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 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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