You may be considering selling food online in the United States and you are not the only one. More and more individuals are beginning side hustles or full time companies through cooking, baking or food packaging. A 2023 Statista study predicts internet grocery and food product sales in the U.S. would reach $150 billion by 2026. That means plenty of opportunity but also several rules to follow.
One question various food vendors ask is "Do I need a business license to sell foods online?" and the simple answer is generally Yes.
But this need not be confusing or costly. In this article, we will discuss how you can obtain the licenses & permits you might need and how you can sell your food legally and safely.
Why You Need A License To Sell Food Online
When you sell food products - cookies, jams, hot sauce or other food items, you get into a regulated industry. Food safety is a huge thing in the U.S and local governments all are involved in ensuring food offered to the general public is safe to consume.
Licensing helps authorities determine who's selling the food, the way it was grown and how it was stored and packaged correctly. Additionally, it safeguards customers against foodborne disease and dangerous items.
If you sell food online - perhaps out of your kitchen, you most likely require some kind of food-related permits and business license.
Steps to Sell Food Online in the U.S
Below are 5 steps how you can sell food online in the U.S:
Step 1: Get a Basic Business License.
You must register your business prior to cooking or packaging food. What that usually involves:
- Pick a Business Structure
This might be :
- Sole proprietorship (simplest for one-person business operations).
- For added protection see LLC (Limited Liability Company).
- Partnership when you work with another person.
Most start as sole owners or LLCs.
- Request an EIN (Employer Identification number)
An EIN is your business Social Security Number. It is free and available at the IRS site. You need it to start a business bank account and file taxes.
- Get a Local business license
Many towns or counties require a general Business License even if you work from home. See the city hall or county clerk's office.
Step 2: Understand Cottage Food Laws
If you make food from your home kitchen, your state might have "Cottage food Laws." They allow people to create specific low risk foods at home and sell them straight to consumers.
Common cottage food items consist of :
- Baked goods (no cream or custard)
- Jams & jellies.
- Candy
- Dry mixes.
- Popcorn.
- Granola.
- Either tea or coffee beans.
State rules may vary but you might have to :
- Take a food - safety course.
- Sign up as a cottage food operator.
- Mark your products with ingredients and allergy info.
- Sell within your state (in some instances).
- Cap your yearly sales ($ 25,000 or $ 50,000 max).
Important: Not every state lets you sell cottage food online. Some permit in-person sales only at events or farmers markets. Some are more flexible.Look at your state's regulations on the FDA Web site and through your state's Department of Health or Agriculture.
Step 3: Request Food Handling Permits (If Needed).
When you are promoting refrigerated, frozen, or cooked items or you are cooking food at a rented kitchen or restaurant, you will need more than cottage food approval.
You might need :
- Food handler's permit (you or your employees need to take a short training course)
- Health department inspection (particularly for non home kitchens)
- Food establishment license (for a complete food production business).
This extends to online sellers of :
- Meal kits.
- Hot meals.
- Milk products.
- Meats or seafood.
- Sauces that require refrigeration.
In case you are shipping over state lines or because of services like Etsy or Amazon, the rules get even stricter. You might require federal approval by the $A or FDA based on the food type.
Step 4. Label Your Food Correctly.
Labeling is just as crucial as the right licenses. If you sell food online, your food packaging needs to contain some info.
Labels usually must contain :
- Name of the food.
- An ingredient list.
- Major allergens (milk, nuts, eggs, etc.).
- Net weight.
- Your company name and address.
- A statement like "Made in a home kitchen" (in case your state requires it).
Labels let customers understand what they are consuming and enable you to meet food safety laws.
Step 5: Know the Rules for Online Selling Platforms.
In case you sell on Etsy, Shopify, Facebook Marketplace or your very own site, you have to adhere to their food policies.
Each platform might ask for :
- Proof of registration or licensing.
- Food safety documentation.
- Clear product labeling and descriptions.
- Shipping policies for perishables.
Selling food online without appropriate documentation can get your shop suspended or even shut down, so stick to the guidelines from the beginning.
What If You Sell Without A License?
You might think selling a few cookies or jars of jam online isn't that important - but selling without proper licenses can be costly.
If you get caught:
- Your city or state might fine you or impose penalties.
- Your business might be closed.
- You might be liable in case a person is ill from your food.
That is the reason you need to take your food business seriously, even if you begin small.
Also Read | Do You Need a Food License to Start a Small Food Business in USA?
Conclusion
Selling food online can be a good business in 2025 if you like cooking or baking. But like a brick & mortar shop, it carries responsibilities too. As reported by SBA, almost 20% fail within the first year - often because the small business wasn't ready for the legal side of things. Getting the licenses you need and following your state's food rules sets your business in place for success right from the start.
Best part? When you are compliant and licensed, you can do everything you love, making great food and serving happy customers nationwide.
Therefore, in case you are thinking "Do I require a business license to sell food online" - the answer is yes and it is worth every penny.
