The change of year always ushers in higher costs in areas where your have no control.

If you can control costs, it’s still smart business to increase charges where necessary.

Here are three areas in your gift basket business to check today.

Shipping. Reviewing transportation records for the past 3-6 months often reveals that you’ve been undercharging. While trying to be conservative and keep costs low for customers, this sometimes means that you pay for miscalculations.

Deliveries. Has the courier that delivers your baskets increased rates this month? If so, you’ll have to do the same and notify your customers. If you are the courier, calculate how much mileage it takes to get from a general point A to point B and also factor in vehicle maintenance.

Appointments. If you haven’t been charging engaged couples for consulting with them on thank you gift baskets for family and friends after the wedding, now’s the time to start. I learned years ago at a flower industry convention that charging a consultation fee is mandatory because of the time spent giving couples ideas that may not result in a sale.

You cannot make money if you are covering costs that rightfully are passed to customers.

There are other areas in your business to review, but these are the most common. Which one will you adjust first?

Shirley George Frazier

Shirley George Frazier is recognized as the world’s authority on the gift basket industry. She is head basketologist at Sweet Survival LLC (known on the web as GiftBasketBusiness.com), which assists creative people to turn their passion into rewarding businesses. Shirley is also author of How to Start a Home-Based Gift Basket Business, The Gift Basket Design Book, and Marketing Strategies for the Home-Based Business. If you're looking for a speaker who's easy to work with, one that attendees will thank you for bringing to the event, contact Shirley at 973-279-2799 or Shirley@ShirleySpeaks.com.

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It’s easy in this business (and in any industry) to focus solely on getting less-profitable orders.

That’s because after a while it seems that there are more people willing to spend $25 on a gift basket than there are people ready to spend $250.

Is that really true, or has your marketing plan to reach people who will spend $250 become non-existent?

If you want higher-priced gift basket sales, you must do what’s necessary to let customers know that you have such gift baskets for sale.

Do not make the mistake of only promoting your lower than $100 gift baskets. I learned many years ago, from master designers who consistently sell gift baskets in the $300-$3,000 range, that you can only sell these designs by promoting them every day to both new and current customers.

It’s true that not all customers will have the budget for $250 baskets. That’s okay. Still, you must act as your own cheerleader, informing anyone who’s placing an order or thinking about it, that your higher-priced designs deliver more value, better relationships, and in the case of your corporate customers, more-lucrative sales.

When you look at the sweets on your holiday table, do you want a slice, or do you want the little pieces that fall from the slice? Look at your gift basket business in that same light, and you’ll begin eating more cake rather than crumbs.

Shirley George Frazier

Shirley George Frazier is recognized as the world’s authority on the gift basket industry. She is head basketologist at Sweet Survival LLC (known on the web as GiftBasketBusiness.com), which assists creative people to turn their passion into rewarding businesses. Shirley is also author of How to Start a Home-Based Gift Basket Business, The Gift Basket Design Book, and Marketing Strategies for the Home-Based Business. If you're looking for a speaker who's easy to work with, one that attendees will thank you for bringing to the event, contact Shirley at 973-279-2799 or Shirley@ShirleySpeaks.com.

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Free shipping.
$10 off.
Gift with purchase.

Are you offering so many discounts that customers won’t buy without getting something in return?

While discounts will attract some customers, offering too many sales too often may take away from the value of your gift line.

Adding discounts within your business for specific events or certain seasons may be a wise way to gauge sales during those time periods and orders that arrive throughout the year. Here are three options.

1. Specials to celebrate the anniversary of when you opened for business.

2. Summer specials from June to August.

3. New Year, new baskets events in January.

Which type of discount promotions has succeeded most often for you, or is your gift basket business a no-discount zone?

Shirley George Frazier

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“August 2002 – To pay for a new warehouse in Kentucky, Hsieh sells his San Francisco loft. By year’s end, sales hit $32 million, but there are still no profits.“

That’s a timeline excerpt from the June 2010 article in Inc. Magazine entitled, “Why I Sold Zappos,” written by company founder, Tony Hsieh.

Hsieh started the firm, which is best known for selling shoes online, in August 1999.

Just think: He put all of his money and energy into starting and building a business, and three years later, even with $32 million in sales, the company has not yet achieved profitablility.

If this is true for a company selling to a bigger audience than you’ve established, then something else is also true: your business is bound to experience the same no-profit problem.

The answer to the questions, “When will I make money?” and “When can I take money out of the business?” are different for all of us, but the answer in most cases is, “Don’t count on making money or seeing profits for at least 3-5 years and possibly longer.”

Gift baskets are an inventory-heavy business. You must buy a lot of product, along with everything else needed to set up, in order to get started.

Many of the products you buy sit on shelves until selected by customers, and some of the products won’t sell at all.

Profits are the holy grail for every business, and getting to that special place is an uphill climb for each of us. If all signs led to the climb being easy, you would have had no chance of entering this or any other business because the number of people entering the industry before you would have convinced you not to start.

Know your customers. Understand what they want, and buy the inventory they desire. Market faithfully. Take advantage of wholesale specials. Network as often as possible. All of this will get you to the profit line. It won’t be tomorrow, but it will come.

Shirley George Frazier

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Looking at this year’s sales, you may feel compelled to be disappointed about your overall business or next year’s projections.

That’s how I felt after my first two years in business.

It seemed as though nothing would change my sales for the better, but I never thought about quitting.

Instead, I applied pen to paper and began documenting which ideas were harmful to my business (wasting money with no return on investment) and which ones were valuable (increases occurred each time I completed the strategy).

When I decided to plug up the holes and concentrate on what worked to put my gift baskets into clients’ hands, that’s when profits increased.

The most-difficult part of business seems to be the planning — taking time to sit by yourself or with partners and map out the plan. If you take time to device monthly strategies, with the end goal in mind, you’ll see a marked difference in your gift basket business in 2010.

Were you happy with or disappointed about this year’s sales, and why?

Shirley George Frazier

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Remember: Enter the gift basket business contest. Deadline is Monday. Get details here.

“Corporate spending is less, but they are still ordering baskets,” McCreery said.

“I get 800 gift baskets in one order. Instead of $50 per basket, they want to spend $35.”

That’s the order outlook from a gift basket designer in Arizona, as reported by TucsonCitizen.com in a recent article.

It’s better news than featured in other publications, the ones that seem to look for retailers who aren’t putting their best foot forward to make the best of a rough year.

There’s no doubt that getting corporate clients to buy is a tough sell. However, their budgets aren’t slashed to zero, and that’s why the Arizona-based designer who’s filling $35 orders will be the one that corporations buy from when revenues are higher in the coming years.

In the past I’ve recommended, in the newsletter and on this blog, offering clients gifts and baskets in varying amounts – from approximately $20 to $200 – so that you are their gift solution specialist no matter what the economy.

It works for the Arizona designer, and it will work for you.

The above photograph shows most of the grand prize items to be awarded in the gift basket business contest. A few more items will be delivered today.

Thanks to all who entered. Only three will receive prizes, but all of you are winners.

Shirley George Frazier

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“…we continue to be highly focused on achieving our bottom-line growth goals by leveraging our business platform to reduce our operating expense ratio.”

Jim McCann, CEO of 1-800-Flowers.com, said this is part of his company’s strategy to keep the firm profitable.

Last week, MarketWatch.com reported the company’s revenue for the last quarter. Here’s the first sentence in the gourmet food and gift baskets section:

“Revenues increased 60.5 percent to $37.2 million compared with $23.2 million in the prior year period.”

You can read the entire report here, and I encourage you to do so. It’s absolutely critical to read about competitors who sell on this level so that you can determine how to increase your market share.

1-800-Flowers is one of a handful of companies in our industry that’s publicly traded and must, by law, report their revenue. The rest (like you) are privately held, so it’s unlikely that you’ll learn about a smaller rival’s earnings.

McCann mentioned that lowering operating costs was partly the reason for growth. Have you recently reviewed your expenses to see where you can trim waste? Here are some areas to consider:

As an example, I reviewed and decreased my telephone charges, saving me $192 annually, and I lowered my credit card transaction expenses to save an additional $300 each year.

How can you increase sales by lowering costs and still satisfy customers?

Shirley George Frazier

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