Informal Partnerships

 

An informal partnership is an agreement between you and a gift basket company. The gift basket company agrees to provide ready-to-ship designs that you sell to your customers in exchange for a percentage of the profits.

Although this agreement is informal, you should both sign a written agreement spelling out the responsibility of each party and the details of the money transactions. Unlike more formal arrangements, there is usually no minimum number of baskets you must sell in any given period of time nor penalty for failure to meet a sales quota.

 

Before entering such an agreement be sure to research the company, examine their designs, and most important, ensure their professionalism.

Informal partnerships can take on different forms.

1. Consignment

The gift basket company delivers a set of gift baskets to your store or office where you display them. When your customers buy them you keep a percentage of the sale, usually 20%, and send the remainder to the gift basket company. The advantage of this arrangement is that you don't have any out of pocket expenses. The disadvantage is that the gift basket company sets the retail price.

2. Purchase

You purchase a set of gift baskets at wholesale from the gift basket company and display them in your store. When the customers buy them you keep the profits. The advantage of this arrangement is you can set whatever retail price you want, and you keep all the profits.

3. Website Sales

a. Select 3 to 5 of a gift basket company's most popular designs.

b. Place photos of these on your website and in your brochure.

c. Order baskets from the gift basket company as you receive orders from customers.

d. Pay the cost, but keep your percentage, usually 20-30%

e. The order is shipped to you so that you can ship or deliver it to your client. If the gift basket company handles the shipping for you, this is called drop shipping.

Informal partnerships enable you to offer gift baskets to your customers without stocking inventory, creating the actual designs and warehousing finished creations. Although you may be able to have input on the designs, you often have little control on the details of the contents and their arrangement. Your company's credibility and reputation is riding on the level of professionalism of the gift basket company you select.