Tech Peak » How to Start an Online Grocery Store with Low Investment

How to Start an Online Grocery Store with Low Investment

by stepheniepeterson

A grocery store online sells a wide selection of products, ranging from spices and seasonings to packaged goods and beverages. The past year has seen an increase in first-time online consumers, primarily from Tier 2 and Tier 3 cities and towns.

Several social commerce start-ups have sent household staples, as well as dry and fresh groceries, directly to the doorsteps of Indian clients in the last year. The sector has seen both established eCommerce giants and newcomers achieve phenomenal development by expanding into the grocery area.

The primary reason that on demand grocery app stores have grown in popularity in India is the rising use of cell phones. This enables individuals to place orders from the convenience of their own homes. Due to the enormous development potential, numerous foreign corporations are investing in this market.

Market Opportunity

Typically, multiple providers are involved in an online grocery store business strategy. One such retailer is Big Basket, one of the largest grocery stores in the country. Due to the outbreak of coronavirus, an increasing number of consumers are ordering online. 

This business presents many possibilities for small independent companies interested in setting up an online grocery store to cater to a more local customer base.

Why start an online grocery store?

Daily expenses on groceries account for the largest and most consistent portion of any Indian family’s budget. The majority of individuals do not want to spend hours shopping at their neighborhood grocery store and prefer to do their grocery shopping online. 

How to start an online grocery business

We’re going to discover how to start an online grocery business in India in this article. It’s fairly simple, provided you have a firm grasp on your organization and a team of web solution providers on hand to assist you on the online front. While starting an online food store, keep the following in mind:

Order collection

This is the first step in establishing a long-term relationship with your store for a customer. A buyer should be able to easily place an order through mobile or computer. You can create an app or a website to promote your store. Another possibility is to create an account with an eCommerce site. Additionally, you can take orders over the phone.

Order execution

According to research by Fabric, a micro-fulfillment company focused on grocery operations, 65 percent of customers would switch grocery suppliers if they were unable to provide same-day delivery. As a result, it is critical to streamlining the supply chain.

Payment collection

You should provide customers with secure online and mobile payment options that are both quick and avoid fraud. If you choose to use local delivery boys, you can charge an additional shipping price during the customer’s order placement.

1. Register your business

Your grocery business might be registered as a sole proprietorship or as a partnership. To properly finish the registration process, you can contact any tax counselor or chartered accountant. To start an online grocery business, the following licenses and licenses are required.

  • FSSAI Licence and Registration – Because your online grocery shop will offer food products and processed items, you must obtain a Food Safety and Standard Authority of India (FSSAI) license.
  • Shop Act Registration – Every retail counter, shop, or store must have this license, which regulates the salary, hours worked, and other employment conditions of employees.
  • GST Registration – It is an indirect tax that applies to both goods and services. GST currently encompasses all existing national and state indirect taxes.

2. Identify a target audience

Determine the food habits of the residents of your operating zone. It will assist you in identifying high-demand items and stocking them well in advance. Additionally, the number of homes with young and educated members is significant.

3. Decide the delivery region

Customers are increasingly seeking relief from the stress of shopping for daily necessities, and may frequently be found Googling for “grocery delivery near me.” The delivery modules are critical to the success of an online grocery business. You should choose your desired delivery location in such a way that you can rapidly send the shopping goods.

Due to the fact that the majority of consumers require same-day delivery, you must arrange for a fleet of trucks. Alternatively, you can hire delivery boys on two-wheelers. Your delivery region should have a radius of no more than 5 kilometers. Otherwise, the expense becomes uneconomical.

4. Arrangement of inventory

Inventory management is critical while operating a supermarket store. There are two methods for inventory management. To begin, you can fill your warehouse, or you can partner with local grocery stores and wholesale providers.

The warehouse can be used to store things for which you may receive online orders. It should be positioned as near to your region of operation as possible.

5. Funding

Grocery businesses typically operate on razor-thin margins, typically between 2% and 5%. As a result, your funding capital should be sufficient to cover all expenses. Due to the fact that you must deliver the things to the clients’ houses, you must additionally consider in delivery charges.

6. Choose a method of payment

If you have a solid doorstep delivery system in place, the best method of taking payment from customers will be Cash on Delivery (or COD). This will ensure that you have an uninterrupted cash flow. Additionally, you will not have to wait for payment, as many credit/debit card payment gateways do. Additionally, you will save on the additional 2.5 percent payment that they charge as transaction costs.

7. Pick-up at store facility

You can have a convenient pick-up facility for your customers. It will enable them to order and pay for the goods in advance, and later pick them at a suitable time. This can minimize shipping costs and reduce person-to-person interactions.

8. Grocery Mobile Apps

E-grocery apps provide shoppers with excellent value and convenience, such as the ability to order from a single interface and track their orders in real-time. Additionally, you can boost your online grocery store’s sales by developing an exceptional app. Grocery mobile apps can be classified into the following categories:

  • Ecommerce apps- These enable purchasers to explore a broad choice of products and scheduled delivery according to their convenience. This type of application is primarily utilized by online merchants such as Amazon and Big Basket.
  • In-store grocery apps- They combine the capability of an e-commerce site with that of a standalone supermarket app, allowing you to display all of your products along with their characteristics.

If you want to achieve financial independence and live the life of your dreams, starting an online Food business is an excellent choice. Globally, the grocery sector is worth $ 1 trillion, and online shopping accounts for less than 10% of it. There is enormous potential for progress; thus, pursue that desire!

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