Show Notes

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We’ve heard time and again from guests on this show about the importance of sales and distribution when it comes to building your food business. While the dream of being stocked on supermarket shelves is a powerful one, there are other winning sales strategies to tap into – especially when first starting out.

eCommerce used to have a high barrier to entry but is now more accessible than ever. In this solo episode Kylie and Guy discuss some of the pros and cons, who should and should not sell online and bust some myths about common objections to starting your own online shop.

In this episode you’ll learn

  • Why eCommerce is such a powerful tool for startup food producers
  • How selling online can help you take control of your sales
  • What kinds of food businesses should NOT use eCommerce
  • The main objections to creating an online store and how to overcome them

Notes and Links

Take the quiz: “is eCommerce right for me?”
Tessa Stuart episode
CRU Kafe episode
Ugly Drinks episode

Episode Transcript

Guy: [00:00:02] You’re listening to Good Foodies and this is episode 25. Today, we’ve got a slightly different format for you. We’ve done some of these in the past. We’re doing a solo episode today. Just Kylie and I having a bit of a chat about some stuff that we’ve been talking to some of our clients and partners and friends and contacts about recently. We’ve been doing a lot of research into e-commerce and we hear a number of times again and again, that people are either using e-commerce already or they want to, but they’re not sure where to start, or they’ve got lots of questions about it. And so we thought we’d pull together some of that information that we’ve come across recently and put it into an episode. Just a nice short one about 20 minutes or so and hopefully you’ll find it useful. In addition to this we’ve also put together a free training course and there’s more details about that in the show a bit later on. So stay tuned to hear more about that. But for now let’s jump into that conversation that Kylie and I had a little bit earlier.

Kylie: [00:00:58] So, let’s get started. What is your number one reason for a food business using e-commerce?

Guy: [00:01:05] What is my number one reason?

Kylie: [00:01:06] What’s the biggest reason that a food business should jump into the e-commerce world?

Guy: [00:01:13] So I think to answer that, we need to go back a little bit further from all of the people that I’ve met and spoken to and at the pleasure of tasting all their delicious products. A lot of them have this goal, this dream of being in the supermarkets and so it’s almost, I’ve heard this story so many times have people say, “I just can’t wait to be able to walk into a supermarket and see my products on the shelf and pick it up. I feel proud that I’ve achieved something.”.

Kylie: [00:01:44] That makes sense. I mean there’s a lot of that built in to why they start a food business in the first place.

Guy: [00:01:48] Yeah, absolutely. And the thing is, it’s tricky, it’s very challenging to get listed. Once you get listed then there’s even more challenges of getting the products to come off the shelf. And we’ve talked about it in a number of the past episodes. The one with Tessa Stewart springs to mind, the one with Colin from Crew Cafe springs to mind as well. And yeah there’s this huge desire to to build this amazing food business and in my mind, one of the best ways to go about this is to take control of your sales by building your own sales channel with e-commerce on your website.

Kylie: [00:02:27] So you’re saying, let’s not rely on the supermarkets to guarantee our success or to build the success of our business but rather, let’s find another way that we ourselves, as owners or founders, can take control of that success ourselves.

Guy: [00:02:42] Yeah, definitely. I mean, when you put all of your hopes into the hands of somebody else, whether that’s a supermarket or some other online platform, you’re handing over responsibility in your kind of, you’re giving over control of the very thing that is your own. Whereas, there is the option there to create something of yourself that you can control the experience, you can set the prices, you can make the 100 percent of the margin.

Kylie: [00:03:08] So let’s just dig into that margin thing. You’re saying that if you have your own sales channel, the margin is higher? Is that what you’re saying?

Guy: [00:03:16] Yeah, I mean it’s not something that I know all of the ins and outs about but for sure, when you sell to a supermarket, they want to make their cut on top of a price and so you end up giving away like a large percentage of that to them. You also end up spending a lot with them in terms of marketing and promotions and stuff like that. And of course, you would spend all of that money on your own marketing and promotions as well. But sometimes, you end up being beholden to the supermarkets that have very strict rules and regulations and criteria and all that kind of stuff. It really is putting all of your eggs in that one basket.

Kylie: [00:03:52] So I guess that applies too, if you’re selling your product so on in independent retailers, you can sell your price on your website, on your e-commerce platform for exactly the same price but then you don’t have to pay to that retailer their cut. You’ve completely removed that middleman and you get more money in your pocket.

Guy: [00:04:10] Which sounds great to me. I mean and especially when you’re first starting out, you need as much of the profit in the margin as possible to continue to to grow and to put in whatever else it is that you’re doing but also you need some of that money for yourself, you need to pay yourself.

Kylie: [00:04:25] Wrapping that up, we’re saying, by having an e-commerce platform, you are in control of your own sales.

Guy: [00:04:33] The other thing that you’re really in control of as well is the data and the information that you can gather from customers and from those sales. So every time you make a sale, an order goes through your system, you can then learn from there. You can learn what is the average order size, you can learn about the time that people order, you can learn what kind of promotions and what discounts and offers make people spend the most.

Kylie: [00:05:00] And I guess you can look at how often they come back and buy as well if they’re ever a repeat customer or not.

Guy: [00:05:05] Absolutely. I mean that information about repeat business, I mean that can really help you zero in on: Is there a certain type of customer who is always coming back? Is there a certain type of customer who just buys once and then never bothers to come back again? It really just gives you a huge amount of information which you can then use to make the big key decisions in your business.

Kylie: [00:05:26] And a really great thing about that is that that data comes free. If you own the platform so that’s your data. Whereas if you’re in a supermarket or a retailer somewhere else is that data is theirs and getting access to that sometimes can either be difficult or expensive.

Guy: [00:05:42] Yeah I mean, in many cases they will give you sales information. They’ll say you made this many sales or maybe they will tell you made this many sales in this store. You made a different number of sales in this store. And some of the platforms believed that Ocado has really great data probably because it’s also digital and they can gather data in all sorts of different ways. But in most cases, to get detailed, highly granular information, you pay a lot of money. And then you also need something with a lot of expertise to be able to sift through it and really make some sense of it. So yes, having your own data on your own platform is another huge benefit.

Kylie: [00:06:22] There was something really interesting that Colin from Crew said about data that I think is really relevant here which is that, because they know their customers really well, they were able to negotiate with a supermarket so much better and so they weren’t dependent on getting into the supermarket, it was like an added bonus to them.

Guy: [00:06:42] Yeah I remember him saying something like, they were able to negotiate the best possible deal because they had lots of information that they could take to the supermarkets. But also they had proof that people wanted their product. They’d been able to iterate on it and improve it and test different things and get feedback from their customers because they were selling direct online and then they could take all of that information, all of that learning to the retailers. I think they they went into Tesco and Waitrose recently. And yeah, they could get themselves a better deal because they had more confidence in their own product and it was backed up by data.

Kylie: [00:07:18] And any supermarket or any retailer is going to love to hear that. They want to know upfront what you know about your customers. And so if you have data that backs that up rather than just guessing, that’s only going to work in your favor.

Guy: [00:07:32] And I was talking to somebody else recently and they were saying that they ran a whole load of tests on their own ecommerce website about different kinds of promotions and they went into a buyer meeting in the supermarket and the buyer was trying to say, “Oh, we should do a 50 percent off for a 2 for 1 or 3 for 2” Or whatever it was. And the great thing is they were able to say, “No, we don’t need to do that level of promotion because we’ve run some tests and we’ve got the data, we’ve got information that says, if we run a 20% discount then people are more likely to buy at that level than if we discount maybe 50% or 75%.” So really interesting and such a powerful position to put yourself in.

Kylie: [00:08:13] Of course, that sounds like there’s loads of reasons why people should do e-commerce. One question that runs through my head is: are there any reasons not to do e-commerce?

Guy: [00:08:25] Yes, well, I’m sure that people have a lot of objections to it and we’ll get to some of those a bit later on. But yeah, I guess there are some kinds of businesses or setups where it’s maybe not the most suitable thing and one that springs to mind is if you’ve got either fresh or chilled or frozen products, then it’s not to say that e-commerce won’t work for those things, but it is a lot more complicated. But I guess if you are one of those people who does ice lollies or does ice cream or does some kind of chilled thing like a hummus or something like that. Then, you’ll already know that it’s more complicated because you’ve got to keep it at the right temperature, you’ve got shorter shelf life and all that thing. So yeah, it’s not to say that it doesn’t work for those but yeah there’s more issues.

Kylie: [00:09:12] You’re right. It’s definitely much more difficult with chilled products. We did a competition with chickpeas, a chilled hummus on Eco & Beyond and we had to send that out in a post. And it’s much more difficult. So there had to be ice blocks involved. And then there’s only certain courier companies who will take chilled product, so it ends up being much more expensive. Definitely a word of warning, is be prepared if you are a chilled or frozen product. And it’s definitely not to say it can’t be done because Ben and Jerry’s definitely have an online store. They know how to obviously transport ice cream. So it’s definitely doable.

Guy: [00:09:48] Yeah and they do some really cool stuff actually. I was looking into them recently and their online stuff, they use it to do like limited edition things, so they’ll do like new flavors that you can’t get in the supermarkets. And yeah, they do some really interesting stuff with their whole online thing.

Kylie: [00:10:03] Yeah they do a whole campaigns around those limited edition things but then again, there are meal kit companies. We get Gusto delivered and they’ve come up with a way that it works, right? So there are solutions out there you just have to be prepared to put the time into researching and finding one that works for you within the costs that you want to spend.

Guy: [00:10:23] Yeah absolutely. Anything else? I can’t think of too many reasons why people wouldn’t go and do online.

Kylie: [00:10:30] So there’s one that I kinda think is a valid reason. So if you’re doing more like a passion project or a hobby, you make some awesome chutneys or breads or something and you sell them at your local farmers’ market and you’re not wanting to go in and become the next Gail’s bakery or something, then I don’t know that e-commerce would make sense. Right? Because if you just love getting out there and sharing your product, then maybe it’s not for you.

Guy: [00:10:58] Yeah, I guess doing e-commerce is very much taking things seriously and turning it into a business. I guess that there are e-commerce platforms that you could tap into that don’t require you to build one yourself.

Kylie: [00:11:11] That’s true, yeah.

Guy: [00:11:12] So there’s Yum Bulls which is great for small producers and Table as well. And we’ve had Kim from Table on the show, one of the very first episodes actually.

Kylie: [00:11:21] You could also just do drop shipping to Amazon which is pretty easy to set up I hear, so you may have customers right away.

Guy: [00:11:28] Amazon definitely does have customers. Yes. You’re right. Yeah and that’s something that you can definitely do and there’s no reason why you couldn’t have your own online store and also do some stuff on Amazon and be on Ocado and also be in shops and supermarkets.

Kylie: [00:11:45] This goes back to that mantra, “just be everywhere that your customers are likely to be”.

Guy: [00:11:49] Just make it as easy as possible for people to get your stuff. So I think that’s probably, I mean that’s all I can think of in terms of anyone who shouldn’t be doing e-commerce.

Kylie: [00:11:57] Yeah, it wrecks my brain I really wanted to have three because three is a really good number but I couldn’t come up with a third one. There is very little reason for someone not to have an e-commerce store these days. It is super simple to set up and there’s no reason really other than the chilled thing I think which is a bit more difficult.

Guy: [00:12:17] Well you say it’s super simple but I’m sure that those people listening who think, they’ve got lots of things going through their head. It’s expensive, it’s technical. I’m not a techie.

Kylie: [00:12:27] I didn’t say it was easy. I said it was simple. They are very different. So there is a technical component to it but that doesn’t mean that the tech has to be difficult. There are a lot of DIY platforms out there that you can use to build your entire website and shop without being a tech nerd.

Guy: [00:12:47] Yeah, I mean it’s really really changed. So my background is in programming and web development and stuff like that. We used to spend weeks and months building bespoke websites for brands particularly food brands, building e-commerce from the ground up with these very tailor-made solutions. And they cost a lot of money. You would be talking 20, 30, 50, 100 thousand pounds to have something tailor-made to your design, to your specs, to slot in with your existing systems. And there was really no other option at that time. And so it was very very difficult to get started for everyday people. But now it’s a completely different story and there are so many platforms out there, you’d be able to do it yourself or just get started really really quickly and cheaply.

Kylie: [00:13:35] That’s what you want when you’re getting started, you want something fairly simple that doesn’t require too much customization, that can get you up and running for the lowest possible price so that you can get some customers.

Guy: [00:13:49] Lowest price, lowest effort, shortest amount of time.

Kylie: [00:13:52] Yeah, and the great things with those platforms is they often have so many videos, like the user guides in the videoes. You could just follow them. It’s really simple.

Guy: [00:14:03] Yeah, we put a blog post together recently with I think maybe it was four or five of the top e-commerce platforms or e-commerce routes that you could go. You can check it out on the website sapling dot digital and of course we’ll put a link in the show notes as well. And yeah I mean one specific one that springs to mind is Squarespace. A lot of the food startups that we work with that have met over the years. A lot of them are using this platform, it’s very accessible, it’s very affordable. I think for an online store, you’re looking at like 20 pounds a month which is so affordable compared to 20 grand for a whole bespoke system.

Kylie: [00:14:37] For the cost of 4 pints of beer.

Guy: [00:14:40] That’s a nice way of thinking about it. But I guess one of the other big objections is when you create your e-commerce store, just putting it online doesn’t guarantee you any sales.

Kylie: [00:14:50] But that’s the same as putting something on the supermarket shelf, doesn’t guarantee you any sales.

Guy: [00:14:55] That is true although, at least, a supermarket tends to have fairly high foot traffic. But you are absolutely right. Just being on the shelf, if people don’t know about you, they don’t know where to find you. People are busy in supermarkets. They aren’t picking up every single product and going, “Oh this looks new.” So yeah, as much as there’s loads of people who walk through supermarkets every single day, it’s not as simple as just putting yourself where they are. You need to find a way of communicating to them and standing out and getting people to to recognize and notice what’s going on. And the same goes for online as well.

Kylie: [00:15:28] Yeah. And so e-commerce as a platform in getting your site ready is step number one. Step number two is marketing. It’s just, it’s inevitable. You have to do it. Otherwise, how do people know that you even exist and that you’re even selling online?

Guy: [00:15:45] But the great thing about e-commerce and digital marketing, they go so well together because we mentioned data before in terms of having sales data that you can use and you can take that to other retailers and put yourself in a strong position. But when you’re doing digital marketing, you’ve got loads of data as well. You’ve got information about who is following you, where they live, how engaged they are. Measure everything, so many different things. And the two things really fit together and you can take people from social media and lead them to your website. You can make them offers, you can re-target them. There’s so many things you can do. But sometimes, having so many things to do is also overwhelming. And so we’re always about trying to break things down into simple bite sized pieces, create a process so that you can just go and follow that and do exactly what it is that you need to do.

Kylie: [00:16:36] Exactly, we are all about the processes and systems and knowing everything that you need to get started and to support that, we’ve just created a free training course that pretty much covers everything from an e-commerce perspective and what you need to do next.

Guy: [00:16:53] Yeah, e-commerce and marketing. Absolutely. So it’s called “E-commerce Essentials”. But one of the essentials of e-commerce is that you do some marketing as well. So it’s a three part video series, completely free. It starts off by making a strong case for why you should use e-commerce. We’ve got lots of facts and figures and stats in there. Couple of case studies to make it very clear, the benefits of doing this. Then, the second video is much more about the marketing side of things. So once you’ve got your online store and chosen your platform, how can you approach the marketing side of things and instead of going into lots of technical details about you should use this and this and this and this strategy and this tactic, we try and keep it as simple and principle driven as possible. And then in the third video, we zoom right out and we give you the big picture of the whole thing and how e-commerce marketing fits into your business as a whole. So there’s a six part blueprint that we’ve got there, it steps you through everything that you need to know so that it’s very clear, very concise, and very approachable. So you know exactly what steps to take and in what order to take them in. So it was great fun to put together. We’ve really enjoyed it and we hope that you will too.

Kylie: [00:18:06] Where do people go to find this?

Guy: [00:18:08] That is an excellent question! You can find it on our website which is sapling dot digital forward slash ecommerce. Nice and simple. So let’s just recap what we’ve talked about before we wrap things up here today. So Kylie, take us through where we started.

Kylie: [00:18:25] Sure. So we’ve been talking about why e-commerce is a really good sales strategy for food businesses. We started by looking at how e-commerce is a great way to take control of your sales, so you can make a bit more money and you’re the one in charge. And once you are using an e-commerce platform, you also get loads and loads of data and that data is for free. And what’s even better is that from that data, you can interrogate and learn a lot more about your customers and that then gives you the power to negotiate with supermarkets. And we also then looked at who e-commerce probably isn’t great for and so we talked about if you have chilled or frozen products, you just need to be a little bit careful and make sure you’ve got your logistics sorted and also, that if you’re just running a side project that’s maybe a little passion project. Maybe you just want to go onto another platform so that you don’t have to go into all this really heavy business stuff. And then finally, we looked at some of the I guess, the tech objections to e-commerce that we hear a lot. So a lot of people say that it’s really technical and complicated and we say well, actually it’s not anymore. It requires a lot of money. Actually, it doesn’t, about 20 pounds a month. And that’s where I joked about 4 pints beer. And then finally, the objection that I need to have customers. And yes, that is true. You do need to have customers but that is true everywhere. And so marketing will solve that problem for you.

Guy: [00:19:56] Fantastic. And hopefully, this has helped to make that case for e-commerce and perhaps, giving you some some tips and suggestions for maybe different ways to think about it or particularly with those objections. Yes, there is a technical aspect to it and yes, you will need to spend some money and yes, you will need to do some marketing but that really is the case for everything. If you’re in business, there will be those things across the board.

Kylie: [00:20:24] It’s really unlikely that you can run a business and never do anything technical and never spend any money and never do any marketing. I don’t think that would be called a business.

Guy: [00:20:34] Yeah absolutely. But fortunately, there’s people out there to help. There’s loads of great information online. So yeah, I think that’s pretty much it for today. Anything else to add, Kylie?

Kylie: [00:20:43] I would just say if you can come up with another example of who shouldn’t do e-commerce, I’d love to hear it. I really would like to have that No. 3 under my belt.

Guy: [00:20:50] It will make the section feel complete. Yeah, things definitely do seem to have to be better in groups of three. So if you’ve got any idea, do let us know. For details of everything we’ve talked about including links to the free training course, e-commerce essentials. Then do head to the website, Good Foodies dot co dot UK or you can just head to Sapling dot Digital. So yeah, that wraps it up for today. Thank you so much for joining us. It’s always a pleasure hanging out with you guys and we’ll see you next time. Cheers.

Kylie: [00:21:19] Bye for now.