One of the fastest growing businesses in the world right now might just surprise you. New babies come into this world every minute of every day. In the United States, more than 10,000 infants are born, on average, every day. That’s 10,000 families that are about to have their lives changed in many different ways. That’s also 10,000 families that are going to need plenty of supplies to care for their newborn over the coming weeks in months. That’s why knowing how to start a diaper cake business is so vital for the modern entrepreneur.
A diaper cake business doesn’t supply families with baked goods. It’s instead a lot like a gift basket that is made up of the essential products that will be required for infant care in the coming days. The structure of the gift is like a three-layer cake and includes books, bottles, diapers, towels, burp rags, and baby wipes. These would then be purchased for a baby shower or as a gift for a new mom.
Want to get started? Here’s what you’re going to need to know.
1. Secure your business licenses before you secure your inventory.
You might be putting together a bunch of different products together in the shape of a cake, but you’re selling them for a profit. That means you’re going to need business licenses that allow you to conduct retail sales in your local community. If you want to operate under a different business name, like “Dandy Diaper Cakes,” then you’ll need to register it with your local Secretary of Commerce. You’ll be required to pay sales tax, so make sure you’re separating taxes out of your revenues instead of lumping all of the sums together.
2. Wholesale is always the way to go.
The benefit of running a diaper cake business is that your products are going to keep for a long, long time. They can literally be stored for years with just the occasional dusting and no one is going to care. That means you won’t have to worry about rotational inventory. It does, however, mean that you’ll need to locate distributors that can furnish you with the products you need. Don’t buy retail unless you have an emergency situation for a cake delivery. Wholesale is always the way to go.
3. A great design will help to promote your business more than anything.
What makes diaper cakes a unique product is that they look visually attractive from a distance. Many people are even initially fooled by the appearance and start to feel hungry for some baby shower cake before they see that it’s diapers and towels on display instead of cream cheese frosting. It’s becoming popular, but it still isn’t a gift that is seen every day, which is why it is such a great present to give to any expectant or new mom.
4. Locate an arts and crafts supplier.
Just like you’ll want to purchase your diapers and towels on a wholesale basis, you’ll want to do the same with your arts and crafts supplies whenever possible. There’s a huge mark-up on things like ribbons and children’s books, so look for ways to reduce these costs whenever possible. Don’t pass up the perfect ribbon, of course, but be smart about your expenses. If you eat into the profits of your diaper cake, you won’t be able to stay in business very long.
5. Think about opening up a retail environment.
Many people like the idea of starting a diaper cake business because they can do it from the comfort of their own home. This is great for custom work, but it might not be the best way to maximize your business opportunity. If you’ve got the capital on hand to get into a retail space, then you’ll have a place where customers can come visit you when they need a last second present for a baby shower and don’t have the time to wait for a custom job.
6. Does your community have the ability to support a diaper cake business?
There are some communities that aren’t as right for a diaper cake business than others, but there are some surprising places where you’ll see them operating. If you live in a retirement community, for example, a diaper cake business that ships the gift to expectant mothers can have a surprising amount of success as grandparents look to spoil their grandchildren for the first time.
A group of small communities might all benefit from one business, even if just one community by itself doesn’t have the population base to support the business model. Look at the population demographics, see who might be interested, and if you’ve got enough interest – open your doors.
7. Think about cake decorating designs as you build your diaper cakes.
Many diaper cake business owners will take cake decorating classes [as in the actual baked goods] to gather ideas for their own products. Because the visuals are essentially the same, the training can help business owners stay on top of modern decorating ideas that can be replicated through ribbon and lace instead of frosting and fondant. Many cake decorating courses happen once or twice per week during your off hours, so it won’t cost a lot to be able to get a lot of potential experience.
8. Branding matters in the diaper cake business.
All one has to do is look at the wide variety of diaper prices that can be found on the market today to see what the price variation in diaper cakes could be. Generic diapers can be up to $15 per package cheaper than name brand diapers. If you can purchase directly from the name brand and save, however, you’ve got the chance to beat retail prices while still clearing a nice margin. That will give you the best of all worlds right there.
Diaper cakes can be used as a direct gift or as a table centerpiece. If you community doesn’t have this service, then you may have an amazing entrepreneurial opportunity. Study the demographics of your area and use these steps to create your own diaper cake business today.
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