How to Start an Online Bakery in 8 Steps

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An online bakery can be a great way of selling baked goods to a wider audience. Here, we’ll explain how you can set one up in order to share your baked creations with the world.

Home baking is a big business. It’s no longer just a hobby or a necessity when a birthday rolls around – it’s a full-blown industry in its own right. It’s even thought that baked goods produced and sold in the US have an estimated $423 billion impact on the American economy – big business indeed!

Bakeries aren’t just an in-person experience anymore, either. More and more bakers are moving their business online – this is thanks in part to the pandemic, which left them with no choice but to pivot to ecommerce, but also due to developments in packaging and transit.

Basically, it’s a great time to start an online bakery – but it can be overwhelming thinking about where to begin. This article will guide you through every step of setting up your store, so that all you need to worry about is deciding between chocolate or red velvet cake. Spoiler: the answer is both!

How to Set Up an Online Bakery

  1. Get the right licenses
  2. Find your niche
  3. Create a brand
  4. Create an online store
  5. Showcase your baked goods
  6. Price your baked goods fairly
  7. Package and ship your baked goods
  8. Invest in marketing

#1. Obtain the Right Licenses

The very first thing you need to do is make sure that your online bakery is legal. You don’t want to invest all your time, effort and money into it, only then to be slapped with a closure notice or hefty fine.

The best thing to do is to visit the Department of Health website for your specific state, to find out more about what are often called “cottage food laws”. Cottage food laws will determine whether or not you can make food for sale within your home, or whether you’ll need official external premises.

Once you know whether or not your online bakery is something you can run from home (if that’s what you want), you’ll need to discover what, if any, specific licenses you’ll need. Common areas which often require a license or certificate include:

  • Food hygiene standards
  • Health and safety
  • Fire safety
  • Sales privilege
  • Food handling
  • Catering

Once you’ve identified which licenses are mandatory in your state, you can work towards ensuring that your online bakery meets all the necessary criteria.

#2. Find Your Niche

Just like any business, you need to find your niche. What sets you apart from the hundreds of other online bakeries that are already out there?

Think about what you can offer potential customers that others can’t. You need to have a USP (unique selling proposition) and a brand that will attract people. Don’t be tempted to ‘just bake’ and sell anything and everything – instead, focus on your strong points. Examples of bakery niches include:

  • Chocolate goods
  • Vegan goods
  • Goods with natural ingredients
  • Celebration cakes
  • Baked goods inspired by a specific region, e.g. French patisseries
  • Cupcakes

Remember that your chosen niche needs to be something you can personally provide. If your strong point is decorating celebration cakes, but you hate making cupcakes, then stick to what you know and enjoy it. You don’t want to get stuck running a business that spoils your love of baking – always remember why you started in the first place!

For more information on how to set your online bakery apart, explore our guide to how to find your niche online.

#3. Create a Brand

One of the most important steps in creating your own online bakery is developing your brand. Think about your favorite bakeries and brands – what is it that you think of when you hear their name? We bet they all have individual colors, branding, and logos that make them stand out from the crowd, and are easily identifiable.

Every brand is different, and developing yours will take some time and thought. Take a look at what you are planning to offer, research the market to check there’s nothing like what you’ve got planned out there already, and undertake some audience research to see how they react to elements such as your logo, name, and color scheme.

betty crocker logo
The Betty Crocker logo and branding is instantly recognizable to households across the country.

Remember to also identify your brand values and ethos. People are increasingly looking to spend money with brands that have values and social ideas that reflect their own. Perhaps you want to use all-natural ingredients, make your packaging fully recyclable, or give a percentage of each sale to charity. Whatever it is, your brand needs to have morals.

Top tip!

Make sure your brand identity is cohesive. You want customers to be able to identify your brand at every touchpoint – whether it’s your website, social media, packaging, or products, make sure they all feature the same chosen colors, fonts, and tone of voice.

#4. Create an Online Store

An ecommerce store is an online store where you can sell your products to a wide audience, all without needing a traditional bricks-and-mortar shop for people to visit.

There are various ecommerce platforms that you can use to set up your online bakery which are easy to use, customizable, and available with fixed pricing plans to suit every budget. They also often offer extensive help and support, meaning you don’t need to be a technical expert to ensure your store runs smoothly.

Better still, most website builders offer you the choice to utilize a pre-built design theme, meaning you don’t have to start from scratch as far as visuals are concerned. Check out our guide to the top bakery website templates on the market for more info (and inspo!).

shopify brooklyn theme
Shopify themes are customizable and responsive.

The most popular ecommerce platforms include:

An ecommerce store is a great way of overcoming some of the common hurdles that can arise when opening an in-person bakery, such as geography and location. Often, people will see gorgeous baked goods online, or in marketing collateral, but will be too far away to visit the bakery. An ecommerce store, on the other hand, allows everyone to access your delicious creations!

#5. Showcase Your Baked Goods

Once you’ve decided on your brand and set up your ecommerce store, you’ll need to begin populating it with your baked goods. When it comes to showcasing your products, they need to appeal to your target market. After all, nobody is going to purchase a baked good that doesn’t look like it would be delicious, are they?

So how can you best showcase your baked goods? Let’s take a look.

1. Write product descriptions

First of all, you’ll need to write product descriptions that sell. Describe your products in detail; make them sound appealing, without going over the top or making false claims.

When it comes to baked goods, you’ll need to make sure you’re providing every piece of essential information, such as ingredients, allergy advice, and best before dates. Think about what you would want to know about a baked good before you bought it, and make sure you include all of that information in your product descriptions.

2. Photograph your products

The best way to show off your baked goods is to take high-quality photographs of them. Think about elements such as background and lighting, and make sure the images are accurate representations of your product.

When taking product photographs, try to shoot your items from various angles, and in various situations. The key, however, is making sure that your images clearly show your baked goods. If you’re shooting a slice of birthday cake, for example, place it on a plate where it can clearly be seen, rather than in someone’s hand where it may become obscured.

magnolia bakery product photos
Magnolia Bakery uses multiple images and even videos to showcase their products.

#6. Price Your Baked Goods Fairly

One of the key things that will make or break the success of your online bakery is your price. If you price your products too high, people will find a cheaper alternative – and if you price them too low, you’ll struggle to break even, let alone begin to make a profit.

When deciding on a price for your baked goods, it needs to be fair to both you and your customers. People don’t want to feel like they’re being conned or overpaying. If they do, they won’t become return customers – but, on the other hand, you want to ensure the money you receive reflects the time and effort you put into creating your goods.

Some of the key things to think about when developing your product pricing strategy include:

  • The quality of your products and the ingredients used
  • Your overheads, such as ingredients, kitchen equipment, and storage
  • Best before dates of your products
  • Prices of your direct competitors/the market average
  • The amount of time and effort taken to create the individual product

#7. Package and Ship Your Baked Goods

Packaging may not sound like the most exciting part of creating your online bakery, but it’s by far one of the most important. How you package and ship your products will have a major impact on the condition they arrive in.

Could you imagine how annoyed your customers would be if they ordered delicious-looking baked goods online, only to receive a smashed-up birthday cake? This could have a major impact on the reputation of your brand, and would likely impact customer reviews and feedback.

When choosing the right packaging, you need to consider what will keep your items fresh and protected, whilst still being cost-effective. If there’s one area that you may need to invest more in with baked goods than you might for other products, it’s your packaging.

sprinkles cupcakes packaging
Sprinkles Cupcakes packaging is simple yet effective, and features their branding throughout.

When it comes to choosing a carrier service, it’s important to do your research. One of the key factors for online bakeries will be whether or not the carrier even accepts food parcels – not to mention the speed at which they can deliver. You don’t want to find out your carrier will take weeks to deliver your parcels – particularly after it’s too late, because they’ve already been shipped!

You’ll also need to decide how much you want to charge for shipping your products.

Some companies offer free shipping, and if you’re in a financial position to do so, then this can be a great perk to your customer experience. If not, you can decide between a flat rate shipping fee (which is ideal if all of your items are of a similar weight and size) or a real-time shipping fee, which will change depending on the size of the order. If you do opt for a real-time fee, your best option will be to integrate your website with a shipping service, such as FedEx or DHL Express.

#8. Invest in Marketing

Marketing is key to getting your products in front of your target market. Some of the most important things you can include in your marketing strategy include: 

SEO

Search Engine Optimization (SEO) is the process of ensuring your website appears in the results of search engines. If people are searching for key terms relating to your business, such as “online bakery”, “postal brownie box”, or “delivered celebration cakes”, then you need to ensure that your website is optimized to appear in Google’s results for these keywords.

Social Media

Social media – and digital marketing at large – are great ways of building up a community, and connecting with your online audience. Once you’ve begun to build up a following, you can use social media platforms such as Facebook, Instagram, and Pinterest to showcase your products, offer behind-the-scenes access inside your bakery, and provide your audience with their own baking ideas and inspiration.

Events and Markets

Events and markets are a great way of taking your products directly to your target audience. Research local markets, shows and fairs in your local area that you think would provide you with the opportunity to reach a wider market.

If you do set up a stand, then remember to make it as visually appealing as possible, showcasing all your products in full, and clearly displaying all of your branding and logos.

How to Start an Online Bakery: Summary

Starting an online bakery can be a great way to reach a wider audience than traditional bakeries can usually offer. With the baked goods market only set to grow, now is the perfect time to take the plunge.

Follow the steps in this article, and you’ll be on the way to online baking success in no time. To recap, the key things to think about are:

  1. Get the right licenses
  2. Find your niche
  3. Create a brand
  4. Create an online store
  5. Showcase your baked goods
  6. Price your baked goods fairly
  7. Package and ship your baked goods
  8. Invest in marketing

That’s it from us – good luck!