How to Start a Gift Basket Business
by Leeia Ladipoh on February 7th, 2008
The gift basket industry is a constantly growing market, with no signs of losing momentum. For those looking for a place to spread their entrepreneurial wings, this may just be the area to do it.
For the most part, entrepreneurs who consider running a gift basket business aren’t just people who want to sell something – they also have a little creativity and get enjoyment from making something that people will appreciate.
They have a flair for knowing what people like, and how to put it together.
Getting Started: What to Sell
Before you jump in, you need a game plan. What do you want to sell? While you may want to sell gift baskets of all kinds, it’s best to start with a few specific themes. You are going to have to buy all the things to go into those baskets, and if you are trying to market to all sorts of genres, you may well be overwhelmed with the initial inventory purchases that you’ll have to make.
Here are some common themes that people choose for their baskets:
> Romance
> Business
> Gourmet Food
> House Warming
> Special Occasions – Baby, Wedding, Anniversary, Birthday
> Bed and Bath
> Custom
The important thing is to know the market you are going to sell to and gear the baskets towards their likes.
Where to Make Your Gift Baskets
Once you have decided what to sell, you have to sort out where you are going to make the baskets. Many people start their gift basket businesses at home. Others want a more professional atmosphere and choose to start in a retail space.
Your budget may dictate this, as you can save a lot on overhead by starting a gift basket business at home. That also gives you more up-front money to use for buying your basket inventory items.
If you do decide on a retail space, make sure it’s not just because you like the location, but because it will be a location where your customers will most likely be.
Building Inventory
Coming up with your starting inventory can be tricky. You need to have ample supplies to begin your business and items to show off to potential customers – but you don’t want to have so many of one item that you can’t get rid of them.
With this said, you will get a much better price by buying wholesale, so buy in bulk where you can. This may be the best way to purchase your baskets , ribbon , wrapping, etc.
Look for local gift shows, artisans, and various other people who may be willing to give you wholesale prices on the unique items you will need to create your gift baskets. Many of them have mailing lists and will be happy to let you know when they have new items or sales.
Many gift shows and wholesalers require business tax information to sell wholesale. You should already have this information if you have registered your business. To find out more, read What You Need to Begin Buying Wholesale .
Setting Prices
Often the toughest part of starting a gift basket business is deciding how much to sell them for. You want to make a good profit, but you also want people to be willing to pay what you are asking. If you set the price too high, your baskets won’t sell. If prices are too low, they’ll sell but you won’t make a decent profit. Generally, a 100 percent markup from your costs works best.
Remember – you have to be paid for your labor as well as the items in the basket. You also have other bills to pay relating to your business. Take those into account.
If you are still having a tough time with this part of it, a good way to get an idea of what you can sell for is to look at similar products on the market.
Marketing
A gift basket business is a personal touch business. A basket is something special for a particular person. If they like it, they will let everyone know. Word of mouth from happy customers will be your main form of marketing. Another will be word of mouth from people you know. Let everyone know you are in business and that you are ready to sell gift baskets. See if any of your friends would like to host a gift basket party.
If you have a little advertising money, try direct mail and newspaper ads. If you are looking to sell your baskets to businesses or real estate agents, make up a brochure and send them information, or a sample basket if you can spare it, to let them know who you are and what you do.
Businesses are an excellent market to target for gift baskets. Here are some ideas:
* Luxury condo or apartment complexes – welcome baskets for new residents
* Hotels or bed & breakfasts – wedding and romance gift baskets for guests
* Partner with local gourmet food shops to put together gift baskets for them
Starting a gift basket business can be a very rewarding experience, if you go into it with a real game plan. Once you have the details sorted out you can focus on the business of making baskets and not the minutia that can bog you down.
i am really elated to see that someone is tqaking this business serious. i am not sure how i came across this online info (probably googled it) but it has been the most helpful information that i have received and not been charged to get it. have you written a book about hoe to start this basket bisness up or have other web links that i can go on. i am a single parent with two babies (13 and 6) and i lost a daughter 07/12/07. her name was Mahogany Davis and she was born premature. i did not cope well with her death with caused me to be off work for about a year and then they let me go a few months ago. the Dr. tells me to do things that i enjoy so i can cope better and my baskets is what i do. so i reakky need to know where to purchase items how to use my tax id number and well pretty much everything, so if you have a book please tell me where i can get it. thank you so much
andrea davison
May 5th, 2009
at 6:51 pm