My start up groceryone.com

[noral]

Hi everyone im new to the forums and i wanted to share the start up me and few of my family members are started is called Groceryone.com Well What Groceryone.com will be is an Online Grocery store. With all the high gas prices it's harder for people to goto grocery shopping. What we will offer is Overnight shipping on all orders for 5.00 Thats cheaper than group shipping and is a hole lot cheaper than driving to the store. We will offer all products that you could find in any store you can goto, we will even ship meat products overnight also. We have a warehouse where we will be shipping our products from and a will be launching a state of the art website within a few months. We have taken surveys around our local area's and found that people would buy grocery over the internet if they can get it asap. We know we may take a little loss over shipping costs but we plan to make it up with the number of orders we will receive. We also we sell small electronic products maybe DVD's CD's and a few other products you may find at a grocery store. So what im asking for YE Members is to give me a little input and let me know what you think. Do you think this will work? Do you think it have a chance? So please let me know.

[Upperz]

I do think it has a chance.
It does however depends on your targetgroup, and where you are located.
Did you do some research yet? To know what will be the average amount people are willing to spend per order?
Also better not do the shipping yourself, but outsource it in te beginning.
About the name, it looks like the domainname is already taken by a hijacker.

[BMX]

Sounds good to me. Have you find a suppier for your food etc

[noral]

yes we have done research we sent our surveys locally around our town to see how much people would spend what people would buy. The adv family spends about 300-400 on food. and around 750-800 a month. We have a dominant supplier for all food products we will be selling over the internet. We will do all our shipping threw DHL or THE USPS

[Upperz]

Do you use the suppliers online backoffice/webshop to connect (thru XML) to your own frontend shop? This way the shop is yours, exept the content.

[Mega B]

This in theory sound a great idea but in practice i can see many many problems,all this is really is a form of drop shipping which is a very good vehicle business wise as it does mean you dont have problems of stock ect.The idea of drop shipping as i have stated does work well with say most items like computer games and the like but the product being food products this is the main concern and when you mentioned meat on a overnight carrier i can see that as the problem as there transport is not chilled and one does not have any control over temperatures when big chains can provide all of these vital requirements when delivering food.

This in my opinion want a lot more thinking about as to comply with food regulations.

Mega........

[jasaunders]

You aren't going to have a little loss on shipping, you're going to have a big loss. Margins on groceries are extremely low, its a volume business. I don't understand your business model as explained, but hopefully you have it figured out.

[Jay Brass]

This is an incredible idea that has awesome potential. Why didn't I think of it?!?!?

Anyway, all the advice I can give you, because I'm not a professional at this stuff by any means, is that I think advertising will be the main factor. Make sure you are thorough about what your services are and I think it should spread by word of mouth.

I wish you the best that luck can provide!

[CIsaac]

Good Idea if it's done cleverly--the structure would have to be positioned in a way to make it work; which I'm sure you are doing as you complete things. I would suggest that you research the regulations of your industry and state to see how you can get around some of them; because I think you might have a problem with a couple of regulations.

I'm not quite sure how the model works, but I'm sure you'll share later. Good luck.

__________________
IBS - Isaac Business Services
BUSINESS BLOGGER

[PhilFreecash]

I agree with jasaunders. Shipping is going to be the killer. 5$ on all orders! That sounds good to me but its not good for you. Over night shipping is expensive you will have to charge more if you want to make any money, plus you want to compete with the major grocery stores so your prices are going to have to compare. If your online store offers specialty foods that aren't found in regular stores thats even better or maybe bulk items like sams club.

[lappy512]

Another problem - people might buy groceries daily instead of weekly because of the convenience, making it even harder for you to offset shipping costs.

[Hooman]

DHL for shipping??? I don't even get how you would ship something like milk by DHL...

This can work, and here's the best way to do it in my opinion.

Setup an online store that lists all the grocery food items. Make a database that lists as many food items as possible, all brands, etc. Rather than list them at the price they sell at in the grocery store, set your own prices, higher than what they would be in local grocery stores.

For example, if milk is $3.50 for a gallon, list your milk at $5-$6. Mark everything up by 50% or so. That way you can make a profit and you could probably even do free shipping in a certain mile radius. Or you could do something like "free shipping on orders over $50" and charge different rates for different order sizes and different distances.

Then, you basically make sure you keep track of all the deals and prices that grocery stores have, so that you can maintain profit margins. You can run "sales/deals" on your site by occasionally dropping prices slightly, but still maintaining your profit margin.

Offer slightly lower prices to people who become members, and pay a monthly fee. That way you develop a loyal customer base. Or somehow let "members" get better aspects of your service, like quicker delivery, etc.

It can be profitable if you can get lots of customers and develop efficient routes. If you know your town well, it can work.

I had in mind to do something like this myself a little while back. The best people to market it to are older people, busy people, and college students. To advertise, print 50,000 little business-card-size ads and drop them in every single mail box in your town. Printing that much advertisements will cost you less than $600. You can also distribute them on the cars in the parking lots of grocery stores. Or better yet, partner with your local grocery stores and have them help you get the word out.

Good luck!

[noral]

ok ok loving the responses. I think Hooman has a good idea about offering free shipping for a order over 50 to maybe a 100.00. An how we will be getting a products are threw Many food distribution warehouses over the city so we will always have stock. But do you think if i mark up the prices people will still buy??

[Hooman]

There was a guy on yE who started a franchise based on this exact structure as I described in my post above. They hit $150K revenue in their third year in Syracuse, NY. Their franchise startup cost is about $1500 I think. (and that's where I got the ideas that I described...)

Here is the thread: Grocery Delivery websites

[Aletheides]

You're not the first one to think of online grocery stores. This idea has been done a couple of times, by some pretty big companies if I'm correct. I remember reading a couple years ago about a big name in Japan that tried to do it and ended up pouring millions into it..

Try Googling this stuff, you can get some information from their mistakes and how you can avoid them if you plan on going forward with this.

But with high gas prices you might be right about this opportunity.