Online Food Business

How Profitable Is An Online Food Business? (Updated for 2024)

Pat Walls

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Updated: September 4th, 2024

How Profitable Is An Online Food Business? (Updated for 2024)

So you want to start an online food business?

And the first question that came to your mind was, “well, are online food businesses actually profitable?”

Especially considering:

You could start a online food business with as low as $200
Based on our data, online food businesses generate an average of $4.03M per year
You could see gross margins as high as 30% with online food businesses

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a online food business.

Let’s dive in!

Is an online food business profitable?

Yes, an online food business is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $4.03M per year with an estimated gross margin of 30%, you could expect to recover your investment within 12 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your online food business.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your online food business is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is an online food business worth it?

If you’re wondering if a online food business is worth it, the answer is a big YES. With online food businesses, you have the potential to earn $4.03M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a online food business to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful online food businesses case studies.

Examples Of Profitable Online Food Businesses

Here are a few examples of profitable online food businesses, and a few more details about them:

1. Just Panela LLC ($2.1M/year)

Scott Unkefer, the founder of Just Panela LLC, came up with the idea for his business when he moved to Medellin, Colombia and discovered Panela, an organic, unprocessed, and natural cane sugar. After experiencing its unique taste and health benefits, Unkefer decided to reposition Panela for the North American and international market. Despite facing challenges in packaging and manufacturing, Just Panela has achieved annual sales of $1.5 million and has gained recognition for its design and product quality.

Is it profitable? Yes
How much money it makes: $2.1M/year

How We Started A $1.5M Cane Sugar Biz Landing Our Product In Whole Foods

Founder and CEO of Just Panela LLC, Scott Unkefer, tells the story of his $1.5M unrefined, artisanal and organic cane sugar business, including how he repositioned the product, designed and manufactured the first product, and launched the business with multi-national operations.

Read this case study

Read by 9,421 founders

2. Urban Smokehouse ($1.5M/year)

Andrew Buehler, founder of Urban Smokehouse, came up with the idea for his business after noticing the growing market trend and opportunity for online delivery of perishable items during the COVID-19 lockdown. As a foodie with a background in financial services, Buehler saw the rising demand for BBQ, a food that tastes great but is often inconvenient to make, and decided to create a digitally native BBQ brand that offers pre-cooked and sauced ribs that can be easily prepared at home in under 20 minutes. He launched Urban Smokehouse as a Kickstarter project and quickly surpassed his goal, raising over $30,000 in pre-orders.

Is it profitable? Yes
How much money it makes: $1.5M/year
How much did it cost to start: $15K

How We Hit Our Goal Within 24 Hours On Kickstarter And Raised $30K+ Worth of Preorders

Andrew Buehler launched Urban Smokehouse, the world’s first digitally native BBQ brand, through a Summer Kickstarter campaign, raising over $30,000 in pre-orders; since then, the company has achieved monthly sales of over $5,000 split between their website and in-person pop-ups and events, relying heavily on word of mouth and organic social media.

Read this case study

Read by 3,011 founders

3. Jaju Pierogi ($960K/year)

Jaju Pierogi, founded by sisters Casey and Vanessa White, started as a side project selling pierogi at farmers' markets and pop-up events. With a background in the corporate world and a love for their Polish heritage, they saw a gap in the market for high-quality, handmade pierogi. Fast forward to August 2022, Jaju Pierogi is now in multiple grocery chains and over 650 specialty independent stores, with a monthly revenue of $80,000-$100,000.

Is it profitable? Yes
How much money it makes: $960K/year
How much did it cost to start: $3.5K

Our Grandfathers Recipe Inspired Us To Start A $1M/Year Pierogi Business

Jaju Pierogi started off as a side hustle at farmers' markets and festivals back in 2016, and as of August 2022, they are in multiple grocery chains and over 650 specialty independent stores with a monthly revenue hovering between $80,000-$100,000.

Read this case study

Read by 3,745 founders

Learn more about starting an online food business:

Where to start?

-> How much does it cost to start an online food business?
-> Pros and cons of an online food business

Need inspiration?

-> Other online food business success stories
-> Marketing ideas for an online food business
-> Online food business slogans
-> Online food business names

Other resources

-> Online food business tips

How much can you make with an online food business?

With a online food business, you can make an average of $4.03M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $200. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 12 months.

How much does a online food business make a week?

Based on our data, average weekly revenue for a online food business ranges around $84K. As such, you could see monthly revenues of $336K.

To know if your online food business achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your online food business.

How much do online food businesses owners make?

The income of an online food business owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established online food business is about $84K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as an online food business owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Online Food Business Profit Margins

Generally speaking, an online food business can expect profit margin of around 30%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of an online food business, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, online food business owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, online food business owners can ensure long-term sustainability and profitability for their business.

Online food business owner salary

The salary of an online food business owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established online food business, in a prime position, might see an average weekly salary around the ballpark of $25.2K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a online food business may be a promising business to start - but the success of your online food business mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable online food business.

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Starting An Online Food Business: Everything You Need To Know

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