Retail Gift Basket Sales Tips
22/11/09 14:10 Filed in: Success Scoop
On a consulting trip a couple of years ago, a retailer told me that their number one problem was ‘labor and cost drain’ from making gift baskets for walk-in store customers. The retailer allowed customers to select any assortment of merchandise from the store, then request that those items be packaged into a gift basket. The problem, according to the retailer, was that he couldn’t make money on the gift baskets.
“Are you charging a labor and design fee? Or a packing fee?” I asked.
“What’s that?” came the reply.
In his answer was the solution to the problem. He couldn’t make money on gift baskets because he wasn’t charging for the gift packing service. When advised to add a 20% - 30% fee, he voiced concern, thinking he would lose sales. The free service was very popular with his customers.
To resolve the problem, I suggested two possible ideas that he might implement:
1. You-Pack boxes (ready to ship boxes with excelsior, bubble wrap, and shipping tape available to customers). Customers who still want the free service could wrap jellies and jams in bubble wrap, and pack other non-breakables in a ready-to-ship box. Excelsior straw could be put out in the boxes, and customers could arrange items in the straw. The boxes, instead of being free, could have a $2 - $3 price to cover the cost of shred and bubble wrap.
2. Baskets and other more design-oriented boxes/baskets could also be placed in stacks near the items most often selected by customers (in this store -- regional foods). Each basket could be priced high enough to cover the design and packing fee. A basket that might normally sell for $2, and hold an average of $20 in retail items, could be priced at $5 or $6 to cover the cost of the packing.
On the surface, customers would not be charged a design and packing fee. The retailer, of course, would reap an extra 20% - 30% from the padded prices added onto the containers.
Last week I called to inquire about this retailer’s gift basket sales this year. “Great!” he replied. He reported that customers were selecting fewer components, but expressing no concern at all about the prices on containers and boxes. “I’m finally making a profit,” he enthused, thanking me again for the advice last year.
Take the free advice and apply it to your gift basket store policies. You’ll make even more than this gentleman because you don’t have to pay the consulting fee!
“Are you charging a labor and design fee? Or a packing fee?” I asked.
“What’s that?” came the reply.
In his answer was the solution to the problem. He couldn’t make money on gift baskets because he wasn’t charging for the gift packing service. When advised to add a 20% - 30% fee, he voiced concern, thinking he would lose sales. The free service was very popular with his customers.
To resolve the problem, I suggested two possible ideas that he might implement:
1. You-Pack boxes (ready to ship boxes with excelsior, bubble wrap, and shipping tape available to customers). Customers who still want the free service could wrap jellies and jams in bubble wrap, and pack other non-breakables in a ready-to-ship box. Excelsior straw could be put out in the boxes, and customers could arrange items in the straw. The boxes, instead of being free, could have a $2 - $3 price to cover the cost of shred and bubble wrap.
2. Baskets and other more design-oriented boxes/baskets could also be placed in stacks near the items most often selected by customers (in this store -- regional foods). Each basket could be priced high enough to cover the design and packing fee. A basket that might normally sell for $2, and hold an average of $20 in retail items, could be priced at $5 or $6 to cover the cost of the packing.
On the surface, customers would not be charged a design and packing fee. The retailer, of course, would reap an extra 20% - 30% from the padded prices added onto the containers.
Last week I called to inquire about this retailer’s gift basket sales this year. “Great!” he replied. He reported that customers were selecting fewer components, but expressing no concern at all about the prices on containers and boxes. “I’m finally making a profit,” he enthused, thanking me again for the advice last year.
Take the free advice and apply it to your gift basket store policies. You’ll make even more than this gentleman because you don’t have to pay the consulting fee!