If you’re a natural in the kitchen, people rave about your cooking, you are the person who ends up baking cakes for special occasions like birthdays or weddings, or you even have a background in the culinary arts, then selling homemade food online in a home-based food business is likely for you. There’s a huge market for home-based foods right now. In fact, the profits possible if you have a cottage food business have consistently risen since 2014. By 2025, there’s expected to be more than a $20 billion dollar market in the U.S. alone competing with food industries in many other countries.
Many states are trying to update their cottage food industry laws so that people who want to know how to sell food products online don’t get stuck in the mire of licensing and inspections. For those who want to know how to start an online food business from home, there are often a few hurdles to jump, depending on the state you live in. In this article, we’ll cover what you need to do to get started selling food in your own cottage food business from home.
Before you get started as a food entrepreneur, you need to know the rules for selling food from home in your state. Some states have zero requirements, except the amount of money that you can make, capping off your profits at $50,000 annually, for example, in Texas. If you want to know how to sell food from home in this state, there’s an entire website going over what is allowable. In this state, you can produce any food from a home kitchen except meat, or foods that require time or temperature control for food safety.
Other states will make you get a license, pay around $250 annually, go to food-borne illness classes and get an online certificate, and even inspect your kitchen before you can begin your home-based food business. No matter what state you want to begin in, the hurdles are surmountable, and with so much profit to be made, it would be a shame to let constantly-changing laws stop you from beginning your dream home-based business.
Starting a food business can get confusing as you attempt to organize your business plan, figure out how to sell online, and actually make and deliver the food. If you’re selling baked goods online, for example, you’ll need to cross off a few different items on your to-do list compared to if you’re repackaging bulk candy for resale. Here’s a checklist to get started:
There are an infinite number of food products you can sell online, from charcuterie boards to wedding cakes to seasonal candies, superfoods, pre-prepped granola for runners or active people, and more. The best food products to sell online will depend on your target market and your special skills as a home baker or chef.
Here are a few trending food business ideas to get your creativity flowing:
When coming up with your own online food business ideas, consider how far you will ship, and the efforts it will take to make a recipe. Your food business from home ideas will likely start with a wide number of possibilities, but narrow them down until you find one to make that’s both fun and profitable.
Unique food products to sell will do better than something that has already saturated a market. Foo entrepreneurs who know how to make money selling food from home are those who try out a small batch in their market, see if it sells, and then grow their business accordingly. Don’t invest too much too quickly without testing your market first.
Cottage food laws and licensing requirements can be one of the biggest steps to overcome when you first start to sell food online. Various U.S. states require a license to sell food online. Many people ask, “Do you need a permit to sell food from home?”, too. Selling food online in Texas is very different from selling food online from New York City.
Refer to the Institute for Justice food laws for all 50 states and the District of Columbia, including recently updated food freedom laws. These laws allow wide freedoms and exemptions from FDA nutrition labeling, food safety licensing, permitting, certification, packaging, and labeling requirements in general.
Here are some commonly asked questions:
Q: Do I need a license to sell baked goods online?
A: These states require a license before you can sell baked goods online: Alaska, Arizona, California, Colorado, Delaware, Georgia, Illinois, Iowa, Kentucky, Maine, Massachusetts, New Mexico, New York, Nevada, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Washington, West Virginia and the District of Columbia.
Q: How do I get a permit to sell food from home?
A: You’re wondering, do you need a permit to sell food from home? If your state requires a license to sell food, there will be instructions at your local or state-level health department websites. In Alaska, for example, you can visit the Alaska Food Health & Sanitation Department of Health. You can find each state’s health department website by doing a quick Google search for health department + state + cottage food laws.
Q: I’ve heard California is changing their cottage food laws. Is selling food from home in California in 2021 still possible?
A: The California Homemade Food Act, also known as AB 1616, was signed into law by Governor Brown on September 21, 2012. It was meant to create more sustainable food sources. It became law January 1, 2013. This law allows you to sell food from home after meeting California’s licensing requirements. A summary of the law can be found here. Once you’ve met these requirements, you’ll know exactly how to sell food online in California.
Q: I’ve been told it’s easy to start a food business in some states. If I want to know how to start a food business from home in Texas or how to start a food business from home in Florida, where should I start?
A: Your best bet is to learn the cottage food laws for the state you want to begin in. Florida and Texas happen to be very food entrepreneur friendly. Florida’s laws can be found here. If you need to know how to sell food from home in Texas, you begin with their cottage food laws available, here.
Online food prepared by home-chefs and food artisans like you is in high demand. There are projections for this industry to explode in coming years and the industry has consistently grown, even through Covid. To get started in your own state, check your local health department for food cottage laws and updates from the Food Freedom Act. Do your market research before betting the farm on a single product, and then get started selling – even if it's from the farm!
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