May
21
It’s been 15 years since an aspiring designer posted a message on the former AOL gift basket board asking, “If I put $21 of products into the basket and sell it for $25, am I making a profit?”
Experienced designers immediately told her that such a pricing structure would land her in the poorhouse, and that’s still true today. Everything has increased in price, and it’s critical that you ensure your profitability whether you’re just starting to make gift baskets or are in your 10th year of business.
Profitable pricing has always been a big issue for designers, and because increasing the bottom line is the No. 1 priority, the formula used to calculate costs is continuously reviewed.
Tripling the wholesale cost of the entire gift basket design is the industry standard, but it’s time to make changes. For example, if your completed design wholesales for $20, consider setting a minimum $50 retail price for the gift. Add two latex or Mylar balloons, and the price increases to $55.
Another cost to adjust now is shipping and deliveries. The latter was recently discussed. Calculate the cost of shipping supplies per order and the price of driving to the shipping facility or having the basket picked up.
Review all costs to ensure that your business is run like a well-oiled machine rather than a non-profit organization. If you have to ask, “Am I making a profit?” you probably are not.
Do you buy nested baskets? This breakdown will ensure that you price them the right way.
Comments
Leave a Reply
