chain to abnormality of weather and the resulting air/waterborne bacteria, there's a list of thousand things that need to be taken care of when opening a food business online. Apart from this, the tension of carefully preserving the delicate and perishable inventory to save it from getting spoiled and, thus wasted, asks for extra care and attention, which pinches extra in this line of business.

Right from buying fresh groceries and correct spices to hiring the best supportive staff, it's you who have to do every task alone to get what you plan to achieve. Once you start succeeding and getting positive feedback from your loyal customers, there is no looking back for your dream online business ideas of starting a virtual food business. Therefore, to help aspiring entrepreneurs establish their food venture online, we have covered all the basics on how to roll out the food business in this post, which is briefed below.

How can an Aspiring Foodie Start a Food Business Online?

Each country has its own food regulations and varies in terms of food laws and licensing procedure. Hence, it is vital to study your country's food laws and regulations before starting rolling out and taking the help of legal experts to be clear and specific about the formation of the food business online of the country you choose to operate in. Now, stick to the following steps of opening a food business online and spread happiness around you.

1. Find your niche

The first step when opening a food business online is finding out the niche, i.e. the cuisines you are comfortable with and which are quick to prepare. From various food business ideas, most have been initiated out of one's passion or hobbies. What is also necessary to check at this phase is the viability of the type of food industry you want to enter. You need to consider questions, like, is there a market for your food of choice, if your food market is saturated, how can you make your food smell, taste, and look different, If there's an untapped niche audience or not, is it easy to sell your food online and ship it on time. Do not forget to contemplate the legalities (in case of any mixed liquor products), shelf life (including refrigeration when in transit), and fragility.

2. Choose between produced vs. curated food

This step depends upon the first step when you fix what food you will sell online. Produced with respect to the food e-commerce business idea means you are producing the dish from scratch all by yourself, and curated means you are simply adding an extra element to an existing or semi-finished food or redefining the original food by giving it a twist or fusion.

3. Source the best ingredients

In food, what matters most is the taste and the aroma, which can only be added to your dish if you use the right spices/ingredients and fresh groceries in the right quantity. Whether for big or small business ideas, never compromise with the quality of the ingredients because it will directly affect the consumers' health and hence your business. Always trace the supply chain and inspect the ingredients only by yourself because you are the best judge of your food and know what will make it delicious. Look for a distributor or a wholesaler who directly works with farmers so that you procure raw ingredients for your food.

4. Decide upon how you wish to produce your food, i.e. in commercial kitchens, home-based, or manufacturing units

Now comes the production part. For a small business idea, you might be able to handle all the orders from your home initially. When your online food business no longer remains a new business idea and starts scaling with hundreds of orders coming in daily, the need for additional workforce, groceries/ingredients, and bigger utensils will increase to make a lump sum quantity of food. For this, you would need a larger space to fit in additional people and warehouse all the ingredients with safety. Therefore, depending on your budget and the area you require, you can choose shared commercial kitchens, which are facilities offering co-op kitchen space on hourly/monthly rent or open your commercial facility.

5. Fix how you are going to package, brand, and label your food business

In an e-commerce business idea of food delivery, the most important part is packaging and labelling because the only way to lure and make them crave your food is through packaging, photography, attractive designs, user-friendly website/application, etc. Adding a product page along with a packaged copy will create an online business idea India will look forward to. Your packaging must be visually appealing, for which you might hire a professional designer or a photographer if you cannot handle the same. The labelling must contain all the country-specific details, such as best before date, nutritional information, manufacturing place & date, allergen warning, ingredients used, and similar other information.

6. Get a valid food license on an immediate basis

Before starting any new business ideas, get all your paperwork done, do with all the legal formalities, get your business registered (if you deem it necessary), and obtain the original copy of your business license, which is a legal proof that you are allowed to operate in that region. In case you are confused about the category under which your food business falls, consult a legal expert and then apply for a license. Never do anything legal on your own if you do not know about it.

7. Effectively managing the food inventory from getting stale

All these raw groceries and ingredients/spices require proper refrigeration and cooling to use for future production. Therefore, you must find a warehouse to store these ingredients and in proper packages and containers that will not allow their freshness or taste to fade away. Every ingredient has a shelf life beyond which they will start perishing and taste sour. So, you must use all the ingredients well-before they are dead. You might also use batch numbering or barcode to keep the inventory organised and keep a count of the supply.

8. Shipping your lip-smacking food through an appropriate mode of delivery

You not only want your product to reach its destination on time but also in proper condition, without any damages. Sourcing such professional, trustworthy, and careful delivery partners is an additional challenge. To the food business online, you must hire a delivery agency with well-trained delivery boys who are experts in delivering food items because they know how to handle the product on-road with utmost safety. Such delivery companies must also provide proper bags and/or special containers to prevent the food from spilling/melting, and/or breaking, for example, cakes, ice cream, etc.

9. Widespread marketing

We are living in a world of digital marketing, so through Line marketing (TTL) techniques, every e-commerce business idea can easily connect to the mass audience at once. Social media platforms, messaging apps, websites, applications, emails, and what not have become the mainstream marketing channels with the traditional advertising medium, such as billboards, hoardings, placards, television, radio, in-store marketing, etc., also in place. Therefore, to reach the masses in a go, make the presence of your food business on all the digital platforms and keep interacting with your live customers by running weekly contests, quizzes, giveaways, and most importantly sharing with them posts about your food business insights that would make them interested in buying. Content is a vital part of marketing, complemented by graphics and visuals. Make sure your content on food is engaging, relevant, and captivating for the readers.

Also read:

1) OkCredit: Simple, Paperless & Secure solution for businesses
2) Why Choose OkStaff for Managing the Payroll of your Small Business?
3) OkStaff: Your one-stop solution for Staff & Attendance management
4) Things to do after Choosing a Name for your Business
5) Top 10 Things Every Business Owner Should Know & Do


Q1.) How ethical one should be in operating an online food business?

Ans: In any big or small business ideas, applying all the code of ethics and being 100 per cent transparent is what customers look for. When it's a food business, besides taste and fragrance, it is the only thing that can make you pass or fail since you directly deal with a person's health and well-being. Hence, no matter how much you are earning initially, never play with your food quality. If you stick to business practices' ethics and principles, your business will prosper in the long run.

Q2.) What is the most reasonable food business to start online?

Ans: Almost all the online business ideas are affordable to start with, requiring negligible investments, space, and manpower, for instance, juice & shakes business, pickles & other condiments viz varieties of chutneys, multi flavour ice-cream, bakery, chocolate making, and more.

Q3.) How to price your food when operating online?

Ans: Prices of the products of your online food business should be extremely cost-effective, with an initial markup of 15%-20% in the cost price to create a good customer base. It is not appropriate to keep a high price since your business does not have major cost factors, like rent, maintenance, crockery, and human resources.