You are a person who likes to make and is passionate about baked goods. So why don't you bring your own hand-made cakes to everyone by selling cakes online and making money from home on this National Chocolate Cake Day? In this article, we will share with you 5 important steps to sell baked goods online successfully with Shopify on this National Chocolate Cake Day, as well as the most effective sales tools and strategies. Let's get started now!
Is Selling Baked Goods Online Profitable?
To learn how to sell baked goods online and specific strategies, let's first address the question on everyone's mind: Is selling baked goods online profitable? The answer is definitely Yes!
In recent years, the trend of online food sales has experienced exponential growth. Besides, there are many types of baked goods on the market that can satisfy most consumers. Furthermore, it is also a popular food item that is easy to deliver and preserve.
According to the Statista Digital Market Outlook report, the revenue of the eServices Online Food Delivery segment Platform-to-Consumer Delivery worldwide is expected to be 96,864.4 million U.S. dollars in 2024.
The Statista Digital Market Outlook also forecasts that the global revenue of the online food delivery market will reach US$1.65 trillion by 2027. This trend has created a golden opportunity for bakers of all levels, especially start-ups.
A great occasion coming up where you can start a business in this baked goods market is National Chocolate Cake Day, which takes place on January 27th every year. This is an extremely good opportunity for you to sell baked goods online to customers who are passionate about chocolates.
Now, let's look at some online bakeries below that have successfully attracted many customers and brought in good revenue, generated from the Shopify platform:
- Milk Bar was founded by renowned pastry chef Christina Tosi. From the Cookies to the Birthday Cake, Milk Bar's estimated annual revenue is currently $113.8M per year. Milk Bar is proof that an online bakery created from the Shopify platform can run a successful business.
- Cape Whoopies, a Maine-based bakery, is a great example of Shopify selling baked goods successfully online. Cape Whoopies' revenue updated from Datanyze's report is $868K with only 5 employees. Shopify's user-friendly interface has helped Cape Whoopies expand its customer reach, introduce a variety of delicious whoopie pie flavors, and drive customer satisfaction. You can see their successful story on Shopify here.
- Sticklings Bakery is a delicious selection of cinnamon rolls and is another online success story on Shopify. According to Datanyze's report, Sticklings Bakery's current revenue is $1.3 M with only 6 employees. Sticklings Bakery's delicious treats are presented perfectly on their Shopify store, with attractive visuals and easy navigation that have contributed to their growth, and ability to bring their mouthwatering creations to a wider audience.
Which Baked Goods to Sell Online
After catching the growing trend as well as the profit potential that baked goods bring, don't rush to start selling baked goods right away, ask the question of which type of baked goods you will choose to sell online because choosing the right items for sale can have a significant impact on the success of your online baked goods business.
According to Google Trends data, this is the top 10 trending baked goods items to sell online. You can vary the flavors, designs, shapes, and sizes to cater to different tastes:
- Chocolate chip cookies
- Cupcakes
- Banana bread
- Croissants
- Pie
- Brownies
- Donuts
- Muffins
- Bread
- Cake
When to Sell Baked Goods Online for Maximum Profits
When you decide to do any food business, you need to have a specific business plan and strategy. Therefore, you can sell cakes online at any time of the year, however, the best time you definitely cannot ignore is the upcoming National Chocolate Cake Day. This is not only an opportunity to attract customers to significantly increase profits, but also an opportunity to promote your other baked goods. Some possible ways are:
- Special chocolate cake promotions: Create special offers/promotions focusing on chocolate cakes such as buy 1 get 1 free or special Combos to attract customers.
- Create engaging content: Share on your website and on social networks with extremely interesting and attractive content and images about chocolate cakes.
- Providing limited edition products: Limited edition items are always interesting and sought after by customers. Do it with your special chocolate cakes just for this occasion.
- Customer engagement & Giveaways: Encourage customers to share their chocolate cake experiences/reviews on social media, using branded hashtags with attractive giveaways. This will help expose your brand to more customers.
Besides, this is also an opportunity to help you build customer loyalty because they not only make repeat purchases but also interact more with your brand, contributing to promoting the brand to more people around them. Now, take a look at some popular methods of building loyal customers for your online bakery:
- Customer acquisition strategy: Leverage social media and email marketing to reach potential customers using attractive images and exclusive promotions to attract them such as BOGO, Combos, and Free Shipping.
- Provide exceptional customer service: Take care of your customers with professional, enthusiastic, and dedicated customer support service, bringing customer satisfaction.
- Encourage customer reviews and referrals: If customers feel satisfied, suggest they leave positive reviews as well as encourage them with referral programs when they refer friends and family.
In addition, there are many ways to build loyalty, but here we only mention how to nurture customer loyalty.
💡 Quick read: How to Build a Loyal Customer Base
In the next part, we will introduce to you the platform that helps online bakeries like Milk Bar, Cape Whoopies or Sticklings Bakery bring in good revenue and have many potential customers, which is Shopify.
Can You Sell Baked Goods on Shopify?
Before delving into the specifics of the steps to selling baked goods with Shopify, let's first understand what Shopify is. Shopify is an all-in-one commerce platform that makes it easy to start selling to customers no matter where they are. It offers the combination of user-friendliness, customization, and marketing capabilities that any online business owner wants.
The answer is Yes, you can sell baked goods online on Shopify. Even if you're not a programming expert and you don't know how to customize your own online store, Shopify always has solutions to help you. Shopify offers all the features to keep your online store running including diverse themes, easy customization, over 8,000 apps, links to 3rd party platforms, and thousands of other features.
If you have a physical store, that's great, Shopify has launched Shopify POS which allows you to directly collect payments and sync them with your online sales. Additionally, if you want to sell fresh baked goods immediately, Shopify supports extremely flexible same-day delivery. All you need to do is set delivery limits and specify which goods are available for pickup, shipping, and delivery.
💡 Quick read: Shopify Essential Features and Benefits
Now, let's cover some legal and regulatory considerations when selling food online. This is an indispensable step that directly affects your online store. If you violate it, your online business will most likely stop:
- Food safety regulations: You must comply with local food safety regulations and obtain the necessary business license to sell food products online.
- Ingredient labeling: You must ensure that all ingredients and allergens such as nuts, dairy, or gluten in your baked goods are clearly listed on the product description to inform customers and meet ingredient labeling requirements.
- Shipping and Packaging: Shipping and Packaging: You should use appropriate packaging to package your baked goods to ensure quality and freshness during shipping. Remember, you must communicate shipping costs and delivery times clearly and transparently to your customers.
- Taxes: You should be familiar with tax regulations related to the sale of food in your local area, including sales tax or value-added tax (VAT).
If you comply with online food sales regulations, your business will not be interrupted, while ensuring that your store is reputable and fully licensed with quality products. We are gradually building a successful online baking store.
Besides, make sure that you set your baking prices for your online business to meet customer expectations and help you earn more profits. This will help you maintain a successful bakery business. However, it is not about you guessing the price or imitating your competitors, because your product is different from theirs. Let's learn how to accurately price your baked goods.
How to Price Baked Goods for Online Sales
Pricing for online bakery items is important to calculate the revenue your business earns. For example, when you determine how to calculate the cost of making Cookies with other types of baked goods such as Cheesecakes and cookie Sandwiches. You will easily be able to evaluate which items are most profitable to add to the menu or adjust the price of the item if necessary to find the best profit margin.
Are you ready to stop guessing at prices and get your bakery pricing strategy right? Here are some factors to consider and pricing strategies to help you set the right prices:
- Cost of Ingredients: Create a list or spreadsheet to record the cost, quantity, and weight of each ingredient. The price per unit is calculated as the quotient of the purchase price by the quantity purchased.
- Variable costs: It may include cupcake liners, parchment paper, packaging and labels, etc. As your output increases, your variable costs also increase.
- Overhead Expenses: They are rent, utilities, packaging materials, and baking equipment maintenance.
- Competitive Analysis: Research competitors' prices to be able to maintain competitive prices in the market.
- Labor: Includes your labor costs and how much your time spent making the baked goods is worth. The better you are, the more excellent and competitive your baked goods are, the higher your labor costs will be.
- Profit Margin: is the amount of money left after covering all costs. It is calculated using the formula: Profit Margin= 100*(sales price – cost of goods sold)/sale. In which, the cost of goods sold = ingredient cost + labor cost + variable costs + overhead.
Now that you know the factors that go into pricing your baked goods, let's move on to the next section to see what your pricing strategy includes!
Pricing Strategies for Online Bakery Businesses:
- Premium Pricing:
- Highly Priced Items
- Must be of Premium Quality
- For consumers looking for quality and not worried about budget
- Penetration Pricing:
- Prices are low at the start and gradually increase thereafter
- Good strategy when you’re new in the baking industry
- inform customers that this is a discounted price and will increase later.
- Economy Pricing:
- Low-budget & Fast-moving product
- Produce quantity in order to make a profit
- Keep your costs low
- Price Skimming:
- Introduce a new baked product with a high price
- Sell high price until the product becomes saturated in the market
- Psychological Pricing:
- Use numbers that look cheaper, for example: $99 instead of $100.
- Promotional Pricing:
- Discount pricing during holidays or special occasions like National Chocolate Cake Day, such as BOGO, or Flash sales.
You think you only price baked goods once and that's enough, don't do it! Continuously monitor prices to ensure you're not only making a profit but also meeting customer expectations.
💡 Quick read: 14 Best Small Food Business Ideas
How to Sell Your Baked Goods Online in Just 5 Steps
Congratulations on reading this far, isn't it great? We have just gone through the best preparations to get to the 5 important steps to sell baked goods from home with Shopify. Let's dive into 5 steps with Shopify:
1. Create Your Online Store
The first step is to set up your online store including:
- Bakery Name and Logo: This is the identity of your bakery product, your brand. You can create attractive and eye-catching names and logos with the free Shopify shop name ideas tool.
- Online store theme: Choose a professional and attractive theme available from Shopify themes or Shopify theme partners
- Customize with PageFly: Don't worry if you don't have coding knowledge or want to optimize conversion rates, consider using PageFly - a Shopify Page Builder. It offers an easy, user-friendly drag-and-drop builder with tons of templates for you to check out, and it also has 3rd party integrations that will make creating your store a breeze and more eye-catching.
As you can see, setting up your online store with Shopify is extremely easy and can be done in just a few minutes, even if you have no previous web development experience.
2. Set Up Your Product Pages
Once your online store is set up, go ahead and create engaging product pages:
- Product Images: Upload quality, beautiful images to stimulate customer attention. When customers see something attractive, they will take action to buy.
- Product Description: Besides attractive images, use words that highlight the flavors and ingredients of your food, making customers crave your creations.
3. Select Your Apps and Sales Channels
This is a step that cannot be skipped because it will make your store much richer. The Shopify App Store has tools and apps that can help you with marketing, product reviews, email, and more.
For the niche like baked goods, there are some essential types of apps that you should install for your store like Klaviyo orMailChimp for email marketing), Loox or Judge.me for product reviews, SEOAnt orSearchPie for SEOm, VIBE for Shoppable Instagram feed, for PageFly for building a unique store.
4. Pick Your Payment Gateway
Shopify offers many reliable and secure payment gateway options, allowing customers to pay in the most convenient way. Some most popular payment gateways are:
- Shopify Payments (ShopPay):
- Shopify's in-house payment gateway.
- Available in select countries.
- Streamlined experience since it's integrated directly into the Shopify dashboard.
- Allows for credit card payments without the need for a third-party gateway.
- Third-party Payment Gateways: Shopify supports numerous third-party gateways. The availability of each gateway might depend on your store's location. Some of the most popular third-party gateways include PayPal, Stripe, WorldPay,...
- Alternative Payment Methods: These are options that don't necessarily fit the traditional payment gateway mold but are popular in certain markets or for certain types of purchases like Amazon Pay, Apple Pay, Google Pay,...
However, you should consider the transaction fees of payment gateways and security to make the most suitable choices.
5. Market Your Baked Goods Store
Marketing is an indispensable part of businesses, especially for online cake shop owners, it helps attract more customers to your brand. There are some popular marketing strategies such as social media using platforms like Instagram, Facebook, Pinterest, or Email marketing, Customer Reviews and Referrals are also top choices.
The 5 steps above will help you run an online bakery business on the Shopify platform. However, that's not all, cake quality is still the core of your business story. Pay attention to the quality taste of the cake so that customers can feel all the love and passion placed on each cake.
Conclusion
In summary, above are the important steps you need to know to run an effective online baking business, attract many customers, and have a good profit.
If you are wondering when is the best time to start selling baked goods, we advise you to start now, so that your chocolate baking products attract a lot of customers, and earn more on this upcoming National Chocolate Cake Day.
As you embark on this exciting journey, remember that in order to sell baked goods online is not just about making sales; it's about creating a community of loyal customers who share your passion for baking. So, seize the opportunity, don your apron, fire up the oven, and share your love of baking with the world. The potential of selling baked goods online is as vast as your imagination and dedication allow it to be. Happy baking, and wish your online bakery to rise to new heights!
