When Bob McClure was ready to level up his family business, McClure’s Pickles, he found shared commercial space in a tofu factory. The healthy bacteria in the air—caused by the fermentation process of the soybeans—ruined his entire first batch of pickles.
While every industry comes with complications, food businesses often face unique challenges. There’s an increased risk of legal consequences, the delicate dance of inventory and expiry dates, and a volatile supply chain that can be affected by anything from weather to airborne bacteria.
For many, however, there's nothing more fulfilling than making great food and feeding people. If you’re ready to take on the challenge and realize your dream of starting a food business, you’re in the right place.
This step-by-step guide teaches you how to sell food online, with expert advice on navigating food law, maximizing your marketing dollars, and building a mouth-watering brand.
How to sell food online in 13 steps
- Research food laws
- Find your niche
- Decide on a business model: produced vs. curated
- Source ingredients
- Determine your food production model
- Build your brand
- Run the numbers
- Price your food products
- Set up inventory management
- Plan for growth and product development
- Set up shipping
- Choose your sales channels
- Market your food business
1. Research food laws
Normally, the first step to starting a business is landing on a great idea. With food businesses, however, it’s important to understand the complexity of food laws before diving in.
When making and selling food online, safety is always a concern. Government organizations closely regulate and monitor the food industry to ensure public safety, but the onus is on the business owner to stick to the rules and be obsessive about quality.
Provided you do your homework, acquire the proper licenses, and meticulously track everything, the likelihood of getting into hot water with the health department is low. But if you do, the consequences can be severe, says food lawyer Glenford Jameson. “The government can throw you in jail, take all your products and destroy them, shut you down, or give you a big fine.”
Food inspectors offer you some pretty sage and, frankly, free advice on how to make sure you’re making a good and reasonable product.
Glenford Jameson, Food Lawyer
If your product is complicated or requires additional licensing (meat, fish, and some agricultural products, for example), you may want to consult a lawyer with experience in the food industry. Though the upfront cost may be high for a new business owner, it could avoid even costlier consequences down the road.
If you choose to navigate the legalities of running a food business without a lawyer, be sure to follow these general best practices:
- Properly handle and store food. Learn how to properly handle and store food. Keep tabs on food preparation practices. Make sure you do what it takes so people don’t get sick eating your food.
- Trace the supply chain. Ask questions of your suppliers and get referrals.
- Work with a lab to test your products. Labs can help identify and trace elements that may be known to cause allergic reactions.
- Keep thorough records. Track everything coming in and going out of your facility.
- Make friends with the food inspector. They are there to identify issues and set you up for success. “Food inspectors offer you some pretty sage and, frankly, free advice on how to make sure you’re making a good and reasonable product,” says Glenford.
- Get liability insurance. Be sure you’re covered in case anyone does get sick.
Note: Every country and region differs in terms of food laws and licensing requirements, and some industries, like dairy and alcohol, may be subject to additional rules. Be sure to consult with a lawyer and your local government for information specific to your business and region. For the purposes of this article, information and tips will be general, and should not be taken as legal advice.
2. Find your niche
In many cases, the best online business ideas are born out of a passion or a hobby. The same is true for selling food. For example, if you make jams for friends and family from strawberries grown in your own backyard, that’s a good place to start. You already know the process and have had experience honing and testing the recipes.
Bob McClure and his brother Joe grew up making pickles with their grandma Lala, and it was her family recipe that ultimately inspired their business, McClure’s Pickles. An actor and a psychology major, respectively, they didn’t know the first thing about business or manufacturing, but their tried-and-true family recipe was their foundation.
Food trends
If you don’t yet have a product idea, look into current food trends. The New York Times predicts fusion snacks, hot sauces with complex flavors, and plain-old soup as viral success for 2024.
Other places to watch food trends include Google Trends, food publications, and social media platforms like TikTok.
Bear in mind, however, that jumping on a trend means you’ll encounter plenty of competition. Ask yourself how your product can stand out in a noisy market.
When the McClures decided to offer a premium pickled product, they had very little competition. More than a decade later, though, pickling gained popularity as part of the slow food movement. Bob sees the competition as a good thing. “It’s the right type of competition if it’s bringing awareness to highly specialized, quality-driven entrepreneurial products,” he says. “It helps improve our entire category.”
More food business ideas
Another way to discover a great idea is to find a gap in the market. Many profitable food business ideas start with solving a problem or filling the needs of a niche market.
Could your food business be in one of these niches:
- Custom or novelty products
- Gourmet, artisanal, and small batch food
- Allergen free, gluten free, or nut free
- Certified organic, natural, and fair trade ingredients
- Vegan, vegetarian, kosher, or halal foods
- Paleo, keto, or low carb
- Food videos, recipes, meal kits, and cookbooks
Jodi Bager’s business, Grain Zero, grew from her experiences managing ulcerative colitis. Its audience is made of people also living with colitis and other forms of bowel disease. She produces healthy snack options without the ingredients that commonly trigger her condition. “We also address the needs of the growing paleo community,” Jodi says, “and we’re appealing to a wider audience than ever before.”
Ideas for beginners
If you’re new to food, look into easy small business ideas that require a low investment, minimal equipment, and fewer shipping challenges and legal restrictions.
Some lower investment ideas include:
- Candy
- Packaged snacks
- Canned and pickled products
- Dried herbs
- Baked good ingredient kits
- Bulk nuts and seeds
- Raw ingredients (flours, etc.)
- Curated resale (products made by other vendors)
- Coffee and tea
Thirteen-year-old Charlie Cabdish makes and sells candied pecans from his family’s home. It’s a business he can run from a domestic kitchen, between school work and basketball practice.
Market research
If you have an idea already, test its viability. Is there a market for this product? If it’s a saturated market, how can your product differ? Is there an untapped niche or underserved customer?
Your market research should include looking into the rules that govern the specific industry. Is selling your product online and shipping it even possible? Here are a few questions to ask:
- Is it legal to sell your product online in the region where you operate or plan to ship? Think liquor or cannabis infused products.
- Is your product too fragile to ship? What special packaging would be required to protect it? Think flaky pastries or glass jars.
- Does the shelf life of your food product make inventory too challenging? Think bakery goods or guacamole.
- Does your product require refrigeration? If so, how does that limit your shipping radius or carrier options? Think meats or fresh dips.
3. Decide on a business model: produced vs. curated
There are many ways to start a business in the food industry from supplying raw ingredients to manufacturers to opening your own restaurant, but if you want to sell food online, there are two main business models.
Producing food products to sell
This business model refers to producing food in either a home-based business or commercial facility and selling it direct to consumers (DTC). You may choose to handle the full supply chain and be personally involved in production or work with a third-party manufacturer that produces and packages a recipe to your specifications. In this model, you may also expand your selling channels and consider wholesaling to other shops.
Legal note: Many regions have cottage food laws that allow you to produce certain food items in a domestic kitchen without meeting the same requirements as commercial kitchens. In the US, be sure to look into each state’s cottage food laws, as they can differ by region.
Curating and reselling food
This model involves reselling by curating other brands’ products under your own banner. Your unique selling proposition (USP) may be that your shop brings the best of a single product type (say, mustards from around the world) to a single shopping experience. Otherwise, you may try dropshipping to bring another brand’s products to a new market.
Note: Much of this article applies to food production businesses. If you’re looking to curate existing food products, scroll down to step 6 to start building your brand.
4. Source ingredients
Glenford stresses the importance of doing your homework when sourcing your ingredients. “Trace the supply chain,” he says, so that your packaging claims match what’s inside and you’re working with trustworthy companies.
If you plan to produce a product that will be labeled organic, for example, be sure your raw ingredient supplier has the proper certification before making claims on your packaging.
Developing a relationship with your supplier improves trust and makes them feel more invested in your business. “Sometimes our suppliers make suggestions based on something new that comes to market,” says Jodi. “It’s a collaborative partnership.”
- When you’re just starting out and producing small batches, it may be cost effective to shop for ingredients at consumer warehouse club stores like Costco or Sam’s Club.
- Make connections. In certain industries, finding suppliers may rely on word of mouth and personal introductions. The founders of Soul Chocolate networked in the industry to make connections with regional cacao farmers.
- Alternatively, for commodities like cacao and coffee beans, look for a distributor or broker who works directly with farmers.
- Team up with other small-batch producers to purchase bulk wholesale ingredients together.
Helpful resources:
- FDA food ingredient and packaging guide, including allergen and food additive information (US)
- Food Composition Database (Australia)
- Licenced Natural Health Products Database (Canada)
5. Determine your food production model
Though McClure’s Pickles started in their family kitchen, the family continuously upgraded their production. “When we were first starting out, we rented a kitchen that had a larger stove,” says Bob, “and we would call up our friends and say, ‘Hey, I’ll buy you pizza and beer if you come make pickles with me on the weekend.’”
The company eventually landed a 20,000-square-foot factory space. McClure’s serves as a great example of how to scale production as you grow. Starting from a home-based facility is a low-risk way to test your business model.
Selling food from home
Some food items can legally be produced and sold right from your domestic kitchen, but look into the regulations surrounding your chosen product. In the US, the FDA requires you register your home-based business as a facility. You may need to make upgrades to your home setup, such as improved ventilation. Be sure you secure the required license to sell food from home in your region.
Renting from shared commercial kitchens
Many facilities offer shared or co-op kitchen space that you can rent hourly or monthly, depending on your production needs. The benefits are:
- Reduced costs. You don’t need to buy equipment from scratch and the shared model means you’re not covering rent on your own.
- Less paperwork. These facilities are already registered as commercial space and have appropriate insurance.
- Shared knowledge. Exposure to other small business owners allows you to learn from others and build community.
Setting up your own commercial facility
Have full autonomy and start from scratch with this model, building a facility that meets your needs from the start. This is the most expensive option and one that requires due diligence—you are responsible for ensuring your facility meets code and is properly licensed.
This may not be the best option for new entrepreneurs, but rather a future goal. “We started small in our home kitchen and then grew from there,” says Jodi. “We did not move out until we were bursting at the seams and knew we had a big enough business to support the move.”
It is really impressive how much diligence goes into running a USDA-inspected facility.
Daniel Patricio, Founder, Bull & Cleaver
Working with an existing manufacturer
This option is great for hands-off entrepreneurs who are more interested in the business than the production. It’s a safe option for industry newbies, too, as the manufacturers should already be versed in food safety and regulations. While the idea, recipe, and brand are all yours, the execution is left to the pros. This gives you more time to invest in other aspects of the business.
“We partnered up with someone that had a USDA-inspected facility so that we could ship across the US sooner, without any food safety issues,” says Bull & Cleaver founder Daniel Patricio. “It is really impressive how much diligence goes into running a USDA-inspected facility.”
6. Build your brand
Selling food online is especially challenging because the most important decision-making sense—taste—can’t be accessed. Because customers can’t sample your product, branding is especially important. Package design, photography, website, product page, and copy need to work together to tell your story and help customers imagine how your product might taste.
With packaging being so critical in this industry, consider hiring a designer to help with your needs.
Building a brand starts with answering a few questions about how you want customers to perceive your business. “We chose our name and our identity—everything from the label, the look, the feel, the text—to be something that connotes handmade and family, yet urban,” says Bob.
Here are some branding resources:
- Simple and Low Cost Ways to Build a Memorable Brand Identity
- How To Design a Memorable Logo in 8 Easy Steps
- Food Photography 101: How to Take Perfect Pictures of Your Food
- What Is Brand Voice and How To Create One for You Business
- Selling Through Storytelling: How to Craft a Compelling Brand Story
🛠️ Tools: Stuck on your brand name? Try these free tools
Packaging and labeling laws
Aside from the visual appeal of your packaging, each country has its own labeling requirements, which may include best-before dates, nutritional information, allergen warnings, and country of origin. If you plan to ship your product across borders, especially to retailers, be sure to check the destination country’s rules around labeling.
Helpful resources:
- FDA food labeling, ingredients, and packaging information (US)
- FTC Fair Packaging and Labeling Act (US)
- CFIA food labeling requirements (Canada)
- Food Labeling Information System (EU)
- Food labeling and packaging (UK)
7. Run the numbers
How much does it really cost to start a food business? If you were to open a restaurant or physical food store, your upfront costs could be upward of $175,000. But there are many ways to get started with much smaller startup costs.
Small-batch producers who start home-based businesses have far less overhead and can expand into commercial spaces later as the business grows.
Without expensive leases or staffing costs, you could realistically start selling food online with just a few hundred dollars to cover ingredients, website and marketing costs, and packaging.
Tip: You may be able to claim some of your housing and utility costs at tax time if your living space doubles as your business space.
If it’s not possible to run your business from home, consider the monthly cost of a commercial facility when calculating your startup costs. Production facilities can be expensive, but many co-ops and incubators offer shared kitchens to entrepreneurs for a fraction of what you’d spend in a dedicated space.
8. Price your food products
Most entrepreneurs, regardless of the product they sell, will agree: pricing is hard. Ultimately there’s no one pricing formula that will work for everyone. Know your costs (both fixed and variable), and keep adjusting until you get it right.
Daniel suggests forgoing profit at first to get your product in front of as many customers as possible. “Over time, those cost savings will come,” he says.
Bob has a different philosophy: if you believe in the value of your product, price it accordingly. He stands by McClure’s pricing. “We’re not the cheapest product out there,” he says, “so we have to compete on something that’s truly unique, otherwise you just become one of the other commodities. And then it’s a race to the bottom.”
Profit margins for food businesses also depend on many factors—what you’re selling or how and where you’re selling it, for example.
Additional Reading
9. Set up inventory management
Grain Zero’s brand is built on products that contain natural ingredients and no preservatives. The shelf life on most of the company’s products is only five to six months. Jodi, therefore, keeps inventory tight, turning it over every one to two weeks.
While McClure’s Pickles have a longer shelf life, Bob wants to be sure customers get his product while they’re as fresh as possible. For that reason, the company’s inventory strategy errs on the side of producing too little of the product, rather than too much.
“It’s a juggling act, and we’re always getting better with forecasting our needs,” he says. “We have to make so much to justify a production run, while also ensuring there’s a sales channel or outlet and enough demand behind it to really make it work.”
Tips:
- Investigate the inventory tools available in the Shopify App Store—they’ll integrate with your store to help you sell online.
- Use batch numbering or bar codes to keep inventory organized.
- Educate your team on your inventory management best practices.
10. Plan for growth and product development
The McClures found success by focusing on their brand’s namesake product, perfecting and iterating on their grandmother’s recipe.
Low-risk ideas came next. Tried and true pickle flavors, for example, were applied to other products, like chips. By popular demand, their Bloody Mary mix followed.
Initially, the McClures expansion moves were made in response to customer feedback. Since then, however, product development has become more sophisticated, and the family relies on data to inform their next move.
You have to make sure that there’s enough critical mass behind the idea before you take that into a product launch.
Bob McClure, founder, McClure's Pickles
While the family still loves engaging with customers and hearing their ideas, Bob warns to take them with a grain of salt. “Not all ideas are like gold,” he says. “You have to make sure that there’s enough critical mass behind the idea before you take that into a product launch.”
Expanding to food-adjacent products
Dominion City Brewing Co. sells its beer locally via its online store, but liquor laws prevent it from selling beyond Ontario’s borders. Fans of the brand who live outside the province can still shop for branded merchandise that they sell online, like glassware and clothing.
For your food brand, consider complementary items to extend your reach beyond your local market, increase average order value, and build brand awareness:
Ideas:
- Branded merch like totes, t-shirts, and mugs
- Gift cards
- Complementary food products (say, third-party crackers to upsell with your cheese)
- Relevant kitchen and serving tools like aprons, cutting boards, and tea towels
- Recipe books, ebooks, or subscription recipe content
When Wil Yeung hit his stride on YouTube, amassing thousands of followers on his vegan cooking channel, he was ready to monetize. Now, Wil sells cooking classes, e-cookbooks, and physical cookbooks through his own online store.
11. Set up shipping
We’ve spent a lot of time building resources to help ecommerce entrepreneurs streamline their shipping processes. It is, after all, one of the most common pain points for business owners.
And, no surprise: shipping food carries additional challenges, especially when shipping outside of the country. “When you’re exporting food, there are a series of foods whose export is regulated under commodity legislation,” says Glenford. “Those have their own rules.” Look into whether your product is subject to specific laws in the countries where you’re shipping to—and from.
Consider, as well, the potential restrictions on your product in its destination country. Technically, once products are in the shipping stream, they become the problem of the purchaser, but a poor customer service experience can be bad for business. Mitigate the customer’s ultimate frustration by versing yourself on the laws where you ship.
For example, a cannabis-infused product may be legal in Canada where you produce, but may not be in many US states.
Alternatively, to avoid the red tape, you may consider working with a fulfillment service if you do most of your business across the border. “We found the cost of shipping individual orders to the US was prohibitive,” says Jodi. “For that reason, we ship bulk orders to the US where they are warehoused and shipped directly out to US customers.”
Packing and shipping fragile or perishable items
Many food items are fragile or are packaged in fragile packaging. As such, they may require extra shipping materials to offer enough protection from breakage. Factor in the extra cost of materials, shipping weight, and staffing time when setting your shipping and handling rates.
Products requiring refrigeration aren’t ideal for cross-border shipping, but Vegan Supply in Vancouver successfully ships its cold products nationally across Canada using cold packs and expedited shipping. You can also work with carriers that use refrigerated vehicles, or opt to only ship and deliver locally.
Order pickup and local delivery
If you’re selling an item that simply cannot be shipped by post (say, cupcakes slathered in fluffy icing), consider alternatives that still allow you to sell food online. Offer online options to customers who preorder your product: in-store pickup or local delivery.
At the start of the pandemic, many retail stores pivoted to selling food online and set up contactless curbside pickup in lieu of in-store shopping. In response to these challenges, we’ve put together a comprehensive guide to help you set up these delivery methods for your store, too.
12. Choose your sales channels
The best way to start a food business is to sell online through your own website. This method gives you full control over your brand and ownership of your customer list. Reaching your target audience is a bit trickier with an online store than with a marketplace, so you may wish to explore other sales channels as you grow.
Building a website
As with branding and packaging, the look and feel of your website is important in helping influence the customer to buy a food product without tasting it first. In some cases, it may also be a visitor’s first impression of your brand.
Website content
Use product page copy to describe your product’s taste and texture in detail. Online product descriptions should include ingredient and allergy information in full. Product photography is also important here (we’ll talk about this in more detail later). Also consider including on your product page: customer reviews, user-generated content (UGC), and recipes that include the product.
To keep the product page uncluttered, invest time in a thorough FAQ page to answer additional questions about ingredients, dietary information, and production methods.
Even if your website isn’t supplying the bulk of your sales, it’s important to nurture it as a tool to connect with customers and tell your story. “We’re in 5,000 stores worldwide,” says Bob, “but we still have a core group of people that come to our website, purchase every year, like to see what we’re doing, and get connected to our brand, our story.”
Operating a restaurant?
Take your business online with Shopify's online ordering system.Expand with take-out orders and spend more time doing what you do best: making delicious food.
Website building and design
Building a website from scratch may be a daunting idea, especially if your talents lie in cooking, not coding. Good news: you don’t have to. With many ecommerce platforms, like Shopify, you can set up a site quickly, with no technical experience necessary.
Choose from a set of standard website templates in the Shopify Themes Store then customize it with your brand colors, logo, and copy. Some favorites include:
Food photography
You can opt to DIY your photoshoots or hire a professional who has experience with styling and lighting food. Food photography can be especially tricky due to capturing natural-looking color and glare from reflective surfaces (say, package jars or glossy sauces).
For product pages, shoot food product photos against a clean background. These should include packaging from several angles and close-up details of the product to show texture and color.