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How To Start A Gift Wrapping Business

How To Start A Gift Wrapping Business

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How To Start A Gift Wrapping Business

How To Start A Gift Wrapping Business

The idea of unwrapping a gift is almost as exciting as the gift itself. The anticipation, the mystery, and the joy of revealing a surprise – it all begins with how the gift is presented. And what better way to tap into this emotion than by starting a gift wrapping business?

If the thought of turning paper, ribbons, and embellishments into beautiful packages excites you, this guide is for you. We’ll provide an in-depth look into the industry, steps to get started, and answers to common questions.

Business Overview

A gift wrapping business wraps gifts for customers and sells wrapping paper with creative designs and other gift wrapping accessories.  Some professional gift wrappers operate inside department stores, while others may be kiosks in a mall or even a retail shop.  Customers pay for the paper and the wrapping service.

In addition to wrapping services, some businesses host workshops where customers can learn the art of gift wrapping. This serves a dual purpose: it’s an additional revenue stream and also a fantastic marketing opportunity.

For creative entrepreneurs, gift wrapping allows you to turn your artistic talent into a flexible small business. Focusing on custom designs and excellent customer service are keys to standing out.

Industry Summary

The gift wrapping industry has shown remarkable resilience over the years. With the rise of e-commerce and the convenience of gift cards, one might assume that traditional gift wrapping would wane. However, the opposite has been observed. As e-commerce platforms offer gift wrapping services, the demand has only grown. Additionally, occasions like birthdays, anniversaries, weddings, and holidays keep the need for gift wrapping perennially high. In essence, as long as people give gifts, there will be a demand for wrapping them beautifully.

Exact figures for the gift wrapping industry are hard to pin down as most businesses in this industry tend to be very small and privately owned. One report shows that total sales were $19.5 billion in 2021 and are expected to reach $32.3 million by 2030.  

It is worth noting that professional gift wrapping services are sensitive to economic fluctuations because when people spend less money during economic downturns, they will turn to DIY.

Target Market

The target market for a gift wrapping business can be quite diverse, as it primarily depends on the specific services offered and the location of the business. However, there are certain demographics and groups that generally tend to make use of such services more frequently. Here are a few potential target markets:

Individual consumers: This includes people who buy gifts for occasions like birthdays, weddings, anniversaries, holidays, and other special events. Within this group, you might find that busy professionals, parents, or individuals who value presentation but lack the skill or time to wrap gifts themselves form a significant customer base.

Businesses: Many businesses give gifts to their clients, employees, or partners during the holiday season or to celebrate milestones and achievements. They may require professional gift wrapping services to save time and ensure a high-quality presentation.

Retail stores: Some retail stores offer gift wrapping as a value-added service to their customers. If they don’t have in-house gift wrappers, they might outsource this task to a professional gift wrapping business.

Event planners: Event planners often need gifts for guests or honorees wrapped in a way that matches the event’s theme. They might enlist the help of a professional gift wrapping service to achieve this.

Online marketplaces and e-commerce businesses: With the rise of e-commerce, many online sellers are offering gift wrapping options for their customers. A gift wrapping business could partner with these sellers to provide this service.

Checklist To Start A Gift Wrapping Business

Starting a gift wrapping business offers a unique blend of creativity and enterprise. However, it’s important to navigate this process with careful planning and organization.

That’s where a checklist comes into play. Our checklist will unwrap the details of the proper steps from market research, business registration, marketing and more, so that you can get started with confidence.

Step 1: Research the Market

Launching a new business, such as a gift wrapping service, without conducting thorough market research can be like venturing into the wilderness without a map or compass. Market research helps you understand if there is sufficient demand for your new gift wrapping business. It allows you to identify your target audience, better understand their needs, level of competition, and assess whether your business idea aligns with those needs.

To conduct market research for a gift wrapping business, consider these cost-effective methods:

Competitor analysis: Look at existing gift wrapping businesses or departments within large stores. Are they thriving? How are they pricing their services? What do their customers say in reviews?

Engage with local retailers: Speak to local businesses that sell gifts, from boutiques to bookstores. They might offer insights into customer demand for gift wrapping services.

Analyze regional corporate data: Estimate the number of businesses that may need branded gift wrapping for employees or clients. For better information, call and ask if they need this service.

Conduct an online customer survey: Create a simple poll for community members to identify wrapping needs.

By committing to thorough research, you’re not just taking precautions—you’re setting the stage for informed decision-making. A successful gift wrapping business is not just about the skill of wrapping but also the art of understanding and anticipating market needs.

Step 2: Register the Business

The next step in starting your gift wrapping business is to make sure it’s properly registered and legal to operate. It’s important to note, however, that the exact process can vary from state to state, so you’ll need to check the specific requirements for your location. Here’s a general guide to the key registrations:

Business structure: The first thing you’ll need to decide is what business structure is best for your business. This could be a sole proprietorship, a partnership, a limited liability company (LLC), or a corporation. Each of these structures has different implications for liability, taxes, and administrative complexity.

For gift wrapping businesses, many start as sole proprietorships due to the ease of setup and lower initial costs. However, as the business grows, transitioning to an LLC or corporation might be beneficial for added liability protection. The best structure often depends on your specific circumstances and long-term goals.

Related: Comparison of business structures

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular LLC formation services include:

IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Obtain business licenses and permits: Depending on your location, there will likely be a variety of general licenses or permits needed before opening. This could include a business license, seller’s permit, and Employer Identification Number (EIN).

Related: What licenses do gift wrapping businesses need?

Step 3: Set Up a Space

Deciding on where to operate your business is an important step in starting your gift wrapping business. Whether it’s a home-based operation, a retail storefront, a market kiosk, or even a mobile service, each model has unique requirements and preparation steps.

There are many considerations when making this choice. For example, if you decide on a retail storefront, you’ll want to consider factors like foot traffic, visibility, and proximity to complementary businesses. You might also visit other successful gift wrapping stores to gather ideas on layout, decor, and workflow organization.

If you’re considering a home-based model, you’ll need to set up a dedicated workspace that allows you to work efficiently without interruptions. And for models like market kiosks or temporary holiday spots, securing a location in high-traffic areas will be key.

Going mobile is another option, where you take your mobile wrapping station to a client’s location (typically a large company to wrap their employee’s gifts) or a downtown shopping event.

Regardless of the model you choose, preparing your location involves several common steps: designing an effective workflow, ensuring you have all necessary equipment and supplies, setting up your display and branding elements, and arranging for any necessary inspections or permits.

Step 4: Purchase Supplies

Finding the right suppliers is a cornerstone for anyone starting a gift wrapping business. The quality, variety, and cost of wrapping materials can directly influence the final product and hence, customer satisfaction. A few things to consider before purchasing supplies:

Business registration: Most suppliers will look for proof that you’re a legitimate business before sharing detailed pricing or setting up an account. Registering your business can make you more credible in the eyes of potential suppliers.

Finding suppliers: One of the unique issues a gift wrapping will face is managing supplies. Since customers are most likely to use a gift wrapping service during holidays, having the right amount of inventory is important. Otherwise, you risk holding on to supplies until the following year.

For bulk purchases, use search engines to find potential suppliers. Websites like Thomasnet, American Retail Supply, and OneCoast can provide a good starting point. Many distributors have minimimum order quantities (MOQ) or shipping costs can be high for some products, so be sure to factor these into your pricing.

While the pricing is better when purchasing in bulk, you may not need or want to order such a large amount starting out. In either case, having a reliable source locally is important, and craft stores are usually an excellent place to find wrapping supplies. In addition, you can reach out to other businesses in the industry and ask for their recommendations or join industry forums or online communities for advice.

Step 5: Set Pricing

Determining pricing for a gift wrapping business is a delicate balance between covering costs, offering value to customers, and ensuring profitability. Here are some tailored tips to assist in figuring out how much to charge:

  • Factor in all costs: Materials, labor, overhead. Estimate the average time and supplies each wrap design requires.
  • Charge by dimensions not gift value: Base pricing on the size of the box/item. Simpler for customers.
  • Offer package tiers: Basic, deluxe, and premium with increasing prices based on extra materials, embellishments, and complexity.
  • Price rush orders higher: Consider charging 50%+ more for same-day or quick turnaround wrapping.
  • Bundle offerings: Offer discounted rates for high-volume corporate clients or multi-item gift basket assembly.
  • Compare competitor prices: Research local wrapper rates but don’t undercharge. Before using the pricing of the competition as how much you can charge, factor in all costs to make this is sure you can still make a profit.
  • Increase prices for specialty items: Charge more for odd shapes, fragility, oversized, etc. that take more time.
  • Avoid hourly pricing: Packages priced individually are easier for customers to understand and more profitable for you.

Step 6: Begin Marketing

Opening a gift wrapping business requires a marketing strategy that taps into the needs and desires of potential customers, creating awareness about the unique value your service offers. Firstly, leveraging the power of social media platforms, especially visual ones like Instagram and Pinterest, can significantly boost your reach. By posting high-quality images and videos of your wrapping designs, techniques, and before-and-after transformations, you can engage and inspire a broad audience. Furthermore, utilizing targeted ads on these platforms can help capture the attention of specific demographics, especially during festive or gift-giving seasons.

Secondly, consider collaborating with local businesses, such as gift shops, bookstores, and boutiques. These partnerships can allow you to provide on-site wrapping services or offer exclusive discounts to customers of these establishments. By doing so, you directly tap into a customer base that’s already in the mindset to buy gifts.

Email marketing, although traditional, remains a potent tool. By collecting email addresses (easier after you have been in operation for awhile) and sending out newsletters showcasing new designs, seasonal specials, or wrapping tips, you can stay top-of-mind for your subscribers. It’s also an avenue to announce loyalty programs or referral discounts.

Last, becoming a member of your local Chamber of Commerce can foster connections with other business owners and professionals in your community. This not only provides opportunities for partnerships but also gets you invitations to local events or fairs where you can set up a booth, offer live wrapping demonstrations, or distribute promotional materials to generate interest.

With the right mix of both online and offline marketing strategies, your gift wrapping business can establish a strong brand presence, attract a steady flow of customers, and achieve lasting success.

Related: Low-cost ideas to market a new business

Step 7: Prepare to Launch!

Starting a gift wrapping business involves several steps to ensure the smooth running of your venture. Every business is unique, so these steps might vary based on your specific situation and needs. Here are some additional considerations and steps you might need to take:

Obtain business insurance: This is important to protect your business from potential risks. General liability insurance can shield you from claims in case a client’s item gets damaged during the wrapping process, while property insurance can cover damages to your inventory or equipment..

Set up bookkeeping: Having a system to track income, expenses, and profits will make tax time more manageable and provide insights into the business’s financial health. Consider using software like Wave Accounting (FREE) or Quickbooks tailored to small businesses.

Open a bank account: A separate business bank account helps keep your personal and business finances separate, making tax time less stressful.

Accept credit cards: Accepting credit cards can make it more convenient for customers to pay for your services. Consider using services like Square or Stripe for processing credit card payments

Greg’s Tip: Hosting workshops or online tutorials can serve as both a revenue stream and a marketing strategy.

Greg's Business Tip

Common Questions When Starting A Gift Wrapping Business

How much does it cost to start a gift wrapping business?

Starting a gift wrapping business is often viewed as a relatively low-cost venture, especially when compared to other types of businesses. However, potential entrepreneurs should be aware of all the costs involved to make informed decisions.

Based on industry averages and insights, the initial costs to start a gift wrapping business typically range between $1,000 to $10,000, depending on factors such as location, scale, and business model.

Supplies: The primary expenditure for a gift wrapping business will be supplies, which include gift wrapping paper, tissue paper, ribbons, bows, boxes, tapes, scissors, and embellishments. Initial stock might cost between $500 to $2,000.

Equipment: You might need tables, chairs, cutting tools, and other equipment for your wrapping station. If you don’t have these, expect between $100 to $1,000, if buying new.

Licensing and permits: While the cost can vary based on location, securing the necessary licenses and permits often range from $50 to $400.

Location: If not operating from home or a mobile setup:
Retail storefront: Security deposit and first month’s rent could range from $1,000 to $5,000, depending on the location.
Market kiosk: Initial rental could be around $300 to $1,000.
– Temporary spots or shared spaces: $100 to $500 for initial setup.

Marketing: Initial marketing endeavors, such as a logo, website, flyers, social media ads, or local promotions, could range from $100 to $1,000.

Miscellaneous: There could be other costs, such as shelving, storage solutions, or decor, ranging from $100 to $500.

While these are the main costs involved in starting a gift wrapping business, it’s important to note that the actual amounts can vary widely based on your specific situation and location.

How profitable is a gift wrapping business?

The profitability of a gift wrapping business can vary widely based on factors such as location, business model, client base, and efficiency. However, we can provide a rudimentary breakdown to give an idea of potential profit.

Let’s begin with revenue:

Gift wrapping businesses can generate solid part-time or full-time incomes depending on the owner’s scale and efficiency. Industry data shows the average wrapper completes 4-6 standard sized packages per hour at an average price of $7-$10 each. This equates to $28-$60 in revenue potential per hour.

Working a 25 hour week for 50 weeks annually, a solo wrapper wrapping 5 packages per hour at $8 each would produce annual sales revenue of $50,000.

Then we have expenses:

Estimated annual operating expenses, including materials, marketing, insurance, and transportation, might conservatively total $15,000.

That results in an estimated annual pre-tax net income of $35,000 for a solo owner initially. There are opportunities exist to grow revenue through corporate contracts, add-on services, holiday rush pricing, and managing other wrappers.

Keep in mind though, these numbers are hypothetical and could be much higher or lower based on various factors, especially as many gift wrapping businesses operate only during peak gift giving seasons.

What skills are helpful in running a gift wrapping business?

Running a gift wrapping business requires a blend of creative, technical, and business skills to ensure its success. Here are some of the key skills that can prove useful:

Creativity: This is essential in designing unique and aesthetically pleasing wrapping styles. An eye for color coordination, patterns, and themes can set your service apart.

Technical proficiency: The ability to execute neat folds, firm creases, symmetrical bows, and other wrapping techniques is crucial. This ensures the final presentation of the wrapped gift is of high quality.

Customer service: Excellent interpersonal and communication skills help in understanding client preferences, addressing concerns, and ensuring customer satisfaction.

Organization: Inventory management, scheduling appointments, and tracking orders demand good organizational skills. This helps in streamlining operations and reducing errors.

Marketing and branding: In today’s competitive landscape, skills in promoting your business, whether through social media, local advertising, or other marketing strategies, can be a significant advantage.

Sales skills: Being able to upsell premium wrapping materials, accessories, or additional services can boost revenue.

Budgeting and finance: Understanding the costs of materials and operations, setting appropriate pricing, and managing finances is essential to maintain profitability.

Time management: Especially during peak seasons, efficiently managing time to accommodate the maximum number of orders without compromising quality is vital.

Combining these skills with passion and dedication can lead to a successful gift wrapping business that stands out in the market.

What is the NAICS code for a gift wrapping business?

The NAICS code for a gift wrapping business is 561910, which is categorized under Packaging and Labeling Services.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code and how to find yours

How To Start A Gift Wrapping Business

How To Start A Gift Wrapping Business

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