Trying to understand the pros and cons of starting a personalized gift business?
Here are all of the pros and cons of selling personalized gifts online:
Pros Of A Personalized Gift Business
|Flexibility||You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.|
|Ability to start your business from home||It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning!|
|Pick & choose the clients you work with||Personalized Gift Businesses have the ability to choose the clients they work with. You have the freedom to work with only a few loyal clients or with hundreds of clients!|
|Unlimited income potential||With starting a personalized gift business there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make.|
|Amazing perks and discounts||Working in the personalized gift business comes with its perks! As a seller for these products/services, you typically also get to enjoy industry perks and discounts.|
|Predictable income stream||Your businesses income stream tends to be predictable based on the number of customers you have signed up. This makes financial planning and outlooks much more seamless!|
|Higher likelihood of getting referrals||This business is all about referrals, which can be a a very impactful way to attract and retain customers. It's critical that you have a great referral program in place that incentivizes your customers to tell their friends about your product.|
|You can sell your product in various places!||There are various different markets to sell your product, which will help you reach different audiences and revenue streams.|
|Simple business model||A personalized gift business has the advantage of a simple business model, which makes launching and building the business more seamless.|
|Greater Income Potential||With this business, the sky is the limit in regards to your income potential.|
|You get to do something you truly love||With starting a personalized gift business, you get to put your energy into something you are truly passionate about! You'll find yourself devoting as much time and energy as possible into the business to make it successful.|
|You can decide who you work with||Gone are the days of working in a toxic work environment with employees that you may not vibe with. As a small business owner, you get to decide who you work and surround yourself with.|
|Express your opinions||With starting a personalized gift business, you can express your opinions and knowledge to your audience, which allows you to build your own reputation and identity.|
|You can promote and sell your product on Amazon||Although there are some [disadvantages](https://www.repricerexpress.com/pros-cons-selling-amazon/) to consider when selling your product on Amazon, there are also a host of benefits. Mainly, Amazon is the world's largest online retailer, so you're bound to tap into new business and reach an entirely new audience.|
|You establish yourself as an expert||With starting a personalized gift business, you establish yourself as an expert in your niche, which builds your credibility. In return, customers are more likely to trust you and refer you to other friends and family.|
|Can build solid foundation of clients||It's unlikely you will have one-off customers as a personalized gift business. Typically, you have a solid foundation of clients that use your product and services regularly.|
|Results and revenue happen quickly!||Unlike other businesses, it can be relatively quick to start seeing results and revenue. As long as you follow [all the steps](https://www.starterstory.com/validate-business-idea) to validate your idea before launch, you are likely to see quick results and ROI.|
Cons Of A Personalized Gift Business
|Low margins||The gross margins for your personalized gift business are typically around 22%, which can make it more challenging to incur new expenses and maintain profitability.|
|Taxes||As a personalized gift business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.|
|Stressful work||This line of work can be stressful for both you and your clients. This type of transaction is a significant financial decision for your client, so expectations are very high for you. Although this career path can be very rewarding, it also comes with its challenges and stressful moments.|
|You may need to charge sales tax||If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out [this article](https://www.thebalancesmb.com/do-i-need-to-collect-sales-taxes-in-my-state-398913)|
|Time commitment||With starting a personalized gift business, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business.|
|Difficult to build trust with your customer||With starting a personalized gift business, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business.|
|Impatient customers||You may offer an engaging user experience for your customer, but customers expect a lot and may be impatient if they aren't pleased with your product or service.|
|Difficult to scale||With a personalized gift business, it can be challenging to find ways to scale. Check out [this article](https://www.inc.com/jeff-bussgang/scaling-a-business-is-hard.html) that discusses scaling your business and the challenges that come with it.|
|Learning Curve||When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.|
|Equipment Breakdowns||Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible.|
|Answering Phones||The personalized gift business is still considered a traditional business, which means answering phones is a big part of the job. If you or your team miss phone calls, you could be missing out on potential revenue opportunities. If you are unable to attend to your phone throughout the day, it would be in your best interest to hire a call center or an employee dedicated to this.|
|Recession-Impacted Industry||When the economy is down, personalized gift business's are one of the first things to be cut.|
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
Get our 5-minute email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Having open roles is one thing, but getting qualified candidates to apply is another. That’s where Hired can help.
- Get instant access to a curated pool of responsive top tech and sales talent
- Filter by what you need (skills, experience) and what they want (WFH, equity)
- Trial Hired and pay nothing until you make a hire
See candidates now.