MARKETING FOOD ONLINE



Food Business Ideas: Susbcriber Questions from Marketing Food Online Youtube Channel

Posted by Damian Roberti on

I'm in my studio and we're actually moving a handful of things around and little by little you'll see behind me. It will change over the next couple of weeks and we'll have some new stuff behind me in my studio. So let's hop right into it. I'm actually got my laptop open here on my desk and let's move this out of the way a little bit. So I want to get into a handful of subscribers questions. I have been extremely busy over the past couple of weeks and I apologize. I haven't loaded uploaded as many videos as I would like, but I am going to hop into a handful of new questions that I've got from subscribers. I'd like to do some of these Q and A's mainly for the purpose that a lot of other subscribers are interested in the same question.

So I can kind of get a handful of you guys answered some of your questions at the same time by covering the specific question or topic. So let me jump right into it. So I have one subscriber that was interested in starting a tea company and was looking to ask about basically buying tea in bulk and repackaging it. Now, of course, that is something you can do. You can buy a product in bulk and repackage it, but there is a handful of questions that you need to ask before you do that. And I mean, you need to ask yourself and then you need to also ask the right agency or department within your state.

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Now you gotta understand that. If you're producing a product at home, you fall under the cottage food laws, right? So that's going to be somebody that's going to limit your capabilities with selling it because once you produce a food product at home, normally you have to actually sell it at either farmer's market directly to the customer or fair or a festival or something local in event where you are dealing directly with the customer. 

You can't have a third party. So if you were, let's say making a repackaging, T's right, you can't sell it to a local restaurant to resell or reuse. You can't sell it to a retail store that turns around and then sells it to their customers. So it has to be between you and the customer. Now that's the first question.

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The next question is, is if you're looking to do this type of a business that you need to figure out, if you're going to rent a commercial kitchen to do the packaging process of it, or if you're going to open up a facility yourself or rent out a little warehouse and manufacture these teas yourself, by breaking them down into your private label or a smaller packaging. Okay. Now, when you do that, there are also different types of licenses needed depending on the type of food business you are preparing to do.

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Okay. And what I mean by that is if you buy a product in bulk and repackage it and you're, you're kind of manufacturing it, you're breaking it down, relabeling it repackaging and resizing it, et cetera. That's considered in some States manufacturing, okay. You're not actually making the tea itself. You're not drying the tea leaves, then packaging it, et cetera, et cetera. So depending on the process, depending on the type of business that you need, you need to check with your state your local County or cities business office, where you were going to apply for your business license within that County and asked them, what is it specifically needed in order to do the process that I want. And you can pretty much just, they're going to ask you. So I have a little questions of how are you doing it? Choose a Business Name?

How are you packaging it? Where are you doing it? So can you buy a tea in bulk or any type of other ingredient or candies? Can you buy them in bulk and relabel them and price? Of course you can, but you need to make sure that you're in the right facility. Plus make sure you have the right licensing and the right permits to do that. Because every food business Licenses is different. If you go to get a license, let's say, and you're opening a restaurant, I would actually apply for a different type of business license for food handling than I would if I was manufacturing. Okay. If you're manufacturing food it's a different type of license altogether. So hope that answers your question. Yes, you can. You can definitely do that. You can pretty much repackage anything you'd like, but you just want to make sure that you follow those guidelines and ask the questions as far as where are you going to do it from and how are you going to sell it? So how are they going to classify your business? Okay. so next question I had is actually from www recommended produce. Yes.

So liability insurance. So this person was looking to

Figure out how, what type of insurance they need liability. Do they need liability insurance? If they're selling a food product online. So yes you do. I would highly recommend you do. There's no internet laws in regards to like food selling online. You just need to make sure you follow the department of agriculture or the health department's guidelines or your city's ordinances and such in regards to selling online. And what I mean by that again, is going back to the idea of a cottage food business. You can't really do that from home. It's not allowed in most States to do e-commerce from your home and you're preparing food. So you want to do it in a commercial facility. Now, do you need liability insurance? Yes. Yes. And yes, I personally recommend every single one of you. If you're watching this video and you're looking to open up any type of food business, you need to protect yourself and your business and you need to separate the two. Food truck Funding Ideas.

So by incorporating yourself and creating either an LLC and S Corp or C Corp, however it is that you wish to file. That is fine, but also getting liability. Insurance is ultra important because you want to protect yourself. I've kind of touched on this a little bit on a couple of my other subscriber Q and a questions. It's actually a question I get quite often. So I personally would recommend you no matter what type of food business you're in there is a lot of risk. Of course it comes with any business, but when you're dealing with food things that going to be consumed by somebody and not just something that's worn or a hat, there's a little bit more of a, of a risk factor that comes into play when you're handling food. I don't want to scare you away from starting a food business, but just keep that in mind is the realities of it is you're preparing a product it's going to be, it's going to be consumed.

It's not something that has lower risks, like if you were selling watches or something. So definitely look into that and get yourself some liability insurance before you sell them. Okay. So next one up I actually had a subscriber asks you about a beef jerky company starting a beef jerky company. Now I did a very short, brief video about this in regards to a handful of companies that actually could private label, they have recipes, they have the machinery, they have everything you need to create a private labeled, a beef jerky or dried meat, dried meat business. So beef jerkies are hugely popular. I mean, there are a million brands out there, but to be honest with you, the market is always big enough for even more. And I never steer anyone away from producing any type of food product when you're doing it online, you're in, you've got an e-commerce presence. With any business make sure you open a Business bank Account.

It is gigantic. You're literally open to the entire planet. So any additional food products under a certain category of if it's beef jerkies, if it's candies, whatever it may be, the market is gigantic, never limit your thinking to the idea that you have no space in the market for your product, because it's just way too big. We have probably half of the products that we actually make in our facility. Our products that have been out on the market forever in a day, the chocolate pretzels and chocolate Oreos, but we do a heck of a lot of business with those all the time constantly. But there's probably a million people who make the same product. So it's never stopped me from actually introducing a product from our line of, of snacks and candies. And I would never stop you from doing it either because there's just so many ways that you can sell it with it being online or in a retail store, wholesale food service, private labels, even and so on and so on.

There's a lot of different ways to sell it. So keep your mind open to the idea but you could literally hop into the beef jerky business with, with these companies and have them do it for you. I'm actually getting together a handful of these companies. I'm doing a video and I'll actually give you the names and show you the different companies that do this that you can literally pick up the phone. And within a matter of a couple of weeks, have that company with your label, your logo, everything audit literally done for you, and you could sell it wherever you want. So, okay. The next one. Oh, the next one up next up. So the other question that I had, and this was actually interesting it was in regards to customs and bringing in products from outside the U S and manufacturing them.

Can you do that? Do you need special license permits? So it gets a little, but it's not something that can't be done, but if you're looking to source an ingredient for a food product, it's outside the U S and you bring it in it's best to follow all of the international customs regulations in doing that. And what I mean by that is, is that in a lot of cases, if you were to be bringing in a few hundred pounds or thousands of pounds of one particular ingredient to produce a fruit product, there's going to be a lot of red tape is going to be a lot of things that have to be a lot of hoops. You gotta jump through to do that. I have always recommended there was a handful of clients that I actually had did some consulting with who were sourcing a product from India and nothing against bringing it in from India, but it was just an issue of price how much it costs to bring that in. Get Business Insurance "Food Business Insurance".

The one thing about food is that when you're bringing in ingredients that are going to be put together to create a final product, and you're not sourcing a final food product and then just repackaging it. But when you start to do that, you would really need to buy it in ridiculous amounts to make it even financially feasible for you to produce a product. A lot of small scale businesses may think that that's a really good idea, and here's what I'm going to do. I'm gonna try to explain to you, if you had a product that had had five ingredients and you brought in three or four of them from another country, and you bought the other two from here in the U S in order for you to bring that in, get it through customs, and then begin to mix it, make the product and produce it, and then package it.

This is not a small startup, okay. If you're a big company like Hershey's or to Abisko, this obviously doesn't apply to them because they're multinational businesses, but when you're on a startup scale and a startup budget, try to source as much as you can, as close to where you're making it as possible, because you're not going to make it. You're not going to make the food product inexpensive to the point where you've got a great margin on each individual units because of the amount of money that's incurred a lot of costs that are incurred bringing a, an ingredient in just to make a final product. So if you can get those ingredients in the U S I would highly recommend you figure out some way to do that. When you begin to deal in large, large quantities of outside ingredients unless you've got a contract to sell a million of those a month or something, or you've got a big grocery chain, and you've got the ability to create margins where you're actually making a profit sourcing from outside the country on a small scale is extremely expensive.

Okay. I've actually looked into that when I first started and there was a handful of candies and some other things that I was looking into, and I thought, wow, you know, I can get about a thousand pounds of this product at this set price, but after I saw how much it costs to get it to me, all the hoops I had to jump through and make sure it was following regulations and all of the other rules involved, and as well as the time to produce the product and finally have a finalized product to resell. You got also keep in mind that you get a great price on an ingredient. You can get a great price on a food product, but the biggest problem is the time, the time it takes to get everything here and then your product into the marketplace. That's something that a lot of smart, small startups don't think about.

So money is one, one part of it, but it's not the whole story. You got to think about the amount of time. So for instance, if I was going to produce a snack and it was January 1st, and I ordered a product and I was sourcing it from, let's say, India, or parts of Europe or somewhere else. And it took two months to get it. And I'm really relying upon that product to be in the marketplace, to generate money for my business. You've got a two month window before it even gets to you, then you've got to produce it. Then you got to market it. Then you've got to ship it. And so now you're talking about maybe three or four, even half, half a year. It's like six months to get a food product in the market, and you haven't turned any money yet. So if you have an opportunity to produce the product locally, at least within the us, if you're in the U S do that, if you're in another country, I would say the same thing.

If you're in the UK, if you're in Australia, if you're in India, try to source the product the ingredients and everything you need as close to you as possible, the longer, the way the distance that things has to travel, it starts costing you time. It costs you money. So keep that in mind. I hope that kind of explains the question that you're asking. And from there, I would probably make your, your best decisions on really, what's going to make you the most money and do it fast enough that it makes sense to even make the product. Okay. So we got a couple more here.

Did you, did you do to do two?

Okay. So they were talking about,

Okay. So the spice company I had to, I did a video probably a couple months ago, and it was about spice, a spice business, and how to start one and some of the simplest ways to get one up and running. So I had a great question from this subscriber. Her name was Kathy first name. I'll tell her her last name, but just Kathy. And she was asking about the licensing and how much it would cost, or how do you store, so how much money is it? Do you need to invest in to start up of something like a a food product or basically a website to sell spices and such, this will really be dependent on your budget. If you came to us and where you actually created a website for you we try to go on the low end of, of the, of the price range to create a website when it costs people charge a lot of money to do websites.

It's going to be dependent on how, how involved it is, how intricate and how big you really want the website to be. There's a lot of basic websites that can be started for you for just a few hundred dollars. There's a few that could do it for a few thousand. So it's really gonna be dependent on your budget. As far as starting a spice business, how much money would you need for spice business? Again, that's going to be dependent upon your needs or your desires. How big of a, of a company you want to start? A lot of food businesses started home mostly, and they also start very, very small. So if you started a spice business, I personally, if I started tomorrow spice business, I probably come out with maybe three or four different flavors or three or four different spice profiles depending upon the type of spices that you need, if you go to a local grocery store, you'll find like in the barbecue section where there's spices, you'll find probably five or six different variations of a, of a, of a spice splint.

That's a pretty within reason. An entire line of spices would probably not be a good idea when you're first starting. But again, it'll be dependent on your budget and how big and how far ahead you really are thinking, as far as starting it, I would start very, very small with really big ideas, but taking small steps. So the other thing was about the food and drug regulations and selling spices online. And how do you market? Well, the FDA does give a guidance is as it's known, they give kind of a criteria on how to label spices. And what's expected of a spice manufacturer in such a, but in regards to nutritional analysis and those types of things, there are ways that you can actually apply for, of course, as I mentioned to some of my videos, the FDA exemption, and you can get that exemption for your startup.

So you're not having to produce a nutritional analysis for your spice blend. Some spices actually have nutritional analysis and some do not. The best thing to do is I could definitely leave down below an FDA link to the page that talks about the proper labeling and such. Is there a licensing that the FDA, the FDA doesn't actually issue licenses for spice businesses, you'd have to ask yourself, how are you going to make it within the city and County that you're doing business in. And then when you apply for your business license, you need to specify to them that you're actually creating a spice business, and you're going to either manufacture or repackage spices that you're going to get. Okay. Now, but depending upon that, they're going to give you a certain type of license. You can either be a manufacturer, be being a wholesaler.

If you're going to repackage food or spices, if you're going to create them from scratch and such as as I said, manufacturing, those are going to dictate the type of license that you would need. And again, with this type of business, you also need food insurance, food, producers, insurance, and that's going to give you the, the extra, additional insurance and coverage when you produce your product and you begin to sell it and get it onto the marketplace. So, so would that be a set I'll wrap up this little Q and a question and answer, period, if you guys as always have any questions for me, let me know down below, or you can basically send me a message through the channel itself. If you guys need any consulting or if you need any assistance from me, we always have our consulting packages available. And as always, I appreciate you guys taking the time to watch. And if this was helpful, give me a big thumbs up or a big thumbs down, whatever works for me. Thanks guys.

 

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