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Grocery Shoppers - Vital Information
Start-up Investment
Low - $2000 (advertising costs)
High - $20,000 (includes a van)
Break-even time - Two week to one year
Estimate of Annual Revenue and Profit
Revenue $15,000 - $1 million (solo at low end, with employees at high end)
Profit (Pre-tax - $12,000 - $500,000
Food for Thought (and Profit)
In this age of two-income families, it is a rarity to find a woman who has time to manage
both her career and her home with the finesse she would like. As the number of frozen
meals and fats food restaurants attest, when something has to give, it is often the time
spent in the grocery store. Grocery shopping is one of the newest and potentially
lucrative services now being offered to the American consumer.
Who, What, Where...
There are many different types of grocery-shopping services popping up all over the
country. Some are attached to large supermarket chains; a division of the parent company
or someone leasing space as a concession. At the other end of the spectrum are homemakers
who can make an extra dollar or two while doing his or her own shopping (not reporting the
income on their taxes).
No matter what form the service takes, the opportunities can be mind-boggling. Even the
single enterprising shopper can make a good living for the next dozen years or so,, until
supermarket chains catch on.. At that time, it may be highly possible to present your
existing service to the supermarket chain as an already in-place service and be able to
realize a hefty profit from selling your business to the chain.
In the meantime, if you're really ambitious and want to spread your wings, it may be
profitable for you to computerize your record keeping and hire enough employees to fill
several hundred orders a day. If you add a warehouse and more employees, you can increase
your profits even more.
Since there are so few grocery shopping companies around, you will have to decide for
yourself what the market will bear when setting your prices. You will probably want to
break down your prices to reflect the dollar amount of the order, the distance for
delivery and whether you can handle several orders at the same time. (For example: $10 for
a $50 order within a 5 mile radius). Keep in mind, the bottom line in this business is
volume. The more orders you can fill at one time and the fewer miles you have to travel,
the more lucrative your business will be.
On Your Mark, Get Set, Go
All you really need to start a shopping service is customers. Investing in flyers and
peppering the neighborhoods you choose may be the place to start. You can design an
eye-catching flyer and print several thousand copies. You will want to target your
potential area carefully. Look for affluent neighborhoods where both spouses are working.
Singles rarely frequent the service because they don't buy enough groceries at one time to
make it worthwhile. You will also want to target women. Although men are sometimes patrons
of this type of service, patrons of shopping services are predominantly women.
You can either hire kids to hand deliver the flyers in the specified neighborhoods or
utilize bulk mail to send your flyers to a particular zip code. Neighborhood newspapers
and pennysavers are often an economical place to advertise.
You might want to speak with the management at the supermarket you plan to utilize to see
if you can post a notice in the store on the bulletin board or pass out brochures or
flyers in the parking lot or at the door of the sore. But remember, referrals are a
wonderful way to increase business and costs nothing.. So, do a good job at what you're
doing and be courteous. Especially in a service as grocery shopping, you want to appeal to
your customer's friends.
Other than advertising costs, the only start-up cost you will really need is a vehicle (a
roomy station wagon or van) that can accommodate your orders. If you don't have such a
vehicle and money is tight, you can explore the possibility of leasing one. As business
picks up, you may want to add coolers to keep perishables on ice so you can lengthen your
delivery route.
You may eventually want to consider turning your basement or extra bedroom into warehouse
so you can stock high profit bulky items like sodas or disposable diapers. This way you
can purchase in quantity from a wholesaler or food warehouse, increase your profits by
increasing the price, and cut down on the time you have to spend in the stores.
...and How
Some shopping services ask their customers to place orders on a regimented schedule; one a
week, every ten days, and ask them to check off their items on a pre-printed shopping
list. This method guarantees a minimum number of orders per week and allows for long range
scheduling.
Other services stay more flexible by allowing customers to call in to order on as-needed
basis. This method maybe harder to schedule but could pull in more business because of
increased frequency or impulse buying.
Because it is not a very good idea to carry a lot of cash around with you, it may be a
good idea for your company to pay for the order as you purchase them and then collect a
check from your customers upon delivery.
In order to save you and your employees time and effort and eliminate any confusion, you
will probably want to create a standardized shopping list (complete with brand names). In
order to fill out the shopping lists quickly, you may arrange them alphabetically by item
or store layout. If you have a personal computer at home, you may be able to take the
orders in alphabetical order and then rearrange the listing by store layout, producing a
print-out in aisle-by-aisle order. This will definitely speed shopping.
You will probably want to choose one particular supermarket in which to do all your
shopping. Not only do you become familiar with the location of all the items you need, but
you can become familiar with the store's personnel. A friendly "hello" how are
you", may be the little boost you need to be able to get the best cuts of beef from
the butcher or the best produce from the produce manager.
Time Is Money
If you are only shopping for prepackaged food, you can really move through the
supermarket, but if you have to inspect produce or meats or fish, the time you spend is
going to be greatly increased. remember this when you are putting together your pricing
schedule but also remember, you won't have clients for long if they aren't receiving
quality merchandise.
You may also want to consider shopping in stores other than supermarkets. Customers may
want you to stop by the liquor store, deli or carry-out. You may wish to increase your
fees for this additional service or charge the same as for groceries. remember if you're
basing your pricing on the dollar volume for the delivery, the more expensive price tags
at those specialty stores will make it worthwhile to make the extra stops.
Organizational ability is the key to a successful grocery shopping service. It is a
challenge to keep orders straight since you will probably be shopping for several accounts
at once. As time goes by, you will discover ways to make this easier, but you may wish to
use two carts and put hand held baskets into the carts to create separations. Of course,
the cashier must ring each order separately in order to provide receipts for each of your
clients.
Remember, in any service organization, you are selling yourself, as much as you are
selling your product. Courtesy, punctually, and a big smile can take you a long way down
the road to success.
For additional information helpful in setting up your new business, information about
licenses, permits, the legal structure of your business, taxes, insurance and much more
refer to the
Business Start-Up Fact Finder Manual
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