The food producer’s ultimate guide to doing business online - Chapter 1

The food producer’s ultimate guide to doing business online

Fellow food entrepreneurs,

With more and more people spending an increased amount of time online every day, it’s no surprise that even the (typically old-fashioned) food industry has realized the implications of having an online presence in today’s business climate. However, realizing the potential and acting upon it properly are two different things - the former seeming to be the simple one to grasp for most.

In this series of articles, dubbed “The food producer’s ultimate guide to doing business online“, I will cover nearly all aspects of building and maintaining a solid online presence for you - the food producer - that will save you time, money, and possibly some hair/ulcers/breakdowns. Each chapter will give you valuable insights into the technical and non-technical elements of doing business online in the food industry, including strategy, marketing, design, development, costs/budgeting, and “insider” tips/tricks.

So, let’s get started with the first thing all food producers need to consider before they do anything when it comes to doing business online…..

Chapter 1: How the web should be used for food producers

“To sell or not to sell food online, that is the question” (the one I get asked most often, anyway), to which I answer with a series of questions in return:

1. What type of product do you produce, and why would anyone want to buy it online?
2. How easy is it to ship? (does it melt, need cold packing, fragile, heavy?)
3. How easy is it to find a product like this in local grocery stores?
4. Does it have any gift appeal?

Let’s face it, most consumers don’t typically hop online and say, “Hey, I want to find a new salsa/bbq sauce/seasoning blend/olive oil, (and pay nearly double in some cases) to have it shipped to my house from an online retailer”. Instead, they add it to their grocery list and find it in the local food store they frequent. Does this mean you shouldn’t sell your (salsa/bbq sauce/seasoning blend/olive oil) online? No, that is not what I am suggesting; just have the right expectations and understanding of where your online presence will really provide bottom-line results.

Simply put, your web presence (website, strategy, and marketing approach) should be a tool to complement your current business practices and to grow ALL sales channels, including - and most importantly - your offline sales.

Based on my own research gathered from several hundred food companies I have had the pleasure of working with, I have found that most only generate about 10% of their overall business from online sales. The other 90% comes from sales to retailers, distributors, farmer’s markets, events and shows, etc. Furthermore, and interestingly enough, it is estimated that nearly 90% of wholesale food buyers conduct purchasing research online. So, when you look at that data, it’s pretty clear that the online presence probably does (or could) contribute to more of your overall business than you realize.

To take it one step further (the importance of your online channel as it pertains to overall growth, not just online sales), a recent study showed that 70% of consumers have researched brands before buying them at the grocery store.

That being said, here are a few solid strategies I recommend to food producers looking to maximize their online efforts and for using the web as on overall business-building tool, not just for online sales:

1. Use the website and online marketing channel to increase consumer demand and brand awareness, but don’t expect them to buy it online from you. Just like a billboard or magazine ad, it’s all about frequency and reach - how many people you can reach, and how many times you reach them. The key here is that the tangibles are NOT tracked in the form of online sales, rather in the form of overall business growth - typically offline, which segues into point 2….
2. Use the website as a tool to drive consumers to your retail locations to buy offline (when applicable). Don’t try to force them to buy from YOU at full retail on your site PLUS shipping, send them to their nearest retail store if possible. You are more likely to keep a repeat customer who buys from their nearest grocery store as opposed to buying a jar of salsa from you online once a month. Plus, you’ll keep your retailers re-ordering regularly.
3. If no local retailers are available in your website visitor’s area, create an entry form that lets them suggest their local store to you, thus resulting in a free wholesale lead for your sales staff.  Then, create a downloadable flyer that online visitors can take to their local store buyer in order to request the product. You’d be surprised at how effective this really is - trust me. Retailers WANT to know what customers WILL buy at their store, and are sure to listen.
4. Create a wholesale-only section for wholesale buyers that allows them to research your products, apply for a trade account, view wholesale pricing (password protected), and submit POs.

Now, naturally many companies DO still ask, “How can I increase my online sales from 10 percent to 20 or 30 percent of my overall sales?” Going back to my aforementioned series of questions, if your product falls into one or more of these categories:

• IS NOT commonly purchased online by consumers
• IS difficult to ship
• IS commonly found in most grocery stores, and
• has little or no gift appeal,

….then I’d suggest not focusing a whole lot on growing that number (online sales). Instead, I’d suggest looking at your other 90% and implementing an online strategy that will grow that portion of your business. If you don’t fall into any of the previous categories, then keep reading and I will show you how to sell more online in the upcoming weeks.

So now what?

So at this point, you’ve probably re-evaluated your online positioning and possibly have decided that you need to re-focus your approaching. Or, perhaps your product DOES sell well online, and online sales, in fact, can continue to be a big part of your overall business. Either way I encourage you to continue reading this series as we’ll discuss strategies for both situations in upcoming chapters, starting with next edition’s, titled, “Wholesale Business Online and The Long Tail Marketing Approach”. And if this doesn’t catch your attention, here is a sneak-peak at a few other topics I’ll be covering in the next couple months:

• Search Engine Marketing - SEO and PPC
• Selling online through affiliates and re-sell partners
• Social Media - Facebook and Twitter, how can food producers use all this stuff?

Need help with re-structuring or developing a solid online presence? Let me know!

‘Till next time,

Ryan Montague

Founder and CEO

Gourmet Business Solutions, LLC

www.GourmetBusinessSolutions.com

ryan@gourmetbusinesssolutions.com