Running a gift shop sounds like a dream job, and for many it is. But remember this is a business and not just ‘playing shop’. Ask yourself the following questions before you invest…
Are you broad-minded?
The idea that you might actually get paid to indulge your passion for presents is an exciting one for any potential gift-shop owner.
But beware - your idea of stylish, sweet or beautiful may not be for everyone. Whilst niche gift shops that depend on the specific tastes of their owner may have a strong image, the ones that do really well have a wide range of style throughout all their stock.
From homeware to jewellery, children’s toys to toiletries and clothes - a broad selection is needed ensure each customer will find that perfect gift.
There will likely be a lot of trial and error in sourcing stock that shifts, so if you are buying a gift shop and have a whole new vision for its products - factor in a year or two before you hit a winning combination.
Are you in the right spot?
The above being said, your local demographic will affect what stock sells well.
If you are in a trendy London suburb with lots of young families, you can afford to stock more cutting edge designs, designer baby-wear and kooky art prints.
However, in a rural hub, you might want to steer towards the shabby chic/country kitchen market.
It’s also vital that your gift shop is in an area where there is a lot of footfall (a shopping centre or high-street) or in a densely populated residential area; preferably with some wealthy properties nearby.
Do you like holidays?
By this, we mean holidays in the all-American sense. Of course, you like going on holiday…but you won’t be doing too much of that if you’re running a gift shop - at least in the beginning.
This is a six, possibly seven, day a week job and until you are doing well enough to hire staff to run the shop for you, you will be tied to the till.
And holidays will be your bread and butter. Christmas, Valentines, Easter, Halloween, Mothers/Fathers days will mean increased custom and a stock re-shuffle.
You will need to make sure you’ve got in enough baubles, decorations, heart shaped chocolate boxes, spooky masks and ‘No.1 Mum’ mugs to cater to each of these busy periods.
How are you with numbers?
Gift shops’ profit margins depend on the percentage markup they can afford to apply to the goods on offer.
In busy tourist areas, the mark-up on your knick-knacks can be over 50% but if you are competing with a hyper-market up the road, you may have to knock your profit margins right down.
Bear in mind that if you are in an affluent area and can hike your prices up, you will probably be paying a premium in rent.
Careful attention to balancing the books is essential, as is keeping an eye on the wider economy. People may be willing to pay £20 for a scented candle in boom times, but if a recession hits, you may have to change your tactics.
Put the candles in the window at £14.99 to get customers through the door, and you may get some extra impulse buys off the back of it!
Are you precise?
Running a successful gift shop means keeping an immaculately managed inventory.
You will need to keep a careful record of all your stock – be it bought out-right or on consignment – and log each sale of any given product.
This will not only let you know what needs re-ordering, but also what is doing well, sales-wise, and what you need to cut from your selection.
The popularity of gifts are more prone to trends than other consumables, so you may well be changing your inventory on a regular basis.
Do you have spacial awareness?
It may sound obvious, but managing the space of a gift shop is vital to its success.
Cleverly built displays and shelving systems can not only add to the aesthetic of your shop, but will maximize the space you have, meaning you can fit more stock in and offer your customers the widest choice possible.
However, good shop display also means not cluttering the space, which can lead to a stressful shopping experience.
There is a fine line between presenting your products in their best light and keeping enough on the shelves to satisfy an undecided browser.
Do you have aesthetic skills?
The exterior design of your gift shop will play a large part in whether someone will cross the threshold.
Whereas a newsagents doesn’t really need to have a pretty façade to encourage someone in to buy a newspaper and a kit-kat, the external image of the gift shop will give a good indication of what might be on sale and should flirt with customers from across the street.
Similarly, your displays should be creative and eye-catching: many inventive shop-owners will use props such as tree branches to display jewellery or create mini domestic scenes in the window to place their homewares in.
Pretty wrapping and packaging will also add to the attractiveness of your brand, as will a well-designed web-site.
Do you like travel?
Some gift shop owners like to take advantage of the profit margins available from buying very cheap goods abroad and selling them to a far wealthier market at home.
You could, if so inclined, punctuate your year with trips to markets in Spain, North Africa, India or Thailand sourcing cheap jewellery, baskets, bags, wall-hangings or trinkets.
You will need to be aware of potential import/export taxes, customs regulations and associated risks, but there are a wealth of unusual artisan products abroad that your local UK customers would be willing to pay a premium for.
And, though you’re not exactly on that holiday you are dreaming of - it could be the next best thing.
How are your bartering skills?
Whether you are haggling in an Andalusian market for hand-woven table-mats, or on the phone to your UK supplier of phone-cases, there will always be room for negotiation.
And it’s your bank-balance at stake. Whatever price you buy your goods for has to allow for a mark-up that will seem affordable to your customer, and also leave you with some kind of profit.
Are you a sales-person?
A customer is wandering aimlessly through your shop. How do you ensure they leave with a gift? Never be afraid to ask if they need help and then bring out your sales skills.
Ask them what the person they are buying for is like, make a few suggestions, and above all: be friendly. With a little gentle cajoling, your customer will likely make a purchase.
And always compliment them on their choice – it will give them a positive association with your shop and encourage repeat custom.
Buying a gift shop? Sign up for a BusinessesForSale.com account to receive priority listings, as well as the latest gift shop advice and features directly to your inbox!