Forget fashion, forget toiletries — the most stable salable product has always been food. It’s not like people are going to stop needing it any time soon.
So why then, in the age of Amazon, is the world’s most necessary commodity relatively absent from ecommerce? Online grocery stores exist, like Fresh Direct and even Amazon themselves, but their presence isn’t as large as you’d expect for such a mammoth industry. It’s easier to buy men’s beard oil online than it is to buy a carton of milk.
Is the food industry toxic for ecommerce, or is it just mishandled? Is there room for startups to break in, or is it best left to enterprises? Below, we examine the pros and cons of selling food online, so see for yourself how to mix food with ecommerce and still make it fruitful.
Pro: Digital Marketing
Perhaps the biggest advantage of selling food online is the same advantage of selling anything online: enhanced marketing options such as social media, content marketing, influencer marketing, online ads, etc. Sure, brick-and-mortar grocery stores can use these channels, too, but reaching out to a wide range of locations is more effective when you can also ship to a wide range of locations as well.
This is doubly true for new products. If your bakery invented a new kind of pastry, you’d have better and faster exposure if you marketed it online instead of traditional advertising (and subsequently earn more with the added online purchases than restricting sales to in-store only). In fact, the food industry already has a strong foothold in social media, and people like to share new and novel food products. Giving social influencers something new to talk about benefits them as much as it benefits you.
Con: Shelf-Life and Spoilage
Let’s address the disadvantage on everyone’s mind: food products go bad if they don’t sell. If you want to sell fidget spinners, you can buy them in bulk and leave them in a warehouse for months until people buy them one-by-one. Food products don’t have such a luxury — buying in bulk could cost more money than it saves.
On the other hand, non-perishable food products have already proven themselves strong ecommerce sellers. Take, for example, the current popularity explosion for matcha tea; an uncommon product like matcha tea sells better online since not every supermarket carries it, and its long shelf-life doesn’t hinder online sales. If you’re going to sell food online, consider expiration dates when determining your product line-up.
One way around the spoilage pitfall is sourcing your products; then you don’t have to worry about shelf lives or storage. You could discover local artisan crafts and offer them exposure, or you could partner with larger food wholesalers who need a new online outlet. Sourcing food products may not be as easy as sourcing non-food items, but since it’s a viable solution to the major barricades in selling food online, it’s worth the extra work.
Related: 10 Product Sourcing Tips
Con: Geography Laws
There are more laws and restrictions in the food industry than most others. After all, no one wants retailers selling rotten meat or slapping a “gluten-free” label on a normal loaf of bread. There are a lot of regulations you have to abide when selling food online or off, and different geographic areas have different laws.
Before breaking ground on your online supermarket, make sure you’re compliant with all the laws in areas you’re shipping to. This includes:
- Kitchen inspections
- Business licenses (by state)
- Zoning clearances and relevant permits
- Food handler certification
- Legally compliant food labels/packaging
- Prohibitions (alcohol, French cheeses, etc.)
The food industry doesn’t behave like other other industries, so if this is your first food venture, you may want to either educate yourself on how it works, or partner with someone who already has experience.
Pro: Niche Markets
When you’re selling food online, you’re competing against every brick-and-mortar supermarket within driving distance of your customer. A reliable strategy when faced with such indomitable competition is to hone in on niche markets.
The goal is to offer products that normal supermarkets don’t carry. If a customer needs a dozen eggs, they’ll probably drive a few miles instead of waiting a day or two for an online delivery. But what if they need New Zealand Manuka Honey? Because of their high demand and absence in conventional grocery stores, niche food products do well in ecommerce. Exotic, new, or trendy foods are the “bread and butter” of selling food online.
Con: Shoppers like to pick food in person
There’s one inescapable drawback to selling food online, no matter how you approach it. People just feel more comfortable buying food in person. Perhaps its a primal issue where we need to touch, smell, and see it in person to judge its quality, or maybe it’s just the innate fear of online shopping where it’s hard to trust vendors you never actually meet. Whatever the reason, this is one obstacle online food stores will always have to deal with.
To offset the fear of ordering food online, you could entice customers with guarantees and special deals. A freshness guarantee is standard for food ecommerce, but you can go the extra mile with satisfaction guarantees, promotional discounts, or free shipping. There are quite a few obstacles to selling food online, so you have to offer customers a little extra just to level the playing field.
Takeaway: Is Selling Food Online Worth It?
True, there are a lot of risks involved in selling food online and, true, you’ll have to overcome more than a few hurdles. It’s by no means “easy money,” but therein lies the potential for gain. Less online competition means if you can manage to break into the online food market, it’s a clear path to the top. Rather than figuring out whether selling food online works on not, focus on figuring out ways to make it work. The game itself is not rigged, you just have to learn how to play it.