Starting A Gift Baskets Store

Online gift basket stores are becoming as popular as their traditional offline counterparts. These stores make it easy for consumers to go online, purchase a gift basket, and have it shipped to a family or friend as a gift. The level of customization provided by some of these online retailers is amazing. You can do everything from picking out a customized gift basket to choosing what type of wrapping paper and gift card you want to dress the gift with.

There are several ways to earn income from this type of business. Of course, you’re going to generate revenue from the sale of gift baskets and other gift related items; however, like any business, you can generate significant revenue from value-added services—things such as gift wrapping, personalized gift cards, special shipping options, or unique customizable products (e.g., engraved gift boxes). You can also generate revenue from selling online advertising to noncompeting Web sites that target the same audience. Since you are targeting the same audience, you can provide potential advertisers with a dynamite opportunity for exposing their products or services.

SKILLS NEEDED

First and foremost, knowledge of the products that you are representing is a must. This enables you to answer any questions that your clients or potential clients might have about your products. Knowledge of online advertising techniques is also an asset to run this type of business. If you decide to launch a gift basket Web site, you are going to have to ensure that you are generating as much traffic as possible to your site to develop your client base. To do this, you are going to have to dedicate a lot of time implementing various Internet marketing techniques to create a constant flow of traffic to your site. Knowledge about electronic storefronts, shopping carts, and electronic commerce would also be an asset.

COST TO START THIS BUSINESS

Initially you will have to pay for the design, development, and hosting of your Web site, computer hardware, computer software, a scanner, a printer, and a digital camera so that you can take photos of your gift baskets. If you currently have some of these items, your initial start-up costs will be considerably lower. In order to set up your storefront, you will have to purchase storefront software equipped with electronic shopping cart features, use an application service provider, or be responsible for developing this in-house. If you plan to set up a mailing list, you will also have to purchase mailing list software to help you organize and maintain your mail lists. You should also purchase comprehensive Web traffic analysis software to track where your Web site visitors are coming from. This information can be great for future marketing opportunities. Other costs that you will incur are related to the promotion of your Web site and the purchase of inventory. Minimum estimated cost to start is $10,000 to $20,000.

NUMBER OF EMPLOYEES NEEDED TO START

You can start this type of business with one person. If you do your online marketing well and generate significant visitors and customers, you will quickly expand. Approximately one to three full-time employees will be needed in full operation for this type of business. At least one staff member will be responsible for the daily online promotion of your site, while the others will handle all administrative, accounting, shipping, and inventory tasks required to run the business smoothly.

INTERNATIONAL POTENTIAL

This business has strong international potential. People from all over the world will be able to visit your Web site and order your gift baskets to send to their loved ones. However, before you offer your products to foreign countries, you should ensure that your parcels would easily pass through customs. Some countries may have regulations as to what types of products can enter their country or may have significant duties and taxes that may be levied.

IMPORTANT BUSINESS ISSUES TO BE ADDRESSED

Since you are promoting your products to an online audience, it is extremely important for you to generate as much traffic as possible to your site. There are multiple ways for you to do this; however, it is essential that you allocate a significant amount of time to the daily online promotion of the site. You should also remember never to offer a product on your site that is not in stock. Stock-outs can seriously hinder the success and reputation of any online retailer. Nothing would be more disappointing than searching through your storefront, finding a dynamite gift basket to purchase, ordering it, and then finding out that you don’t have it in stock. This could discourage visitors from ever returning to your site to make a future purchase. To avoid this problem, it is suggested that you monitor your inventory levels closely and have the capability to remove items easily from your online catalogue.

ONLINE MARKETING TECHNIQUES

• Developing a comprehensive affiliate/associate program would not only increase the awareness of your gift basket site, it would also send referral business to your site.
• Launching a strategic banner advertising campaign on Web sites frequented by your target market would be a great way to increase traffic to your site. Sites on which you could place banner ads include noncompeting gift sites, holiday-specific Web sites (e.g., Mother’s Day sites, Valentine’s Day sites, etc.), and other Web sites that would be of interest to your target market.
• You could hold a weekly or monthly contest on your site for a free gift basket. You could ask people if they would like to be notified of the winner via e-mail. This would encourage them to return to your site and re-enter your contest, thus re-exposing them to your products.
• Develop a sponsored listings campaign to bid on appropriate keyword phrases with the popular search engines.
• Develop as many links as possible from Web sites, directories, metaindexes, and Web rings frequented by your target market.
• You could develop a Featured Gift Basket page on your site. You could change this product every week. People will continue to return to your site to see what the featured gift basket is. You could even ask people if they would like to be notified of your featured gift basket via e-mail. This would be a great way to encourage repeat traffic.

ONLINE EXAMPLES

PEI Preserve Company https://www.preservecompany.com

This is a terrific online business (Figure 2.5) that sells homemade preserves to people all over the world. They use several effective Internet marketing techniques to increase the traffic to their site, including a mailing list that enables them to communicate with their clients.

GiftBaskets.com https://www.giftbaskets.com

This is a dynamite site that offers a wide range of gift basket products to its clients.