How would you go about building an online business that sells homemade cookies?

1. Clarify Scope

First, I'd like to ask some questions to clarify the scope a bit better.

- What is meant by 'homemade'? Are the cookies prepared in a commercial kitchen or in an individual's home? --> Individual's home.

- What kind of cookies are being sold? --> Up to you.

- Are we creating our own standalone DTC site or selling on an existing platform (eg Goldbelly)? --> Up to you.

2. Clarify Goals: Is this a good idea?

Next, I'd like to consider whether this is a good idea to launch this business. There are several aspects that would make launching a business like this very challenging. If the goal of launching this business is profitability, there are several concerns that could prevent us from achieving this goal

- Regulation: Food is typically highly regulated due to the risk of getting others sick via foodborne illnesses. We need to ensure it is legal to launch a business like this and we are following relevant regulations.

- Positioning: The cookie market is highly crowded and generally has low perceived value (eg, people can buy a dozen cookies at the grocery store for $5). The lack of differentiation, plus low dollar value of the sale, makes it challenging for e-commerce because 1) the cookies must be differentiated enough to justify waiting for shipping vs immediate satisfaction of picking up from a store; and 2) the overall sale must be high enough to justify the shipping fees.

- Freshness: Homemade cookies tend to lack perservatives. As such, they have a limited shelf life. This creates constraints around how quickly the cookies must be shipped (e.g, within 48 hours of purchase), as well as the geographic area that it can service (must be able to deliver within 48 hour period).

3. Clarify Business Model / Positioning

Given these considerations, I would advise against launching this business. However, there are some choices that can be made to make this business model more viable.  

It is crucial to differentiate the cookie to create unique positioning, enabling sellers to charge more per cookie, which will make the DTC model more viable. Some options:

1) Diet specific cookies (paleo, vegan, keto, no sugar) -- It is challenging to find tasty cookies that meet these requirements. As such, people will likely pay more for them.

2) Custom cookies (custom shapes, custom decorations, etc) -- People pay more for custom desserts vs. generic / off the shelf.

3) Bulk order cookies for events (wedding favors, birthday parties, etc) -- This will increase the average order size.

Given these options, I would recommend pursuing custom, bulk-order cookies for events (eg, wedding favors) because it will elevate the individual value per cookie, while also raising the average order size.  Additionally, it will help us more efficiently plan our ingredient needs since bulk event orders are typically placed in advance vs. 'impulse' consumer cookie purchases.

4. Execution

With this business model, I would create a standalone DTC website. This is because, to my knowledge, there is no platform for buying homemade goods that would aggregate my target customers (event planners in my geo).  Alternatives like Goldbelly generally ownly sell goods prepared in commerical kitchens.

Users on the DTC site would be able to:

- View past photos of cookie creations, grouped by event type (eg, wedding, birthday, etc) --> solve user pain points around information needed to make purchase decision

- View customer reviews / testimonials for various cookies --> solve user concerns around trust via social proof

- Create an account to store payment info for recurring purchases --> solve user pain points around time / efficiency

- Place a custom order, specifying event type and date, # cookies needed, cookie / icing flavors, cookie icing shapes / colors, etc.

- Pay for custom order

- Receive email receipt with details of custom order

To get the word out about my business, I would target wedding and other event planners within the geos I serve via an email and social media marketing strategy. I would also consider strategic advertising / product placements on sites for wedding planners like Zola.

5. Summary

To summarize, I would be careful before launching this type of business since there are several challenges to do so profitably. That being said, if I were to launch, I would launch a custom cookie business for large events, targeting wedding and event planners. I would build my own DTC website to serve this market and I would target my customer base through email campaigns and targeted social media marketing.