Tips on Starting a Gift Shop Busines

To succeed, you must have a personal touch with customers, a keen sense of what they want and a flair for displaying merchandise. You must also have excellent skills in managing, selling, accounting, purchasing and advertising. Before starting your own store, gain experience by working in a gift store and taking related training and courses. The industry is very competitive — gift stores have the third highest failure rate among retail outlets.

Types of Gift Stores

Assess your prospective market and your personal tastes when deciding on a type of gift store (some offer a combination):

Souvenir. Cater to tourists, with low-priced, high turnover items. Must be situated in tourist areas, where rent is often high. Little advertising needed.

Tableware. Cater to buyers of special occasion gifts (weddings/anniversaries) with higher-priced items such as china and glassware. Often located in middle to upper income residential areas. Should carry at least 3 brand names and 4-10 place settings, which can drive up inventory costs.

Decorative items. Cater to both passers-by and regular clientele, with large variety of gifts in wide price range. Best located in shopping malls for high traffic. Must be aware of trends and preferences and must continually add new products.


When choosing a location, do your research. Assess the demand in the gift market. Check population statistics, demographics and area development plans:

  • Find out where your competition is — see if an area can sustain another store.
  • Assess traffic — tableware stores need convenient, substantial parking, while decorative items stores need lots of passers-by such as in shopping centers.
  • If you rent a location, ask a lawyer to review the agreement. After payroll costs, rent can be your second largest cash outlay. Also determine renovation costs.
  • Consider a home location. Start with a lower overhead and initial amount of capital, work flexible hours (part-time), claim some expenses, eliminate travel.

Design and Layout

Combine the elements of design, layout and displays, to create your store’s unique image, highlight your merchandise and make an impression. You will also:

  • Boost the demand for items in the introductory stage of the product life-cycle.
  • Educate customers about new items.
  • Encourage customers to buy on impulse and to buy more than one item.

Windows and Displays

Windows and displays are critical to attracting customers to gift stores:

  • The number of items displayed depends on store type. Souvenirs are displayed in large quantities; tableware/decorative items are displayed in single units.
  • The frequency of changing displays depends on traffic flows. Tableware and decorative items stores change displays often; souvenir stores less so.
  • Window types include shadow box windows (small eye-level windows), straight front windows (glass-enclosed areas from floor to ceiling) and corner windows.
  • Interior displays include island displays (free-standing), perimeter displays
  • On walls, ceilings and shelves and glass showcases.
  • Complementary display aids include product posters/reprints, racks/fixtures.

Human Resources

The ability to hire and keep excellent employees is essential. Educate yourself in all areas of human resources — how to recruit, interview, screen, motivate, train, evaluate and develop personnel policies (wages, pension plans, benefits). Promote continuous training and upgrading through related courses and programs. See the Human Resources fact sheet for more information.

Advertising and Promotion

Advertising aims to inform, create interest and establish customer confidence. Your approach depends on your plans, finances and merchandise. Product ads focus on merchandise, institutional ads focus on your services and store image. Two kinds of media in particular are cost-effective for gift stores:

  • Direct mail, especially for tableware, to send notices of new arrivals and sales.
  • Newspapers, for promoting special events.
  • In general, the most effective form of advertising for a gift store is word-of-mouth. Develop an image and reputation for excellent customer service.
  • Provide convenient hours. Most gift stores are open 60-72 hours per week.
  • Choose a distinctive name to portray your store’s image.
  • Offer gift-buying advice. Record customers’ purchase preferences.
  • Set fair policies for returns, cashing cheques and handling complaints.
  • Allow credit card purchasing and offer layaway plans (installment credit).


Gift item prices should allow for sufficient gross profit to cover overhead expenses and a reasonable net profit. Choose and understand one of two pricing methods — mark-up (based on cost) or margin (based on selling price). Traditionally, gift stores have had mark-ups of approximately 100%, margins of 50%.

Selecting Suppliers

  • Check trade directories, trade journals such as Gifts and Tableware and attend trade shows. There are four types of suppliers:
  • Manufacturers – The least expensive method. However, often you must order a minimum quantity and pay freight costs.
  • Wholesale distributors – Supply in any quantity, but at a higher price.
  • Importers – Supply from foreign sources. Prices tend to be high due to currency exchanges, tariffs and shipping costs.
  • Artisans – Independent artisans can supply original work at reasonable cost, often on consignment (you pay a percentage only if you sell).

Selecting and Controlling Inventory

An inventory control system provides information to monitor stock telling you what’s selling and what’s not, and when to reorder items. The particular system you choose depends on your store size and merchandise.

  • Start with low levels of inventory to keep costs down and to monitor sales.
  • The number of times inventory is sold and replaced in a year (turnover) varies between stores.
  • Tableware may turnover once; souvenirs turn six or more times.
  • Changing the inventory selection also varies. Souvenirs rarely change; decorative stores must constantly change; and tableware stores should carry limited lines at first, then try to buy exclusive rights for popular items.
  • Sales fluctuate depending on items. Tableware shops usually sell more during wedding season, souvenir shops during tourist season, gift shops at Christmas.


Gift stores are particularly vulnerable to pilferage from uncollectible credit card sales, bad cheques and theft from shoplifters and store staff.

  • Screen employees carefully. Check references and work histories.
  • Train staff to watch for shoplifters; apprehend and prosecute those caught.
  • Use mirrors to see all areas of the store; lock expensive items in cases.
  • Check all identification and get authorization for cheques and credit cards.

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