Your Guide to Quality
Gift Basket Supplies!

Gift Basket Supplies for the discriminating Business Owner coming Soon!
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A Comprehensive Listing of Sources for the Gift Basket,
Floral, Balloon & Party Industries
with a Guide to Making Cost-Effective Vendor Choices.

A NOTE TO THE READER

In any case where the information provided is incomplete, every attempt was made to place the company in the correct category and to list all types of products supplied by the source. Brand names are not listed - as the purpose of this guide is not to recommend a particular supplier or product, but to provide gift professionals with a selection of sources from which they can select those appropriate to their specific operation.

All companies are listed alphabetically by name in their major product category/categories. Minimum requirements, terms and FOB have been listed only if the source has provided that information to Baskets of Dreams and may be changed at any time, at the supplier's discretion. An attempt has been made to identify whether each company operates as a manufacturer, distributor, wholesaler, manufacturer's rep or retailer.

As owner and operator of a gift basket studio since 1989, as well as a cost control consultant with over 14 years as a purchasing professional, I felt an urgency for a source guide that provides a more complete view of the sources available to the gift industry.

I have attempted to combine my experiences as an entrepreneur in the gift industry and my cost control consulting knowledge to present you with the basics of making cost-effective purchases as well as a reference guide for the gift industry.

We hope you find Baskets of Dreams Source Guide both useful and informative.

TABLE OF CONTENTS

THE BASICS OF COST CONTROL

Some of you may have left an executive position with a large corporation to seek a new challenge, some are attracted to the artistic and creative nature of the business. You may be operating a retail store, a kiosk in a local mall, or a home-based business. Many gift retailers cater to a specific marketing segment ... to mail-order, consumer, professional or corporate buyers. Regardless of the nature of your particular business, your primary goal is to make a profit!

A profit is simply the amount of gain resulting from the use of capital in a transaction. In other words, it is the amount of money left after you pay your bills. There are two types of profit that should concern you. The first, gross profit, is the amount of gross receipts less the immediate cost of production (your cost of goods to produce a product). The second type is net profit, the actual amount of gain made on a business transaction or during a specific period after deducting all costs from gross receipts. When I say "all costs" I am referring to expenditures incurred, not only from the purchase of goods to manufacture your product, but expenses necessary to operate a successful business.

There are three common denominators to operating a successful business. First and foremost - you must have a plan. Secondly, you must have the ability to produce a product or service. And lastly, you must manage your operation.

This guide has been written to assist you in managing your business. Management is the ability to handle or direct those areas of a business that will accomplish your goals. Management may be broken down into four distinct areas: your people, your paper, your product or service, and your money.

With this in mind, I will attempt to explain briefly the importance of the purchasing function and its relationship to the profitability of your company. Your P&L, more commonly known as a Profit & Loss Statement (I suggest you look into this, if you currently do not have one) is normally broken down into major categories reflecting the following figures:

1) materials
2) direct labor
3) burden
4) selling expenses
5) general & operating expenses
6) pre-tax profit

In the majority of cases you will find that your material costs are your greatest expenditure. With materials totalling 40-50% of your sales figure, your inventory represents your company's largest asset investment. You may say that your number one priority is selling your product. This certainly is a concern and is necessary to create the capital from which your business is developed. However, there are costs involved in sales, whereas, cost reduction costs very little. In fact, it may be necessary to increase your sales by 200-300% in order to effect your profit as much as a 10% decrease in costs. There is no better way to affect profitability than to reduce your cost.

Which brings us to the purpose of this guide ... to provide you with the basics for making cost-effective vendor choices.

With the recent growth of the gift industry, vendors are becoming increasingly aware of the market potential. Sources are beginning to get in touch with the needs of the gift industry and are making concessions to obtain your repetitive business. They are revising their packaging for our convenience, lowering their minimum requirements and assisting us in making wiser purchases.

When browsing through this guide, keep in mind that companies listed in this directory have their own manner in which they operate their business. One of the primary goals in any business is to generate revenue. The method of obtaining this goal varies greatly among those listed. It is the responsibility of the buyer to obtain enough knowledge and information to identify and match sources to their specific needs.

With experience as a divisional buyer, cost control consultant for small to mid-sized companies and small business owner, I have found that partnerships between a source and buyer are particularly important when operating a small or home-based business. A small business simply does not have the buying power of a Fortune 500 company. Vendors elect to do business on a small scale with the hopes that your business will grow and, if adequately served, will continue to buy additional products or services from them. Your job as the manager of your business is to seek out the best sources for your size company and inventory level and continue to make a profit.

Please refer to the "Hints for Making Cost-Effective Vendor Choices" section of this guide for further information on IMPROVING YOUR PROFIT!

DEFINITIONS

any unfilled portion of an order

Bid:

a quotation or offer to sell specific goods to a prospective buyer

Bill of Lading:

a shipper's receipt for goods

Business Service:

a person or business that performs a service

Challenge Specifications:

a savings method accomplished via changing a process, method or material requirements in order to reduce costs

Carrier:

a person or organization engaged in transportation of goods for hire

Change Order:

a formal notice to supplier that a previous order is to change

Contract:

an agreement between two or more parties

Destination:

a predetermined point to which a shipment is being delivered

Distributor:

a business or person that buys products from manufacturers in large quantities and resells to customers in smaller lots

Economic Order Quantity:

the purchase quantity when ordering costs are equal to inventory carrying costs

Expediting:

any follow-up or "rush" processing of an order

Fixed Pricing:

a purchase price that is not subject to change within a specified period of time

Inventory:

the value of property on hand at a given time

Inventory Turnover:

average number of times that an item in inventory is issued and replaced each year

Lead Time:

the amount of time required from determination of the need and its receipt

Mail Order Retailer:

a retail business whose business is established by mail

Make-or-Buy:

the decision to produce an item in house or buy it from an outside supplier

Manufacturer:

a business or person that produces a product by hand or machinery

Manufacturer's Rep:

a person or business given authority to represent a manufacturer

MRO:

maintenance, repair and operating supplies

Open Order:

an order than has been placed with the supplier that has not been completed or received

Origin:

a point from which a shipment is being made; often referred to as "shipping point"

Overrun:

the quantity received from a manufacturing process that is in excess of the quantity ordered

Packing List:

shipper's document that itemizes details of the contents of a shipment

Partial Order:

a quantity shipped to the buyer that is less that those ordered

Payment Terms:

the conditions under which the buyer will pay the seller for purchases

PO:

a term used for a purchase order

Prepay Discount:

a price reduction offered by the seller in exchange for buyer paying for materials in advance of shipment

Quantity Discount:

a price reduction offered by the seller in exchange for larger orders

Quotation:

a supplier's statement of price, terms, delivery for goods or services to a prospective buyer

Retailer:

a business that is engaged in the sale of goods to ultimate consumers for personal consumption

Rush Order:

an order for material or services that allows less than the supplier's normal lead time

Scrap:

any material that no longer has value, with the exception of the cost of material

Shelf Life:

the length of time a particular product is usable

Shipping Point:

see: Origin

Terms of Sale:

the provisions and agreements of the sale that typically describe the manner in which payment will be made

Title:

something that contains all the elements to constitute legal ownership

Unit of Measure:

a unit in which the item quantity is measured

Wholesaler:

a merchant who sells chiefly to retailers, other merchants or industrial, institutional and commercial users, mainly for resale or business use

DOMESTIC FREIGHT TERMS

• FOB Origin, Freight Collect

title to goods passes when carrier signs bill of lading
seller has no obligations
buyer pays freight charges; absorbs freight charges; owns goods in transit; files all claims


• FOB Origin, Freight Prepaid

title to goods passes when carrier signs bill of lading
seller pays freight charges; absorbs freight charges
buyer owns goods in transit; files all claims


• FOB Origin, Freight Prepaid & Charges Back

title to goods passes when carrier signs bill of lading
seller pays freight charges; bills freight charges on invoice
buyer absorbs freight; owns good in transit; files all claims


• FOB Destination, Freight Collect

title to goods passes when carrier delivers shipment
seller owns goods in transit; files all claims
buyer pays freight charges; absorbs freight charges


• FOB Destination, Freight Prepaid

title to goods passes when carrier delivers shipment
seller pays freight charges; absorbs freight; owns goods in transit; files all claims
buyer has no obligations


• FOB Destination, Freight Collect and Allowed

title to goods passes when carrier delivers shipment
seller absorbs freight; owns goods in transit; files all claims
buyer pays freight charges; deducts freight from invoice

HINTS

1. Remember ... all hints provided should be considered in direct relationship to the size of your business and the occasion of your purchases.
2. Substitute less expensive material when possible without compromising your quality standards.
3. Review and change any process or method that will reduce your costs, if you are certain that it will not drive another cost up.
4. Substitute standard or more easily attainable items for special items, unless it clearly will allow you to charge more for your product.
5. Research alternative sources for any sole source items to encourage competitive bidding for purchased products.
6. Be sure you are aware of why you purchase a particular product. Do you need it? Does it give your product increased value? Will your customers buy it?
7. Obtain a minimum of 3 bids on any large volume product, highly repetitive item, or if you have experienced an annual price increase of 5% or more.
8. Evaluate your supplier's service and delivery, as well as your cost, prior to awarding a bid to a vendor.
9. Consider volume buying contracts at a lower price per unit for products that are repetitively purchased.
10. Separate products into groups of like items and negotiate fixed pricing for a period of 6 to 12 months.
11. Split requirements between two or more sources if cost-effective. Watch for minimum requirements to be sure it is to your advantage.
12. Negotiate for better trade discount, cash discount, quantity discount and payment terms.
13. Negotiate for better trade discount, cash discount, qu
ty discount and payment terms.
14. Combine subsequent requirements with current open order. In other words, add to an existing order, as opposed to processing a new purchase order and separate invoice.
15. Check last purchase price of each product prior to obtaining bids for a reorder.
16. Issue a blanket order for items with high annual volume. Generally, this means that you will make a commitment to a specified time frame and estimated volume for same period, release product as required and be billed upon release.
17. Take advantage of economic order quantity. Ask all suppliers where the next price break is. If you can use the product, buy it. Don't forget ... inventory costs money too.
18. Where a minimum order charge applies, ask if there is a fee for less than minimum (some sources have strict minimum requirements) or ask for maximum material for minimum charge to get all of that product that your money will buy.
19. If you require less than a case of a particular product, ask if there is a fee for splitting a case or if you are permitted to mix a case without an additional charge
20. When shipping any item, keep total weight of gift to a minimum.
21. Consider buying heavy items locally unless you are able to negotiate FOB: Destination - Freight Prepaid
22. Supplier selectivity is particularly important to the very small retailer and home-based operation. Consider buying from low minimum manufacturers or wholesalers in case quantity for high volume items or working with a distributor representing a number of different products.
23. Continue to work from a kiosk or home-based location until such time that your core clientele can support the costs of a retail storefront
24. Explore the possibility of purchasing equipment as opposed to leasing or renting. There are advantages to each option. If you have adequate capital available, a purchase may be in your best interest and may be depreciated over several years. A lease may be a good option for a company trying to establish a credit rating or working with a minimal capital budget. In either case, it would be wise to seek professional legal and/or tax advice before making a commitment.
25. When looking for an adding machine or calculator, determine whether or not you need printing capability, memory, large keys, large display, portablility or expanded mathematical capability. Convey your requirments to the suppplier and be sure to include the features and his recommendations on the Purchase Order. Vendors are more likely to accept a return if they have assisted you in making a selection.
26. A home-based business should invest in a reliable answering machine or voice mail service. Answering machines have a variety of features available. It is recommended that you choose a machine with a VOX option, otherwise incoming messages will be limited to a specified period of time. Another feature that is invaluable is the time/date stamp which eliminates the need for the caller to specify the time of the call. Other features include remote access, call counter, memo record (to leave internal messages), confidential memo and conversation recording. Evaluate these based on your needs. Again, convey your requirements to your vendor and they will assist you in choosing the appropriate model.
27. The first step in buying a computer is to decide what you plan to do with it. Different types of software take up various amounts of space in the computer's memory. If your memory is crowded, your computer will be slow. If you are not computer literate, you may want to seek the assistance of a trusted supplier or computer consultant to discuss your requirements before making a purchase.
28. When ordering furniture, large quantities of books, cases of wine and other heavy items, negotiate for FOB Destination - Freight Prepaid and Allowed
29. Always ask if the supplier will delivery furniture assembled or knocked down. Time is money ... and if they build it, I can assure you that it will save you a trip to the hardware store for that missing bolt.
30. Determine and list standard office supplies to carry at all times. These items are those items that are critical to your office operations. Replenish stock on a monthly basis. Any non-standard item should be considered before purchased.
31. If you spend a combined average of $50 to $100 per month in general office supplies, computer supplies, typewriter supplies and furniture, speak with an office supply representative abou t setting up an account with them.
32. Once you have qualified a supplier based on product quality and service, negotiate for fixed pricing and free delivery for your standard office supplies.
33. Office supply retailers often offer discounts ranging from 30% to 70% off the price listed in their catalog. These discounts range considerable depending upon the profit margin of the particular type of product. For example, office equipment such as calculators carry a low markup reflecting a relatively low discount of 20% to 30% whereas paper products may be able to be sold at a 60% to 70% discount.
34. Use office supply catalogs for reference only. After you have identified the part numbers of the products you would like to buy, call for pricing. Unless you have fixed pricing based on volume or total annual dollars, the prices may change regularly.
35. When obtaining competitive bids for office supplies, there's no need to fill your library with catalogs. Generally, office supply retailers buy the bulk of their inventory from the wholesaler. Since there are a limited number of office supply wholesalers providing most of the industry, the full-line catalogs are similar regardless of the company that you're working with. Simply choose an item from your current supplier's book, and call your new sources for pricing.
36. Ask to view your printer's stock logos and borders prior to investing in design services and artwork for custom designed business cards and letterhead. Assembled properly, your company will present a professional image at a fraction of the cost.
37. When your company requires over 100 copies of a single original, call your local printer for a quote on offset printing to get better quality at a lower cost.
38. The single most important piece of furniture in your office is your chair. The purchase of quality seating can save you large amounts of money in posture and health concerns. Look for a comfortable chair with a good adjustable back support, as well as, adjustable height that will accommodate both desk (30") an keyboard (26") levels.
39. Full suspension file cabinets are a bit more costly but will outlast a lower cost file by years.
40. Be certain to evaluate your insurance coverage annually to assure that you are adequately covered for general business, general liability and your product lability. If you are a home-based business, speak with your insurance company about advantages and disadvantages of adding a home business to your current homeowner's policy as opposed to a separate business policy.
41. A small investment in a good surge protector can protect your computer from power spikes and save you substantial dollars while preserving your data.
42. When purchasing books, ask about their return policy. Many book wholesalers offer a trade-in discount of 50% or more if you return books in mint condition within a specified period. why stock what you can't sell.
43. Prior to meeting with your legal or tax professional, outline exactly what you would like to accomplish during your meeting. Most likely, you will be billed hourly and this small effort can cut your billed time in half.
44. When contracting a consultant for an extended assignment, be sure to ask for discounted rates. Most professionals work by the hour and offer special daily, weekly, monthly or project rates.
45. When making arrangements to attend an out of town seminar, ask if they have arranged special group rates for airfare or accommodations for attendees ... and don't forget that all your expenses including meals are normally deductible business expenses.
46. Try to locate rebuilt or refurbished office equipment and furniture from your local dealer.
47. Tag all food and perishable products with an expiration date to avoid costly liability claims.
48. The cost of basket fillers should be evaluated by volume as opposed to weight in order to get the best value.
49. Use "no charge" organizations, when possible. Various Federal, State and Local Government offices offer assistance to small business that can answer many of your business concerns. Check your local telephone directory for offices in your area.



U.S. Government:

Postal Service --- U.S. Postal Service
Small Business Admin --- SCORE
Social Security --- Department of Health & Human Services
Taxes --- Internal Revenue Services


State Government:

Employment Services --- Employment Services Bureau
Equal Rights --- Civil Rights Commission
Taxes --- Taxation Department
Unemployment --- Employment Services Bureau
Worker's Compensation --- Worker's Compensation


Local Government:

Taxes --- County Treasurer's Office
Health Department --- County or City Health Department
Taxes --- City Finance Department


50. Check the quality of imported wicker products prior to making a major purchase. Importers generally acquire baskets from a number of different countries. The quality varies substantially throughout the world. Ask your importer for her recommendations.
51. Store metal containers in a cool, dry storage area to avoid rusting and loss of inventory.
52. Invest in corrugated cartons only a few inches larger than the product to be shipped. This will allow enough space to protect the product but will keep the total shipping weight to a minimum. Use only light weight packing materials when packaging your product.
53. Store excelsior in a cool, dry place to avoid mildew and damage to your inventory. Also store away from any source of heat in a fire resistant container to avoid possible fire.
54. Clothing should be purchased in one-size-fits-all, if possible, to maintain low inventory level and accommodate the majority of customers.
55. Specify the material, quality, brightness and type when ordering business and office machine papers. Stick to economical products when the image of your company is not at stake.

Materials:

Cotton Fiber or Rag is the highest quality (letterhead)
Rag/Sulfite comes in varying percentages (letterhead or general printing)
Sulfite is the most economical


Quality:

Weight - ranges from 9# to 28# (20# suggested for copy machines)
Bond - smoother 1 side (commonly used for typing and copying)
Laid Finish - textured pattern (high quality letterhead)
Cockle Finish - slightly rippled (documents)


Brightness:

88 - top of the line (letterhead and hi-speed laser printers)
86 - mid-range (internal letterhead)
83 - commodity sheet for economy (internal communications)


Types:

Typewriter - slightly rough surface (letterhead, sheet-fed printers)
Premium Xerographic - smooth, bright finish (hi-speed copiers)
Dual-Purpose - (copier and general typing)
Laser - smooth finish (laser, cut-sheet and high speed printers)
Ink Jet, Thermal Transfer, Plotter - Specifically designed
Continuous Form - available in 9 1/2" x 11" or 14 7/8" x 11" (impact printers)


56. Consider laser printed brochures rather than a 4 color process to reduce costs.
57. Fabric ribbon is normally slightly more costly, but is far easier to work with than mylar or plastic materials.
58. Displays and storage shelving should be planned in advance and purchased through a local material handling or equipment dealer. Your supplier will be glad to help you in the planning of your facility. If you need assistance in assembly, advise the representative prior to your request for quotation.
59. Test all adhesive product labels for adherence to the actual product, before printing.

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