Gift Basket and Care Package Business make money from other people’s gifts
  • Photo illustrates importance of an artist's touch. Visual appeal, color, arrangement, and sizes of items help sell your basket. Photo by Roberto Verzo http://www.flickr.com/photos/verzo/

Start a Gift Basket Business

We have divided this article into two parts.  (1) Gift baskets which tend to be more decorative and have more high value items in them, and (2--see below) care packages which usually consist of regular items in a cardboard box.  

The gift basket is the perfect way for a business owner or executive to say "I feel social pressure to award a gift to you on this occasion--holiday, birthday, birth your child, retirement...--because I want every member of my work/office family to feel included, but I don't really know you are.  And I don't have time to go shopping.  So I'll take a shotgun approach with this big ostentatious basket I spent less than three minutes picking out.  It's filled with many items some of which you will enjoy.

Your main market will be organizations giving to their members.  But you alos have husbands/boyfriends who have don't have a clue what to buy so they will buy a gift basket to be safe.  And business will also want to show appreciation to their customers.  For instance Real Estate agents may send baskets to their big clients...

Suffice it to say, your real business will be SELLING gift baskets.

Marketing Your Gift Baskets

Have a clear Menue People who buy these things are doing so because they do not have a lot of time.  So instead of going in and saying "I really like to make gift baskets, and I am really good at it.  Lets talk for a while about what you want."  You want to go in and say "Here is a brochure which shows my themed gift baskets and prices."  Your themes should be aimed at general categories which the basket giver can put their potential receivers in.  For instance, the husband might say Yea, my wife likes that spa stuff.  Or a boss might be able to say Yea, I see him drinking coffee at 5AM the coffee lover's basket would work.  

Presentation You will want color handouts with photos of your baskets, and ordering information.  In todays world, you will want to make it possible for people to order off the web.  That's just the way people buy things now days.  So set up a webpage, and use the photos on your brochure.  If you have some money to invest, there are some options for setting up an e-commerce webpage that takes credit cards.  See this page on OCSmallBusiness.net on credit card processing and e-commerce sites for small businesses --add link when article is published.--

Competition:  This is one of those home-based businesses that has been promoted a lot.  So there's a lot of competition.  So it might not be the best strategy to invest a lot in inventory.   One strategy is to put Basket Marketing before Basket Making   Have photos of pre-made baskets, and sample baskets.  You don't need to spend a lot to get the baskets pre-made.  Minimum orders at the vendors below are relatively low.   Buy your inventory after you have booked some orders.  

You may also want to set up a website or at least list your e-mail address so people can order directly.

Marketing Lists

You customers can be broken down into three categories, but chances are that they will be women.  For cultural reasons, women take on the task of maintaining social bonds.  In the family, often women are expected to do most of the holiday shopping, even if they have a full time job.  And in the corporate world, gifting is often delegated to a secretary or administrative assistant--usually a woman.  The exception are Mothers' Day and Saint Valentine's Day.  So you can segregate your potential customers:

1. Women  who work full time and have additional family responsibilities.  They buy gift baskets to save time.  They will generally be upper income women.  2. Intra Organizational Givers.  They give gifts to others in the organization during the holiday, retirement parties ...  3. Commission Based Professionals.  They give gifts to build relationships with clients and potential clients.   4. Men buying for special occasions--Mother's Day, anniversaries  and Valentine's Day--who don't know what to buy. 5. Hospitality Businesses.

(add note about chamber of commerce, city business licenses ... )

Selling Gift Baskets Direct

Holiday Craft Fairs  This is a list of the arts and crafts fairs in Orange County.  Many of them want hand crafted items, but some that occur around the holidays will accept other items.  Arts and Craft Fairs in Orange County   Another possibility is to sell at a swap meet -- List of Orange County Swap Meets  The key point is that these events get booked in advance before the holidays, so you need to book your spot way in advance.

 

Where do you get the stuff to put in gift baskets?

We found one real interesting Orange County business that caters to people who want to make gift baskets:

JDW Gift Basket Supplies http://www.jdwdist.com  The nice thing about this business is that it's local (Just across the street from the big A) so you can get your stuff right away, and the minimum purchase is not that high.  They sell a lot of gourmet items in smaller sizes that will look great in a gift basket.

Costco You can build a basket around a great bottle of wine or champaign.  From what we understand, Costco offers a wide variety of wines with fancy labels.  And they don't say Costco or Kirkland on them.  There are many impressive imported wines that look expensive.

Downtown Flower Mart.  For mother's day, or Saint Valentines Day, you might want to include fresh cut flowers.  The downtown flower market is the place to buy flowers wholesale.  www.laflowerdistrict.com/index.asp  You will need to buy a $30 membership to get some of the the wholesale deals.

We found this series of videos from Tracy at Gift Basket Appeal that show how gift baskets can be put together.   She takes it from the beginner's level.  This should tell you what you need to know about putting together gift baskets.

Custom Coffee Packs.  A supplier has contacted us from Puerto Rico.  He makes small packs of gourmet coffee designed for gift baskets.  He ships from Puerto Rico, so he can take advantage of the US Post Office's low shipping rates.  He can put your brand name directly on the labels so your gift baskets will have a custom look.  He also can produce small batches for those of you just getting started in business.    [Click here to see samples of his products]  

Turnkey Operations

Okay, maybe you are not really into the artistic aspects of putting baskets together.  We noticed one company that just allows you to do sales

Bella Baskets http://www.labellabaskets.com/how-our-program-works.php  They allow you to sell from their online store to your customers.  And the baskets are delivered UPS.  But they did not give any general commission levels on their site, and it looks like it's a multi-level-marketing business where you get paid to find other people to sell. We're not sure.  Check out our report on mlm schemes to see the persistent problems this type of business set up has as a business model.    

Selling in Parking Lots and Private Property Be sure you have written permission, on hand, from the property owner or manager.  If not you could face large fines, and even criminal trespassing charges.  If someone tells you to go, GO.

 


 

Care Package Business

Care packages became popular again because citizens wanted to help out men and women serving overseas in Iraq and Afghanistan.  Servicemember just couldn't get the product that they were used to at home, so receiving a box of goodies meant a lot to them.

Today, there are a lot of people making money putting together care packages and selling them online.  On some of the boxes we saw, the markup seemed to be pretty high.  Candy, cookies, personal hygiene items, and coffee seemed to be common.  Snack themed boxes seemed to be the most popular, but there were also health food boxes.  In addition to military men, care packages are also being shipped to students away at boarding school or college, and people on religious missions.  We assume there is also a market for people who have been incarcerated, but that was not advertised.

What are you selling?  Well, as with the gift basket business you are selling convenience.   It takes a lot of time to go shopping, put these boxes together, and wait in line at the post office.  So basically you are selling time.

Where to sell?

Well, Amazon and Ebay seem to be marketing a lot of these boxes through their site.  And there were a lot of folks who set up their own websites.    


Regulations

Since this is such a small scale business, it's hard to determine how much you will have to go through.  Although we don't recommend this, we have a feeling that a lot of people are just doing this out of a dorm room or apartment, and government officials don't have the time to send out the food police to bust them.  But you will probably want to comply with all the regulations, so read below.

Health Permit  AB1616.  This law allows you to sell homemade food from your home (Class A) or through third parties (Blass B).  This point might be moot if you plan to sell through a big site as they seem to restrict the sale of homemade food.  (Article on Selling Homemade Food) As long as you are selling sealed pre-packaged items, (we think but are not sure) there shouldn't really be a problem with the OC Health Department.  This might or might not fall under AB1616, but to be safe you might want to contact OCHealth to be sure.  Technically, you may need to store the items in an approved facility, but we don't know if that is really enforced.  Cold temps could destroy some items, and you do not want them to be in contact with chemicals, bugs or rodents.  To state the obvious, don't store food items in your garage or backyard shed.

City Business Permit  Most cities are reasonable and allow you to have a home business.  But some cities have exact zoning laws which will prevent you from doing business from home.  You may also need a letter from your landlord giving her permission.

FTB Resale Permit  The Franchise Tax Board (FTB) are the people who collect sales taxes from businesses.  Technically if you are operating in the state, you need to pay sales tax on this type of packaged food. 

Click here for Info on how to get permits in your city and from the California Board of Equalization (BOE).

 

 Insurance  Well that's a tough one.  Generally homeowners or renters insurance will not cover you.  But we are not sure you are Required to have insurance, and the risks are minimal.  But this is California so there is always a lawsuit risk.

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