How to Start a Gift Basket Service

Target 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.

The market for gift basket businesses is no longer limited to a single consumer looking for a unique gift. At one time, women made up the largest segment of the industry's market, both as customers and basket recipients. But that situation is changing. The two primary gift basket markets are now the individual gift-giver and the corporate client. Both can be lucrative and fun to serve.

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.

Another reason women buy more gift baskets than men is that wives, mothers and girlfriends often assume the responsibility of buying gifts on behalf of the men in their lives, even when the recipient is the man's friends, relatives or co-workers.

Gift basket buyers tend to be in the moderate- to upper-income levels, so your market research needs to include finding out where people in this particular demographic shop.

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.

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.

Custom baskets will often include items you purchase specifically for that basket, and most of these items will be bought at retail, which means they'll be more expensive than your standard offerings. You'll need to explain this to your customers, find out beforehand how much they want to spend, and work within that budget.

Standard baskets--including gourmet food, toiletry and bath, and wedding and baby shower baskets--can serve as samples you can show to prospective customers. If the contents are nonperishable, you can assemble and store a number of them fairly quickly, lowering your labor costs and allowing you to charge lower prices for these selections.

Consider offering anywhere from six to 20 standard baskets in a wide range of sizes and prices. For example, your chocolate lover's basket (a must for any gift basket business) may come in several sizes and price ranges to suit your customers' needs and budgets.

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