Startup cost
$50k–$500k
TRUiC Business Ideas
How to Start a Grocery Delivery Business
Decision Snapshot
Grocery Store Delivery
Idea Score
36
Profit margin
11%
Break-even
4 mo–12 mo
Time to launch
12 wk–36 wk
Demand trend
Stable
5-yr failure rate
—
Capital intensity
Very high
Time commitment
Full time
Part 1 - How to start a Grocery Delivery business - Background
A grocery delivery service will do people’s food shopping for them. They’ll typically partner with a grocery wholesaler to get a wide selection and may offer additional services to their customers to assist with meal planning.
Our guide is in 3 parts:
- Part 1 - How to start a Grocery Store Delivery business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
What are the costs involved in opening a grocery delivery business?
Costs involved may not be very much to start because you’ll mainly buy what’s already been ordered and you don’t necessarily need a formal space to conduct business. However, you’ll likely want to invest heavily in technology so your customers have an easy way of ordering. You’ll also need to insure your drivers with commercial auto insurance and workers’ compensation, and budget for marketing as well.
What are the ongoing expenses for a grocery delivery business?
Grocery delivery businesses have to account for the cost of salaries, gas, insurance, and equipment maintenance. They’ll also need to budget to keep their automation as relevant and reliable as possible.
Who is the target market?
The target market is anyone who can afford luxury, time-saving services or for those who may be unable to drive to the store or shop on their own.
How does a grocery delivery business make money?
Grocery delivery businesses charge people a membership fee for their services and a markup on the cost of food. They may also charge additional fees based on quantity of food ordered and location of the home.
How much can you charge customers?
Most delivery services make people sign up for a membership first, charging around $100 for the year. They also may charge a delivery fee or about $10 or so for smaller orders. For larger orders (e.g., over $50), they may waive the delivery fees in lieu of the profits they’re making off their personal wholesale markup. Check out your local competition before setting your terms.
How much profit can a grocery delivery business make?
Profits for grocery delivery services can be considerable in the right neighborhoods. Let’s say you charge a 10% markup for the food you sell, and sell $100,000 worth of food every two months. This leaves you with a profit of $10,000 plus delivery fee charges and membership charges (if applicable.)
How can you make your business more profitable?
You can make your business more profitable by expanding your services with additional perks. For example, delivering people their Starbucks in the morning the moment they step out the door, or offering an express option for small items where people can pay a modest premium to indulge their cravings.
Day-to-Day and Growth
What happens during a typical day at a grocery delivery business?
The name of the game is flexibility when it comes to grocery delivery businesses. Owners may find themselves doing everything from maintaining relationships with wholesalers to completing the actual deliveries. In addition, owners also need to coordinate pick-up times with staff, keep up with invoicing, and figure out ways to market their services to a greater audience. But the biggest thing an owner may need to do is work with their automated features. Most delivery businesses find they need constant fine-tuning to ensure the customer experience goes well.
What are some skills and experiences that will help you build a successful grocery delivery business?
Owners should definitely have some type of experience working in the delivery industry. There’s a lot to keep track of when it comes to perishable food, especially considering that schedules can be difficult to coordinate with customers. From spoiled onions to box theft, there are a million ways for the order to go wrong. That’s why it helps to understand the logistics of ordering and delivering. It can’t prevent every mishap, but it can go a long way to ironing out the kinks before they actually occur.
What is the growth potential for a grocery delivery business?
People are starting to shift a significant portion of their income into services and they’re willing to pay a premium for convenience. As cities like NYC and LA continue to become more condensed, grocery delivery can look more and more appealing to a young professional who probably doesn’t want to navigate traffic or spend time perusing 30 different supermarket aisles.
What are some insider tips for jump starting a grocery delivery business?
Grocery delivery services are somewhat new, meaning owners are still in uncharted territory. It’s very exciting for an entrepreneur who wants to make an impression on their customers, and there are a variety of ways to do it. For example, popular meal delivery services such as Blue Apron may look more appealing to busy professionals without a lot of time to plan their meals, so grocery delivery services may want to try offering a simplified version of this service as just one component of their businesses.
You can also offer a variety of options to your customers based on their previous orders. You can suggest meals or products to them to make their shopping experience easier. Or you can set up customers with a standard shipment and invoice every week so they don’t even have to think about it. Make sure you identify your target market before moving forward. A 30-year-old single professional will need a different message than a 55-year-old ordering your services for their ailing parents.
Owners also need to devote time to talking to wholesalers. While it’s possible to contract through grocery stores, it makes more financial sense to go through a wholesaler because their markup is far less drastic. However, this step will require establishing a good reputation for yourself among the people in the business, which will take both time and effort.
How and when to build a team
If you’re just getting started, it may be better to go it alone at the beginning. Once you start exceeding your monthly goals, consider hiring additional drivers or an administrative person to coordinate contracts, billing, and scheduling.
Part 2 - Is a Grocery Delivery business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Grocery Store Delivery business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Grocery Store Delivery Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Grocery Delivery business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.