How to Start a Local Grocery Delivery Service

11 min read

An entrepreneur has some responsibilities. A key one is to offer solutions to real world problems with products. For their trouble, the successful entrepreneur gets a successful (as in, profitable) business. Anyone can venture into a business, but doing so should be an indication that you are ready to meet people’s needs. One easy way to meet a need without innovating on a new product? A grocery delivery business. Delivering groceries is widely recognized as a legitimate need in many communities. Growth in the space on the individual level, however, is attributed to the successful application of the model. And for that, we recommend using an ecommerce solution to guarantee success.

Do you want to know how to start a local grocery delivery service? In this post, we will discuss a step-by-step approach to everything there is to know about the subject. Since Ecwid’s introduction into the ecommerce space in 2009, many online shoppers and business owners have chosen to sell their products online through the platform. This makes the company well suited for opening a local grocery delivery business.

Why a Grocery Delivery Service?

A grocery delivery service is one of the few businesses that doesn’t present that many upfront challenges. Part of what makes it easy is the add-on nature of business: where you can choose to add deliveries to your already existing grocery store if you have the financial capability.

Alternatively, you can choose to function as a delivery add-on to an existing grocery store that you do not own. In this case, your job is simply to get the groceries delivered to your customers. Your decision to start a grocery home delivery business is an indication that you are ready to shoulder some responsibilities in terms of shopping groceries on behalf of your customers and delivering them to their doorsteps- whether at home or offices or other locations.

How To Start a Local Grocery Delivery Service

Owning your grocery store can be a lucrative business if you choose the right platform for it. To start a local grocery delivery service, follow these steps. (Note that starting a business is more than just creating a name and an online store).To become successful, make sure your business is well planned, properly registered, and compliant with all local laws, especially ones related to food sanitation.

Understanding the grocery industry

Statistically, the grocery industry was made up of grocery home delivery and supermarkets. These two models were the bulk of the grocery business in the US in 2013. In addition, home delivery services for groceries accounted for 90 percent of the food consumed by the country in the same year. In other words, the food retail industry features low-margin, high-volume, and cutthroat competitions.

Do your research

Market research and feasibility studies are a must as they will help you understand the demographics, psychographics of the target audience. This will also help you decide on your niche. While there is no particular niche area in terms of grocery delivery business, very often, many grocery delivery companies could decide to own their grocery store or operate without one. Some may also choose to operate online and others- both online and offline.

In addition, you have to know who the major competitors in the industry are. In every industry, some brands perform better or are given more regard than others. This could be because they have been in the game for a long time, and it could also mean that they have been known for delivering impeccable services.

Identify the possible challenges and threats you will face

To start your own grocery delivery company, one major challenge you are likely to face is the presence of well-recognized companies in your location. This is why it’s advisable to create a delivery service in partnership with a pre-existing grocery store, whether that be your own or someone else’s. In addition, any unexpected economic downturn or unfavorable government policies are other challenges that could hamper the growth of your proposed delivery company.

Step 1: Have a plan

As an entrepreneur, you cannot attain success without a clear plan. A plan will help you map out the basics of the business and uncover other unknowns. Here, you have to consider things such as the costs involved, especially if you are considering investing in technology- one of the specifics of ecommerce solutions.

In addition, you want to determine what the ongoing expenses for your grocery delivery business are. You will also account for the cost of salaries, insurance, equipment maintenance, and gas, among others. Determining your target market, and identifying how to make money off the business are other crucial things you should plan for.

Part of what accounts for other costs are:

How much will you charge customers for deliveries?
How much profit can you make off the business?
How can you increase your profit margin?
What name will you give your business?

Step 2: Ensure you form a legal entity

Sole proprietorship, partnership, corporation, and limited liability company (LLC) are some of the most common business structure types. It is important to establish a legal business entity to gain some protection from being held liable if your business is sued. You can start an LLC yourself and pay the fee or hire an LLC Services for an additional fee.

Step 3: Get your tax registration done

Before you can launch the business, you will need to register for some state and federal taxes. To do this, apply for an EIN through fax, mail, or the IRS website. Depending on the business structure you choose, you might have various options for how your business will be taxed. Get the specific state taxes that apply to your business.

Step 4: Open a dedicated business account and credit card

Operating financially as a business will ensure some protection for your assets. You will be putting your assets at risk by mixing your business and personal accounts. Plus, a company credit card just makes everything simpler and more intuitive.

Step 5: Create business accounting

Practice the art of recording your expenses and income to help you understand how your business is performing. Doing this consistently will also help simplify your annual tax filing.

Step 6: Get the necessary licenses and permits to avoid fines.

This is in terms of state and local business licensing requirements, food and vehicle regulations

Step 7: Get an insurance

Protect your business and your company’s financial wellness in case of any loss

Step 8: Define your brand

One of the reasons you have to define your brand is to stand out from the rest of the local grocery delivery services. Hence, you must know how to promote your business. Being an online grocery business, you have to pay more attention to your online presence to grab user’s attention. Many online grocery shops and consumer packaged goods (CPG) companies depend on the on-demand grocery delivery model to keep their business up and running. This is even made possible by linking and partnering with Ecwid’s ecommerce solutions.

Step 9: Create a business website

Another key thing is to set up your website or blog to promote the service, and since most people are turning to the internet these days to seek information, you must make your website accessible. By integrating Ecwid’s ecommerce solutions, you are confident that your website will have a good display, and the grocery stores you work with are well known.

Conclusion

A grocery delivery service can provide a great service to your community: doing people’s food shopping for them. This also comes with great responsibility, as you will become a nutritional lifeline to many. Typically, to ensure success as a grocery delivery company, you should partner with a wholesaler, or local grocery store to ensure that you have food options that people want to buy. In some cases, you can also offer additional services to assist your customers with meal planning.

Whatever your goals and interests are, there are proven ways to go about setting up a local grocery delivery service. Choosing the right ecommerce platform will make the job easier and help you with some of the logistics so that you can implement your plans and have the best chance at grocery delivery success.

Sell online

With Ecwid Ecommerce, you can easily sell anywhere, to anyone — across the internet and around the world.

Get started

May 14, 2021

About the author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.