How to Start a Party Favor Business Online

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Everyone loves a good party and stores have popped up catering to those looking for supplies. Nielson market research shows that 84% of global Internet users used the Internet to shop for merchandise. With so many online shoppers, the niche market for party favors can be a great business opportunity for those with an online site and the marketing to draw new customers. Whether you want to sell unique birthday party favors or memorable customized wedding reception favors, the Internet is a great channel for you to sell your merchandise. However, starting any online business is a challenging venture and proper planning is key to being successful in the long run.

Select a legal structure for your business to protect yourself against personal liability lawsuits and provide you with the most beneficial tax advantages. Sole proprietorships, partnerships, corporations and limited liability companies (LLC) all have important tax and legal liability implications so speak with a lawyer or financial advisor to ensure you have the best business structure for your party favor business.

Find manufacturers that produce the finished goods that you want to sell through your business or the materials you will use when creating your own products. ThomasNet and Alibaba are registries that can help you connect with manufacturers.

Contact manufacturers for the products you intend to sell. Ask questions that will help you plan your inventory and potential start-up costs. You must know about the time it will take to receive products after ordering, minimum quantities that you must order for various favors and whether the manufacturer will extend credit to small businesses in lieu of paying cash for each order.

Determine the types of payments you will accept on your website. Your local bank and online payment gateways can both be of assistance with this crucial decision. Credit cards are a common form of payment online and you will need a merchant account and business bank account to accept these transactions. Research various merchant account providers to learn about upfront costs and costs per transaction as these will both affect your profitability.

Set up accounts with various shipping providers you will use. United Parcel Service and Federal Express allow customers to create business accounts to save money on volume shipping. These accounts also allow you to track packages effortlessly online.

Take professional pictures of your party favors to be used on your website. The quality of your pictures will help your customers make informed buying decisions. You can take pictures yourself with a digital camera, tripod and light box or hire a professional photographer to create your product catalog.

Choose the type of e-commerce website you will use to sell your products. Online auction sites provide an easy avenue for you to sell your party favors online. Your online auction store is easy to set up and despite its name, you have the option to sell your party favors at fixed prices. Alternately, hire a web designer to create a custom website to sell your goods.

Market your new party favor business and promote your new venture to bring customers to the website. Pay-per-click advertising is an effective, highly focused means of getting visitors that are already interested in your products. You will only pay when someone clicks an advertisement and arrives at your site.


  • Visit the websites of other party favor vendors and take detailed notes on what these business do well and what you can improve upon with your own website. Remember that you do not need to sell every party favor your manufacturer offers. Often, too many products on a website can become overwhelming for your customers.


  • Limit your exposure to potential fraudulent transactions by selecting a merchant company that has safeguards in place to detect illegal transactions.