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Gift Basket Assembly, Inventory and
Pricing
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Learn about gift basket assembly, inventory and pricing
for your gift basket business.
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There's an endless number of gift basket themes you can
offer for sale to your customers. If you'll be running
your gift basket business from your home, you'll need to
decide how many different themes you'll offer - which
may be dependent upon how much space you can dedicate to
inventory storage, and work space.You'll want to
build your inventory as your business grows. You should
try and develop a specialty (or signature) gift basket
theme, then build four to five other themes around your
main specialty theme. Once you've decided what your
initial five gift basket themes are going to be - plan
on developing three versions of each theme: small,
medium and large. This way, you'll be able to make use
of the same inventory in each basket size, with a few
additional products for the medium and large sizes. |
Gift Basket Themes and Occasions
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| Once you've determined what your main
themes are going to be, decide how many 'occasion' gift
baskets you can create from basically the same products.
Your inventory base can then be kept to a minimum and
with just a few embellishments, you'll be able to create
a variety. You could begin with a Coffee Basket, a New
Home Basket, a Healthy Basket, a Chocolate Basket and a
Snack Basket. Combine the components with coordinating
containers to create a variety for different occasions.
Your customer target market will determine what your
first five basket themes should be. As an example: if
you plan to market to Realtors, then a New Home Basket,
or a Breakfast Basket would be appropriate. The Realtors
will buy the gift baskets from you - and in turn,
they'll gift the baskets to their clients. |
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Inventory
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Basket or Container
Filler/Stuffing
Sizzle or basket stuffing material can be ordered by
10lbs or 25lbs. A 10lb box normally runs under $30,
delivered. There are many varieties to choose from:
shredded tissue, dyed wood shavings, shredded mylar, or
colored cellophane shred. Our preference is the crinkled
paper shred called Sizzle. It comes in quite a few
colors and looks nice in all types of arrangements. It's
also an excellent packing filler for shipping. Order one
color, and develop that color into part of your company
branding - use one color sizzle, one color bow, etc, as
your company signature packaging.
Balloons
If you'll be offering mylar and latex balloons,
either as a single balloon add-on or as balloon
bouquets, decide which 'messages' you want to carry. You
can rent a helium tank by the month. The helium company
normally will come by once per month to bring a new
tank. For latex balloons, purchase a product called
Superfloat. This will extend the life of the latex
balloons.
Cellophane Wrap
Cello wrap comes in rolls of various lengths, styles,
patterns and prints. You have the option of buying a
biodegradable variety, but the choice is yours. Cello
comes in three different lengths - 24", 30" and 40".
Clear cello is a classic choice - it allows you to
showcase the products inside. Think of this: someone
delivers flowers to you and they're enclosed in paper or
a printed tissue and the flowers are hidden. There's no
opportunity for oohs and aahs because no one can see
inside. You don't want to hide your design, you want
everyone to see it, because everyone is a potential
customer. Receiving a spectacular gift basket elicits
the same response as receiving two dozen gorgeous,
long-stemmed roses. The display and presentation must
have an impact. |
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Ribbon and Bows
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There's hundreds of styles and colors
of ribbon to choose from. What you buy will depend on
the look you're trying to achieve and the type of gift
basket you're selling. Check out your competition. What
are their bows and embellishments like? Make yours look
better.
If you're unfamiliar with making bows, there are pull
bows available through wholesale suppliers. They aren't
cost effective and don't really look that great. Use
your area resources and take instruction on bow making.
A local floral wholesaler will have books on bow-making,
as well as local craft stores (most craft stores offer
classes in making bows).
If you do have a local floral wholesaler (fresh flowers)
in your area, you may choose to purchase your ribbon
from them. They will offer every conceivable color,
texture and width, and their prices are competitive.
Check out as many local (in your city or town)
wholesalers as you can. Visit each one or call and
request a catalog. Compare their products and pricing.
Most of the larger floral wholesalers carry baskets,
gift ware, balloons, a huge assortment of decorative
containers, potpourri, candles, many of the items you'll
need. The advantage is you do not have to buy a minimum
or in bulk. They're an excellent resource for when you
need something immediately. If you don't have one in
your area, but there is one is a neighboring city, ask
if they ship, you can have what you need in a just a few
days. |
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Gift Tags, Gift Labels, Business
Cards, Brochures, Company Info Sheet, Photo Postcards
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| It's very important to have these
custom designed, and they should include your phone
number. The initial cost will pay for itself in a
relatively short period of time. These are items that
will be placed both inside and outside of your basket
design. They should project your professional image and
are important advertising tools. Remember, every
recipient is a potential customer. |
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Prepackaged Food Products
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Once you've decided on your main
themes, make a list of what items you want to include in
each basket, then make sure you keep the basic items in
stock at all times. Listed below is just an example
list, and will not necessarily be items on your
inventory list:
- Bottles of Mineral Water or Fruit Spritzers
- Crackers
- Individually wrapped candies (in cellophane or
foil)
- Smoked Salmon
- Cheeses
- Cookies and Shortbread
- Snacks: nuts, trail mix, popcorn, bagel chips
and/or pretzels
- Chocolate Bars
- Jams and Preserves
- Syrups and Honey
- Tea, Coffee, Cocoa mixes
- Pasta and Dried Tomatoes
- Regional Specialties from Your Area
- Standard Gift Items: Mugs, Colander (for Pasta
baskets), Bowls, Pens, Baby Toys, etc
All food products you stock should be nonperishable
and have a shelf life of 6 to 12 months. If you have any
local or state companies that offer gourmet foods, by
all means, showcase them in your baskets. You're looking
for items not found in the grocery store, but in
exclusive gourmet food shops. The exceptions may be
designs for New Employee, Employee Recognition, and
Snack Baskets.
If you plan to include alcoholic beverages (wine or
champagne) in your baskets, or to ship baskets
containing alcohol, you need to check with your local
Department of Revenue or State Liquor Agency. In many
states, it is illegal to ship alcoholic beverages out of
state. |
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Placing An Inventory Order
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| After reviewing all your catalogs or
wholesaler websites, and you've decided which items you
want to carry - go ahead and place orders for your
initial inventory. You'll need your business Resale# (UBI#)
to order. Write or type up a purchase order for the
merchandise you're ordering. You'll find an order sheet
inside each catalog or included with information the
vendor sent you. Indicate product number, quantity,
individual price and total price. You can fax or phone
in your order. If you fax, request an order confirmation
with the expected delivery date indicated. If ordering
online, be sure to print the itemization of your order.
When the goods are delivered, match the contents against
the invoice or packing slip to your original purchase
order. Any errors the vendor made need to be called in
immediately. Any damage must be reported within a
specific timeframe and varies by vendor.
Maintain an inventory control sheet for each supplier
you make purchases from. Each sheet should contain the
following information:
- Name, address, phone number, fax number and
contact person at the supplier company
- Stock number of the product item
- Case pack quantity
- Cost price of each merchandise item
- Opening inventory quantity
- Re-order quantity
Put into place a system to track your inventory
usage. Establish a minimum re-order quantity, and place
your re-orders accordingly. |
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Establishing Credit and Terms
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As a new business, it will take time to
establish a credit rating. Be prepared to pay COD (cash
on delivery) for your inventory (most businesses will
accept your business check). Many suppliers also accept
credit cards, which gives you 20 to 30 days to pay,
depending on when you make the purchase.
When you've ordered three or four times from a supplier,
ask if they'll place you on a credit program. Once
you've established accounts with three suppliers, it'll
be easy to open accounts with other suppliers, as long
as you pay your bill on time. Many suppliers give a
discount if you pay with cash at the time of purchase,
so when ordering, confirm this with each supplier.
Most wholesale suppliers have minimum purchase
requirements. Minimums will vary by supplier, as will
requirements to purchase in case packs. Some suppliers
will split cases for an additional fee. Some will sell
you mixed cases for a small additional fee. Most will
send samples, with you just paying for shipping. |
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Gift Shows and Gift Centers
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Attend regional Gift Shows, if at all
possible. They're normally held twice a year all over
the United States.
Start a subscription with:
Gifts & Decorative
Accessories Magazine
Geyer-McAllister Publications, Inc
51 Madison Avenue
New York, New York
USA 10010
Almost every Gift Show will have demonstrations on how
to make gift baskets and you'll find basket, gourmet,
gift lines and packaging wholesalers. The
wholesalers/suppliers pay the showrooms at the Gift
Center to represent their products. New products come
through the showrooms every month.
You may have a Gift Center in your area. Check your
local Yellow Pages (or check online) under Gifts, Wholesale. Most of the
Gift Centers are open one or two days a week. You can
visit, view merchandise and set up accounts with these
suppliers.
Gift Shows and Gift Centers are not open to the general
public. You'll need to register for admittance, so be
prepared to show your business license, business card,
company check, copy of a paid invoice from a wholesale
supplier and personal identification. Once you've
registered and are on file, you won't have to go
through this process again. You're issued a member
card. Always bring your business cards to leave one with
the suppliers you place orders with. |
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Baskets and Containers
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| Being creative with your containers
will ultimately set you apart from your competition.
Many customers, when they think of a 'Gift Basket', an
image of fruit in a cheap basket comes to mind. That was
twenty years ago, but not today. Your customer wants
something different, something original and something
unique.
You should always have on hand a stock variety of
baskets, but should also have a variety of containers.
Suggestions:
- Heart Shaped Basket
- Ceramic Bowls
- Acrylic Ice Bucket
- Plastic Coated Wire Boxes
- Special Coffee Mugs
- Fabric Covered Boxes
- Terra Cotta Pots
- Good Quality In-Box Trays (new employee
designs)
- Enamel Colander (for pasta baskets)
- Assortment of Tins (decorative)
- Wood Boxes or Crates
- Painted or Galvanized Metal Buckets
- Gold or Silver Trays (hotel/convention
baskets)
- Wicker Bassinet or Chair (new baby)
- Metal Watering Can
- Hat Boxes
If you can't afford all or any of these, begin with
assorted baskets (small, medium and large) and a nice
assortment of decorative tins. |
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Gift Basket Assembly
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| Every Gift Basket designer believes
their design technique to be the best method. You'll
eventually learn - not all designers are created equal.
Use your eye for design and balance, combine it with
your creativity, and you'll learn to recognize a 'good'
basket design from a 'not so good' basket design. For
the inexperienced basket designer, we offer tips to
follow in your initial startup stage. As you become more
experienced, you'll automatically find which method
works best for you. The goal is for your finished design
to be Impressive, Colorful, with the appearance of
'overflowing with goodies'.
The height of your design is important. Unless you're
shipping an array of items in a flat shipper box, you
want to produce the maximum amount of layering and
height possible. It doesn't matter what size or shape
your container is, think "height".
To give your container a firm basis, upon which to
build your design, it requires some type of base filler,
before you use the more expensive basket Sizzle or
Shred. An exception would be if you're using a very
shallow container, then just use the Sizzle. Purchase a
bale of packing paper (found at moving companies) or a
roll of white butcher paper. Crumple the clean paper and
fill the container about two thirds. Cover the clean
paper with tissue, the same color as your Sizzle. Cover
the tissue paper with the shred stuffing or Sizzle.
Your individual products for the basket contents
should be in front of you. Tallest items should be
placed either in the center or near the back of the
container. With each product addition, add a little more
Sizzle. Products should be standing up or angled to show
off their labeling. Layer products as necessary, to
achieve maximum height. If your products sink into the
basket, you need to add more packing paper. Fill empty
spaces with individual candies or cookies.
Remember to nestle two business cards and your
company information sheet or brochure, in with the
basket contents. On the outside, once wrapped, place a
high-gloss sticker with your company name and phone
number on the upper portion of the cello plume, above
the bow. The gift card or gift tag can either be
attached to the outside of the basket or placed inside.
Measure your cellophane so you have approximately six
to eight inches of overlap on the basket top. Place the
container in the middle of the cello. Gather the cello
around the container, holding one section tightly and
adding to it until you have enclosed the entire
container. If there are areas that seem loose, pull up
the cello from the center tightly. Tie and secure with a
length of ribbon. We recommend using a #3 ribbon width,
the same color as your bow. Cut a length of #9 ribbon or
the same width as your bow, and tie around the first
ribbon. Cut these streamers into a "V" shape on both
ends. Secure your bow around the neck of the basket.
Study the cello plume, above the bow. Pull out, up,
sideways, positioning for the fullest effect. If
necessary, snip cello with scissors to create an even,
full plume.
Filling large volume orders is extremely labor
intensive. You'll want to employ the assembly line
method. Cut all your cellophane, make all your bows,
layout all inventory you require, place the packing
paper and tissue covering in all of the containers.
Then, fill each container, wrap and secure bow. This
method is faster and more efficient than making one
complete basket at a time. |
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Pricing Your Baskets
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| Many new gift baskets business owners
find it a difficult task to price their product. You
must be competitive, but you also need to have a firm
idea of costs as well. Again, if you've researched your
competition, you know what they're charging for their
baskets. If they're a company that processes huge volume
orders on a monthly basis, they are paying less for
their product, and paying less for their shipping. They
are able to offer their baskets for a lesser amount than
you are, and still make a profit. By setting yourself
apart from the competition and offering a higher level
of quality, the customer will be less apt to compare
prices with anyone else.
Here's an Example Pricing:
You have one case of 1.5oz preserves shipped to you
at $1.00 each, 12 jars to a case. Your invoice lists the
charge as $12.00 for the case of preserves. The shipping
costs are $5.00. Total you're paying is $17.00. Divide
the shipping charge amount by the number of units in the
case.
$5.00 divided by 12 = 0.416 or .42
Each jar of preserves has cost you $1.00 each plus .42
each for shipping.
Total = $1.42 (total cost) Selling price = $3.26 (1.42 x
3)
Your Retail mark-up will be three times your wholesale
cost.
Don't forget to add the Shipping into your Retail
calculation.
If you pay $10.00 for an inventory shipment, add that
$10.00 to the cost of the inventory.
Other Costs You have to Include
into the Equation
Remember to include your costs for:
- Basket/container
- Content products
- Filler Paper
- Tissue
- Sizzle or Shred Filler
- Cellophane
- Ribbon and Bow
- Embellishments
- Gift Tag and High Gloss Sticker
You may decide to set a flat fee amount for the
'Wrap'. This flat fee would include the filler, tissue,
sizzle, cello, ribbon, bow, gift tag, sticker, brochure
and business card. Maybe set a rate of $4 or $5. You
should calculate exactly how much it costs you for all
of these separate items, per basket. Then multiply by
two or three. |
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Pricing Large Volume Orders
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| When you receive volume orders from
corporate clients, you should offer a % discount. If you
offer a 30% discount, add on a 10% labor charge. Just be
sure to total the wholesale cost of everything and base
your discount amount on the % of profit needed to
support your specific overhead and operation. |
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