The secret to making money is knowing how to price what you make, and that can be puzzling.
However, the way to solve that problem is to give customers good value while calculating your gifts for the highest possible profit.
Let’s go over a very-important step about pricing before you choose the best method.
Your secret for success
Here’s where you start:
Price everything in the basket!
I’m talking about every detail of making that one-of-a-kind design.
- Did you stuff the inside of the basket with newspaper? There’s a cost for that.
- How about the lovely greenery added for color? You must charge for it.
- There’s a beautiful bow at the top to perfect the appearance. Include it in the price!
Everything you add in your gorgeous gift, from the basket to the bow, gets a cost attached to it. You cannot overlook anything even if it’s something that’s re-purposed.
The way to make sure you account for all costs is to write everything down on paper just as you would write a grocery list. That way you know what’s included in the gift basket and can calculate the best cost for it.
Pricing for profit
Once I reveal in the online Start Your Own Gift Basket Business class the number of ways available to price gifts, the questions and ideas really begin. There’s no one way to determine price. Gift baskets are made worldwide and in various locations (at home and in stores, for example), so one method isn’t right for every place.
This is an advantage for you, because you get to pick the formula that’s not only best for the people who buy but also ensures that you make money.
Here are your choices.
Double your total.
Example: The price you calculate for everything that goes into making a birthday gift basket is doubled. That’s simple, right? This method is best if you make gift baskets at home in an attic, basement, garage, or spare bedroom.
But take note – this method is for gift basket makers who aren’t looking at gift baskets as a money-making enterprise. To put it bluntly, doubling your costs is okay, but won’t make you money if you are creating gift baskets as a business.
Double and add a percentage.
Example: Using the same scenario as above, the birthday gift basket’s costs are doubled. Then a certain percentage more is added to the cost. That percentage is anywhere between 30 – 50 percent over the cost spent for everything in the basket.
This method will make money if you live in a vacation area and sell gift baskets to tourists and other visitors. It won’t make a huge sum of money, but it will certainly make more than doubling your costs.
Round up times three or more.
Example: Take the birthday gift basket’s cost and round it up to the next highest figure (if $58, round it up to $60). Multiply the rounded figure by three, four, or more, and you’ll arrive at the price to sell it to customers.
This pricing method is similar to what many of today’s retailers charge for gift baskets sold in stores. It’s easy to charge this amount if you are located in or near a major metropolitan city.
After reading this, I have a good feeling that you already know which option is for you.
Gift baskets are not only a fun pastime, it’s also a lifestyle that thousands of aspiring designers, just like you, enjoy doing every day to put smiles on the faces of people who receive these gorgeous gifts made for every imaginable occasion.
Want to know more about pricing, marketing, and other details to start your business? The online Start Your Own Gift Basket Business course is for you! See the lesson plan on the GiftBasketClass.com website, and ask me questions (if you need guidance) before enrolling in the next session.