How Close is Your Competition?
How would you react if a competitor set up shop directly across the street from your location?
This problem occurs not only to retail shop owners but also to home-based business owners.
Before you answer the above question, make sure you understand who the competition is for you and who it isn’t. The article, Who is Your Gift Basket Competition? provides insight in case you’re not sure.
Years ago I interviewed two gift basket store entrepreneurs whose shops faced each other in a popular town 15 minutes from my location. Each of them told me that they weren’t concerned with the other’s business because they catered to different clientele.
Still, something about their body language told me that an uneasiness had set in between them even if it wasn’t mentioned during our conversations.
What’s the first thing you’d do if competition set up camp close to your business?
First in Your Area to Make Gift Baskets – Is That Good?
You decide to make gift baskets in your area for individuals and corporate buyers. In your search for competitors, you find none. What could that mean?
- No one needs gift baskets – that’s highly unlikely as people in general need gifts for all occasions
- Gift basket stores once existed but designers closed up shop – this may exemplify the need for gift baskets but not for a standalone facility
- Florists and out-of-area firms service the local market – if this is true, you haven’t don’t enough research, as this proves there are competitors
I remember one of the first “rules” learned in business about being the first person in the area to offer a product or service and how such a position meant your business would fail. Today, we know this rule to generally be untrue.
How many people have iPhone repair businesses and maintain companies that consult with niche businesses? That alone points to the fact that gift baskets have their place in every city, even those with just 100 residents.
Your main objective is to research the target market so you purchase gift basket products that they want most.
Outside of one shop specializing in fruit baskets, I was the first business in my area to offer gift baskets What position do you hold in your area?
Has Your Gift Basket Competition Increased or Decreased?
As the economy continues taking its toll on industries large and small, your business may be generating more orders due to less competition in the area.
Has this occurred, or has downsizing introduced new gift basket businesses started by people making career changes?
Most of my designer clients report many more sales from corporations they were once unable to convert due to long-time competitors.
They are happy about the increased orders but know that at some point new players will enter the market, so they’re guarding against that possibility now.
You’ll learn more about this topic in the article, Who is Your Gift Basket Competition?
What’s the competitive action like in your area?
Are Superstores Competitors or Allies?
Each year, as aspiring designers enter the gift basket industry, one question is always on their minds:
“How can I compete with (superstore name) when they sell gift baskets for low prices?”
It’s a subject I talk about extensively in chapter 10 of How to Start a Home-Based Gift Basket Business because we all need a reminder on how to view these membership stores.
While superstores can be viewed as competitors during the end-of-year holiday season, they are really indirect competitors, firms that offer what you sell but cater to people who aren’t looking for your type of service.
The people who roll gift baskets out of these stores, on flatbed surfaces in the wind or rain, want something quick and don’t concern themselves with superior styling and freshness.
Superstores are also viewed as non-competitors because unlike them, your studio is not set up in a football field-size environment. When you reach this level, you can then consider superstores to be a direct competitor, one that competes head to head with you for customers and sales.
Meanwhile, these stores can be considered as allies because they sell products that fit within your inventory such as:
The article, Who is Your Gift Basket Competition?, provides more insight on this popular topic, and when you’re ready, the article, Making Gift Baskets for Warehouse Clubs, prepares you for the huge step of making gift baskets for their members.
When you see gift baskets at a superstore, do you pass by them without a glance, or do you check them out with a microscope to counter customers’ comparisons?
Even Temporary Competition Needs to Be Watched
During the fourth quarter every year, gift basket competition of some type comes to town. They set up makeshift shops in malls, standalone stores, and even in supermarkets.
This is in addition to the competition you already prepare for at superstores, discount retailers, and office supply chains. How do you convince clients to order from you rather than the other outlets that try to trump your sales?
One gift basket designer I recently spoke with says she deflects competitors by expanding her services during the holiday season.
That includes the distribution of free gifts (beautifully wrapped, slow-moving merchandise) and the mailing or Emailing of a customized gift-giving list generated according to the client’s order list from last year.
She says that she knows her clients appreciate her services because her sales increase each year.
What’s your plan for watching how and when the competition comes to your town, and how do you convince customers to buy from you and not from them?
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