Remember the difficulty you experienced getting groceries at the start of the global pandemic?
The long lines...
The slow check-out process...
Tissue paper shortage...
Do you also remember how easy it was to order your needs online from the comfort of your own home?
You can even get them in just a few hours!
Yep, grocery shopping immensely changed over the past couple of years. The need to stay at home changed grocery stores and online grocery shopping forever.
And that's not going to change anytime soon. Grocery delivery businesses are thriving more than ever.
Here are vital numbers you need to know:
- By 2025, online grocery will be a $250 billion market in the US.
- Since the pandemic, the number of customers for online grocery has upped by 30% globally.
- 70% of US shoppers will be buying their groceries online by 2022.
- The total downloads of online grocery mobile apps exceeded 200%.
As you can see, the demand for grocery delivery services is high!
But while you may be eager to start your online store, you might have little to no idea where to start.
Keep reading as I will share with you...
- Reasons why you should start your own grocery delivery business
- Step-by-step guide on how to start your grocery delivery business
- Challenges you might stumble on while you establish your grocery delivery services
More about that later. For now...
What Is An Online Grocery Delivery Business?
This is an eCommerce website that sells groceries online. This online business shows lists of products and prices for grocers to put into their online cart.
Additionally, customers can choose the time and place for delivery. Because of this, customers can enjoy the accessibility and comfort of online grocery delivery businesses.
Those are all benefits for customers. What about the benefits for small businesses?
Let's talk about...
Why Start A Grocery Delivery Business?
Besides the growing demand, here are other advantages of setting up an online grocery delivery business.
Since the global pandemic, people have been more careful about their safety and hygiene. More and more customers are ordering groceries online to be safer.
This change in consumer behavior keeps the emergence of a successful grocery delivery business going.
Plus, as a local grocery store, you get to sell perishable items. These items need to be delivered within 24 hours. An online platform of your local store can help you deliver on the same day.
For all of these reasons, it gives you a window to significantly grow your business. As your revenue increases, you can get good capital to further your business online.
Now listen up as we go through...
How To Build Your Online Grocery Delivery Business?
Your online grocery business starts when you...
1. Identify Your Target Market
To acquire customers, keep your location as your priority.
Are you aiming to start your grocery business in your local area? Perhaps around your state, or even nationwide?
Identifying who your target audience is and its size will help you make better decisions.
Once you identify your customer base, you can learn more about their purchasing decisions. It will let you know what you need to sell.
Knowing your customers' grocery shopping behavior will help you keep up with their demands. You'll also find out about your own market niche.
The next step to building your grocery delivery business is to...
2. Establish Your Product Categories
So, what products are you going to sell?
With your target customer in mind, you can make a list of product categories. When you categorize your products, it will make your inventory management easier to go through.
When categorizing, think of its storage management, delivery management, volume of wastage, etc.
Of course, the categories will also make a better customer experience. The list will be easy to navigate to find what they need.
Your grocery delivery business won't be complete when you leave out...
3. Choose Your Business Model
For an online grocery delivery business, your business structure is the core. To help you choose your business model, here are the most common ones for grocery delivery services:
🏪 Multi-vendor Marketplace Model
This model provides a general grocery website for multiple vendors. Essentially, you will be acting as a middleman between the vendors and customers.
This also means you have no control over inventory management. The grocery vendors also handle the delivery operations and customer orders.
In exchange for your eCommerce platform, you can charge a particular percentage for your grocery service.
For example, the company Peapod offers a grocery delivery service. They partner with grocery stores as they fulfill orders in their warehouses.
A similar grocery delivery service option like this one is...
Much like the previous business model, this model means you don't have your own grocery store. You will be providing the platform for vendors' products to sell.
This model focuses on speedy delivery.
Their home delivery service fills the demand for a certain region... Which means you would need to collaborate with as many local suppliers as you can for inventory.
The company Instacart offers grocery home delivery, as well as pick-up options as a grocery wholesaler.
Another online grocery business model you can choose is...
🏪 Click And Collect Model
You might have heard of the term BOPIS. It stands for Buy Online, Pick-Up Store.
This model lets customers order their groceries online. Then, they can pick up their order in a physical store.
Of course, it still offers online delivery options.
For example, Walmart's Grocery Pickup allows customers to order online and pick up their orders without getting out of the car.
The last model you need to know is...
🏪 Inventory Based Model
With this model, you (the owner of the platform) are the one who is responsible for inventory management.
As the owner, you will be purchasing and storing what you sell. You can get your stock from different suppliers in your own warehouse.
In simple terms, it's an offline store with an eCommerce website that offers delivery services.
It's also the recommended business model for you to build on. With you having full control, you can earn from the orders and delivery fees.
And compared to the other models, you can save extra costs you get from dealing with vendors and storage.
With an inventory-based model as your online grocery delivery business foundation, you can now...
4. Decide Your Grocery Delivery Solution
Here's the deal... your products have a limited shelf life.
I'm talking about the vegetables, meat, milk, and other grocery foods that need to be delivered in a certain amount of time.
Yep, you will need a well-planned grocery delivery scheme to make sure that your groceries are fresh and high-quality.
To provide fast delivery, you can leverage delivery services that are available locally.
But you can also set up your own on-demand delivery services. Build a team with 2 or 3 delivery personnel.
They can pick up the product from the warehouse and directly deliver it to your customer's house.
For a better experience, you can let your customers choose their grocery home delivery schedule. They may also track their orders for a smooth transaction.
When you start a grocery delivery business, you will also have to...
5. Manage Your Inventory
Don't make the process harder for yourself!
Here's what I mean...
Without an inventory management system, your operations will suffer. So, create an inventory management module to help you monitor your stock.
Prioritize acquiring a warehouse for you to stock up on your inventory.
Also, keep track of your customers' demands. Check which products are selling well, and the ones you sell least.
As you perfect your inventory management, you can also handle your business expenses better. That leads to a healthy business bank account!
The most exciting part of building your unique business idea is when you...
6. Set Up Your eCommerce Store
It's time to build your high-converting eCommerce store!
Don't know where to begin?
Here is a comprehensive guide on how to build your eCommerce store for you to follow. You don't even need to know how to code!
Setting up means you also need to finalize your revenue model.
Your online grocery delivery business will earn revenue in different ways, such as:
- Sales revenue. With the inventory-based model, you will profit by selling products and services.
- Advertisements. You can get more visitors when you pop ads on social media platforms. Promotional ads can also be featured on your website.
- Delivery charges. Your delivery fee can also gain you revenue.
Once you have your grocery delivery business up and running, you get to...
7. Create Your Marketing Strategy
News flash: potential customers can't visit your eCommerce site when they don't know its existence!
So, start by promoting through word of mouth. Tell your friends and family about it to create sustainable growth.
You can also try door-to-door campaigning or do an on-site promotion.
Of course, you need to focus on digital marketing.
You now know what to do, so go ahead and...
Open Your Digital Store Doors!
Here's the thing... groceries are a basic human need. And the internet is also becoming a necessity in this modern world.
When you put them together, the demand for your services steadily increases.
Do you want to find success with your online grocery delivery business?
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