Q: Hi Alice. First let me thank you for the great online letters you send out.

My question: I would like to start my own gift home based gift basket business, but I think the overhead to keep all the products is going to be overwhelming. Can you tell me what should I do? Don’t think I like the drop shippers too much……..Help!!!!!!!!

A: First, let me say thank you for our kind comments. I’m always glad to hear that my advice is helpful and is pointing you in the right direction.

You definitely have a big decision ahead of you for a number of reasons:

1. The online gift basket industry is HUGELY competitive.

2. There is a lot of overhead involved with gift baskets, particularly if you aren’t selling in large volume.

3. If you’re doing business from home, make sure you have space for all the materials and space to work or you’re home will be overtaken by boxes, ribbons, baskets and cellophane!

4. If you are going to create your baskets, you will likely spread yourself too thin. You’ll be the marketer, the manufacturer, the shipper/receiver and so forth. That’s a lot to handle in one business.

I would recommend you get your feet wet before jumping right in. Again, the industry you’ve chosen is extremely competitive. I’d start by building a mailing list, joining some affiliate programs and see what kind of response you can get. At this point, I might not bother with dropshippers either because you’re just trying things out.

(For help with affiliate marketing, click here)

If you start seeing success and have a list of interested in gift basket buyers, you might consider selling your own products. Have a look at the numbers and see what kind of profit margin you’ll be seeing. You might find that taking into account all your labor in designing your own baskets (or paying an employee to help you with that), the profits and effort isn’t worth it. It might be better to stick with delivering great gift-giving information to your readers and making nice commissions without all the hassles of fulfilling orders.

If you want to add products, you might consider information products. As you get to know your market, you’ll know what they want and you can deliver it.

(For help with information products, click here)

I’m a bit biased in my advice, obviously. Not because I happen to have courses in affiliate marketing and information products, but because I believe in maximizing your profit and avoiding the following:

- Working outrageous hours
- Doing “on the job” market research (i.e. joining affiliate programs, building a list) before jumping in completely.
- Working with a huge overhead when you don’t have to
- Letting your business take over your living space with inventory and supplies

I’m all about working smarter, not harder. Make sure the market you want to move into is the right one for you BEFORE you pass the point of no return or worse yes, major financial debt if it doesn’t work out.

To learn about online marketing, sign up for my Internet Marketing Sweetie course.