Learn how to start your own home business by making gift baskets with low risk and even with a limited budget. Becoming successful in the gift basket industry may take some planning and time, but you can get started quickly.
Targeting Market
Just about everybody has the potential to become your customer. But if you try to sell to the entire world, you'll end up not selling much at all. You need to research and identify the market, choose a niche, and then develop a plan to serve it.
Individual Buyers
The individual gift-giver is more likely to be a woman. This is because men may order a gift basket, but they typically only think of it after they've seen one. Women are more likely to have seen, sent or received gift baskets. Therefore, they're better able to picture the basket they have in mind for someone even if they don't actually have one in front of them as they might in a retail store. Also, women are more likely to know that custom baskets make great gifts.
Business Customers
Corporate clients can be some of your best customers. Most businesses have long gift lists, plus they buy year-round, not just during the holidays. They regularly recognize employee anniversaries, promotions, retirements and birthdays throughout the year. Many also give gifts to customers during the year.
Like individual gift buyers, business customers frequently don't have the time or personnel available to shop. A savvy gift basket business can function as a customer's personal shopper, so all the client has to do is make one phone call and a special gift is on the way.
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What Will You Sell?Having identified your market and determined what potential customers are likely to buy and how much they'll spend, you need to decide on your standard basket offerings. Even though you may promote yourself as a custom basket maker, you need an internal structure of standard baskets to use as a guide for marketing and purchasing.
Most gift basket businesses offer a combination of standard and custom baskets. Custom baskets can be a made-from-scratch arrangement, or a variation on one of your standard offerings. A wonderful way to showcase a special gift--perhaps a family heirloom, photograph or piece of jewelry--is to include it in a gift basket.
Startup Costs
Even You can start your business with just $100.
First Calculate how much you need to start your ideal business, and then figure out how much you have. If you have all the cash you need, you're very fortunate. If you don't, you need to start playing with the numbers and deciding what you can do without. The checklist below will serve as a guide for creating a startup budget for your gift basket business. Prices for supplies and equipment are estimated ranges and will vary depending on features, sources and whether they're new or used. What you spend may vary because you may already own some items, such as office equipment or a computer.
Don't forget to also factor in rent (unless you're home-based), business license, utility deposits, insurance, any legal and accounting services and your grand opening advertising.
Specialty equipment - including work space fixtures, work tables, crafting tools, shrink wrapper, heat gun, signage and security system.
Storage fixtures and hardware - including storage shelves and cabinets.
Store equipment/fixtures for retail operations - including special displays, display shelving, cash register, counter, marking guns, floor gondolas, pegboard, hooks, showcases and wall gondolas.
Retail supplies - including cash register tape, shopping bags, gift boxes and sales tags and/or labels
Office furniture, equipment and supplies - including computer and peripherals, fax, phone system, furniture, business stationary and miscellaneous supplies.
Packaging/shipping equipment - including hand truck, high-speed tape dispenser, carton stapler, electronic scale and paper shredder.
Packaging/shipping supplies - including sealing tape, boxes, mailing labels, cushioned mailers and packing materials.
Gift basket supplies- including baskets/containers, packing materials, decorative materials, shrink-wrap and/or cellophane and product/gifts.
The range is based on how much you spend on the products and gifts you put into your basket.
Operations
The flexibility of a gift basket business gives you a lot of choices in where to locate your operation and how to get it set up. You can opt for a retail store, a warehouse location, or to work from home. Regardless of your location, you can sell face to face, via mail order or on the internet--or use a combination of these methods.
Though industry surveys indicate that more than half of all gift basket businesses have retail locations and more than half of them are home-based. we are suggesting you start initial home-based gift basket operations.
Because of the room required to store inventory and assemble baskets, home-based gift basket businesses will find their growth limited by the available space. Whether or not this is a problem for you depends on your own personal goals. If you're looking to create a sizable company with several employees and generate hundreds of thousands of dollars each year in sales, you'll need a commercial location. But if your goal is a small business that generates a comfortable income for you, being home-based may be the ideal situation.
Inventory
Your initial inventory should be focused on baskets and other containers and the items that will go in them. As your business grows, you can expand your inventory to include other specialty gifts, such as local arts and crafts, personalized linen, jewelry and so on. You may find suppliers through various trade publications and may even find them listed in your local Yellow Pages under "wholesalers."
For a gift basket business, shopping is a major behind-the-scenes activity. Depending on your volume, expect shopping and ordering to take anywhere from one to four hours a day on average.
Income & Pricing
Your revenue will be limited only by how hard you want to work and how much you want your business to grow. You can easily gross more annually working part time from home, or operating a retail store or mail order business full time.
About half of your business will be holiday-based, and the majority of that will be Christmas-related. One of the fastest-growing segments of the gift basket industry is corporate holiday orders. When the Christmas rush is over, Valentine's Day, Easter, Mother's Day, Thanksgiving and Secretaries' Day are the most profitable holidays.
Pricing Your Creations
Pricing can be tedious and time-consuming, especially if you don't have a knack for juggling numbers. If your prices are too low, you rob yourself of profits or are forced to reduce the quality of your product to maintain your profitability. If your prices are too high, you may lose business.
Theoretically, you should price every item you carry to cover its wholesale cost, labor costs, freight charges, a proportionate share of your overhead and a reasonable profit. In reality, some items will warrant a high gross profit and others will require a low or no gross profit for you to move them quickly.
Most gift basket business operators expect to net 15 to 30 percent of their gross revenue, and they typically reach this goal by applying a 100-percent markup to the cost of the items in the basket.
Marketing
Marketing is something many people don't like to do, but it can be as creative and as much fun as actually making the baskets. And no matter how clever and attractive your baskets are, they won't sell themselves you need to market them.
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