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A gift basket service can be a successful venture operating out of a home. Since there is no "store" location involved there need not be a substantial outlay for rent or equipment. Inventory can be stored in existing storage spaces within your home and garage. You may have to add some shelves for proper storage, but these can easily be constructed at little expense.
Most homes already have some of the equipment needed for business use -- a phone and a typewriter. If your phone isn't equipped with an answering machine, you should get one since orders may come in while you are out making deliveries. Not much else in the way of equipment is essential. However, you may want to invest in some sort of file cabinet and cash box.
Another piece of equipment -- a shrink wrap machine -- will add a touch of professionalism to your operation. This machine wraps your baskets in a clear or colored plastic film. Good shrink wrap machines sell for about $400.
If you need to buy office furniture, don't get carried away. A small desk and chair, along with your file cabinet and bookshelves, are all that is really needed. This should be an expense you can hold under $500.
You'll also need adequate record keeping equipment as well as stationery, envelopes, business cards, sales slips, invoices, containers, labels and other miscellaneous items. Most of these items can be purchased at local office-supply stores. Again, don't go overboard. Buy only what you need.
Most gift basket orders can be taken at home by phone, and the finished product can be delivered to the customers home or place of business. If some of the deliveries are not within reasonable driving distance, the local UPS can handle the delivery.
It is important that you keep a log of all your deliveries. Be careful to get the full name, correct address and phone number of the recipient. Should you get lost, you can call and get directions to put you back on course. Most home business owners average from 2-5 deliveries per hour. All UPS deliveries should be logged the same as other deliveries, and you should keep a record of all postage costs.
Since as much as 80 percent of your orders will come in by phone, you'll either have to be available or have an answering machine. Scheduling deliveries for morning hours will allow you to spend the rest of the working day answering the phone and arranging new baskets.
If, for some reason, a home-based business is not feasible, another way to get started in gift basket servicing is to rent a space or office in your community. Specialty shops are good locations for a gift basket business because you will be providing a "special" service.
Renting or subleasing space in an existing shop can be beneficial to both parties involved. You will be getting adequate work space for your business while paying a percentage of the owner's monthly rent.
Once you've decided where you will start up your gift basket business you'll need to begin making "business" like decisions. After all, you will be the boss. You'll have to decide how much time you are going to invest in the business. You can plan your hourly work week by determining how many baskets you are willing to make. This is an individual matter. It depends on how much time you have and how much profit you wish to make.
Inventory
To be successful in the gift basket business you must offer baskets that are unique and filled with pleasing and useful items. You'll need to locate a good source for the type of baskets you'll be offering, and you'll need to shop for the appropriate items to fill those baskets.
Initial inventory should be a combination of wholesale and retail items. The wholesale inventory should be made up of items to be used in large quantities as "fillers" and in the most basic basket arrangements. Retail inventory should consist of items used in making customized or thematic baskets.
Some people getting started in the gift basket business have taken the initiative to contact various stores and businesses that offer gift baskets for sale. Through these contacts, new owners can obtain information on what kind of baskets and themes work best. The beginner can then create gift baskets based on what has worked for others.
Most home-based gift basket services purchase baskets wholesale. Before doing this you must determine the type and size of the baskets you'll be making. You'll need to know if you'll be specializing in small gift baskets or large, or a combination. Depending on your location, you'll most likely need to go to a large city to purchase baskets wholesale.
As a small, home-operated service most of your customers will be interested in basic, relatively inexpensive gift baskets.
If the need arises for more elaborate and expensive "designer" baskets you can purchase those wholesale too.
To begin, you should purchase just a few types of baskets, such as planters, fruit bowls, baby baskets and candy baskets. These baskets are most likely to be in greater demand than other "special" baskets. When ordering baskets, it is a good idea to ask your supplier for recommendations. This is a good way to learn the proper styles and amounts of baskets you should have on hand. Of course, your customers will also furnish you with invaluable insight into the types of baskets best suited for your market.
Once you have located and purchased the types of gift baskets you plan to offer, you'll need to get items to fill them.
Keep in mind the kinds of baskets you are offering. Don't go overboard on expensive merchandise that isn't appropriate for the baskets you have in stock. The thing to remember is ... stick to the basics.
Since toiletry arrangements are very popular, you should have a good supply of lotion, shampoo, bath oil, soap, and fragrant powders. With these arrangements, it is also a good idea to have in stock several all-natural items, and children's products.
The initial inventory should also include items for popular gourmet food arrangements. You can shop around and find an intriguing selection of teas, coffees, crackers, cheeses, sardines, oysters and fruit. Some people include wine, beer, and champagne in these gourmet arrangements, but a special liquor license is needed to resell these items. That's an expense a beginner may want to put off until the business is turning a profit.
Your start-up inventory should also include popular items such as candles, toys, stuffed animals, dried flowers, small books, stationery, writing utensils, and an assortment of items such as golf tees, tennis balls, socks and gloves.
Another aspect of gift basket inventory is decorations. With each basket you'll want to include an assortment of trimmings, labels and cards. You'll also need a supply of ribbon, artificial grass, tissue paper, small cards with envelopes and tape. These items can normally be purchased in quantity, and that can save money on your initial investment.
To find current manufacturers and distributors of gift basket supplies you should scan the directories published by many giftware magazines. You can call or write to any of these magazines to find out if they have any directories to offer, and if so, how much they charge. You can also subscribe to trade magazines to keep abreast of new companies entering the gift basket supply market. A trip to your local library should furnish you with ample information about various giftware and relevant trade magazines.
Usually, when starting up, a new gift basket service will only need a few suppliers. Besides locating these suppliers by the methods just described, you can attend tradeshows, wholesale showrooms and conventions. A thorough and patient research of suppliers will allow you to select the most reliable people to do business with. You'll also get quality merchandise at the most affordable prices.
When selecting suppliers you should decide whether you wish to deal with manufacturers, distributors, independent craftspeople, import companies, or some combination of the four. These are general categories, but they do describe most suppliers you will be dealing with.
Many small business operators buy from manufacturers because their prices are usually the lowest. One drawback to buying from manufacturers is that your business location may mean high shipping costs. Buying from a distributor usually results in paying higher prices than those to a manufacturer, but if the distributor is nearby, shipping costs are lower and delivery is quicker.
Some of the gift basket makers best purchases are made from independent craftspeople. Since most of their products are made at home, quantities of specific items may be limited, but often a working relationship between the craftsperson and gift basket operator is a profitable arrangement.
Depending on individual attitudes about buying foreign products, import sources can supply a gift basket service with both exotic and practical merchandise. The type of suppliers you use depends on the type of merchandise you plan to market, your budget, and your business location.
Once you have an adequate inventory of baskets and supplies you'll need to determine how to price the finished product. Most first-time business operators find that adding a 100 percent markup straight across is the least complicated method of pricing. This percentage of markup normally covers all expenses and still allows a reasonable profit.
You can determine prices in a more complicated fashion. This method requires keeping a log of how much time it takes to make each basket. You'll also need to figure in the cost of the basket, the "filler" items, and trimmings. If the basket is to be mailed, figure in postage. If it's to be delivered, add for gas, mileage and time. Also determine overhead costs, and then decide what you consider a fair margin of profit. Once you've done all that, you should be able to come up with prices for each basket.
The most important thing a new gift basket business owner should realize is that starting slow, with a small inventory is the most prudent and safest way to begin. It may take about one year for a new gift basket business to get established. After that amount of time and experience, the owner should be able to determine what sells best as well as monthly sales and inventory turnover. With this information, the owner can decide how much inventory to carry. If the business is to be profitable, it is essential to have the proper amount of inventory without an excessive outlay of cash.
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