Starting a Food Mail Order Business

The Idea

Running a mail-order food business may seem like the perfect career for a foodie with an itch to sell, but if you're considering a start-up of your own, you'll need to research the pros and cons first.

To begin with, you'll need to have a great idea for a food product that is original, meets a need that the market is currently not providing and will appeal to a large number of folks that read their junk mail. Out of the 15,000 or so food products that are marketed each year, only about 10 percent are still around a year later. The competition is tough, and there are a number of start-up costs and regulations that many would-be entrepreneurs don't consider before launching their businesses.

After you've come up with a product that will sell, do your research to find out who will buy it and how you can market to them through the mail. Look into what state and federal regulations will apply to your product; find out how much mailings will cost; develop a business plan that takes expenditures, mailings, profits and expenses into account; and decide how you will proceed with acquiring your initial start-up costs.

The Plan

Come up with a detailed description of your product, including every ingredient used in its making and how and where it is to be produced and packaged. Contact your county extension office to find out what you will need to know about starting a mail-order food business in your area. County agents can help arrange a product development meeting with the local Institute of Food and Science Engineering (IFSE) representative, who will help with your product development.

You will need to know how to increase your recipe for mass production, and you will need to understand the preservation process if you are creating packaged and canned goods for mass consumption. These are all things that the IFSE representative can help you with.

Comply

Locate places where you will get your equipment, ingredients and packaging, and make sure the facility where you produce your goods is up to local codes and ordinances. You will need to contact the state Department of Health as well as the U.S. Food and Drug Administration to find out how to comply with regulations and obtain licenses. If your product contains more than 5 percent meat, you will need to be approved by the U.S. Department of Agriculture as well.

Code

Develop a proper code for your product, showing where the product was manufactured, the date it was created and the product batch number. Keep accurate records of all coded products so that tracking can be done if necessary.

Label your product, keeping in mind any specific labeling laws put out by the regulatory agencies mentioned above. Contact the appropriate agency to make sure your labeling is correct and meets all requirements before having labels produced by a graphic artist and printed by a printer. If you anticipate doing more than $50,000 in business, you will need to provide all of the nutritional information for your product.

Develop a UPC code if you want to sell your products through stores as well as mail order. Most wholesalers and buyers will not purchase your item without a UPC, which is a bar code that identifies the item.

Market

Consult with a marketing expert to determine the best strategy for promoting your product. Know your target buyer, and appeal to that demographic in your labeling and ads. Research similar products to determine your price point. Consider your expenses when pricing an item. If your food product is unique and in demand, you may be able to price it well above what it cost to produce it, but keep in mind that your start-up costs and business expenses will be high. It is difficult to profit without a steady stream of return customers, so plan ahead to produce another item that your identified customer will purchase in the future. Happy return customers are what keeps most mail-order businesses afloat.

Resources

• More on Mail-Order Businesses
• Starting a Food Business