How to Start a Spice Store
As food trends come and go, and our palates continue to evolve, our love for spices remains constant. From home cooks to high-end chefs, spices are a pantry staple, and demand for quality spices continues to grow. With revenue of $16 billion in 2019, the spice industry is a great option for entrepreneurs looking to open their own store, especially if you have a passion for the colours, flavours, and varieties found in the spice world.
Ready to dive into this major industry and start your own spice store? Breaking into the millennium-old spice trade, with vendors from all over the globe, can be a little intimidating, especially as a new entrepreneur. From sourcing spices to branding and marketing your business, we’ve compiled all the resources you need to ensure your store is a success.
Why start a spice store?
Starting a spice store is appealing to budding entrepreneurs because it can be done as a part-time gig at first, working out of your home or living space. A spice store is also not a big financial investment upfront, and your business can grow exponentially as your revenue increases. The potential for success as a spice store owner is high, as it is a business that does not require a lot of overhead and can grow steadily as you build trust with your customers.
Owning a spice store is also a great way to flex your people skills, as you will often be meeting with different vendors and building relationships with them to source your product. You’ll learn about different cultures and food practices as you dive right into the varied world of spices. Your job will also rarely be boring or hum-drum, a major draw for entrepreneurs who are seeking an interesting, unique career.
What skills do you need to start a spice store?
Owning a spice store in Canada requires a varied skill set. As an entrepreneur, you need to have skills like adaptability, creativity, and innovative thinking to succeed, no matter what industry you work in. As a spice store owner, these skills will come in especially handy as you build and grow your business.
In addition to these skills, you will also need to be a good communicator and good at building relationships. In the spice world, relationships with your suppliers, vendors, and customers are incredibly important. You will need to grow, maintain, and cultivate these relationships regularly to stay in business and thrive.
Another key skill is having a passion for spices and for learning more about their history and properties. Maybe you love using specific spices in your cooking, or you grew up eating certain spices at home. Or perhaps you like the smell and taste of rare spices. Having a passion for your product will show customers you take your business seriously.
With so many spices out there, it’s also important that you take some time to research the spices you plan to sell so you can answer customer questions or queries. It will also help you source the best spices and determine what will sell best in the market. Researching specific spices online and asking other spice sellers about the market will help you stay current and informed as a business owner.
Setting up your spice store
When it comes to setting up your spice store, you have two options: striking out on your own as an independent owner or buying into a franchise in your area. Depending on which route you choose, you will have to then determine how you will select, source, and market your spices.
Be an independent owner for flexibility
If you’re ready to jump into small business ownership, going independent and opening a spice store on your own may be the way to go. Owning your own business means you get to control everything, from branding and packaging to spice selection. When a customer buys your product, they’re investing in your business and your vision. Many entrepreneurs find this level of control and ownership exciting.
As an independent owner, you can also work out of your home and sell products online to start. This allows you to build your business around your schedule and your lifestyle, giving you more flexibility and time to grow as an entrepreneur.
However, being an independent owner also means you are responsible for every aspect of your business and will need to be committed to wearing many hats, from purchaser to marketer to financial administrator. You may decide to hire other people to help you manage these details down the road, but during the early days of your business, you’ll need to be at the helm.
Starting as an independent owner also means you will need to have start-up funds set aside to help you stay afloat during the first one to three years of operation. Depending on the scale of your business, you may need to have $5,000-$10,000 CAD set aside to ensure you have enough funds to get your business off the ground.
Choose a franchise for stability and security
Buying into a spice franchise, which is a business owned by someone else, might be a better option for you if you’d prefer not to have to create something from the ground up and are craving a stable entryway into entrepreneurship. When you buy into a franchise, you are also buying into the business’ existing reputation and success with customers. Maybe there’s a spice franchise in your area that is doing well, and you feel it would be a sound investment to buy-in. This could be a good way to go into business for yourself without the risks of being an independent business owner.
However, buying into a franchise can be pricey, ranging from $40,000 to $100,000, depending on the franchiser. You will also still need to invest money into buying a location and pay royalties to the franchiser on all spices sold at your location. The amount of your investment into a franchise can be surprisingly high, especially if the franchise is doing well and pulls in high revenue.
Buying into a franchise also means you do not have ownership over any of the products you sell in terms of branding, and you do not control what spices you sell or how you market to your customers. This lack of control can be more accessible for some business owners, but it can feel limiting or restrictive to some.
As you can see, there are pros and cons to going the independent route or buying into a franchise. As an independent owner, you will have more control over aspects like selecting and sourcing spices, which we will explore further in the next section.
Finding a location for your spice store
Once you’ve decided if you’re investing in an independent business or a franchise, you will need to establish a location for your store.
Choose an online store for less overhead
Setting up your store online can be a great way to reduce your overhead and work from home or living space. An online store gives you the ability to add and remove spices as your stock changes, and to connect with clients right away. You can also organize shipping spices to customers easily and expand your customer base to more than just your local area.
A brick and mortar store facilitates community connection
A brick and mortar location might be a better option for you if you’d prefer to have a physical store and want to feel more connected to your community. A physical store may also be ideal if you have access to a rental space already or can afford to purchase a storefront.
Getting the required licenses
You will need to apply for and acquire a business license so you can operate legally as a business in your area. You may also need to comply with specific requirements for producing food or food products, even if you operate your business from home. Check if you are required to register with the Department of Health Canada.
If you’re creating your own labels for spices, you will need to comply with the Department of Health Canada food label requirements to ensure you are packaging your products correctly.
Naming your spice store
Choose a name that will tell consumers exactly what you sell, so there is no guesswork involved. You may incorporate your name into the store name or another personal detail. Get creative, and choose something short and memorable.
For example, you may choose a name like “Sam’s Spice Store” or “No. 1 Spice Market.”
Selecting spices for your store
As an independent business owner, you are responsible for sourcing all of the spices you will sell to your customers. To facilitate this process, you should:
Research popular spices on the market
Before you dive into selecting spices for your store, look at popular spices at the grocery store, farmer’s markets, and at other spice stores in your area. Ask friends and family what spices they love and buy often.
Many spice stores base their inventory on the latest food trends, often dictated by cooking shows and restaurants. Pay attention to the spices used at your favourite local restaurants and cooking show personalities. Notice if spices from a specific region or area in the world are becoming popular at restaurants, as they often dictate food trends.
For example, you might notice spices from the Middle East are becoming more popular and select several spices from that region for your store.
Go for whole spices over ground spices
Whole spices have a longer shelf life and stay fresh longer than ground spices. Fresh spices are also of a higher quality than spices that have been ground and sitting for a while, losing their flavour and texture. Distinguish yourself in the industry by offering whole spices to customers so they know they can access quality products at your store.
Some spice stores will buy whole spices and grind them in-house, so they are fresh when they are sold to customers. You can use a coffee grinder or a spice grinder to do this easily and efficiently.
If you prefer investing in ground spices, only buy small amounts at a time to ensure they are fresh for customers and retain their quality.
Buy staple spices
Build your inventory around spices that are considered timeless and guaranteed sellers. Baking spices like cinnamon, clove, cardamom, nutmeg, and cardamom are versatile and often used by consumers. Cooking spices like black peppercorn, salt, cumin, and paprika are also worth stocking for their popularity and common use.
When you buy staple spices, try not to order too much or in bulk quantities. This can reduce the quality of these spices, as they will sit in bags and lose their flavour as time goes on. Purchase small quantities of these spices, especially when you launch your business, to ensure they retain their quality.
Invest in several high-end spices
While staple spices are a good foundation for your inventory, consider also selecting several higher-end spices to add some variety to your store. Spices like saffron and Madagascar vanilla can be appealing to customers looking for quality spices and won’t be shocked by the sticker price.
Try to leave space in your inventory for a few higher-end spices so you can cultivate certain customers who are willing to pay for these products.
Stock based on season
Customers will shop for spices based on what they plan to cook for the season or time. For summer, stock up on grilling spices like cumin, red chilli, and paprika. For winter, make sure you select hearty spices like rosemary, oregano, and thyme, as well as baking spices like cinnamon and nutmeg.
Create your own spice mixes
To stand out from the crowd, considering making your own spice mixes to sell to your customers. Custom spice mixes are a great way for you to distinguish yourself as a spice seller, especially if it is a unique blend. Seasonal spice mixes like a summer grilling mix or a baking spice mix can be great sellers and can boost your business’ profile.
Sourcing and pricing spices for your store
Once you’ve drawn up your product list, it’s time to find and source these spices to stock in your store.
Find local and international vendors
The spice trade was started by pirates, and many spice traders like to say it can still operate this way. To get your business started, you will need to find reputable vendors so you can be sure you are buying quality products at a fair price.
Look for spice traders and vendors in your local area at farmer’s markets or co-ops. Local vendors will have access to spices grown and cultivated in your area, which can be appealing for consumers.
For spices from different parts of the world, you will need to tap into a network of spice vendors based in Asia, Africa, and Europe. You can find these vendors by reaching out to other spice sellers and by doing research online to find potential vendors. You can then buy spices online in Canada from Canadian vendors, and purchase online from vendors internationally.
Ultimately, building a network of vendors takes persistence and a knack for relationship building. Over time, you will find vendors you can trust and come back to again and again for your products.
Set fair prices for your spices
Determine pricing for your spices based on your base cost, or what you pay vendors for the product. Add a set amount to your base cost to ensure you cover your business costs. Make sure your prices are competitive with other spice stores as well as the cost of spices in local supermarkets or specialty stores.
For higher-end spices or more rare spices, you can charge a bit more of a premium for these spices. You may charge a higher price per gram to ensure you cover your costs. For example, you may sell single vanilla beans at $2-$3 CAD each, as this spice is a higher-end product.
Marketing your spice store
Once you’ve established your spice store, you will need to invest in marketing to raise your business’ profile and attract customers. Set aside a portion of your startup funding for marketing to ensure you have some money to put towards it.
Do online branding and marketing
Promote your spice store online through social media platforms like Instagram and Facebook. Post beautiful images of your latest spices and connect with other spice stores and vendors online. Make sure you also follow restaurants, chefs, home cooks, and other potential customers for your business.
Collaborate with restaurants
Though retail sales will help you build your business and your brand, connecting with restaurants directly can really boost your revenue. Reach out to local restaurants to see if they would be interested in sourcing their spices from you or working together on a signature spice mix to sell to consumers. Proprietary spice mixes can be a great source of revenue and help to raise your store’s profile in the food world.
With the help of this comprehensive guide, you should now be ready to jump into the spice industry and own your own store in Canada. Starting a business is never easy, but with the right approach, you’re sure to succeed.
Ready to start your business? Ownr has helped over 20,000+ entrepreneurs hit the ground running quickly – and affordably. If you have questions about how to register or incorporate your business, give us a call at 1-800-766-6302, Monday through Friday from 9 am to 5 pm EST, or email us firstname.lastname@example.org
This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.