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How to Start a Gift Basket Business [Right from Home!]

How To Start a Gift Basket Business

Starting a business can be stressful. So planning is important. If you want to know how to start a gift basket business, planning is going to be the first step. Not thinking through critical preplanning steps like market analysis (need for your product), picking the products you'll provide (and how much it will cost to provide them) and your marketing plan. How will you get the word out about your business. Having a strategy for all these pre-launch steps will set you up for success.

You'll want to keep in mind as well, that you'll need to check with your local government regarding starting a business. You'll want to pick a business name and get it registered. There may well be permits to purchase. And creating a business entity for your gift basket business is great idea. Many basket business are limited liability companies (llc), but you can be a sole proprietorship too.

Think about business insurance too. There are many types of insurance and your agent should discuss all these options with you to find what suits your business best. General liability insurance is important, do not skip this step.

Open a business bank account just for your business. You can add your company logo to these checks to make them even more official!

Creative Types are Perfect for Starting a Gift Basket Business

Next, does this business suit your personality and skill set? Designing gift baskets can be fun and profitable! And a successful gift basket business – very lucrative. If an online job or career isn't your cup of tea and starting a home business is – this might be perfect for you. Gift-basket entrepreneurs buy gift items and baskets, use an artistic flair to package them attractively, then find creative ways to market their eye-catching creations to others. The gift basket industry has been going strong for over 20 years, and the outlook continues to be bright. When I initially wrote this article, annual sales for gift baskets totaled about $800 million in 1996, up from $700 million in 1992 according to Kathy Horak, editor of Gift Basket Review. Now annual sales exceed a billion dollars.

Gift baskets remain incredibly popular. There's a gift basket variety for almost any occasion and they can be enjoyed and shared with others. Gift baskets have become extremely personalized as well. Letting gift givers hone in on exactly what their recipient loves most. Whether it be anime or tea or popcorn.

The most typical gift-basket buyers, according to the Gift Basket Review survey, are women between the ages of 35 and 49, who account for more than 76 percent of gift-basket sales. Next in line are corporate customers, who account for approximately 20 percent of sales.

Can I Make Money Selling Gift Baskets?

A survey by the magazine reveals the majority of American gift basket designers in business at least one year boast annual sales of $50,000 or more; approximately 30 percent enjoy sales of at least $100,000 annually. So the potential for making money (see money making program reviews on this page) with a creative type home business like this – is indeed there.

Because prices for gift baskets run anywhere from $15 to $1,000, customers tend to come from the moderate to upper-middle income levels. Despite the baskets' widespread appeal, running a successful gift basket business can pose a few challenges.

A general rule of thumb is to charge three times your labor costs. So if a basket cost you $22 in time, labor and products — you should charge $66 retail.

“This is an incredibly competitive business,” says Jo Masterson, owner of Mountain View Gift Baskets in Redmond, Washington. “The main thing that surprised me when I entered this industry five years ago was the amount of competition that's out there. In my area, for instance, we have more than two pages' worth of gift basket provider listings in the local telephone book, and there's another gift-basket shop just three blocks down the street from mine.” Other gift basket services aren't your only competitors. Masterson notes that florists offer similar convenience and prices and target the same market. Masterson has succeeded in this competitive environment by focusing her marketing efforts on corporate rather than individual clients.

“When I started out as a gift basket business owner, I targeted my offerings to individuals rather than to businesses, because that's who I already knew. But my intention from the beginning was to gradually shift my focus to the corporate market,” Masterson explains. “That's because a company that uses your service regularly tends to place five or six gift basket orders a month, whereas most individuals order only one or two times a year. In short, for the same amount of marketing and physical effort, you generally get a bigger return with the corporate market.” This doesn't mean, however, that Masterson turns her back on individuals. “Today, I sell about 20 percent to 25 percent of my items to individuals,” she says, “many of whom learn of my business through the workplace.”

Think of all the holidays or occasions that gift baskets can be sent for:

*…and so many more!

Valentine’s Day
Father’s Day
Hostess/Host gift
Going Away
Divorce Celebration (Yep… some people are thrilled to celebrate this.)
Graduation – both HS and College
Job promotion
New home
Thank you
Mother’s Day
Get well
Baby shower
New Business Opening
Bridal shower

Making Gift Basket Making Work

Anyone operating a gift basket business should be prepared to spend much of the holiday season working long hours, especially during the weeks before winter holidays. “The demand for our baskets is steady all year long, but it's during the last few months of the year when things really heat up and we work very, very hard,” Nichols says. Still, operating a gift basket service offers a variety of distinct advantages. The market for gift baskets is sizable, with repeat business being not the exception, but the rule. Start-up costs can be as low as $3,000.

It's possible to make substantial profits running this business part-time, as Masterson did. “I ran this as a part-time home-based business for my first two years and had some success that way, but once I realized I really enjoyed the gift-basket business, I decided I needed to move things up a notch,” Masterson says. “So I quit my day job as a nurse and moved into a retail spot with a showroom and a warehouse. That definitely took the business to a whole different level, converting it from a hobby into a full-time `real job.' ” Sales also reached a new level: Mountain View Gift Baskets brought in sales of more than $100,000 back in 1997! For gift-basket entrepreneurs, the rewards are more than financial.

“Being creative, seeing your visions come to fruition, and [seeing] the responses of [people] who receive your baskets–that makes all the difference,” Nichols says. “When you get a call from someone who tells you how happy one of your creations made them, it just makes you feel so darn good.”

Obviously today – a bigger monetary investment is involved, but the profits are higher as well. And gift baskets have so many themes now. With this industry growing tremendously – even in a tough economy – it seems a good business venture if you have a solid business plan, the right creative talent and are ambitious.

Helpful Gift Basket Business Resources

For More Information Contact the Gift Association of America, 612 W. Broad St., Bethlehem, PA 18018, (610) 861-9445. Subscribe to Gift Basket Review ($29.95 for a one-year subscription), Festivities Publications Inc., 815 Haines St., Jacksonville, FL 32206, (800) 729-6338.

How to Start a Gift Basket Business, Entrepreneur.com

Start Your Own Gift Basket Business, Free Mini Course

Learn to Make Candy Bouquet, Edible Crafts for Kids, Fruit & Veggie Creations & MORE, ebook

There are also some direct sales companies that allow you to start your own gift basket business with less risk and some mentoring. Please feel free to look in the direct sales company directory for some of these companies. I know just off the top of my head that La Bella baskets has an opportunity with baskets.

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  1. I’m just beginning to build my web site for my gift basket business. After reading your review it looks like I have some serious work to do. As Jo mention earlier about first starting with individual clients, which was the same thing that I had in mind. But it looks like If I want to stay afloat in this business that’s where I’ll start along with my other targets.

  2. Richard Fabian says:

    My wife and I are planning on starting a gift basket business and where we live there are a lot of resources to use and with my creative ideas I think we will be successful.

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