feature story

the business of baskets

 

Whether you’re just getting started with gift baskets or expanding your current offerings, these tips from successful retailers and product suppliers will help you succeed in either endeavor.


by Shelly Urban


Gift and gourmet baskets are natural fits for flower shops. While customized options can provide a valuable service for customers and be financially rewarding for retailers, many florists swear by ready-made selections, which require little or no labor and can be shipped direct to recipients.

 
Which is best for you? And, whatever you choose, how can you effectively market your services? With help from retailers and suppliers, we’ll answer these questions and assist you in starting or expanding your gift services.
 
creative customizations
At Gordon Boswell Flowers’ two Fort Worth, Texas, locations, gift baskets are exclusively custom made. And clients appreciate the service, purchasing some $20,000 worth in 2006. President Martha White says that a few custom creations are routinely on display, especially the company’s signature Texas Treats basket. On the shelf, it is priced at $50, but it can be adjusted to other price points as needed. Common price points are $50, $75 and $100.
 
The ability to adjust is key, says Ms. White, as is the ability to offer quality, hard-to-find items. “One of our favorite suppliers is Sweet Shop USA. Since they’re in Fort Worth, everyone recognizes that it’s a high-quality brand, and we put [Sweet Shop products] in just about every basket,” she points out.
 
According to Sweet Shop’s marketing director, Krista Webb, stylish packaging and exclusive wares are two reasons that many retailers opt to create their own gift baskets. “Our boxes don’t have to be decorated, and all the shapes give a different dimension,” Ms. Webb says. But it’s the range of handcrafted confections inside the boxes that customers really want.
 
That added value makes a must-have gift that is difficult to replicate in ready-made form. “Custom-made baskets, especially fruit baskets, are time-intensive,” concedes Ms. White, “but ours look and taste great and are hard to resist.”
 
Mary Mele Abel, owner of Mele Brothers and Sister Florist, in Braddock, Pa., agrees that custom creations are ideal for serving her shop’s clientele, who buy baskets in the $50 to $100 range. “It’s OK to have basic gift and gourmet items,” she shares, “but florists should add special touches to make gifts personal.”
 
Although personalization sometimes requires trips to other retailers, both florists say it’s worthwhile, and both apply their standard markup to these items. For Ms. White, at Gordon Boswell Flowers, the typical markup is three times with no additional labor. At Mele Brothers and Sister Florist, the standard markup is 2.5 times with a separate labor fee added.
 
inventory investments
Both women, who say that fruit and gourmet baskets are their best-sellers, agree that getting started in the customized basket business requires an investment in supplies. “A minimum of $300 to $500 is necessary to start,” notes Ms. Abel. She recommends cookies, candies, crackers, nuts, jellies, mustards, cheeses and sausages, all with a shelf life of three to six months.
 
Ms. White suggests a minimum inventory of $500 to $700, but she prefers products with a shorter shelf life. “We focus on taste, which sometimes is exchanged for long shelf life,” she explains. “We have to buy often and keep products moving, but that’s never been a problem.”
 
One of Ms. Abel’s suppliers is Apex Gift Foods, in Pittsburgh, Pa., which offers a complete line of components. Lorie Obernauer, vice president and co-owner of Apex Gift Foods, says the minimum order is one case, and because Apex offers assortments, it’s possible to get started with just one or two cases. “They include a mix of our best-sellers,” explains Ms. Obernauer. “They’re pricier than individual cases, but florists can get a feel for what customers want with minimal risk.”
 
Toprak Alpsoykan, marketing manager for SAKSCO Gourmet Basket Supplies, in Mississauga, Ontario, Canada, says his company also offers assortments as well as smaller case sizes. The minimum order is $100, but on larger orders, SAKSCO offers free shipping.
 
Diane Dennison, sales and marketing manager of the components division for Dairyfood USA, Inc. (formerly Lactoprot USA), in Blue Mounds, Wis., says her company’s one-case minimums also include free shipping. Look for a full line of shelf-stable cheeses and complementary gourmet and bath and body products.
 
the rewards of ready-mades
Recently, Apex has added some ready-made baskets to its line, which Ms. Obernauer says may provide less profit than custom creations but are great during busy times. “Florists who carry ready-mades won’t have to turn down orders on busy holidays,” she explains.
 
Peter McBride, president of Towers Flowers of North Babylon in North Babylon, N.Y., says that ready-mades can be just as profitable. “We realize a 40 percent markup,” he shares. “That may not seem like enough; however, with the savings from labor, waste and speculating, the margin often beats our core floral products.”
 
Ninety-five percent of the 713 gift baskets that Towers Flowers sold last year were ready-made, supplied exclusively by Gift Fulfillment Services, in Deer Park, N.Y. Most were either picked up or delivered locally, although Gift Fulfillment offers shipping direct to recipients. According to Mr. McBride, best-sellers are the chocolate baskets and gourmet mixes, mostly priced in the $55 to $75 range.
 
Towers Flowers promotes the ready-made gifts on its Web site, and staff suggest them to callers. “We direct customers to our site so they can see what they’re buying,” shares Mr. McBride. He also promotes the products with brochures purchased from Gift Fulfillment, but most effective is the in-store display. “Our customers with in-store displays definitely sell the most product,” assures Gerard Candeloro, president of Gift Fulfillment Services.
 
To get started, both Mr. McBride and Mr. Candeloro recommend a selection of six or eight baskets. Mr. McBride carries gourmet baskets appropriate for both sympathy and get-well expressions as well as gifts for parents of newborns. Mr. Candeloro concurs, saying that gourmet baskets are the company’s best-sellers; baby baskets are second. Wholesale prices range from $10 to $150.
 
Another of Gift Fulfillment’s customers is Arthur Conforti Jr., president of Beneva Flowers & Gifts, Inc. in Sarasota, Fla. At his shop, 75 percent of gift basket sales are ready-mades. Although most are ordered via the shop’s Web site and shipped to recipients, Mr. Conforti also relies on his in-store display to promote products.
 
He recommends starting with a dozen ready-made offerings, half of which should be suitable for birthday greetings. “It’s our best-selling occasion,” he notes. Beneva Flowers applies a double markup plus $10, which helps cover the costs of marketing.
 
“It’s the best way to get started,” Mr. Conforti suggests. “You can’t get hurt with ready-mades.” Most offer a shelf life of three to six months although some are less, but he says they’re easy to sell, and spoilage is never a problem.
 
Larry Johnson, executive vice president of FTD Member Services, agrees, adding that many FTD members sell its WebGifts line from their Web sites with no need for inventory. And if their sites are hosted by FTD, “they automatically have new products posted as an added benefit,” he mentions. Suggested retail price for FTD WebGifts ranges from $19.99 to $149.99, not including shipping.
 
At Gift Basket Drop Shipping, in Cape Girardeau, Mo., wholesale prices range from $10 to $90, and with a minimum five-piece order, owner Sandra Dansby says the company will “create just about any type of gift as long as we already stock the components.”
 
consider carrying both
Mr. Conforti makes approximately 25 percent of his baskets to order, which often offers him more options for customizing and personalizing the gifts. Likewise, Shirley George Frazier, gift basket expert, author, speaker and founder of Sweet Survival/GiftBasketBusiness.com, in Paterson, N.J., says most gift basket retailers do both, offering items tailored to meet customers’ and recipients’ specialized needs and filling in with ready-mades, especially during the holidays.
 
persuasive promotions
Retailers and suppliers alike agree that, ready-made or custom, visual in-store displays have a powerful effect on sales. In addition, because many florists sell by phone, staff must recommend baskets as options, and inclusion of gift baskets on Web sites is a must.
 
Most manufacturers and suppliers, of both component items and complete gift baskets, offer tools to help with product promotion. Some provide downloadable images from their Web sites, and others provide imprintable catalogs, brochures and postcards for mailing, usually for a nominal fee.
 
Everyone agrees that the key is making your gift baskets known to clients, both traditional and corporate, and, as Mr. McBride at Towers Flowers points out, there’s no need to “fret about cannibalizing existing floral sales. The vast majority of our sales are from people who want to purchase fruit baskets, not flowers.”
 
So whether you choose custom-made, ready-made or a mix of both, the message from these retailers and suppliers is clear: you can earn more money and make new customers with gift baskets. And now, before the holidays, is the right time to get started. 
 
Contact Contributing Editor Shelley Urban at surban@embarqmail.com.


 


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