ENTREPRENEURSHIP / MAR. 26, 2014
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How to Create and Run an Online Bakery

Image via Flickr by The Travelista

The Internet makes many things possible that weren’t before, and owning a bakery may actually be within your grasp. Run your own online bakery, and maybe one day it will turn into a brick-and-mortar store.

Creating an Online Bakery

Selling foodstuffs is always tricky, because you’re making a product that’s meant for consumption. By law you cannot knowingly give an individual a consumable item that could cause death or harm. You must also provide certain nutritional and ingredient information when you are selling food as a product. And once you get past these hurdles, you still have to address all the tiny details that go into running a business. 

Start by finding the storefront for your bakery. It’s very simple to buy your own website online or create one for free. At some point, you should consider building your own website to represent your bakery. But if you need an online storefront that has all the right features already built in, go to Etsy. Here you can create your store, list your items and sell products using all of their on-board software. It’s free to list items, but the site will take a cut of your profits as part of their fee. 

To get a storefront on this site, sign up for an account with your email address. Use the site to create a storefront. You'll choose a name for the business, list your items and set your own pricing options using the site. Etsy is a good starting point because you can polish your selling techniques without worrying about a lot of technical details.

Products

An online bakery is possible with good planning, but your product range is going to be limited by what you can ship. Elaborate cakes and cupcakes, for instance, are not ideal for an Internet-based baked goods store. These types of items are more likely to get damaged and destroyed in transit than a loaf of bread, for example. Choose your product line carefully. Breads, well-packaged muffins, cookies, some candies and fudge will all ship well.

Building Your Brand

Once you’ve got an online storefront, you have to brand your bakery.

  • Name: Your bakery needs a name, something easy to remember and easy to spell. Ideally, the name will reflect something about the business itself. 
  • Logo: Design or purchase a logo, which is an essential item for brand recognition. You’ll want to place your logo on your packaging. One easy way to do this is to design a round logo and print it on circular labels that can be stuck to all your outbound packages.
  • Packaging: Packaging is part of your brand as well. Do a little shopping around to find boxes and bags that look attractive and fit into your budget. Check local restaurant supply stores and craft stores. Look online to see if you can find any better deals there. If possible, try to choose the same color for all your packaging and use the same materials every time. Consistency will make your brand recognizable, and that goes a long way toward boosting your business’s reputation.
  • Selling: Take gorgeous pictures of your creations in order to list them online. Use social media and your own circle of friends to begin promoting your business. 

Shipping

Packaging is only the first part of preparing your products for shipping. There are a few extra steps you have to take when you're running an online bakery.

  • Outer Labeling: Shipping labels should be clearly and cleanly placed on shipping boxes. When shipping, remember that items containing food should be marked “perishable.”
  • Inner Labeling: Include a list of the main ingredients and basic nutritional information with your shipment. This information can be printed out on a square label and placed on the packaging. Obtain nutritional information by keying your recipe into a site like Cookiti; they will provide this data automatically.
  • Shipping Options: You will want to offer your customers as many shipping options as possible so they can get their items more quickly. Provide them with overnight and 2-day shipping, but charge extra for this service! Etsy and other selling-centric sites will help you calculate shipping costs automatically. These costs don't include your packaging and labeling, so you must add these costs to your price.

Pricing

Pricing is essential in any business, and in online business you must calculate shipping costs as well. Make a list of the items you plan to offer, and the ingredients needed to make each. Calculate how much you spend on making a batch of each recipe. Now, shop around a little. Take a look at other online bakeries to see what they charge for their items. Price your products so that you will make a profit while staying competitive with your peers. 

You want to make a profit on every single product you sell. If you bake a batch of 36 cookies and sell three of them in batches of 12, it may cost you $50 in ingredients and packaging materials. This means you must charge, at minimum, $17 for every dozen cookies you sell. This is less than $1 in profit for each dozen, so you would not be well-compensated for your time at these prices. Don't forget to calculate the time you spend in the kitchen, and pay yourself accordingly.

Running a Bakery

The dream of running a bakery may be very different from the reality. If you are successful you will be working long hours in the kitchen, on your feet the entire time. If business is slow you could find yourself swamped with raw ingredients and packaging materials. Buy only a few items to start, and wait for orders to come in before you make big purchases. 

Who knows? You could be highly successful, and eventually earn enough to bring your bakery into the physical world.

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