How to Start a Small Business in Dairy Products


To start a small business selling dairy products, you need to find a source for your dairy and determine what items to sell and where you will sell them. Dairy products can be sold as liquids, solids, creams and powders in products ranging from food to beauty items. Using milk-based products in your online or offline shop has its own challenges and regulations to protect the environment, the cattle and the health of customers.

Market Research

  • Following consumer trends provided by the U.S. Department of Agriculture's Economic Research Service will help you decide the dairy products in which you should specialize. For instance, according to a June 2014 report from the USDA, consumer demand for liquid milk has been declining since the 1970s, while demand for cheese products has increased. The USDA also provides information to help you determine an adequate price for your products, such as the National Dairy Retail Report, which is issued bi-weekly. You can use this information to price competitively or to avoid overpricing your gourmet dairy products.

Obtaining Dairy

  • If you decide to own a micro-farm and produce your own milk from your small selection of cattle, save money by purchasing your cattle from other local farmers or trading with farming equipment or other livestock. According to Penn State's College of Agricultural Sciences, owning your own cattle will require multiple systems to maintain the health and well-being of your dairy cows including cropping, feeding and waste management systems. Although owning your own cattle can set you apart from the competition, the extra costs associated with micro-dairy farming may outweigh the benefits if you do not have a farm already. If you opt to purchase your milk in bulk for your dairy products, you have the option of buying from local dairy farmers or buying your milk in bulk from local supermarkets.

Government Regulations

  • If you own your own cattle, you must comply with the U.S. Environmental Protection Agency's regulations under the 1972 Clean Water Act. Since 2003, the EPA has strengthened regulations on manure recycling systems. Regardless of how you obtain your dairy, your dairy products will have to follow rules by the Food and Drug Administration to prevent contamination and ensure the health and safety of your customers. The FDA also regulates the transport of dairy products to ensure the shipment does not damage the quality or freshness. Although pasteurization is not required by all states, the FDA recommends using pasteurized milk, instead of raw milk, to reduce the risk of spreading salmonella and other milk-borne illnesses.

Ways to Sell

  • As a small producer, you have many options for selling your dairy products. You can sell online on your own website, on arts-and-crafts selling sites, or on major peer-to-peer retail sites, such as eBay or Amazon. You can also sell locally through your own little shop, on consignment at someone else's shop, or at crafts fairs, flea markets or farmers markets. If you sell through someone else's shop, the shop owner will receive a percentage from your sales. If you sell at local fairs or markets, you will be charged a fee by the event organizer for a tent or space to use for the day, weekend or week, depending on the event.

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