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Creating gift baskets is one of the fastest growing types of businesses today that you can start from home. Gift baskets have enjoyed explosive growth in popularity over the past several years as the number of home-based businesses and independent shops catering to the corporate market has increased.
Businesses and individuals looking for that “perfect gift” now choose to give gift baskets. Gift baskets can be customized to suit the giver, the recipient, the occasion, and the desired price. Hence, it has become a gift of choice for birthdays, weddings, special events, anniversaries, housewarmings, and romantic occasions. It has become a way of expressing thank yous, sympathies, and the congratulatory message for a new baby, and other celebratory milestones in life. Businesses, recognizing gift baskets’ versatility, now forms a large part of the gift basket business and are sending them to their employees, sales force, and business clients.
The gift basket business is a low-cost, low-overhead business that depends primarily on your creativity and imagination. The more creative you are, the greater your chances to prosper.
Like any other business, however, success in this business requires marketing skills, business acumen, and financial savvy. More than the fun and creative part of making the baskets, you need to combine the skills of running a business (e.g. record keeping, purchasing, cash flow management, marketing and advertising) with a strong dose of excitement and enthusiasm.
Starting Your Gift Basket Business
As with starting any new business, you will have to make a number of decisions:
- What kinds of gift baskets will you offer?
- Who is your target market? Why will they buy a gift basket?
- Will you be working from home or leasing a retail space?
- If you will work from home, do you have enough space for creating your baskets and running your business? Do you have space for your inventory?
- What is your target market; and how will you reach them?
- How will you price your gift baskets?
These are but some of the questions that you need to think about when starting this business.
If you are starting on a shoestring budget, it is advisable to go slow and start the business from home. Working from home will allow you to save on overhead expenses and save on rental rates. Plus, you can work flexible and longer hours, and can even opt to work on a part-time basis.
Register your business name and get the needed requirements and licenses that your city or county mandates. For more information on the common operational requirements of starting a business, read the article “10 Things You Need to Know When Starting a Home Business”
Should you decide to lease an office space, consider being near your target market. If you are targeting the business sector, try looking for a space in the downtown area where most corporate offices are located. A good location should be accessible, enjoys significant walk-in traffic, has an adequate parking space, and within your budget. Also, consider the presence of competition and retail regulations governing the area. If you decide to locate in a mall, read the article Are You Ready to Move Your Home Business To the Mall?
Income Potential of a Gift Basket Business
Opportunities for home-based and small businesses abound in the gift basket business. Your income potential depends on how hard you work, particularly in conceptualizing your products and marketing your business.
Industry insiders estimate potential revenues to range from $10,000 or more annually working part time from home, or $1 million and up operating a retail store or mail order business full time. According to a survey conducted for the Gift Basket Review magazine, 72 percent of the respondents reported annual gross sales of at least $50,000, with about 27 percent indicating that their sales reached $200,000 or more. The survey also found that profits averaged 22 percent of sales.
Your Gift Baskets
You can either offer a wide selection of gift baskets or focus on a smaller segment. Some of the common baskets being offered include the following:
- Gourmet/Food Baskets. These are the most popular gift baskets businesses and customers give to their clients, friends, and family. A gift basket can be filled with gourmet food, snacks, chocolate, wine, and cheese, etc.
- Bath and Body Baskets. Also very popular, common ingredients of these baskets tend to include toiletries like scented soaps, fragrances, oils, lotions, and new candles scents, even aromatherapy products.
- Shower Baskets. Perfect for either lifestyle changes like weddings or baby showers. Many online entrepreneurs focus on a single market. For example, you can find a number of retailers selling exclusively baby gift baskets.
- Customized Baskets. A number of your customers will want items in their gift baskets that are not currently included in your item list. Instead of your current offerings, they want a customized gift basket. Be sure to properly price your customized gift basket, given the added cost of shopping especially for the basket.
Inventory Needed
Your inventory level should grow as your sales grow. However, it is prudent to start small, keeping inventory at a realistic level.
You can buy your items for gift baskets either through wholesale or retail means. It is advisable that you buy at the wholesale price the items and supplies that you use in large quantities, such as baskets, “filler” items such as tissue paper, and items common to several baskets.
Retail purchases will typically consist of the merchandise you accumulate when you go shopping for customized basket materials. As much as possible, buy your items for your gift baskets in bulk. Many retailers give quantity discounts for purchases over a specific amount.
Shopping is a major activity for a gift basket business and may take you anywhere from one to four hours a day on average. You may find your craft suppliers and ‘hard to find’ gifts by attending local and regional gift shows, various trade publications, and telephone directory listings under wholesalers. Adding your name to supplier mailing lists is also a good way to learn about new products and those that are on sale.
Marketing Your Gift Basket Business
The goals of your marketing strategy should be to spread the word about your business, create a desire for your products, cultivate the image that you want for your business, and convince buyers that your gift baskets are the best.
The two best techniques for marketing your gift basket are a favorable word of mouth and customer’s satisfaction. The quality of your craftsmanship in creating the products, the selection of items in the basket, how you deal with your customers, and the timeliness of product delivery will determine the level of your customer satisfaction and kind of word of mouth that your business will generate.
Other marketing strategies that work for this business include advertising (e.g. newspapers and coupon inserts), direct mail, and brochures. If you are targeting businesses, you can request for a personal presentation of your business and products. Be prepared to do some cold calling. You can even send them a complimentary gift basket, with your sales materials to help ensure that your business will be at the top of their minds should they need to send a gift to their own clients or employees.
Pricing Your Baskets
Pricing your baskets is a challenging proposition. Price your baskets too low and you run the risk of undermining your profits. Set your prices too high and you run the risk of losing your customers. You may be able to set higher profit margins for some baskets, and low in some others to make your inventory moving. According to the Entrepreneur Magazine, you can “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.”
When setting your prices, be sure to cover your profit, labor, materials, the cost of merchandise in the basket, a percentage of your overhead costs, and all other expenses that you incurred. Many gift basket operators make the mistake of short-changing themselves when calculating their labor costs into the price of the product. Be sure to include the time it requires you to assemble the basket, package and get it ready to be delivered, giving due consideration to the complexity of the product. You also need to include in your cost computation the shipping or freight charges that you will incur to deliver the products to its destination.
To guide you in the setting of prices, it is often useful to check the prices of your nearest competitor to ensure that you are not pricing yourself out of the market. If you are offering similar types of baskets yet the competitor can offer their products at a much lower price, seek out ways you can reduce your costs. This will allow you to price your baskets within a reasonable amount relative to your competitor. Be careful though not to engage in a price war at the risk of your profitability: some competitors may drive their prices down despite the rising costs of making the baskets.
Recommended Books on How to Start a Gift Basket Business:
- How to Start a Home-Based Gift Basket Business, 5th (Home-Based Business Series)
- Start and Run a Gift Basket Business
- Make Gift Baskets for Profit: How to Build a Profitable Business from Home
- The Gift Basket Design Book, 2nd: Everything You Need to Know to Create Beautiful, Professional-Looking Gift Baskets for All Occasions (Gift Basket Design Book: Everything You Need to Know to Create)
- Start Your Own Gift Basket Business (StartUp Series)
Similar Posts:
- How to Succeed in a Gift Basket Business: Tips from a Small Business Owner
- Gift Card Trends Which Are Changing The Industry
- Business Ideas to Make Money during Christmas and the Holidays
- How to Bring an Existing Business to the Web
- Marketing to the Right Audience
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FAQs
Starting a Gift Basket Business - Work from Home and Start a Home Business | PowerHomeBiz? ›
How much profit can a gift basket business make? A gift basket service's profit depends on how many baskets it sells each day. A business that averages 5 gift baskets a day averaging $45 to $50 each will have a daily revenue between $225 and $250, or an annual revenue of $82,125 to $91,250.
How profitable is a gift basket business? ›How much profit can a gift basket business make? A gift basket service's profit depends on how many baskets it sells each day. A business that averages 5 gift baskets a day averaging $45 to $50 each will have a daily revenue between $225 and $250, or an annual revenue of $82,125 to $91,250.
How to start a basket making business? ›- Step 1: Write a business plan. ...
- Step 2: Pick your legal entity. ...
- Step 3: Choose your niche or target market. ...
- Step 4: Pick your type of basket. ...
- Step 5: Choose your sales channel. ...
- Step 6: Set your prices. ...
- Step 7: Assess startup costs. ...
- Step 8: Organize your finances.
- Create a business plan that explains your business idea. ...
- Get the required business licenses. ...
- Purchase supplies. ...
- Create inventory that you can quickly turn around and sell. ...
- Create a website. ...
- Advertise your gift basket business.
The size of the gift basket industry is estimated to be worth over $5 billion. What are some of the most popular items to include in a gift basket? Some of the most popular items to include in a gift basket are food items, wine, chocolates, candles, spa products, and small gifts.
How many items should be in a gift basket? ›And, best of all, they're also the perfect gifts for year-round occasions and events. According to retailers, when creating a themed gift basket, you should include no more than five to seven items, depending on the size of the basket.
How do I succeed in gift business? ›- Offer Products Catered Toward Tourists.
- Brand Merchandise and Novelty Items.
- Carry Last Minute Essentials.
- Get Creative with your Gift Shop Marketing, Promotions, and Displays.
- Keep Inventory Cycling.
- Use Technology to Improve Your Gift Shop.
Bamboo is the prime material for making all sorts of baskets, since it is the main material that is available and suitable for basketry.
How much does a basket maker make? ›The annual salary for basket makers ranges from $31,000 to $65,000 per year.
What do you put in the bottom of a gift basket? ›Regardless of the basket you choose, you should fill the bottom with crumpled paper or another type of filler before adding the gift items. This filler provides an even, decorative base. Crumpled tissue paper is one of the most common options, but shredded paper, shredded cellophane, and straw can also work well.
Are gift baskets a good idea? ›
Food gift baskets make a popular gift for any holiday or gifting occasion—the special treats inside can be enjoyed over a long period of time, and while still thoughtful, they make a great low-effort, last-minute gift for anyone on your list.
How much profit do gift shops make? ›With that said, according to IBIS World, the gift shop industry reported revenue growth of 2.1 percent from 2015 to 2020. During that same period, the industry reported average annual revenue of $2.8 billion and an average industry profit margin of 2.4 percent.
Who is the target audience for gift baskets? ›The gift basket industry traditionally has two different target markets: Individuals and corporate consumers. Individuals are customers who are looking for a gift to give to someone in their life. They're looking for an easy shopping experience and a gift basket that the recipient will appreciate.
What is a basket full of gifts called? ›If we asked you what a hamper was, you'd probably say something along the lines of "a large woven or wicker basket filled with an assortment of goodies" and you'd be right, kinda. In reality, a hamper is simply “a collection of food and drink items, usually presented as gifts and sometimes include a hamper basket”.
What is gourmet gift baskets? ›Gourmet gift baskets typically include exotic fruit, and often include quality cheese and wine, as well as other nonfood items. Gift baskets are often sent for special occasions—such as holidays—or as a thank-you or congratulations gift.
What is the rule of 5 for gift giving? ›The five gift rule says that you should give five gifts to your loved ones: one for each of the following categories: something they want, something they need, something to wear, something to read, and a special gift.
How do I bulk out a gift box? ›Tips & tricks for filling a gift box
What is this? Add bunched up paper to the bottom of the box and cover it with the colorful shredded filler. This will help lift up the items so they don't get “lost” in the box. Take edible items out of their commercial packages and wrap them up in more decorative containers.
- Find Your Niche. By finding your niche, you will be able to create much stronger branding. ...
- Make a Portrait of the Target Audience. Think about who you want to sell gift items to? ...
- Pick Your Gift Store Products. ...
- Research Your Competition.
Are gift shops profitable? Gift stores are very lucrative since merchandise markups on average range from 100 to 250 percent as opposed to 50% or less in other industries.
What makes a valuable gift? ›They usually have greater meaning and significance to the person receiving it. A valuable gift does not always require you to spend money. Gifts usually require extra thought, care, and creativity to make them valuable to those receiving them.
What is a basket maker called? ›
basketweaver someone skilled in weaving baskets.
What are the three types of baskets? ›There are three basic kinds of baskets—coiled, twined, or woven.
How long does it take to make a basket? ›Tightly coiled, durable baskets in an impressive range of patterns and colors. For a traditional plateau basket, the bottom coil can take an artisan anywhere from 15 minutes to a full hour to weave. Depending on the size and shape, each completed basket can take one weaver 3-5 days to make!
Is basket making a industry? ›Basket weaving, pottery, and other handicrafts are examples of cottage industry.
What do basket makers use? ›A bodkin is essential when basketmaking. It is useful to have several in several sizes and diameters. A good general purpose bodkin has a metal spike that is around 5” long and that tapers gently towards the tip and a wooden handle. (When buying the size usually applies to the length of the metal spike).
What is a curated gift basket? ›A curated gift box is a themed collection of pre-selected and sometimes customizable items that have been hand-picked by gifting experts.
How do you fit everything in a gift basket? ›Arranging Your Gift Basket Items
We recommend starting by placing the larger and heavier gift items in the back. Place shorter and smaller items in front, arranging them in a way that all gifts are visible. Use tissue paper or shred to help boost height for items that may not be quite as visible.
When a team makes a basket, they score two points and the ball goes to the other team. If a basket, or field goal, is made outside of the three-point arc, then that basket is worth three points. A free throw is worth one point.
What are the duties of a gift shop owner? ›General Statement of Duties:
Supervises operation of Gift Shop; meets, greets, and assists public in selecting gifts and other merchandise; supervises staff also engaged in service to the public, selling, and assisting buyers.
Gifts Retailing Market by Distribution Channel, Product, and Geography - Forecast and Analysis 2023-2027. Enjoy complimentary customisation on priority with our Enterprise License! The gifts retailing market is estimated to grow at a CAGR of 3.01% between 2022 and 2027.
How much revenue does a small gift shop generate? ›
For instance, small gift stores with fewer than 1,800 square feet have a median range of $115 to $140 worth of annual sales per square foot, according to Mike Russo, president of the Gift Association of America.
Why do people like gift baskets? ›If you want to send a gift to co-workers or a family, a gift basket is a great choice because it can be as large or small as you like – the contents won't go to waste because they can be shared around. Everyone will appreciate your thoughtfulness!
How should gifts be categorized? ›Gifts to clients are generally considered business expenses, while gifts to employees are considered personal expenses. Other types of gifts could fall into either category. Be sure to track all gifts carefully so that you can properly account for them come tax time.
Can I sell gift baskets on Etsy? ›Etsy is a great platform for selling gift baskets because it's easy to use and there's a huge audience of potential buyers. You can reach a global market of gift-givers, and you're in control of your own price and shipping.
What are the four types of gift? ›Parents pledge to give their offspring just four presents: Something they want, something they need, something to wear and something to read.
What do you call someone who gives a lot of gifts? ›Some common synonyms of generous are bountiful, liberal, and munificent. While all these words mean "giving or given freely and unstintingly," generous stresses warmhearted readiness to give more than size or importance of the gift.
What do you call someone who gifts a lot? ›philanthropists. A philanthropist is a person who gives money or gifts to charities, or helps needy people in other ways.
Is making gift baskets a good business? ›How much profit can a gift basket business make? A gift basket service's profit depends on how many baskets it sells each day. A business that averages 5 gift baskets a day averaging $45 to $50 each will have a daily revenue between $225 and $250, or an annual revenue of $82,125 to $91,250.
What is a charcuterie basket? ›The Charcuterie Basket is stuffed with gourmet cheeses, salamis and accoutrements. Great for groups of people! This basket includes the following: Flatbreads, crostinis, salami, grilled antipasti, olive tapenade, tomato bruschetta, (2) Beehive cheeses cheesesticks, Dibruno Bros.
How much profit can a gift shop make? ›With that said, according to IBIS World, the gift shop industry reported revenue growth of 2.1 percent from 2015 to 2020. During that same period, the industry reported average annual revenue of $2.8 billion and an average industry profit margin of 2.4 percent.
Is gift packaging a good business? ›
Yes, a gift wrapping business can be profitable, but you'll probably need to sell wrapping paper and other gift wrapping supplies to be successful. How much should I charge for gift wrapping? You should be able to charge an average of $10 to wrap gifts, depending on the size of the gifts.
How do you attract customers to a gift shop? ›- Promote unique items that can't be found anywhere else in the market.
- Promote items that are brand-new to the market (first adopters love this)
- Promote items that are leading a trend (fashion and décor)
- Promote seasonal items.
- Promote limited-quantity items.
Like some tax deductions, there is a limit on exactly how much you can deduct when spending money on business gifts. Currently, that limitation is $25 per recipient per year.
How much should you invest in a gift shop? ›The average budget needed to start gift shop is illustrated below: Rent- Rs 10- 20K (Approx.) Insurance- Rs 10,000 (Approx.) Shop Furniture- Rs 50,000 (Approx.)
Is selling a gift income? ›Gifts Are Not Income
You won't owe the IRS a gift tax, either, if your grandmother gives you a non-cash gift. You will only owe this tax if you decide to give the gift away or if you sell it for significantly less than its fair market value.
Only one Small Gift may be obtained per character per week.
Why gift baskets are good? ›Food brings people together, and a large snack basket is a gift people love to share with friends and family. While we all enjoy indulging in delicious foods, we also enjoy sharing them with loved ones. Gift baskets often become party snacks or something to share with family or close friends who come to visit.
Does Amazon do gift packing? ›We offer gift wrap on most items that we fulfill . Gift wrap includes the following: Gift wrap, box, or bag appropriate for the item. Decorative ribbon.