Category: startups

During the 1990s, when the internet was first coming into its own as a sales venue, online grocery businesses such as HomeGrocer and Webvan crashed and burned. It seemed like a natural fit for consumers to use the convenience of online ordering to procure their daily staples, but the traditional grocery business model didn’t translate to an internet version altogether gracefully. As digital sales have grown across the board, entrepreneurs have learned from these early experiments, making online grocery delivery more viable than it ever was. 

Online Grocery Delivery Business Plan 

Starting an online grocery delivery business will likely require outside capital because it can be an expensive undertaking. Creating a solid and thoughtful business plan will not only give you a valuable tool to present to lenders and investors but it will also provide you with an opportunity to think through important questions whose answers can be vital to your success. 

Your business plan should clearly present your short-, medium- and long-term goals and chart a path from your startup format to long-term profitability. This is an important time to think about scale. You may choose to start with a limited delivery area and a modest selection of products to avoid making a prohibitive investment right away. Alternately, if you have considerable experience in the grocery industry or in online marketing, you may opt to pull out the stops and go big right away, which will require you to purchase infrastructure and do enough initial advertising to make a splash. 

 Whichever trajectory you choose, preparing an online grocery delivery business plan will increase your odds of success by forcing you to do research on the industry. This information will show you where there are openings for new and established models that either build on past successes or offer alternatives to historical mistakes. The financial statement and financial projection section of your business plan will allow you to play out scenarios, including forecasting how much business you will need to transact to break even. 

Online Grocery Delivery Platforms 

Your online grocery’s platform will be the storefront where actual and potential customers will browse your offerings and place their orders. It should be relatively easy to navigate so customers can find what they’re looking for without growing frustrated and abandoning their cart. At the same time, it should be able to offer suggestions and anticipate customers’ needs and shopping patterns to maximize sales and build on existing preferences. 

If you’re reading an article about the online grocery industry rather than hiring a team of consultants, you’re probably going to start relatively small, with limited infrastructure and capacity. It can be prohibitively expensive to launch a venture that can realistically compete with large grocery chains, so if your resources are limited, your best bet will probably be to narrow your focus and appeal to potential customers who are most likely to want and need what you offer. Your grocery delivery business software should reflect these choices. 

Your website should also clearly communicate the parameters and limitations of your service while also emphasizing what you do offer. It’s frustrating for a customer to choose a cart full of products only to learn at checkout that you don’t deliver to that customer’s address. A friendly and informative page for frequently asked questions can help to clear up many of these misunderstandings. 

Grocery Delivery Storage 

Even though your grocery delivery business will take orders online, you will still pack and deliver from a brick-and-mortar location. Unlike specialty art purchased online, groceries are typically purchased because a customer has an immediate or short-term need. You can wait a few extra days to receive an urn or a painting, but if your grocery delivery is delayed, you still have to figure out what to eat for dinner. For this reason, it is critical to have enough inventory on hand to fill orders without having to wait for your stock to be replenished. 

At the same time, if you order too much of a perishable product and your customers don’t order enough of the item, you’ll likely get stuck with items that have passed their pull date. You can still sell products that are close to their expiration dates, but doing so could have an effect on your ability to attract repeat customers because if their food turns bad before they can eat it, they’ll be unlikely to order from you again. 

You’ll certainly need enough shelving and grocery space to hold and rotate your inventory. If your business sells refrigerated and frozen offerings, you’ll also need commercial refrigerators and freezers, which can be expensive. Assess your needs realistically and try to find a sweet spot between taxing your resources by building too much capacity and limiting your growth potential by not planning for enough. 

Planning Grocery Delivery Routes 

The delivery arm of your business is your most tangible point of contact with customers. People order online groceries primarily for the convenience, so your delivery schedule should be convenient for your clientele. At the same time, be wary of overcommitting to meet your customers’ needs if doing so creates an unsustainable business model. It may be ideal for your customers if you have a delivery truck in every neighborhood for every two-hour window, but doing so would probably be prohibitively expensive for your business. 

You can either take the trouble to schedule delivery times when your customers will be at home or you can use a system for leaving food, ideally in a cooler if the items you deliver are perishable. However, leaving grocery deliveries unattended can be problematic if customers live in areas with high crime rates. In addition, if customers live in apartments, you may have trouble gaining access to leave groceries by their door. 

Pack orders so the first bags and boxes you deliver will be the most accessible. If you offer shelf-stable, refrigerated and frozen items as part of the same deliveries, develop a system for keeping track of an order’s different components and retrieving them efficiently at each stop. Track the time it takes to deliver each order and figure these costs into your margins and projections. 

Grocery Delivery Business Models 

Early online grocery delivery businesses such as HomeGrocer and Webvan failed in part because they were conceived by programmers rather than grocery-industry professionals. The grocery industry operates on slim margins, which weren’t sufficient to support tech-heavy platforms. Although online grocery fulfillment warehouses didn’t have to stay open the same long hours as traditional supermarkets, they did have to carry comparable levels of inventory to be able to fill any orders that arrived. 

Subsequent models have revised these early iterations to build on some of the economies of scale that the grocery industry has already achieved. Chains such as Safeway and platforms such as Amazon use physical and digital infrastructure to build onto established businesses. We R Here 4 U LLC uses its platform to provide grocery delivery from existing stores. 

Choosing a Business Name 

Online grocery delivery business names should reflect the approach that you choose for your business. Decide which aspect of your business model you’re most interested in emphasizing and choose a name that communicates this aspect, whether that be convenience, quality or quirkiness. Have a look around the internet for ideas and see what businesses are flourishing. Then apply your findings to coming up with the perfect name or you. 

Every business has a brand, and branding defines how your customers perceive you. Your business’s ability to serve products or services to your customers by fulfilling their satisfaction determines how strong or weak your brand is. If you want to grow and if you plan to remain in your business for long, you will want something between your product or service and your audience, which will resonate with your offerings and also have a lasting impression in their minds.

Branding helps differentiate

In today’s time, when you can easily find a “me-too” product, it is branding that helps differentiate. And even if you do have a unique or innovative offering, it is through branding that you could gain credibility and respect for your product.

Branding is a process

Once you have gone through the process of choosing the right name for your product. You will want it to be remembered. So branding is the process through which your product communicates with your consumer.

Branding creates an experience

Branding helps create a story around your product or service. Branding is everything that goes around the product. It is the experience your customer has with your product. Branding is what connects with your customers through various touchpoints, even before your customer actually gets to see the product. Branding is what can and needs to appeal to the senses of your customer for them to even notice your product.

Branding is a mind game

Well-thought branding is not just about logos, colors, and packaging. It is more of a strategic decision about the image you want to create. It is positioning your product in your customer’s mind.

Branding is an internal commitment

It is the belief the creators & promoters of the product dearly hold. Working towards a shared vision, you build the brand’s essence and value. With this foundation, the brand’s identity is created. Logos, fonts & colors, tag line, message tone, visuals, and packaging are all a means to personify the brand and give it a distinct personality, style, and a voice of its own.

Branding creates an opportunity

Branding further gives the opportunity of extensions for a new product or even a new product category. Thus the scope of branding is vast, and so are its benefits.

Branding builds loyalty and can be measured

Measures like brand equity and brand value help estimate how much worth a brand is. Brand equity is the premium value a company generates from a product when compared to its generic competitor. While brand value is the financial worth and market value of the brand.

The more powerful your brand stands, the stronger the connection with your audience. Strong branding delivers the values to the customer, getting the latter attracted to your product and service.

A start-up is a young business that is just beginning to develop. Start-ups are usually small and initially financed and operated by a handful of founders or one individual.

Below are factors to consider when thinking about working for a start-up:

You wear many hats

Your job description defines what you’re working on, but there will be times where you have to do duties that you never signed up for. You must be able to agree with taking on tasks that you did not expect. It is all about being a team player, and helping in whichever way is needed.

Long hours

A start-up is the polar opposite of a traditional 9–5. While many times the start-up workplace is flexible and fun, there is an expectation that you get the job done and be available regularly to assist the team. It could mean late nights, early mornings, weekends, and holidays.

Fast-paced environment

Start-ups are always moving and changing. You will have more fast days than slow days. It is a place where creativity lives, and you are responsible for executing the ideas you come up with.

High energy, team-oriented, and impactful

Everyone is excited to be part of a start-up because they can see the impact they are making through the work they produce and are on a mission together to build up an organization together. In larger organizations, it’s more challenging to see the impact you have on the organization, and it is harder making change happen due to the approval process that is involved.

Create rules

You will have the opportunity to establish policies, templates, and standards for the company. Test them and change them until it is ideally suited to your ideal working environment.

Potentially has less stability than larger organizations

Larger organizations provide more stability. Start-ups are somewhat risky because you never know what could happen to the company. The company may not be making enough money, or the company could get bought out. There’s so much that can happen so quickly. If you thrive under pressure, then it won’t be as scary. On the other hand, if you are not much of a risk-taker or if you have many responsibilities, you should take some precautions (build an emergency fund).

Salary

Salary hikes depend on revenue generation. If a company does not generate enough money, it will not be able to sustain itself.

Be part of a pioneer team

Since you are among the first employees of this company, you are meant to be the future executives and directors if the company stays strong with progressive and exponential growth.

A start-up environment is such a great way to make an impact on an organization. If you are driven by causing change and seeing the impact you can make, I’d recommend trying a start-up.

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