How to Launch a Grocery Delivery Business – Beginner’s guide

Ecommerce emergence has let us shift into this virtual world of Grocery Delivery Business where buyers and sellers can interact and sell & purchase globally without any strings attached.  This completely revamping of traditional shopping methods to online have made every business go online. Increasing customer digital prints and technological revelations, mobile commerce has turned the table. Now, buyers prefer to buy all their goods on their smartphone and more so it can be done anywhere and anytime. Among all of this, marketplaces are becoming quite favorite of the masses. 

The main purpose of online supermarkets is to bridge the gap between online sellers and their targeted audience. However, they may or may not have their own inventory

If you look into the concept of a supermarket, different vendors are selling goods and services. And in return, they are paying a certain amount to the owner for using their space. Similarly, an online marketplace is where different vendors are selling goods and services online via a popular app/website. Whereas the owner of that app/website is charging a certain price for that online space.

This mobile commerce is a huge boost for small businesses. Traders/businesses can enlist any type of products or services on an online marketplace. Above all, online space offers a lot less spending and more customer engagement.  This is the marketplace for all businesses such as bakery shop, hand-made products and merchandise etc.

This blog will cover the business model of an online marketplace and its advantages to small grocery owners.

Types of Grocery App Models 

  1. Inventory Model – This model is confined to only big grocery business owners. Usually, they have their own platform and there is no profit-sharing.
  2. Marketplace Model – It is for small grocery owners who have not the budget for their own platform. So, they choose to sell it on someone’s online marketplace at the charge of some minimal commission or profit-sharing.
  3. Hybrid Model – This platform is a combination of both model mentioned above. In this way, owners can sell their groceries as well as let others do the same on its platform.

Every grocery app model has its pro and cons. Less inventory is required in the marketplace model and they can earn better profits with less cost.  For this reason, the marketplace model is the one that benefits small businesses owners the most.

Online Grocery Marketplace Mechanism 

3 factors decide the success of the online grocery business, which is as follows :

  • Powerful and robust system for timely deliveries.
  • Attraction to enlist more vendors on your app/website.
  • Marketing, popular apps is likely to get more downloads.

Owners of the marketplace earn through the commission earned on placed orders by the buyers. The customers place the order on the online marketplace and make the payment. As payment will be received on the marketplace owner’s end.  After the delivery of the order, the amount is transferred to vendor a/c  after deducting the commission.

Besides primary source, marketplace owners also generate earnings through 2 other sources.

  • First is monthly or yearly subscriptions
  • Second is periodic advertisements on their app/website

Advertisements can be of various types and these two methods results may vary from companies to companies due to differences in the targeted audience, marketing methods and user engagement methods in your Grocery Delivery Business.

6 ways to make your grocery marketplace successful 

To make any business successful, just put yourself into the place of your audience and try to understand their psyche. Nowadays there are tech businesses that work extensively on the psyche of people and sell it to earn big. Understanding your targeted audience is the key to success in the online marketplace business.

Here are 6 crucial factors that can put your vertical in driving seat:

UI Interface in Grocery Delivery Business

The selling point of any marketplace or a product is its aesthetics. The customer is always keen to look at products or section that are better stacked up and looks more appealing. Moreover, they are willing to buy up from that section even it’s not on their list. At least, one of the items is going on their cart list.

So, aesthetics plays a key role in influencing the buyer’s decision. Also, today buyers take more of seen and pick approach rather than making a list. Key points to note here :

  • Navigation is plain and smooth
  • High quality high resolution product pictures
  • Products beautification and are nicely categorised


Easier Product Discovery in Grocery Delivery Business

The moment customer is lost or able to find out the product of their liking, grocery app is bound to fail. In all honesty, make it easier for the customer to look for products. Try asking few questions first that can help you display relevant products. Go for information such as age, job and interests which will help you narrow down the products customer is interested in.

Moreover, approach your platform algorithm on the dislikes and likes of your customers. Then accordingly place products for your customers.


Grocery Delivery Business

Shopping cart and wishlist

Alike a shopping app, go with a wishlist and shopping cart feature in your marketplace app. It’s not necessary to have a Wishlist feature but based on items they have added to the wishlist, you can re-target your customers in your Grocery Delivery Business.

Whereas the shopping cart feature should be easy to navigate, adding and removing products should not be a problem. Otherwise, this can easily lead to bad ratings and the deletion of the app.


Grocery Delivery Business

Payment Gateways in Grocery Delivery Business

It would be really strange if customers are buying online but not paying. Now, we have more than technology to add online payment. Furthermore, customers prefer easy checkouts and payment at the tap of their finger.

Use only known & popular payment methods such as Internet banking, UPI id, Paytm, and Google Pay etc. Also, choose only reliable gateways that people have heard or at least know about it.

Grocery Delivery Business

Timely Delivery

Today’s on-demand businesses are running mainly on their timely and contactless delivery especially the grocery. So vast is the competition today is, businesses fail even one thing goes wrong. Timely delivery with quality goods is what is making the grocery business successful and help retain customers in your Grocery Delivery Business.

In the marketplace, either the business ships the product or the vendor. It varies from business to business based on its audience, popularity, marketing and much more.


Grocery Delivery Business

Marketplace Popularity in Grocery Delivery Business

Your grocery app reputation is your vendor reputation and vice-versa. Therefore, it’s up to the business owner that none of the vendors is spoiling the name of the grocery app with their unprofessionalism.

To curb this, owners can use feedback form from customers and also a goodwill check on the vendor before enlisting them.

Conclusion of Launching your Grocery Delivery Business

A marketplace business is tough to manage as it is more than just inventory and shipping. Conversely, it is the next big thing for entrepreneurs and small businesses can make it big with the marketplace model as Grocery Delivery Business.

All in all, it is a good deal for both entrepreneurs and small owners. Small owners with the rise of technology and changing times can earn more money here and scale up their business. And the entrepreneurs can affect change in alignment with their business goal.



November 27, 2021
Project Manager at Stackgeeks

Prince Singla

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