Shop Talk: Practical answers for tough business questions
Question: My business partner wants us to bring greeting cards into our store, and I am hesitant. They have a low price point and limited profit potential because they are already pre-priced. What is your thinking on this?
Answer: Our card section is one of the highlights of our store, so my opinion may be pretty biased. According to the National Retail Federation, greeting card sales, while down considerably over the past decade, are still expected to be close to $6 billion this year, so somebody is still buying them! Even though e-cards are readily available, there are times, such as an anniversary, important birthday, or Mother’s Day, when an e-card may not fit the bill.
There are many things to consider if you want to sell greeting cards. It would be wise to start small—maybe a couple of spinners—and see if your customers appreciate the added convenience of being able to buy a card when they purchase a gift. If you do decide to offer greeting cards, see which companies’ cards are offered in your area and then try to find a few unique companies to order from. Greeting cards can range in price from $1 to $10 or more for the specialty, handmade lines, but the best-selling price points are between $2 and $4.
As for the low margin, that is true, but greeting cards can be a real coup for attracting repeat business, especially if you have a good selection. And, don’t forget tasteful humor cards. There is nothing better than hearing a customer belly-laugh while looking at cards!
First published in Vol. 28 No. 5 of Retailing Insight. © 2014 Continuity Publishing Inc. All rights reserved.