Gift Basket Business

   I love the idea of producing a "Scottish Gift Basket" which contains the very best of Scottish produce - the best Square Sausage, the Best Whisky, the best Haggis etc.

   Here is a article recently published on Positive Money Feeds:



How To Start A Gift Basket Business


by Andrew Shim









The gift basket industry is growing steadily, and according to statistics, is raking in an estimated $2.8 billion annually. In a survey conducted by a magazine covering gift baskets businesses, nearly 72 percent of the companies surveyed reported annual sales of at least $50,000 and over 30 percent said sales were at or over the $100,000 mark! Today, gift baskets have evolved to include every conceivable occasion - from ordinary house-warming gifts to pricey corporate PR and business relationship builders. To give you a rough idea of how wide your options are, here's a short list of popular gift baskets :



New baby

New moms

Pet products

Christmas

New Year

Easter

Valentine's Day

Halloween

Golf

Graduation

Mother's Day

Father's Day

Birthday

Wedding

Anniversary

Get Well

House warming

Romance

Chocolate Lover's

Wine Lover's





Who should go into this business?



The gift basket business is one of those businesses where packaging makes all the difference! It's the perfect business opportunity for someone who loves to shop and find a bargain, likes interacting with people and has enough creative juice to turn fanciful ideas into great looking gift baskets. It's a business that mixes shopping, public relations, entertaining and fun to make money!



Valuable skills for starting a gift basket business



Creativity and artistic ability goes a long way in the gift basket business. This helps you transform ordinary bars of soap and toiletries into an eye-catching, posh-looking work of art that's worth every cent you're charging for it.



Sales, marketing and networking skills are critical. You need to be able to convince your customers that you ARE the best, even though you're a small setup, or your charges are one of the highest, or they simply haven't heard of you before. You'll need to know how to get your gift baskets in front of eyeballs so people will take notice and that calls for networking - knowing lots of people.



Organizational skills are needed to keep you from going insane. Remember that you are in a business that involves lots of small items and keeping track of everything and everyone can leave you frazzled if you don't learn to organize.



These skills can be learnt as you go along. It's good to read books or attend workshops on creative gift wrapping to help you get started. It's also a good thing to keep an eye out for unique gift baskets that stand out. Carry a camera along with you and take a photo of a nice gift basket whenever you see one. Take note of its combination of contents too and record all these to be kept for future reference.



Finding your niche



We don't want to pour cold water over your dreams even before you start, but you've got to expect competition in this business. It's like this simply because this is a highly profitable business. There are broadly two directions you will want to head - the do-it-all general gift baskets, or niche (specialty gift baskets).



If you decide to jump into the general category, then expect your customers to come to you with a wide range of needs and expectations. This sort of makes you a Jack-of-all-trades and at times, you may feel that you're being made to squeeze juice out of a rock! The plus side of this is that since your market covers pratically anything and everything, you should be busy all year round.



The specialty niche has less competition and allows you to charge a premium, but it's tougher to break into. It's about finding gift basket ideas that are unique and encompasses a specific specialty, for example, cigars, wines, cheeses or even silk pyjammas. A great example of this is pajamagram.com. Although you need to be "different" and market yourself as a specialist in your niche, it's actually not all that difficult to find a niche. You just have to keep an open mind.



Of course, there's nothing that says you can't specialize in more than one niche or even do a combination of general and specialty gift baskets.



Getting your supplies



A critical requirement to becoming a successful gift basket business owner is knowing where to get anything and everything - from food items to novelties and toys to posh perfumes - and knowing how to get them at a good price. Whether you're into general or specialty gift baskets, you have got to know where to find the right items. Many operators have found that the most affordable option is to get supplies from countries like China and Indonesia, where production costs are low. Even after factoring in the shipping and administrative charges, bringing in items this way may still be cheaper than sourcing for items locally.



Your operations base



When you're starting out, a gift basket business can easily be run from your home or garage. You'll need enough storage space to store your popular items. Remember that you don't want to keep too much in stock - especially items that have an expiration date. You'll need



a phone, fax, computer and email to receive orders and communicate with your suppliers and customers

stock control software to keep track of all your suppliers and current prices

basic office furniture

basic showroom display racks

packaging area

filed catalogue photos of your gift baskets

transportation for delivery (type depends on your volume)

Expect to be very busy during the holiday season, so you will need enough room for an extra staff or two to help you out in packaging. If you intend to entertain walk-in visitors or you want to avoid the hassle of moving when you need to expand, you might want to shop around for a store. Again, how big a store to set up depends very much on the size of your operations. To cut down on costs, you could just rent a small store front as a showroom while your actual packing and delivery operations are based at home or somewhere cheaper.



How much you can make



Gift basket business owners regularly make anywhere from $10,000 to up and around $250,000 annually, depending on their niche, location and operation size. Large companies that specialize in gift baskets have been known to make six-figures per month.



The typical markup you will want to consider is fifty percent, but that again depends on who your target market is and your reputation. If you've built a strong brand presence in a specialty niche, your markup can be any amount you want.



Keep in mind that like any other business, your margin will depend on your costs. Buying in bulk helps lower your costs. Buying at retail prices has the opposite effect. You'll have to know what your competitors are charging to come up with a profit margin that you're comfortable with yet is competitive.



Getting Your Business Off the Ground



You can't expect to cover your market all by yourself unless you have loads of capital to start with. What you can do though, is work smart :



Leave sample baskets in appropriate shops. For example: wedding baskets in bridal shops & tuxedo rental shops; baby baskets in baby shops. A great way to work with these shop owners is to have them sell your gift baskets on consignment or even better, get the shop to buy baskets to resell themselves.





Leave posters, flyers or calling cards in these shops if they are not open to having your gift baskets there.





Give your baskets as gifts. When you see people excited at the sight of your gift baskets, tell them that you have a business making these baskets.





Offer your friends a commision for every referral that results in a sale or give them an attractive discount every time they make an order. This will surely get them to volunteer to get the gift baskets for office colleagues, church events or family get-togethers.





Baskets make wonderful fundraising items. Donate a few baskets to your children's school, local animal shelter or charitable organization. They can sell raffle tickets and give the basket as a prize. Make sure that you are given credit for the donation and are allowed to include your business cards or brochure.

Online Marketing Ideas



A website is the perfect way to promote both the online and offline components of your gift basket business. Websites are sales staff that never sleep, never need a toilet break and never take sick leave. If you organize you website well and provide enough information on it, then chances are, when you receive a call or an email, it will be from customers who knows what they're going to get, what it will cost them and are ready to place the order. That cuts down tremendously on the time spent on your sales pitch and follow up. Here are a few ideas to promote your website and online business:



Build a website that's user friendly giving detailed descriptions of your gift baskets, prices and ordering process. Remember to also give visitors to your website options to contact you either via an online form or telephone number. A well thought out website helps to assure people that you are a real business owner running a legitimate, above board business. This also helps encourage webmasters to link to your website.





Build a mailing list and send out a newsletter on a regular basis. Design your newsletter around a topic that relates to your gift baskets. This is easy, because gift baskets can be for any occasion. You newsletter should contain useful articles, information or tips eg.recipes, event planning tips, product giveaways, etcn - anything that you feel will be useful to your clientele. Along with this content, promote your business and specials in your newsletter, but do try to offer more than a sales pitch. For your more corporate clients, you may wish to take a different angle. Remember that your mailing list helps you stay in touch with your web visitors who might be potential customers. People are more likely to buy from someone for whom they have established a certain amount of trust.





Form partnerships and exchange links with gift reminder services (or start your own!), your suppliers, crafters and other related sites. If you sell different items, promote those on your respective sites. You can also coordinate deliveries across the country with other gift basket makers.





Build other websites related to topics that your clients will be interested in eg. Weddings, family, hobbies, gift etc. and place links to your gift basket website.

The Gift Basket Industry is huge and competition can be fierce, but it's also a great home based money maker for stay-at-home moms who are just looking to supplement their household income.. You don't necessarily have to run a multi-million dollar operation to make money. If you want to go on to that level, great, but if you're content to stay small, this can be a really fun, family business!