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Profit vs problem: Is creating a gift box worth the gamble?

  • News
  • December 6, 2018
  • Courtney Devereux
Profit vs problem: Is creating a gift box worth the gamble?

As Christmas rolls around the corner at an ever-increasing rate, we’re seeing more and more ploys to get consumers attention. The latest craze is gift boxes, little parcels of pre-packed convenience that can make a healthy margin for the creator. Here we’ve collected some of the best and weirdest gift boxes to get you inspired for the holiday seasons and what you need to start your own.

Gift boxes can often be a gamble when it comes to value. A hefty ‘convenience fee’ can deter people, for example when a gift box with an inner retail value of around $30 is marked up by over 100 percent. And swift backlash can occur when consumers feel like they've been ripped off, leading to pages being shut down and even an investigation from the Commerce Commission. 

But there are some around that combine the best of value, and the ease that comes with not having to shop or package your own goods. A lot of consumers these days are fulled by the ease of which they can purchase something and have it delivered ready to go, and now retailers can now tap into that desire by offering a more complete package. 

As a retailer, a gift box may be a good thing to add to your offering, a few select goods packaged nicely can make the world of difference for customers looking for a quick fix. But what makes a good gift box, does it go beyond just chucking a few items into a box and marking up the price? 

Below are some examples of some successful boxes that prove the move to boxing is easy, yet must still be done with an air of respect for the products and more importantly, the customer. 

Spoil Me gift boxes:

If you can think of an occasion, Spoil Me has a gift box to suit it; from night caps, groomsmen, new babies, romance to night picnics. Artisan products are selected and packaged in a healthy modern looking box then shipped to your front door.

Spoil Me’s wide range is exciting to browse through, and their options for pricing limits mean anyone can get involved.

However, I would suggest going in with a plan of what you’re looking for or who you’re buying for, so many options can get overwhelming very quickly.

Night Cap gift box

Edible Blooms:

Over-saturated would be a understatement to describe how many edible gift boxes have come into our market recently. Boxes full of doughnuts and lose chocolate bars took to Instagram to promote their sweets.

Unlike these other sweet-boxes, with Edible Blooms there is an amount of craft involved rather than chucking prepackaged goods into a box, making the box seem slightly more special.

Handmade donuts and carefully structured chocolate bouquets look and feel the part. Some of the items are at a higher price point, but the effort that has gone into its construction will be reason enough why. Edible Blooms is a good example of how a higher price point is acceptable when the effort is shown to be done.

Box Smith:

Similar to Spoil Me, Box Smith pushes a wide range of boxes for every occasion. Breaking categories down into person, price and occasion makes traversing the site easy. Box Smith offers more obscure boxes, like ones for soap lovers, cheese enthusiasts and wellness junkies.

What this site shows us is that you can find a box for the most random of interest and they’ll do the rest of the work.

Dessert Box Set

Sweet Box NZ:

There are pros and cons to pre-made ‘sweet boxes’, with food often struggling to travel well or looking like what is described within the photo. Yet it is still a safe option as you’ll struggle to go wrong with gifting sweet edible boxes. However make sure that any unpacked food follows proper handling and delivering regulations. 

Sweet Box has a more reasonable price point than others, but still charges a convenience fee for delivery and putting the items together, but labour costs are nothing new.

Should you make your own?

Gift boxes are a great way of curating items you think your consumers would like, while also getting to stack labour fees on top of what you’re probably already selling. As long as your product is packaged well, has a certain reasonable value and is moderatly ‘instagramble’ then is hard to operate at a loss.

Using Alibaba as a popular stocker for bulk products, let’s have a look at what you’d need per gift box and how much it would cost on average.

The Box: On Alibaba for an average of a classy looking magnetic folding box, it averages around NZD$3 per box. They can come in a range of colours, but be aware Alibaba often comes with a minimum limit of purchase.

The stuffing: Averages around 0.04 cents per roll. Optional colouring, depending on box size you’d most likely use one to two rolls. 

Ribbon: Although an optional expense, ribbon comes in at 0.06 cents per yard. And is a nice touch for some of the priceyer gift boxes.

Customisable thank you cards: An essential part of gift boxes is the customisable thank you cards that customers can send messages on, as most boxes will be for other people. A higher price point at $3.50 per card, they’re definitely a must have for that modern sleek look.

Total: Rounded up to $7 per creation of each gift box. 

On top of this retailers can charge labour fees and delivery fees, meaning a gift box can usually result in a healthy profit for minimal effort.

Retailers must keep in mind that although the gift boxes can be an easy way to make a bigger margin on the same products, consumers will know when they are being undervalued. 

So making sure the gift box is something worth it for value, as well as being something exciting to purchase and receive, is key in creating that good customer experience. 

​ ​

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