Five Questions About the Gift Basket Business
Many years ago I set up a frequently-asked pages section at GiftBasketBusiness.com.
It answers lots of queries, but more, very-smart questions continue to arrive from designers worldwide.
Here’s a sample of what’s on your minds.
1. Which accounting software is best for tallying my gift basket sales?
I’ve heard designers talk about QuickBooks more than other accounting software programs, but that doesn’t mean QuickBooks is the only choice. It seems that because the software is generally popular that designers might not consider anything else.
Your small business accountant can pinpoint which accounting programs are available and user friendly.
2. Will a toll-free number be helpful to my business or harmful to my pocketbook?
The answer can go in either direction, so before investing in a toll-free number, it’s wise to consider your clients’ locations.
If you are currently or planning to service people in your immediate region, then a toll-free number is not worth the cost. If you envision your business fulfilling gift basket orders received from a national or worldwide buyers, then a toll-free number is mandatory.
I invested in a toll-free number when I regularly displayed gift baskets to 22 million views on the Food Network. Problems arose when a person began abusing the number, calling me every minute, and after 30 minutes of abuse, I canceled the number. Thankfully, all of the false call charges were credited to my account.
Please do not let my experience turn you against the service. Plenty of designers have such a number for their clients‘ convenience, and their experiences are positive and profitable.
More about toll-free numbers are explained in How to Start a Home-Based Gift Basket Business.
3. What type of license do I need to sell gift baskets in person and on the Internet?
Every legitimate gift basket business requires a business license issued by the county and/or state where they work. You’ll find information on your state’s or country’s Web site.
This question on Ask The Gift Basket Expert provides a link to California’s “starting a business” Web page. This is what you look for in your area.
If in the United States, consider applying for an Employer Identification Number (EIN). It’s issued by the Internal Revenue Service (IRS) and can be issued even if you have no employees.
An EIN is a more-professional and secure number to give to wholesalers instead of your social security number.
Currently, you do not need another form of identification to proceed with in person and online sales. Your county and/or state I.D.s and the EIN are adequate for general business and end-of-year tax filings unless your state’s or country’s Web site dictates more.
4. Where can I find gift basket statistics?
As a business owner of a privately-held enterprise (sole proprietorship, partnership, corporation) with no shareholders, how willing are you to give your profit and loss information to anyone outside of a government reporting agency (IRS or similar country entity)?
Everyone’s answer is “not willing,” and this is why, to my knowledge, statistics revealing how much everyone makes do not exist.
Statistics on the number of gift basket retailers in each U.S. state and other general information does exist. Those are compiled through GiftBasketStatistics.com.
Magazines such as Gifts & Decorative Accessories and Specialty Food Retailer have documented how much money gift basket retailers make, but that was in the early 1990s, and who’s to say those figures were correct?
Statistics on the number of retailers and their locations? Yes.
How much money they make? No.
5. Where are empty baskets that are attractive and affordable?
Other than traveling to Asia, you’ll find that most basket suppliers are located on the U.S. west coast. Suppliers also exist in Texas, Michigan, Massachusetts, and through floral distributors located in most U.S. states.
Basket suppliers are also in Canada and Africa, and I’m sure many are found throughout Europe, especially in the United Kingdom, but I’ve never researched that area and do not know where they’re located.
One way to find suppliers that sell baskets, such as the ones shown on BasketsGiftBaskets.com, is to attend trade shows or ask the show producer to mail you a buyers’ directory from the previous show (expect to pay a fee).
The Internet is useful in finding suppliers only if sellers properly code their sites with keywords so that search engines locate them. I find that most do not.
I welcome your follow-up questions and comments.
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2 Responses to “Five Questions About the Gift Basket Business”
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If you do have a toll-free number for your customers, I suggest that you don’t include that number on correspondence to your suppliers. There is no reason why you should pay for a call from one of your vendors especially if they’re calling to sell something to you!
Great point, Lorie.
Some suppliers don’t include their local number online or in catalogs. When I call them about business that won’t result in a sale, I ask for their local number and call back on that non toll-free line.
I went this extra mile because it was simply the right thing to do.