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aidacards aidacards is offline
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Join Date: Oct 2009
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Greeting card industry!

Hi there,

My partner and I are investigating the possibility of starting up a greeting card publisher company. We have a niche, and are currently requesting samples from suppliers.

Is there anywhere we can look on the internet for information on how the industry works?

We have looked at the GCA website, and Mintel reports, however we require more cost-specific information such as:

* how low trade prices are (we hope that a trade price of £1.45 p/c, with an RRP of £2.99 would be acceptable!),

* the best route to retail (we were thinking of direct to retail, contacting buyers of specific stores/shops, however an agent does sound interesting),

and more.

We do hope to expand quite rapidly - our idea has not yet been implemented on a large scale, in fact, there are only one or two small websites selling cards like ours!

Thanks,

James
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tin03gin tin03gin is offline
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Have you seen the latest card company to launch?

http://www.printweek.com/News/MostEm...card-platform/
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James Smith's Avatar James Smith James Smith is offline
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"how low trade prices are (we hope that a trade price of £1.45 p/c, with an RRP of £2.99 would be acceptable!)"


The mark-ups on cards are about 3.25 times. Generally I would say the max wholesale for £2.99 retail would be about £1+VAT. More likely 50-75p on bulk orders for printed cards.

Whilst I appreciate the whole point of your post is to gain knowledge, I have to ask the generic question, "why are you trying to enter a business in which you have little knowledge?" This is risky. Unless you are a fairly hard-boiled entrepreneur most succesful startups will know their industry inside out at the outset. Its often hard enough going from employee to owner for most mortals!

Anyway don't want to jump on your idea, but be careful before you commit and funds. Failure rates when people jump to a new industry are a lot higher than in what people know.

Regards,
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aidacards aidacards is offline
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James,

I do agree that it's a bit heavy, going into an industry whose inner workings we know nothing about... but on the flipside, I would argue that without outside attempts, industries would become a bit stale?
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James Smith's Avatar James Smith James Smith is offline
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I don't disagree with you there. Successful niches can be exploited by bringing in new ideas.

Being "too" industry can make you tunnel visioned, so it certainly helps to bring ideas from other areas.

Point of posting that sort of a comment is really to make you think than get an answer....but the fact remains its harder work to go into something where you don't know the 'insider' tricks.

That said a clean sheet can help with some things such as using new technology to its potential rather than being constrained by what was possible 5-10 years ago when the current incumbents perhaps last thought about it in detail.

Horses, courses and no right answer as ever I am afraid.

Regards,
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aidacards aidacards is offline
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Our idea really does involve bringing a new type of card to the wider marketplace. I don't really want to say what it is, but I can say that all of our output is either recyclable, compostible or biodegradeable, totally green and eco-friendly, and that the card can be a present in itself.

Hopefully we will have some real samples to present soon!
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ian37a ian37a is offline
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I don't know this industy but as a customer I have been impressed by Moonpig which seems to have changed card buying habits for quite a few people I know. My sister-in-law could keep a whole company going just based on how often she uses them. It would be worth trying to analyse what has made them so successful. A couple of observations:
- great idea to personalise cards that you typically see in a shop
- website is easy to use
- it asks you if you wanted to be reminded about this card in the future, ie. "we will remind you in a year that its someones birthday which will of course prompt you to buy another card from us."

It might not be exactly the same market as you are after, but there are bound to be some useful lessons.

Good luck
Ian
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aidacards aidacards is offline
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Sadly, in the first instance, our idea is nothing like that - however, there is the possibility of a moonpig-esque personalisation extension.
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lemonribbon lemonribbon is offline
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Hi James,

Hope you still get this. We are a new prints and graphics studios and have been designing cards for publishers. Although our background is in childrenswear, we thought we could take our graphics into different markets and the greetings cards one has been very successful so far for us. What I would say about the greeting cards industry is do your research, and then do some more. Speak to the GCA, subscribe to Greetings Today & Progressive Greetings, go to Trade shows such as Spring/Autumn Fair, Pure and the Home and Gift show in Harrogate. See what the other publishers are up to and get knowledge from them. For example do you know enough about printing? Colour Matching? Barcodes? Copyright protection? Selling Agents? Distribution? Storage space? etc. There are a hell of a lot of small publishers about and someone might already have a similar product/style. We did our research ( and still are!) and decided it was much easier just to supply the artwork than actually publish and most people we spoke to said that it was an extremely difficult time to enter the market.

In terms of costs the trade price tends to be from 90p to £1 depending on quality. Remember your costs per card include:

Printing about 15p
Any fancy decoration such as funny eyes etc - 3p
Barcodes - 1 - 2p
Envelopes - 1 - 2p
Celophane wrapping - 3p
Storage - prob about 4 - 5p per card
Delivery - 5p
Raw materials - 20p
Agent fees - 20% of trade prices
Any royalties on artwork - 5% of trade prices

As you can see out of 90p, you are looking at a bare minimum of 70p for costs - this doesn't even include start up costs such as website, advertising, pr etc. So you can see why publishers need to sell at least 500,000 + per year just to make a living let alone be profitable.

In terms of going straight to retailers, you need proven commeciallity with your product, esp in this economic market. Retailers will pick cards at certain times of year for certain events. e.g: we were designing valentines cards for a publisher to submit to retailers in August. Agents know these times and will direct you but agents will only want to work with you if you make them money. Trust me they don't care about cards just the money cards make them. Most of the big publishers have got the major retailers tied up so you will have to start building up your comercial track record through smaller shops etc. Again its tough but do-able. One of our publishers had been doing it for 10 years and says this year is the first year she has felt she is finally it is really taking off - not because of a bad product, it is just taken that long to build up the reputation and success.

Its a tough industry and again I can't stress enough to do your research and speak to publishers. If you have a good product look into getting the big guys to licence it while you are building your knowledge of the industry. Good way of building money as well as knowledge.

PM me if you have any more questions I will try and help. Also if you need any designs, esp for children, then we could be your people. Have a look at our website for an idea of our style.

Good luck

Ed

Lemon Ribbon
Creating packages of imagination
www.lemonribbon.com
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James Smith's Avatar James Smith James Smith is offline
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Excellent post Ed. Thanks for sharing your industry specific knowledge.

To sum up your strategy, this is a classic "stick to what you know" ie in your case designing cards, not making, distributing or selling which are all very different skills.

More widely these sorts of strategies tend to work for small businesses, that is to say being good at a niche rather than doing everything.
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missfituk's Avatar missfituk missfituk is offline
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Quote:
Originally Posted by aidacards View Post
Our idea really does involve bringing a new type of card to the wider marketplace. I don't really want to say what it is, but I can say that all of our output is either recyclable, compostible or biodegradeable, totally green and eco-friendly, and that the card can be a present in itself.

Hopefully we will have some real samples to present soon!
Without wishing to sound negative, I wouldnt spend more than 99p on a card becase I can go to that really cheap Card Factory (or whatever its called) place in town and get a big, luxury card for 89p and thats if I bother to buy a card at all - my friends and family never send cards we buy a £2.49 bag of thorntons for each other instead saying if someone is gonna spend £3 on me, Id rather have them spend it on a lovely bag of Alpinis that a piece of card that makes my mantlepiece look untidy.

My opinion is that more people are sending e-cards or buying them super cheap from card bargain shops that are on every high street. I for one certainly wouldnt care if it was biodegradeable, compostable, reduced co2 emissions..... there is no way I would pay £2.99 for card - unless it was from Moonpig and I could design something with a photograph
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Spodaz Spodaz is offline
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I can't remember the last time I purchased a card in a shop, Moonpig completley changed the way I buy cards.

The fact is that it costs very little more if nothing more to have a completley personalised card and they can deliver direct to the recipient as well which is convinient.
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