Last Updated Date 23rd, April 2025
Consumers today continue to shift to online grocery delivery platforms for purchasing groceries and having them delivered to their door instead of trudging around a brick-and-mortar store. This shift is creating new opportunities, broadening the grocery business landscape.
According to Statista, the revenue in the grocery delivery market is expected to reach US$940.96 billion in 2025, growing at a CAGR of 10.07% in the forecast period (2025-2029). The market is anticipated to reach a projected market volume of US$729.83 billion by 2029. In this blog post, we describe in detail how to start a grocery delivery business in easy steps.
Gaining in-depth insights about the industry before knowing how to start an online grocery delivery business is highly recommended. In this section, let’s explore the latest industry statistics and important data.
It is always suggested to gain insights about the prominent grocery delivery service businesses before you decide to start a grocery delivery business. This not only helps in gaining a better understanding of your competitors in the industry but also provides you important insights about the growth and success journey of the prominent players. Further, let us take a look at a few prominent grocery delivery service businesses.
Amazon Fresh is inarguably the most prominent player in this industry. Approximately 48 million people use Amazon Fresh for online grocery delivery. The annual revenue of Amazon Fresh was $4.96 billion in 2022, a 5.7% increase from 2021. Amazon Fresh is popular online grocery delivery platform among users and according to a survey 26% of online grocery delivery users in the United States state that they will use Amazon Fresh again for purchasing online groceries.
Instacart is a North American leader in online grocery as its delivery services are available to more than 85 percent of U.S. households and 70 percent of Canadian households. It has partnered with more than 350 national, regional, and local retailers, to deliver from more than 25,000 stores. Instacart reportedly generated $3.3 Billion in revenue in 2024.
Founded in 2002, FreshDirect is an American online grocery delivery company that is headquartered in the Bronx, New York. The company sells fresh produce, meat, dairy and so on by finding the shortest route from dairies, fisheries and farms to the table. According to Crunchbase, it has raised $189 Million in funding.
Shipt is an American grocery delivery service that was founded in 2014. Headquartered in Birmingham, Alabama, US, Shipt provides access to a variety of stores and product categories including fresh produce, household essentials and more. It has raised $65.2 Million in funding according to Crunchbase.
Walmart grocery delivery is a popular online grocery marketplace catering to over 255 million customers per week. It offers groceries items in a variety of categories ranging from food items, household products, to pet essentials, and more. According to a study, 57% individuals prefer Walmart for groceries as compared to 15% who prefer Amazon.com. It controls 28.4% of the grocery store market in the US. Moreover,in future, digital consumers are expected to spend $63.79 billion on Walmart groceries.
This grocery delivery marketplace enables shoppers to choose and purchase groceries from a huge variety of products. Kroger doesn’t offer free shipping like many other grocery delivery platforms, however, it does provide a Boost membership for $59 per year, offering free delivery. Kroger enables users to get their groceries same-day or later, as per the customer’s convenience. Kroger company holds the fourth-largest online grocery market share.
After gaining an overview of the popular market players, you must have understood that this industry is profitable, and right now, it is the best time to launch your online grocery delivery platform. However, to streamline this process of starting your online grocery delivery business, we have curated a comprehensive step-by-step guide. Further, let’s explore the steps to start an online grocery delivery business.
Since the market seems lucrative for online grocery delivery businesses for years to come, it is appropriate for entrepreneurs/grocery retailers to set their foot in this direction and start their own online grocery delivery business. In this section, we list the steps to start a grocery delivery business.
The first step to starting an online grocery delivery business is conducting market research and figuring out the target market, which means finding out everything about the needs and wants of individuals. Once you have the understanding, you can delve deeper into their behaviors. Hence, if you are just starting out, having a defined target market will not only help you in starting your business, but will also help in creating effective marketing strategies. To define your target market, you can start by answering the following questions:
To find the answers to these questions, you can:
Choosing a business name and forming a legal entity is one of the primary steps to give your idea form. An authentic registration for name, a form of business, and compliances is a must. Furthermore, as online grocery delivery businesses need to pay taxes for the online sale of groceries, so registering under appropriate accounts to pay these taxes is a mandate.
Business owners can register their business under the following legal business structures:
In its true essence, an online grocery delivery business works on the principle of picking up an item from the vendor and delivering it to the buyer’s doorstep. Hence, several business models are available to start a grocery delivery business. A few of them are listed below:
In a multi-vendor business model, multiple sellers get a technical infrastructure to sell their vast range of grocery products to the buyers. Furthermore, it is also known as the ‘zero inventory model’ as the owner of the platform does not hold any inventory of its own.
Using the inventory model, the grocery eCommerce business is responsible for storing inventory from various retailers in a warehouse, maintaining and keeping a track of it and providing on-time delivery of grocery orders to the buyers.
As the name suggests, hyperlocal refers to a small geographical area. So, this business model caters to the needs of grocery buyers within a defined area. The main USP of this business model is that the grocery order deliveries are prompt.
Click and collect or BOPIS model brings the benefits of online shopping while still retaining the charm of picking the grocery order from the brick and mortar store. It offers an omnichannel experience to buyers as they can purchase groceries online and as per their availability pick them from the store.
This model facilitates delivery of grocery orders as per the schedule that fits the needs of all the parties involved, i.e. the retailer, the delivery staff personnel and the buyer.
Once the business model has been chosen, you need to decide the revenue streams. This will not only help you generate revenue but will also help in driving the overall growth and profitability of your online grocery business. Some of the possible revenue channels include:
Commission by far is the oldest and the most preferred revenue channel for marketplace owners. There can be two prominent ways to charge commissions with the sale of groceries online:
Also called membership fee, you can use this revenue channel to bring in vendors who are not comfortable with the commission model by paying a fixed subscription fee. These vendors can use your service for a fixed period of time (quarterly, bi-annually, annually, and so on).
A good source of drawing revenue from the marketplace platform is allowing vendors to carry out their personalized ads via banners and schemes on the platform homepage. The admin can charge the sellers for the space and number of campaigns they want to run.
Such advertisements can act as business-boosting elements for the website as well as for the vendors. A good amount of revenue can come in from certain independent product ads as well.
As more and more individuals are transitioning to online channels for grocery shopping, it is pivotal to make their user journey remarkable. This can be done via features of the online grocery marketplace. Discussed below are some of the pivotal features to have in an online grocery delivery platform.
The signup process for grocery retailers and buyers should be simple. If multiple steps are there for the signup then the users may get discouraged and move to your competitors site. Hence, simple signup is a must.
As a marketplace offers a lot of grocery products to the buyers, it is important to have easy navigation and a custom search feature so that the buyers can get the right product quickly.
Easy checkout with a reduced number of checkout steps is pivotal to decrease cart abandonment, boost sales and create more revenue.
It is crucial for an online grocery delivery service provider or any e-commerce store to have multiple payment options for consumers, making it easy for them to purchase.
Using this feature, buyers can keep a track of the status of their order, i.e. they can review the real-time status of their grocery order.
Allow buyers to provide their feedback through ratings and reviews. This feature helps in trust building and also provokes new customers to complete their purchase.
The admin should have full access to all the reports and analytics so that they can evaluate business growth and plan future strategies.
The admin should be able to approve the request of sellers to join the marketplace through a seller approval management feature.
Every marketplace should have a clean and comprehensive product catalog enlisting essential information about the product. Product catalog management facilitates the same.
The next step is to build and launch an online grocery delivery platform. This can be done via following two development approaches:
Custom grocery delivery marketplace development approach can be followed if you have custom requirements for which tailored functionality is needed. It is more time consuming and expensive because the development is done from scratch. You need to hire a team of web developers and designers to build your grocery delivery platform.
The second approach is to opt for a ready-made solution to launch an online grocery delivery marketplace. Readymade software solution offers pre-built features and capabilities, making it easy for business owners to launch and run their online grocery delivery business. Moreover, the features offered by a ready-made solution are time-tested and industry-specific. In comparison to custom development, this is a quicker and cost-effective way to launch the marketplace for the delivery of groceries.
Growcer is one such popular readymade software solution that enables aspiring entrepreneurs to launch their business with ease. This software comes pre-equipped with all essential features and functionalities, helping business owners easily create and manage their online grocery delivery marketplace.
Once the marketplace is ready, it is pivotal to market it to broaden the horizon of the target audience by bringing awareness. Marketing can be done via the following methods:
Now that we have discussed the steps to start an online grocery delivery business, let’s take a look at the cost of starting one. The primary cost while starting an online grocery delivery business is the cost to build the platform. If you choose to develop a multi-vendor grocery delivery marketplace platform then the biggest cost-driving factor is going to be its complexity, i.e. the features and functionality to be included. Cost of development depends on the time needed for the development of the platform and the availability of resources.
Hence, an online grocery delivery platform can approximately take 1900 to 2400 development hours. And, the development cost could be anywhere between $47,000 to $360,000. Instead, you can choose Growcer, a grocery eCommerce solution from FATbit Technologies that would cost you way less and is time-efficient.
Growcer is a ready-made, fully customizable grocery eCommerce solution that is equipped with all the necessary capabilities to help you start an online grocery delivery business. It offers multiple modules and features specific to the admin, seller, buyer, and delivery staff. Enriched with user-centric features, grocery delivery platforms like Walmart, Peapod, FreshDirect, Instacart, and more can be built using it. Growcer also offers pre-integrated APIs and robust ready-to-use mobile apps for buyers and delivery staff. Being a self-hosted software, clients do not need to have any technical expertise.
Growcer offers numerous benefits for entrepreneurs such as:
Growcer stands out in many aspects, hence making it a reliable choice in the industry. Further, it is a white-label solution and offers a plethora of revenue-generating options to business owners. That said, Growcer has enabled many startups to do more. A few of them are mentioned below:
Growcer’s Global Clientele:
Explore the complete client portfolio of Growcer.
The grocery retail landscape is constantly changing with people shifting to online shopping channels. Hence, starting an online grocery delivery business is a good idea. So, if as an entrepreneur you are excited about starting your own online grocery delivery business in less time, then consider our ready-made solution Growcer. For more information, get in touch with us.
Q 1. Is the online grocery delivery business profitable?
Ans. Online grocery delivery business is profitable as more people are ordering groceries online. The transition in consumer behavior is evident and the business is expected to remain profitable for the years to come.
Q 2. How much can my business earn per grocery order?
Ans. Businesses mostly charge a fee of 10% to 15%, depending on the order size. A fee of $15-$20 can be charged for a grocery order of $150. If on average 100 orders a day are received, then a business owner can make $1500 to $2000 per day. More orders will ultimately result in good profit.
Q 3. How should I acquire grocery sellers on my grocery delivery platform?
Ans. Grocery sellers that are active on other marketplaces can be approached. You can research their expectations and provide them with exclusive offers and also have an approachable seller service support system. Implement useful guides and provide them with buyers on board. Further, you can ask grocery store owners to join your online marketplace and increase their sales/ revenue through your grocery delivery platform.
Q 4. How should I acquire customers on my online grocery delivery platform?
Ans. Today’s fast-paced life with long working hours, hectic study schedules, and more does not allow employees or students living independently to go out and spend time shopping for groceries. In this context, customers who are looking for on-demand delivery services are ideal as a grocery eCommerce store solves their problem by providing them with flexibility. Buyers can shop any time, from anywhere, and get the order delivered to their doors. You can market your platform on various social media platforms to grab people’s attention.
Q 5. How can FATbit Technologies help in growing your business?
Ans. The team of digital marketing experts at FATbit will help you to grow your business online and enhance its online presence through various digital marketing services offered. This includes social media marketing, PPC, and so on. Online Grocery Delivery Business in 2024
Q 6. What are the main challenges of running an online grocery business?
The main challenges of running an online grocery business could be:
There may be many challenges to running an online grocery delivery business, however, most of these problems can be solved if you choose an efficient and reliable online grocery delivery software.
Q 7. How long does it take to launch a grocery delivery platform?
Ans. Well, this depends on the development approach you choose to build and launch your online grocery delivery platform. If you opt for the custom development than the launching process may take 12+ months. Whereas, if you opt for a ready-made software to build your grocery platform then you can launch your marketplace in a few weeks.
Q 8. Is it better to build a custom app or use a ready-made solution?
Ans. Both the development approaches have their own pros and cons. However, ready-made software solutions are more cost-effective and takes less time than custom apps. If you are eager to enter the market and want a competitive advantage than ready-made solutions would be an ideal choice for you.
Q 9. How can I attract my first customers to my online grocery delivery platform?
Ans. After the launch, it is extremely crucial to attract users on your online grocery delivery platform.
Q 10. How much time does it take to start a grocery delivery business?
Ans. The time to start a grocery delivery business depends on the development approach you choose to launch an online grocery delivery platform. The custom development method takes more time, ranging from a few months to even years, whereas a readymade software solution would enable you to launch your online grocery delivery platform in just a few weeks. However, the time to market also depends on other factors such as feature integration requirements, customization, design enhancements and more.
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Vibha Sharma is an accomplished senior content writer and marketer at FATbit Technologies, where she brings her passion for storytelling and digital expertise to create compelling narratives. With a Master’s Degree in Computer Applications, Vibha successfully blends creativity with technical acumen. Outside of her professional pursuits, Vibha is a voracious reader, an avid traveler, and a lifelong learner.
