On a warm and sunny afternoon, you’re shopping at Costco, Walmart, or another large retailer or warehouse club.
You stroll up and down the aisles, stopping to browse books, inspect luggage, and sample those new chicken patties. Your last stop is the meat case located in the back.
You glance to the left and see a new assortment of shish kebabs, but something across the aisle catches your eye.
No – it couldn’t be – gift baskets filled with baby bibs, blankets, and toys; more baskets with cookies, biscotti and chocolates; and still more with gardening seeds, tools, and supplies just in time for spring or fall planting.
Worst yet, your heart sinks when you see the low prices.
Suddenly, the shish kebabs don’t seem so savory, and you leave the club empty-handed, dazed and depressed, wondering:
“How can I compete with that selection and cost?”
Competition comes in all shapes and sizes. However, there’s something you must understand and remember every time you pass a store selling what you make:
Every store that sells gift baskets is is not your competitor.
There are designers who live in your area and possibly on your same street. They are your direct competition, the ones you must watch closely. Their businesses are the same size as yours, and they cater to the same people and businesses. Make no mistake – they are after the same clients you have and want to serve. They struggle with the same problems that you want to solve or haven’t yet experienced.
In addition, there are retailers that sell gift baskets. This group, with recognizable names such as Macy’s, Home Goods, and Costco, are indirect competitors. Their inventory is composed of thousands of products, including gift baskets during special occasions and the holiday season.
Indirect competitors sell cookie-cutter gift baskets, the kind that look alike. Indirect competitors don’t deliver and won’t let you customize anything. You like it, you buy it, end of transaction.
The next time you’re rattled when seeing another store selling gift baskets, ask yourself:
1. Do my customers buy look-alike baskets, or do they prefer gift basket designs that are personalized by theme, color, and style for a special person?
2. Does the retailer save customers’ time by taking orders to ship gift baskets, which is what I do, or do customers drive to the store, purchase a gift basket, buy shipping supplies, wrap and label the gift basket for shipping, drive it to UPS or the postal service, pay for postage, come back home, and collapse from all of that work?
3. What are the customer service differences between the retailer and me? Do they send a thank you note after each purchase with a photograph of the chosen gift basket as I do after every order?
You’ll find more tips and advice about the competition in the industry’s best-selling book, How to Start a Home-Based Gift Basket Business.
Don’t let the indirect competitors’ retail pricing fool you. The buyer in charge of these purchases buy for hundreds of stores within the chain. When you start ordering merchandise to fill hundreds of stores, along with leasing space the size of football fields and hiring thousands of workers, then you can also price your gift baskets in the same manner as they do.
Until then, keep your eyes on what’s happening with the direct competition in you area. She’s just down the street making a gift basket for a client that ought to be yours.
Now, go back to the club and get ideas for your baskets by inspecting theirs. Don’t forget to buy the shish kebabs to celebrate all of the new business you’re about to get.