Hope Jones, the owner of Hope, Faith and Gluttony Bakery, was burnt. What had started out as a dream (owning her own bakery) had turned into a nightmare (owning her own bakery). So she walked away -- for two years. But she missed baking, and her customers missed her. So she decided on a compromise and opened an online bakery.
“Selling online -- I thought ‘this will be easy!” recalled Jones. After all, she knew how to bake (in fact, she was much savvier about it now). She was still in contact with many of her former customers, and not having a storefront would mean fewer hours, lower overhead and decreased labor costs. How hard could running an online food business be?
As Jones and many other bakers and sellers of food products have found out, you have to be one tough cookie to be successful at selling food online. Not only do you need a good ecommerce site, you need good packaging and a good shipper. You also need to make sure you are in compliance with local health department regulations. (For government information about selling food, go to the FDA’s Food Industry site.)
|Linzer heart cookie from Hope, Faith and Gluttony Bakery.|
To help you determine if running on an online food business is right for you -- or to help you make your existing ecommerce food business more successful -- Small Business Computing spoke with three online food experts who shared their recipe for selling food online.
Small Business Ecommerce: A Picture Is Worth a Thousand Orders
Unlike going into a physical store, a bakery for example, when you go online, you can’t smell or get a taste of the food that’s for sale. “That’s why good visuals are key, especially for food,” said Gina Frieze, the founder and cheese wiz at Venissimo Cheese, an online and retail seller of artisanal cheese based in San Diego, who recently re-did her website to make it more visually appealing.
“With food, you really have to visually convey the deliciousness and the joy that it’s going to bring to someone,” added Lee Zalben, the founder and president of New York-based Peanut Butter & Co., which has been selling online since 1999. That means really great product shots. “If your products are not presented in a clear, in-focus, well-lit way, then everything else is for naught,” he added.
And while small business owners may fear that the cost of hiring a professional to photograph their food will be prohibitively expensive, Zalben said you can find people who can do great-looking product shots for $50 (or less) per image. You can also try bartering with family members and friends who are into photography -- or invest in a good digital camera and photo editing software and take pictures yourself. “It might take more time, but it’s something that you can do on your own.”
Small Business Ecommerce: Two-click Ordering
Almost as important as having good images is having a good shopping cart when selling food online. “If someone can’t click on a product and buy it within two clicks? Forget it. They’re gone,” explained Jones. “I found that out the hard way.” The bottom line: make the checkout process simple, said the experts. Click to learn more about shopping carts.
Product Pricing: Finding the Sweet Spot
Pricing your products properly is also critical -- if you want to stay in business.
“I had a business coach for the first year or two, and we looked at other sites and figured out that for baked goods the initial get-them-in-there price is $25,” not including tax and shipping, said Jones. The key is to figure out the cost of your goods, and then add labor, overhead, packaging and shipping costs, as well as re-shipping costs for when things go wrong. Then you mark up the price enough so you can make a profit without scaring away customers.
“It’s tempting to give things away for free -- like free shipping,” said Frieze. “But there are costs involved [with running an online food business], and if you don’t cover those costs, you won’t be successful.” And you will go out of business.
Small Business Ecommerce: Packaging and Shipping Tips
A big part of pricing your goods -- and keeping returns to a minimum -- is using the right packaging and shipper. Unlike other items sold online, any kind of perishable food item (e.g., cheese, freshly baked goods, chocolate-covered strawberries) needs to be shipped overnight or two-day guaranteed, which can add to the cost. Even pre-packaged, shelf-stable items need to be packaged and shipped properly. And because so many online food items are purchased as gifts, the packaging needs to be attractive.
|A nutty gift basket from Peanut Butter & Co.|
So how do you decide what packaging is right for your product?
When Frieze and her husband decided to add an online component to their business, Frieze ordered cheese from leading cheese purveyors all over the country, to see how they packaged and shipped their cheeses. She also ordered from a couple of non-cheese perishable food companies, including Shari’s Berries, which sells chocolate-covered strawberries -- and is considered quite successful.
Not only did Frieze want to know what their packaging looked like, she wanted to see how they shipped perishable items, especially in the warm summer months, and if they included any kind of educational literature or information about their products.
After evaluating all the different packaging and shipping methods, Venissimo went with guaranteed two-day shipping during the cooler months and overnight shipping during the summer months (both via FedEx). “Cheese is a hardy food. We know we’ve got a couple days with an ice pack and cheese is going to be fine,” she said. “But we learned that in the summer we absolutely have to go overnight, because ice packs just don’t hold up for two days in the summer months.” In addition, Venissimo makes sure to include storage information about the cheese in each package.
Jones used a similar method to come up with Hope, Faith & Gluttony’s packaging and shipping method, ultimately choosing packaging that was practical yet attractive. “You eat with your eyes,” she explained. And she wanted customers to feel as though they were unwrapping a present when they received a box of her goodies.
While both Jones and Frieze use FedEx, both women advised business owners to speak with several carriers (UPS, FedEx, DHL, and the U.S. Postal Service), to find the one that offers them the best pricing and service. They also stressed the importance of building in re-shipping costs for those orders that don’t arrive on time or arrive damaged or spoiled.
“I guarantee that if something arrives wrong, I’ll fix it and resend it,” said Jones. “It’s just good customer service.”