Gift cards are a popular option for busy shoppers.
Gift cards have become a popular go-to gift for busy shoppers and those who simply don't know what to purchase for the gift recipient. However, so often shoppers have to go around to various shops to get the gift cards they want or visit a number of online stores, inputting their personal information over and over again -- which is where a prepaid gift card business finds its niche. Opening a prepaid gift card business lets you cater to a very specific, but a very lucrative market. Due to the nature of the item you're selling, you will need a solid business plan and be willing to put forth a substantial amount of time and effort to get your gift card business going.
Instructions
1. Write a comprehensive business plan. Determine whether you want to open a brick-and-mortar shop, start with a mall or street kiosk, or launch an ebusiness. Choose which stores or online shops you want to partner with, what packaging and shipping options you will offer, and how you will advertise your business.
2. Develop an accounting system and explore your options for start-up capital. Create a budget that factors in your overhead costs (for example, website hosting or shop rental) and initial inventory. Many stores that partner with other businesses to sell their prepaid gift cards will require you to purchase a minimum number of cards in a single denomination or a minimum overall amount.
3. Obtain a business license as applicable from your state and/or local government, a fictitious business name and tax ID number, and a wholesale or retail permit according to the laws in your area. Even if you operate your prepaid gift card business online, you will still be required to charge and pay sales taxes, Federal income/business taxes, and any other taxes or fees your local government charges on the sale of gift cards.
4. Begin contacting the shops you wish to partner with about their gift card programs. Find out about any restrictions they place on the cards, if there is a minimum order required, how cards are activated once they're sold, and how they handle lost or damaged cards. Read the fine print of any agreement before signing it to make sure you know exactly what your responsibilities are and resolve disputes.
5. Prepare your storefront of choice. For example, if you choose to launch an ebusiness, you must develop a website, find reliable webhosting and secure servers to handle financial transactions, and begin an online marketing campaign. For brick-and-mortar businesses or kiosks, space should be rented or purchased, inventory stocked, and employees hired and trained, if applicable.
6. Advertise and open your store. Consider utilizing social networking platforms to promote your prepaid gift cards, partnering with similar businesses (card shops, balloon/flower delivery services), or joining sites like Amazon or eBay to further promote and sell your prepaid gift cards.
Tags: prepaid gift, card business, gift card, gift card business, partner with