freebizreports

HOW TO START YOUR OWN PERSONAL SHOPPING BIZ

HOW TO MAKE BIG MONEY WITH YOUR OWN PERSONAL SHOPPING SERVICE

With the fast-paced, high pressure professional lifestyles
of today, more and more people have limited time to do their
personal shopping. Holding down a full-time job, raising
children, and maintaining a household doesn't seem to leave
enough hours in the day to get everything done. That's why many
people are now opting for a "service" to do much of their
personal shopping for them -- everything from buying groceries to
planning and purchasing an entire wardrobe.

Within the past decade personal shopping services have
emerged as a rapidly growing cottage industry with the potential
for highly profitable large-scale operations. It's a service that
appeals to a busy, above average income clientele, as well as to
corporate clients. And an enterprising person providing this kind
of service can make substantial profits.

Shopping for other people is not necessarily a difficult
task. As part of the service, the personal shopper usually meets
with clients to determine their needs and compile a list of items
to be purchased within the client's specified price range. Then,
the shopping begins. After the client's items have been
purchased, the shopper and client meet again. The client looks
over the purchases, and once satisfied with the shopper's
selections, pays the bill. Most of the "work" involved with a
personal shopping service, is in the shopping itself.

Start-up costs for a personal shopping service can be
relatively minimal. There's little need for expensive equipment
and hardly any initial investment in inventory. The biggest
expense a home-based shopping service encounters is usually the
method of transportation used by the shopper. Since most of a
personal shoppers time is spent shopping, an efficient running,
low-mileage car or van is essential to get to the many shopping
locations.

Most of these services begin as part time, home-based
operations. Beginning the service at home allows the novice
entrepreneur to maintain a full time job while devoting ten to
twenty hours a week to being a personal shopper. Once a
profitable client list has been established, and depending on the
market size, the service can expand to a full time, multi-
employee business with yearly earnings of $50,000 or more.

BUSINESS OVERVIEW

Before starting up any new business venture it is essential
to determine if the business is right for you. You must have the
right temperament as well as the facilities and an adequate
market for your service. Understanding these and other factors
involved in operating a personal shopping service before you
"take the plunge" will enable you to be prepared for any
eventuality. It's also a good way to insure success and profit.
Shopping can be a tiresome, demanding and frustrating
undertaking. Obviously if you want to be a personal shopper, you
must enjoy shopping. Most of the people who utilize a personal
shopping service simply don't have time to shop for themselves.
And some just don't like to shop. If you are not fond of shopping
for yourself, you won't like doing it for others either, even if
they pay you. You can draw from previous personal experience to
help you determine if you would enjoy shopping for others.

Once you've determined that you have the ability, and would
be happy shopping for other people, you'll need to focus on the
"business" side of operating a personal shopping service. And
that means you will have to be certain that there is a market for
your service.

Generally, a personal shopping service cannot rely on
clientele with average or below average income. You'll need a
"pool" of clients who can afford to pay for someone to shop for
them. Many personal shoppers have found that people with incomes
of $40,000 or more are their best sources of clients. You'll need
to do some research before you start up to determine if your
market can support a personal shopping service.

The success of a personal shopping service depends largely
on the quality of the service. You must offer professional
service and quality merchandise. This type of service requires
that you know the best places to shop, be familiar with brand
names, and that you work within the client's price range. The
most successful personal shoppers have established good
connections with retailers and wholesalers and know where to get
the best merchandise and the best prices.

You'll also need to be creative. Many times a client will
need a gift for someone. The client give you a description of the
person, and then it's up to you, the personal shopper, to find
the gift to fit that person. This requires not only creativity,
but an understanding of people as well.

Another important factor to consider is how you will
advertise and promote your service. This is especially important
when you are starting up. You'll need to make your service known
to your market area. You should investigate all the available
avenues of advertising and determine what's best for you.
Establishing a realistic advertising budget and implementing an
effective advertising campaign will mean more business and bigger
profits.

EQUIPMENT

Starting a personal shopping service at home is the ideal
way to begin. No large facility is needed for storage or
equipment. One room can serve as office space for
administrative purposes, such as bookkeeping and record keeping.
You should also have an answering machine for your telephone, a
typewriter or computer and printer if affordable, and various
office supplies.

Furnishing a home office can be relatively inexpensive. A
desk, chair, filing cabinet and bookshelf are the only basic
items needed to begin. Purchased new, these items will cost from
$500 to $700. You may be able to find good quality used items for
much less. Many yard and garage sales have adequate furniture for
a home office, and at good prices.

If you don't already have an electric typewriter, you can
get a good one for $200 to $300. You shouldn't go overboard here
-- a typewriter that produces professional looking documents is
all that is needed. A computer is an optional expense that can
wait until the business has expanded. Once the business is
"booming" investing in a computer can bring a high degree of
organization and efficiency to bookkeeping and record keeping.

The most important piece of "equipment" a personal shopper
will need is a car. Transportation is also the biggest expense
this type of service will likely incur. Since well over 50
percent of a personal shopper's working time is spent on the
road, to and from shopping excursions and consulting with
clients, an economical and dependable method of transportation is
a must.

Most people operating home-based services use their own
cars. This alleviates the necessity of buying a new car, or
leasing a vehicle. If your car is in good working order and gets
good gas mileage it makes sense to use it for your business. The
government will reimburse you, via tax deductions, for the
driving and other expenses incurred as part of the business.

Many personal shoppers also invest in a small camera. This
is a relatively modest investment that adds an extra service to
your business. A camera will allow you to take pictures of items
you think particular clients may be interested in. Your clients
will appreciate this extra service because it allows them the
opportunity to see, and approve an item before it is purchased.
It's a good way to build an on-going and trusting relationship
with clients, increasing the chances for repeat business.

A good instant camera is sufficient for a personal shopping
service. You can get one for about $50 and it's well worth the
investment.

When starting your service, it is important to remember to
"live within your means." There's no need to get several pieces
of expensive office furniture, or buy a new car. Be sensible and
get only the basics. Your total investment in equipment and
office furnishings and supplies need not exceed $1,000.

INVENTORY AND PRICING

Since a personal shopping business is service oriented, you
won't be selling a specific product. That means there's not a lot
of initial inventory as there would be if you were starting a
retail business. However, you may on occasion find it necessary
to deal with suppliers of wholesale merchandise, because some
clients may demand such merchandise.

If you purchase wholesale merchandise for your clients, it
is important that you maintain a good relationship with
dependable suppliers of inventory. The better your connections
with reliable suppliers, the better your chances of getting those
special items for your clients at a good price.

Even though you usually won't be selling a product, you will
be selling a service. And you'll need to take just as much care
in pricing your service as you would a line of products. Most
personal shoppers use one of two common methods for pricing their
service:

1) Set a fee based on the total price of the merchandise.

2) Charge an hourly rate.

Whichever pricing method you choose must bring in enough
income to cover any overhead you have, your time and labor, and
leave you with a reasonable profit. This requires knowing what
the market will bear, as well as how much you desire to make your
service personally profitable.

Most home-based shopping services initially institute a fee
based on the total cost of the merchandise purchased. This fee
should be a percentage of the purchase price. The percentage will
vary depending on the market area, the type of clientele and the
total price of merchandise purchased. It's up to the personal
shopper to determine an appropriate percentage.

Generally, the larger the total price of merchandise
purchased, the smaller the service charge. For example, if you
charge a service fee of 20% on a purchase of $500 or more, your
minimum fee will be $100. For a smaller total purchase of
merchandise -- say, from $200 to $500, your service charge could
be 25%. That would leave you with a minimum fee of $50 and a
maximum of $125.

This type of pricing makes good business sense if you do a
lot of pre-shopping from newspapers, catalogs and by phone. That
way, you've located your merchandise before you actually go
shopping. This will save you time and result in a higher degree
of profit on your labor.

Hourly billing for this type service usually works best if
your service offers a good deal of consultation as well as
shopping. In most cases, personal shoppers who also feature
wardrobe consulting as part of their service, charge an hourly
fee. If your service is in a market that has the potential to
support a wardrobe consultant as well as a personal shopper, you
may consider billing clients by the hour.

Many personal shoppers who also offer consulting as part of
their service charge as much as $45 an hour. The rate you set
depends on how much you feel your time and efforts are worth, and
how much the market can afford. You'll need to make a profit, but
you'll also need to be affordable.

If you limit your service to shopping -- no consultations --
then an hourly rate isn't realistic. Sometimes you may only be
shopping for $50 worth of merchandise and charging an hourly rate
of $30 to $40 will not be appreciated by the client. Your rate
should be such that every client feels it's worth the time saved
to pay you to do their shopping. For shopping services only, a
service fee based on the total price of the merchandise is more
practical, and ultimately more profitable than an hourly rate.

GETTING CLIENTS

Any personal shopping service's client list depends, in
large measure, on the variety of shopping and consultation
offered. As pointed out earlier in this booklet, some personal
shoppers also serve as wardrobe consultants, giving advice as
well as selecting clothing items to show the client. Wardrobe
consulting could be a profitable feature for a personal shopping
service if the market has the potential clientele.

Generally, if you are located in a market of less than
100,000 people, there will not be much demand for wardrobe
consulting. That's why most personal shopping services are
located in, or near a relatively large population base with an
abundance of working people, and a variety of stores. The
services offered in such a market can be varied to cater to
specific client needs.

If shopping for personal clothing is your forte, your client
list will most likely be comprised of women. Many of these women
will be making a transition into professional life and are in
need of a business wardrobe. Your ability to consult with these
clients -- to advise them and select an appropriate wardrobe will
go a long way in determining your success as a personal shopper
and consultant. If you do the job well, the chances of adding men
to this particular client list will increase. In many cases, men
are becoming more open to the idea of getting help in selecting
their "professional" attire.

Some of your personal clothing shopping will be done for
parents who need help getting their children ready to go back to
school. You may also get women who are soon to be married and
need assistance in selecting gowns for the wedding. Some people,
planning exotic vacations, may require your help in choosing a
special "vacation" ensemble.

In most cases, the previously mentioned clients are limited
to large markets. If your market area is moderate to small,
depending on "wardrobe" clients as a major source of your income
is probably a mistake. You should rely on more generalized
shopping. Personal gift-shopping is a good way to realize profits
in any market.

When you are shopping for gifts, most of your clients will
be men. Many of these will be husbands who know what they want to
get their wives but don't have the time to shop for themselves or
have little, if any, idea where to shop. It'll be up to you to
track down these items, usually in a limited amount of time.

Other clients on your gift shopping client list will include
executives who need to get gifts for their clients and employees.

In most cases, these clients will also be men. As a rule, it
seems that men prefer to have someone else shop for gifts rather
than spend the time themselves going from store to store. So a
personal shopper can usually count on men as a good source of
clientele for this type of service.

Your client list will also include some elderly people, or
physically disabled people who aren't able to do their own
shopping. These people are most generally interested in a grocery
shopping service. This type of client, while not a major source
of your income, will be a steady source.

One major source of income for many personal shopping
services is the corporate client. This type of client may take a
great deal of time and effort to land, but the results will make
it worthwhile. That's because corporate clients normally make
large volume purchases, and if they are pleased with your service
will be a source of repeat business.

There's no doubt you'll have to work hard to get corporate
clients. It requires a rather comprehensive study of your market
in order to be familiar with all the potential clients, followed
up by an impressive and convincing sales presentation. But if you
can convince many of the businesses in your market that you can
save them money, time and hassle by doing their necessary gift
shopping for them, you'll have a valuable client list with a high
profit potential. So you should be determined and persistent when
pursuing these clients.

In the most basic of terms, a personal shopping service's
clientele depends on the types of services offered as well as the
market's need. The client list will include busy professionals --
both women and men, corporate clients with business gift needs,
and senior citizens who are unable to do much shopping for
themselves.
Your market will dictate which segment of potential clients
you should rely on. You'll need to know the kinds of people in
your market area and what they need in a personal shopping
service. Your service should cater to those needs.

ADVERTISING YOUR SERVICE

Even though your talents as a shopper may be formidable, you
won't get much business if you don't let people know your service
is available. That's why it is essential to develop an effective
advertising and promotion strategy.

Since personal shopping services are a relatively recent
innovation, many people aren't familiar with them. These people
need to know what a personal shopping service is and how it can
be of benefit to them. It's up to you to let them know what you
offer and how you can save them time and get better merchandise.
The success of your service depends on how effectively you
"spread the word" about what you are doing.

Determining the best advertising campaign for your service
will require some research of your market to understand the best
way to reach the widest segment of potential clients. First of
all, you'll need to have a good idea as to who your potential
clients are, and how many of them there are. You'll also need to
offer them something that isn't already available and then
convince them to take advantage of your service.

This "pre-marketing" research doesn't necessarily have to
involve a great deal of expense. One good and inexpensive method
of obtaining information about your potential market is to
conduct your own survey. Discuss your personal shopping idea with
all of your contacts -- business and personal. You can also get a
sampling of opinion by going through the phone directory and
calling as many businesses and people as time will allow. Be
prepared to ask specific questions that will allow you to obtain
usable information. Some questions worth asking include:

1) Would the person or business pay a service to do their
shopping? If the answer is yes, you should then find out if they
would use the service on a regular or repeat basis.

2) What kinds of shopping would these potential clients pay
a service to do? Try to get them to be as specific as possible
about wardrobe consulting, gift shopping, grocery shopping and so
on.

3) What's the potential client's idea of a reasonable
service fee? You may have to do some prompting here. That is, you
may have to suggest something like 20 to 25 percent of the retail
price. You should soon get an idea as to what the market would be
willing to pay.

This isn't a scientific survey, but it should enable you to
better plan and instigate your advertising campaign. You'll have
a good idea as to who your potential clients are and what they
would expect from a personal shopping service. The next step is
to come up with an advertising budget you can afford and then
find out where your advertising dollars can best be spent.

You'll have to use your own judgment as to how much you
allocate as an advertising budget. However, you should keep in
mind the importance of advertising to the success of your
service. Many businesses, both small and large, budget anywhere
from 1 to 5 percent of their projected gross sales for
advertising and promotion. You should have at least some idea of
projected gross sales from your pre-start-up research.

The important thing to remember is to be reasonable. Don't
spend more than you can realistically afford. You'll need to be
as financially sound as possible until your business is bringing
in a healthy profit. At the same time, you don't want to
undermine what an effective advertising campaign can do to help
your business.

Once you have decided how much you can afford to spend on
your initial advertising campaign you'll then have to select the
media which will bring you the best results. Generally, for a
personal shopping service, advertising in newspapers, the yellow
pages, and by direct mail gets the best results.

A less expensive, but more time consuming, means of
advertising is through personal contacts. This form of
advertising usually works better in small markets, but can be
effective in larger markets as well. You'll need several hundred
professional business cards to pass around. Impressive business
cards are not at all expensive and are a good way to get your
name and service known. You'll also need to set aside a good bit
of time making personal calls on prospective clients. This is an
excellent way to let people know that your service is available.

When calling on a prospective client you must be well
prepared. This means being able to explain your service in a
clear and professional manner. Let your prospective clients know
exactly what your shopping service offers and how it can be of
benefit to them. And before you leave, make sure they have your
business card as well as any brochures or flyers you may have
detailing your service. Ask them to consider your shopping
service, then follow up your presentation with a phone call a
couple of weeks later. Don't let them forget about you and the
service you are offering.

Newspaper advertising can be effective for a personal
shopping service that gets most of its clients from the immediate
community. Again, this type of advertising may work better in
smaller to moderate markets. Most newspapers charge reasonable
rates for display and classified ads and reach a high
concentration of potential clients.

Another effective means of advertising your personal
shopping service is in the yellow pages. Make sure you choose the
most appropriate category for your listing or advertisement. You
can have an illustrated quarter page spread or simply a one line
listing with the name of your business, address and phone number.

The yellow pages can be one of the most effective methods of
advertising at your disposal, so it is a good investment,
especially when your service is just getting started. You'll have
to be careful and get your ad in before the stated deadline,
otherwise you will most likely be waiting an entire year before
you can advertise in the yellow pages.

Other forms of advertising you should consider include;
direct mail, which allows you to distribute information about
your service to a selected group of potential clients,
newsletters, flyers and brochures. All of these methods of
advertising can be effective and are relatively inexpensive.

Knowing your market is the determining factor, along with
your budget, as to the type and amount of advertising you do. It
should be obvious however, that the more advertising you do, the
better your chances of reaching the greatest number of potential
clients. And that is, along with convincing those potential
clients that your personal shopping service is the best in the
market, what your advertising campaign should strive for.

SUCCESS ANALYSIS

Eight contributing factors are measured on a 1 to 10 basis
(with 10 being excellent) based on analysis of this opportunity.

1. Time Investment                                7
2. Start-up Costs                                 10
3. Gross Income Potential                         8
4. Net Income Potential                           8
5. Income in Relation to Investment               10
6. Stability                                      7
7. Overall Risk                                   8
8. Potential for Growth                           9

Overall Potential for Success                     8.38

POTENTIAL EARNINGS

To some degree, a personal shopper's business will be
seasonal. The biggest profits are usually made from October
through December, but there is still plenty of business for a
highly motivated shopper throughout the year. The amount of
profits depends on several factors including time devoted to the
business, proper marketing and setting fees that bring the best
return for services rendered.

Many home-based personal shopping services, operating part-
time, have reported extra earnings of as much as $1,000 per
month. This type of profit is usually realized by shoppers who
take advantage of the service's low start-up costs. In the
beginning, these services are equipped with little more than a
telephone and an answering machine. Advertising is done through
some personal contacts, fliers posted on company bulletin boards,
and business cards.

These part-time services use their own cars for shopping
excursions, which average about twice a month. Some of these
shoppers get as many as five individual clients in a month's
time. The result could be a handsome profit that more than covers
the initial investment which does not need to be more than
$1,000.

If you are planning to get into the business on a full-time
basis, you'll need to make a larger initial investment. If,
instead of a home-based service, you plan to utilize a commercial
office and at least one helper, your start-up costs will be
substantially greater than a home-based, part-time operation.
You'll likely need more than one vehicle for shopping trips, and
your advertising campaign will need to be more extensive.

This type of operation could mean an initial investment of
$7,000 to $10,000. No doubt that's a sizable investment, but once
the service has become established, you can realize earnings of
$50,000 and more per year. If an investment of several thousand
dollars is beyond your immediate means, beginning a personal
shopping service part-time, at home, will allow you to get into
the business with a good chance to expand to full-time in a year,
or so.

CONCLUSION

Because of the low start-up costs and high profit potential,
a home-based personal shopping service can be the ideal business
for many people. But, in order to be successful there are several
key factors prospective shoppers should understand.

(1) Shopping can be a tiresome and frustrating experience.
If you don't like to shop for yourself, you won't like shopping
for other people and your business will not succeed.

(2) If you are not located in, or do not have reasonable
access to a fairly large market, a personal shopping service may
have a tough time surviving. Before you start up, analyze your
market -- know who your potential clients are and how many of
them you can realistically count on to pay for your service.

(3) Knowing the best places to shop for the finest quality
merchandise at the most reasonable prices, is essential. You'll
need this expertise to convince clients that you are, indeed, the

best person for the job. It's something you'll have to
demonstrate in order to get new, as well as repeat business.

(4) This is a personal service. You will be shopping for
other people's personal needs -- everything from groceries to
apparel. In order to do this properly, you'll need to get as much
information from your clients as possible. Let your clients know
you understand what they want, and that they will be well taken
care of. You'll need to be a good listener as well as a good
communicator.

(5) Your service fee should be realistic -- both for you and
your clients. You will, of course, need to make a profit. But
you'll also have to work within your client's means. If your fee
is too high for your market, potential clients will usually find
the time to do their own shopping.

(6) A well planned advertising campaign can mean the
difference between breaking even and making substantial profits.
Develop an advertising budget that will allow you to make your
service known to the majority of potential clients in your
market.

(7) Adjusting your service to fit the needs of your market
will mean greater profits. If you specialize in gift shopping,
you may be overlooking other potential avenues of income, such as
wardrobe consulting. You should be as versatile as your time,
resources, and the market will allow.

A personal shopping service can be a personally rewarding
and highly profitable venture. It is not, however, a means to
"overnight" wealth. It will take a good deal of time and work to
make your service known and understood, and to build a client
list substantial enough to return big profits. But, if you like
to shop, and you are good at shopping for other people, a
personal shopping service could be the ideal business for you.

SOURCES

Business Guides:

AEA Business Manual No. X1310, Personal Shopping Service,
from American Entrepreneur's Association, 2392 Morse Ave.,
Irvine, CA 92714

Magazines:

Working Woman, February, 1991

Vogue, November, 1990