I understand. You want to live a life of your dreams. You want to be financially independent. You want freedom. Therefore, you’re here eager to know how to build an online grocery store.
BUT, you don’t have any idea on how to go about. How to start an online grocery store?. How to source groceries?. How to fulfill orders?. How to market your grocery store?.
There’re so many questions.
And, you aren’t alone. Almost all newbies face this dilemma. In fact, when I first started online, I didn’t had a pinch of an idea about stuff like eCommerce, fulfillment, online gateways etc.
But I learnt while doing. So, don’t get overwhelmed. It’s natural to not know about many things at the start. What really matters is that you start.
Here in this post, I’m going to share with the practical steps you need to take to start an online grocery store. All your questions will be answered here.
So, are you ready to live a life that you always wanted?. The idea of owning a business & working your yourself is exciting. Isn’t it?.
Then, let’s jump right in.
HOW TO BUILD AN ONLINE GROCERY STORE OR DELIVERY BUSINESS
Step #1. Start With A Domain Name
A domain name is a virtual address of an online store or website. Example: https://www.onlinegrocerystore.com
Ideally, a domain name should be:
- Having a .com extension
- Short in length
- Easy to pronounce
- Available (not already taken by someone else)
- Having a meaning related to grocery
You need to buy a domain name from a domain registrar. It’s simple process. Just like buying any other digital product. Add the domain name you want to the cart, select the validity, enter your address & then checkout.
I’ve bought all my domain names (including Bizain) from NameCheap. Their easy-to-use dashboard & support is what I like the most.
Step #2. Create The Online Grocery eCommerce Store
Once you’ve your domain name ready, time to create an online grocery store.
The best way to do that is by using an eCommere website builder. An eCommerce website builder can help you to build an online grocery store within a matter of minutes. No, you need not know coding or programming skills.
Most popular eCommerce builders have drag-and-drop editor as one of the core features. That means you can build a website simply by dragging & dropping various web elements like text, images, videos, menus etc.
Typically, an eCommerce store builder can help you build a grocery store by the following simple methods:
- Create an account
- Connect your domain name
- Choose & install website template or theme (that’ll define the structure & look of your website)
- Edit the website template to suit your needs
- Feed the website content (Title, description & images)
There’re many online store builders out there. But the most popular one is Shopify. And, my favorite too.
In fact, as per a statistic:
- A whopping number of 800,000 merchants have their online store built by Shopify (As in 2019).
- $ 1.073 billion amount of orders were processesed by Shopify merchants in the year 2018.
- Shopify supports more than 2,400 apps (These apps help you to customize your store with value-added features).
Back then in 2016, I had built my first online store. Since, I’m not a programmer or coder, I was looking for a solution that can help me build a top-notch store without having to hire a coder or agency. Luckily, I found Shopify & instantly fell in love with it.
Following are the benefits of using Shopify to build your online grocery store:
- Simple & easy-to-use
- Full customization potential
- Connect your domain name
- Free SSL certificate (makes your website secured)
- In-built payment gateway (to collect payment from customers)
- Multiple local languages supported
- In-built email templates (for order confirmation, cancellation or refund emails to customers)
- Integrated with Facebook shop & Amazon
- Supports coupons & gift cards
- Automatic tax calculation
- Supports unlimited products
- Unlimited bandwidth (That means an unlimited number of users can browse your store at a given point of time)
- Hosting included (You don’t need a third party hosting solution.)
- 24*7 customer support (I’ve found them knowledgeable. But usually there is some waiting time of around 5 minutes)
To get started, you need to sign up for a new account by clicking on “Start free trial” button.
Answer a few question to help Shopify figure out your needs.
Now, enter your business address. That’ll will used on all customer communications like invoices, emails, notifications etc.
After you’ve entered your business address, you’ll be directed towards the Shopify dashboard. That where the real action begins.
On the dashboard itself, Shopify will guide you on how to proceed further. It suggests you to add products, customize theme & connect domain. The domain name you bought at Step #1 needs to be connected with your Shopify store.
Let’s start by connecting your domain name. Click on “Add domain” button on the dashboard.
Now, click on “view instructions” (specific to your domain registrar) to connect your domain name to Shopify store. You’ll need to access your NameCheap dashboard & point your DNS settings to Shopify. Don’t worry. The instructions are self-explanatory. In case of an issue, contact the Shopify support.
Once the domain name has been connected. Time to move towards installing a website template or theme.
Needless to say, you need to choose a grocery theme.
Click on “Customize theme” button available on the dashboard.
You can either choose a free theme or a premium theme. Alternatively, you can also upload your own custom made theme or a theme purchased from a third party developer.
I would recommend you to start with a premium theme since they’re feature-rich.
For a grocery store, I would personally go for the “Avenue” theme. It’s an awesome theme especially designed for grocery stores.
Buy, install & customize the theme the way you want.
Almost done. Now, all you need to do is add your products. We’ll cover this in Step #5.
Remember, you also need to customize your store settings by clicking on the “settings” link available on the dashboard.
Special attention to be given to the “payment provider” link. There you need to enter the credentials of your payment gateway channel. The easiest & fastest way is to choose PayPal as your preferred payment partner (all you need is PayPal login ID & password).
To summarize, on Shopify, you need to sign up for a new account >> connect domain >> add theme >> add products >> customize settings.
Congratulations, you’ve your online grocery store ready.
To add a custom feature to your store, you may install a Shopify app. Here’re some of the most popular apps used by Shopify merchants:
- SEO Manager (to make your store SEO-friendly)
- YotPo: Reviews Photos, Q&A
- AfterShip: For Shipment Tracking & Customer Notifications
- Smile: Rewards & Loyalty
- Tidio Live Chat
Here’s a video that covers Shopify set up in more details:
Step #3. Register Your Business Legally (US & India)
Do you want to avoid legal troubles?. Do you want to stay on the right side of the law?.
Of course you do. Nobody wants to receive those tax or other legal notices. Every business owner wants to peacefully do business by complying with various state laws.
An online grocery store, being a legal entity is no different. And, since you would be purchasing & selling stuff, you’ll need to register your business under the tax law.
Registering a business will help you to fullfil orders, raise tax invoices, purchase goods legally & file tax or other returns required under the law.
At the outset, you need to decide on the legal structure of your online grocery store.
In the US, there’re the following legal structures a business can have:
- Sole Proprietorship (Recommended)
Since you want to start an online grocery store or business on your own, a sole proprietor form of business is the best. A sole proprietorship will mean that you’re going to be the sole owner of your online store.
So, how do you go ahead & register your business as a sole propiertorship?. It’s actually quite simple. Some US states require sole proprietors to obtain a business license.
Therefore, if you’re going to carry out your operations from a state that mandates sole proprietors to get a business licence, then you’ve to get one.
Additionally, there’re some states that require the sole proprietors to get their business name registered. Example: If your business name is ‘XYZ Groceries’, then you’ll have to register that name under the state law.
Luckily, if your state law doesn’t mandate either a business license or name registration, then you don’t need to anything.
In a sole proprietorship form of business, your personal identity will be your business identity & vice-versa. That status remains unchanged irrespective of the fact whether you’ve got a business license or your business name is registered or not.
If this sounds overwhelming to you then use consult a business lawyer using Incorporate.
To sell something to your customers means collecting the basic invoice amount + applicable taxes. That tax amount needs to be deposited with the state.
To do so, you’ll need a federal tax ID or EIN(Employer identification) number for your business. Alternatively, you can also use your social security number (only if you’re a sole proprietor).
Using the federal tax ID or EIN or SSN, you can file periodic sale tax returns.
TaxJar is an awesome software that can help your online Shopify store to sync with it & prepare tax returns with a few clicks.
You’ll also need to file your personal income tax returns once a year. The income from your online store will be your personal income (only if you’re a sole proprietor).
NEVER use your personal bank account for business purposes. Why?. Because, personal bank accounts are meant for personal savings & expenses.
Mixing up business transactions with personal ones won’t help you to prepare & report correct numbers in your tax returns.
So, open a current or business checking account with a local bank & use the same in all your business dealings.
In India, you can have either of the following legal structures:
- Sole Proprietorship (Recommended)
- Private Company
Indian law doesn’t mandate registration of sole proprietors. But for tax purposes, you need to obtain a GSTIN(Goods & Service Tax Identification Number) & Permanent Account Number (PAN).
GSTIN is required for sales tax (GST) purposes. And, PAN is required for income tax & certain banking purposes.
A sole proprietor can use his or her own personal PAN (Note: PAN is widely used as a personal identification document in India).
Using the GSTIN & PAN, you can open a current account with a local bank. That’s it. In India, all you need to start a sole proprietorship online grocery store is a GSTIN, PAN & a bank account.
To apply for GSTIN & PAN, contact your nearest tax lawyer or an accountant.
Disclaimer: The aforesaid advice is only for your information & doesn’t necessarily constitute professional legal advice.
Step #4. Source The Products (Groceries)
Your online grocery store will be functional only when you’ve products or stock.
Therefore, this step talks about sourcing of grocery products for resell.
Basically, there’re two sourcing models you can use to source groceries:
- Inventory model
- Dropshipping model
Inventory sourcing model involves sourcing of products & keeping stock in anticipation of future sales or orders.
The inventory model requires investment of working capital in stock. Also, you need to commit a fixed cost every month in the form of warehouse rent, warehouse electricity etc.
Whereas, dropshipping involves sourcing & delivery of products directly from wholesaler or manufacturer to final consumer (without keeping the actual stock). A purchase order is placed with the wholesaler only after receiving an order from the consumer. Of course, dropshipping results in non-blockage of funds in stock. Also, dropshipping reduces the rent bill.
Dropshipping sourcing model is what most eCommerce marketplaces follow. Amazon?. Yes, you’re right.
Now, the big question. Where to source the groceries from?. Whether to source locally, nation-wide or go international?.
If you follow the inventory model of sourcing then you can source from anywhere you want (except for groceries with short-shelf life).
To find nation-wide or international suppliers, you may use directories like WorldWideBrands. They’ve got a list of 16+ million wholesale products on their platform. Also, all suppliers listed there are certified wholesalers.
If you follow the dropshipping model of sourcing then you’ll have to buy locally. Yes, there’s no other way out. Why?. Because you can’t have your customers waiting for groceries for a week!.
To search for local suppliers, explore the nearby wholesale market. Go there & talk to as many suppliers as you can.
Tell them about your business plan & take their feedback. If they agree, bring them on-board & explain the complete ordering & fulfillment process.
Choose your suppliers carefully. They can infact make or break your business. A non-committed supplier will result in delay in delivery of orders.
An ideal supplier should:
- Keep adequate stock
- Take care of the freshness factor
- Deal only in quality products
- Have a high response rate
Don’t you want your online grocery store to have a strong profitable growth?. I bet you do.
It’s not just about delivering orders but making sure that your store churns high profit numbers. That’s possible only when you buy products at best prices.
To get the best rates from suppliers, you may use the following strategies:
- Sell your vision to the suppliers (Explain the future potential of your business)
- Buy in bulk quantity (Applicable for inventory model)
- Commit to a certain number of orders per day, week or month
- Look if there’s a possibility of entering into an exclusive agreement (category-wise) with some suppliers.
Note that you also need to source packaging & labeling items like:
- Labels or Stickers
- A4 Size Papers (For Invoices)
The aforesaid packaging & labeling stuff can be sourced from ULine. They offer packaging material at wholesale rates.
If you’re following the inventory sourcing model then you need a small warehouse to stuff your products & packaging accessories.
At the start, to keep the costs to minimum, use your own house basement as a warehouse.
Last but not least, you also need to source some mandatory office equipment like a printer, a modem & a laptop. Get them on Amazon.
Step #5. Feed Images & Descriptions Into Your Grocery Store
By now, you’ve an online grocery store & your groceries (at least the source) ready.
Next up, you need to feed the grocery images & description in your Shopify store.
Login to your Shopify panel & click on “Add products”.
The images are going to be the first thing that your potential customers will see. So, make sure that your images are:
- Displayed from as many angles as possible
- Having a white background
- Captured using a professional camera
- Enticing enough to encourage store visitors to click through
- Clear, non-edited & authentic
Make sure that you use a professional camera to take photos of products (groceries). Or, outsource the photography work to a nearest photo studio.
Your title will also play a huge role in getting people to click through your products. So, make sure that your product titles contain emotional & sensory words. Take multi-grain flour as an example :
- XYZ Multi Grain Flour 1 LB (Normal title)
- XYZ Super Healthy Multi Grain Flour 1 LB (Title with emotional & sensory words)
Next comes product descriptions.
If product images & titles entice customers to click through then product description encourage customers to convert.
A good product description seeds confidence in the mind of a visitor & entices him or her to click that “buy now” button.
So, how should an ideal product description be written?. What’re some of the essentials of a good product description?. Let me explain.
A high-converting product description should:
- List down product benefits
- Be transparent about product technical specifications (like weight, nutrition, calories etc.)
- Answer product FAQs (Frequently Asked Questions)
- Support your points with statistics or facts
- Incorporate expert reviews, if possible
- Be SEO-friendly (This is a huge topic in itself. Google for more details)
If you think you aren’t an expert copywriter or don’t have enough time to write descriptions for 100s of products then hire a freelancer at Fiverr.
Step #6. Build Your Delivery Team
By now, your online grocery store is ready to process orders.
But, what about the deliveries?. How’ll your orders be delivered?. That’s where you need to build a team of 2 or 3 delivery personnels.
Contact a local HR firm or a college & shortlist a few candidates. Take their interviews & assess their abilities. Finally select those who possesses the following:
- Comfortable with traveling
- Strong knowledge of local addresses & locations
- Good presentation & behavior
- Good communication skill
- Speak local languages
- Possess a vehicle
Remember, you need to introduce & arrange a meeting of delivery personnel with the local suppliers. Also, you need to explain the ordering & delivery process in details.
Typically, your ordering & delivery process will be as follows:
Step #1. Customer orders a product
Step #2. Order shows up in the Shopify dashboard
Step #3. You notify the delivery personnel about the order details
Step #4. Delivery personnel gets the product from the local supplier & delivers it to the customer. (Dropshipping model)
Step #5. Delivery personnel picks the product from the warehouse & delivers it to the customer. (Inventory model)
Step #7. Market Your Online Grocery Store & Start Selling
Last but not least, you should market your online grocery store.
Of course, no one would visit your website until unless you promote it. And, by promoting I don’t just mean spreading the word among your family & friends.
Yes, family & friends can help at the outset. But, you want the mass market. Don’t you?.
So, let jump in & explore some of the effective ways you can market your store.
Door To Door Campaigning
This is perhaps the most easiest, affordable & direct way to promote your store. All you need to do here is visit individual houses in your nearby locality & talk about your store.
If you’ve pamplets or brochures with you then that’ll be even be better.
Talk about the unique selling point (USP) of your store. Example: Guaranteed delivery within 30 minutes OR 100% quality checked products OR 100% authentic products etc.
The success of door-to-door campaigning will depend on how well you pitch your online store & it’s USP. You HAVE to make people visit your store.
To entice people further, offer a discount of say 25% to your first 100 customers (there’s an app to do this on Shopify). That’ll help you to kickstart your sale operation (vital for boosting your own confidence).
Since door-to-door campaigning is a tedious job, you may need the help of your friends or family members. Or, you can hire a few field sales interns from your nearest HR agency.
Bulk Email & SMS
The idea here is simple. Extract a list of local emails & phone numbers of your target audience & pitch your store.
How to extract such emails & phone numbers?. There’re such service providers everywhere. Google to find out someone from your locality.
Customer privacy is important. Therefore make sure that the agency whom you’ve hired have taken requisite consent from the recipients.
Make the email brief & to-the-point. Note that everybody is today’s world is busy. You’ve got only a few seconds to grab attention of the recipients.
Make sure that the email title contains emotional & sensory words (preferably with a smiley). Add some images into your email body & talk about the USP of your store. Explain that WHY. That means explain why a person should order from your store.
As far as SMS goes, you’ve to make it short & crispy. Add words like “Limited period discount” to entice people click through your website.
Coupons & Discounts
Print a good number of physical coupons (with discount codes & your website details printed on it).
Then, tie-up with a few local stores, hand them over the coupons & request them to give it away to their customers.
In return, the stores may ask for financial compensation or may request their store name or logo be printed on the coupons. Either way, this marketing strategy is a great way to attract targeted audience to your store.
I had used this strategy for my first eCommerce store. Trust me, it worked like charm.
Tie-up with some of the biggest malls or retail stores of your area with large footfalls for installing temporary canopies.
A canopy is an effective medium to attract attention of mall visitors. Make sure that you design your canopy in a strategic way with website name & USP clearly displayed.
Talk to the customers stopping by your canopy. Hand them over your pamphlets or brochures. Show them a demo of your website. And, maybe, offer them a spot discount as an incentive for instant purchase.
Do try out different strategies & get the visitors to buy something then & there.
Banners & Hoardings
Contact a local advertising agency for banners & hoardings at public places like:
- Bus stations
- Railway stations
- Hospitals etc.
Yes, this is a costly option but effective nonetheless. Give this idea a try preferably after getting some traction.
Affiliate marketing is a new-age digital tactic that connects buyer with sellers via affiliates.
These affiliates promote brands, products & companies on their blogs, video channel or social media profiles in return for incentives.
Did you know that Amazon gets 50% of its sales from it affiliates?. Yes, affiliate marketing is that powerful.
Now, how to find affiliates or partners for your store?. Simple. Explore the following affiliate marketing platforms:
- Commission Junction
- Rakuten Marketing
The aforesaid platforms will help you connect your Shopify store with a large base of affiliates.
Do you see banner ads when you visit some random websites?. That’s Google Ads.
You as an online store can also display your banner ads on other websites using Google Ads. No, the process isn’t complicated. All you need to get started is to sign up for a Google ads account & set up the payment.
Similarly, you can also go for Facebook ads. You must be aware of those ads displayed on your Facebook feed. That’s Facebook Advert.
Comparitively, Facebook Advert is cheaper than Google Ads.
To succeed at digital ads, you need to target the right audience using various targeting options like location, interests, age, gender etc.
A word of caution here. Don’t invest a large sum of amount at the start. Test with a small token amount, learn what works & then scale up your campaign.
Word Of Mouth
Do you want your online grocery store to achieve long-term sustainable growth?. Then, your customers need to spread the word about your store among their colleagues, families & friends. In short, they’ve to become your store’s FREE brand ambassadors.
How’ll that happen?.
That’ll happen only when your present customers are happy with your products & service.
All other marketing strategies are just gimmicks to get some short-term success. For long-term, recurring & happy customers, you need to exceed your customers’ expectations.
Of course, this isn’t easy & it won’t happen overnight. Stay focussed consistently on delighting your customers with great products, offers & service.
Of course, there’s hard work involved in the aforesaid steps. And, no one promised that it’s going to be easy.
But, look at the other side of the coin. The steps listed here are all what it’ll take to build an online grocery store of your dream.
Things will become easy if you take the first step. Go, get that domain name. That domain name will push you to act on other steps. Does that sound tough?.
Yes, you’re just one step away from building your business. This’s the time. Show what you’ve got.
Dream. Hustle. Succeed.
What do you think of the aforesaid steps on how to build an online grocery store? If you have any questions then comment below & I shall be glad to help.