How To Select and Market
Mail Order Products
Almost anything that people want or need is today being successfully sold by mail. In fact, some offers could not be handled in any other way. The problem is how to determine which product or service and then find and develop a market. Within the wide range of items sold by mail, there are things especially suited to limited sale operations. The question is not so much "What can be sold by mail" as it is, " What can I sell by mail?" Another factor to be considered is what priced lines to carry. Some mail merchandisers choose to handle high priced items, others prefer to sell inexpensive articles and, in the long run, profits may not be far from equal. The old adage, "goods well bought are half sold," is only a half truth in the selling of mail-order products and specialties, for mail merchandising involves the selling of education and services, as well as merchandise. And that is why it is so essential for a beginner to deal only in items based on his own personal likes. It is much easier for a beginner to put the necessary enthusiasm into the selling of products he is excited about.
Careful and selective buying is an important consideration in gearinga procurement program to fit sales. A balance must be struck to prevent the accumulation of old or shopworn merchandise and to have the proper goods ready to fill orders promptly. One thing a beginner needs to have impressed upon him is that it is far easier to tie funds up in a stock than it is to sell it out. The mail trade differs widely from retail store operation, where one or two items of a kind can be piled on an odds-and-ends counter and be priced to sell more quickly to casual customers. Effective mail selling calls for mass appeal, in which hundreds or thousands of prospects are approached with anidentical offer.
DECIDING WHAT TO BUY [related books]
In choosing a line, a person may already have a product and be seeking an outlet or additional market; or he may like the idea of selling by mail and be looking for something to offer. Assuming that you do not have anything in particular to offer by mail, how would you go about finding a suitable line? Even if you get all the general information and leads you can about likely products and marketing methods, you yourself will have to choose the line. No one can tell you what you would care to sell. One pitfall into which mail order aspirants often fall is in looking for the "perfect article to sell by mail". There are many offers which could be developed into profitable mail order enterprises that are either overlooked or being half-heartedly offered. In making your selection, pick out something not too common. Furthermore, the offer must permit a good margin for expense and profit. There should be an element of the unusual about it, and preferably you should have control over its manufacture and merchandising. As one consultant states, " The real successes in mail-order are those who own and operate their own exclusive setup or mail-order product or service ... Plan your own." Regardless of the product or specialty to be featured, it is advisable for the small mail-order operator to become acquainted with a number of items suitable for mail selling. Even if he has already fully decided upon his line, as time goes on, he may want to make slight changes in his setup to take on additional items or select premiumsto offer in facilitating the sale of his established offer. A prospective mail-order operator is fortunate if he has a commodity which he can grow, make, or otherwise readily acquire, and wishes to build a business on this foundation. Good advice is: "Sell products that you like to handle." For example, there may be something in your community or vicinity which, with a little effort, you can make up into useful materials or gadgets. For a long time you may have been wondering if the offer had possibilities. Find out. There are a number of mail order consultants who advertise their services in the mail trade publications, and who, for a small fee, will advise you as to the practicality of the proposed venture. Competent advice may enable you to explore and develop a business based on your pet idea.
Even a commonplace article can be sold profitably when promoted with a sound merchandising plan, especially when given a new twist. Ordinarily it is not the item that makes a successful operator, but the selling plan coupled with the energy and determination behind it. A beginner will often desire to start off with a single item, either a purchased one or something of his own make. But should he stop there, much of his merchandising effort will be wasted. As experienced consultants have repeatedly pointed out, though, if the greatest benefit is to be gained from the sales campaign, it is necessary for a small mail-order business to have three or four offers to follow up on inquiries. In some situations, if the first offer has not hit the mark, it is well to try a different approach. The first attempt to get an order may have resulted in failure because the price was too high, or it could have been "too cheap" to convey a sense of value to the prospect. Because of the nature of the mail-order business, there is for some items, at least, no standard markup. However, once an offer has been worked up to sell at a designated price, it is generally advisable to stick to the one price schedule. If sales volume is not up to expectations, then another price level can be considered.
In determining what to buy or acquire for sale, a prospective mail-order dealer is reminded that the selling of items selling for a few dollars by itself will scarcely build a profitable business. It is a good plan, however, to be on the lookout for a few appropriate articles priced at only a few dollars which possess real value and appeal, to offer along with other products as a get-acquainted device in introducing a line of merchandise to new prospects. These articles will help pay advertising and postage expenses, and in addition will be of great assistance in concentrating on genuine prospects.
In buying for resale, the purchase price, of course, is a matter for careful consideration. Suppose the same article is available at various places in three price ranges: high, medium, low. The high price may indicate superiority in construction or materials, or uniqueness in the product. The low price may indicate inferiority, or it may indicate distress merchandise not replaceable at that figure. And of course, there is the possibility that an introductory offer is being made at a low price. Consequently, in making your selections of items to sell, materials to use in further manufacture, or supplies and equipment for the mail-order business, be willing to pay a fairprice, which usually means a competitive one in the medium price range.
In general mail order offers fall into these types: 1. The sale of merchandise; 2. The sale of "information"; and 3. The sale of personal services.
WHAT PRICE TO PAY [related books]
To insure profitable business operation, there must be a sufficient margin between cost and selling price to cover operating expenses and net profit. This spread between the cost of goods and selling price is called the gross margin. Here is an example of how cost and profits are figured, the standard "merchandising equation".
Sales price 100
Cost of goods not only means the basic cost but also freight or other transportation charges against each incoming shipment. The expense of doing business, including salary or wages to the owner, must come out of the gross margin. What is left is the net profit. There are two principal ways of buying and pricing:
1. BUYING TO SELL AT A SPECIFIC PRICE. In many lines of retailing, and in some lines of mail order selling, the retail price of an item is more or less set by custom or competition. In such instances, you cannot expect to buy the item at whatever price offered and then add an arbitrary markup to arrive at the selling price. The markup is determined by the amount you have to pay for the item you wish to sell. The net delivered cost price is the proper amount to subtract from the selling price to determine the margin of gross profit out of which all expenses and profits must come.
Often merchandise of the same sort will be offered by different suppliers at different discounts. Then some of the prices will be quoted to you f.o.b. which means that you have to pay the freight. Other merchandise will be priced to you at delivered cost. Do not let attractive discounts or delivered prices influence you too much in buying. The net delivered cost less all discounts and plus all freight charges is the amount you must establish on any item when comparing prices of different suppliers.
2. BUY AND THEN ADD THE Markup DESIRED. In a great many of the ordinary mail-order items there is really no set amount at which you must price your goods for sale. A price can be set on either what you think the item might bring as a good value to the customer, or the price may be set by adding a markup to the cost price which will cover estimated expenses and profits.
SELECT YOUR PROSPECTS [related book]
Many a new mail order business has gone out of business because no serious attempt was made to find the correct class of prospects. Mail order aspirants are often told that the potential is nationwide, as broad as the sum total of the population itself, but what is not stressed is that successful mail order effort requires selective selling. The problem in mail selling is to locate potential buyers of specialized merchandise and convert these into customers. Efforts can often be guided into profitable channels through encouraging repeat orders of the same products or related ones.
Using poorly printed and cheap looking sales literature is one of the serious and often fatal errors into which mail order beginners frequently fall. Prospects, often accustomed to buying through the mail, can spot the work of an amateur who is not careful to use promotional literature of a standard quality.
A common error is to expect a big return for poor merchandise and little effort. Often merchandise used in filling orders is of low quality, unattractive and cheaply packaged. This gives the customer the impression of an excessive profit per unit of sale.
SOURCES OF SUPPLY [related books]
For fully completed articles ready to sell, there are three general sources: Manufacturers, large wholesalers, and small specialty houses.
MANUFACTURERS - Thomas' Register of American Manufacturers is available at public libraries in most larger places. This directory issued annually, contains classified lists of manufacturers (importers included), arranged according to the product, and subdivided by state and city in which manufacturers are located. One of the volumes also lists alphabetically leading manufacturers, with capital classification for each, without regard to product. There is an index or finding list of products, and also a list of leading trade names and trademarks.
MacRae's blue book is also another annual directory containing alphabetical and classified listings of important manufacturers, producers, and wholesalers. This directory also has a trade name section.
After the name of a manufacturer is known, it is easy to locate the principal local dealers in this product. If the name of the distributor or wholesaler handling a certain make of product is wanted, a card or letter to the particular manufacturer will bring that information. Often the manufacturer sends the inquiry to the wholesale dealer concerned, for further attention if regarded necessary.
LARGE WHOLESALERS - The large houses are divided roughly into
It is often difficult, however, for the beginner who does not send in a professional looking inquiry under his own business letterhead to receive the expensive catalogs and auxiliary literature which these large supply firms have prepared for the trade. These wholesalers are careful about sending out costly literature to just any inquirer and then selling "samples" at retail. Still these larger supply sources are very willing to assist prospects who are likely to become customers.
SMALL SPECIALTY HOUSES - These cover a wide range as to size and age. Some are well established as supply sources for mail operators, while others are small operators with little more than an idea and one or two items as an experiment. Although a number of the products offered are commonplace and time-proven, some small wholesalers are constantly on the alert for new and novel merchandise which carriesa "long profit" to the mail-order dealer selling to the ultimate consumer. The small operator with a flair for merchandising occasionally can select items from these specialty houses, recognized in their field, to exploit in any one of several ways. To obtain names of manufacturers, wholesalers, or retailers telephone directories can be used.
PACKAGING AND SELLING YOUR OWN PRODUCTS
The challenge of manufacturing "your own product" together with visualization of the possible market to be reached, is fascinating to many beginners. Some items are easy to make simply by following instructions. And in some cases, once construction fundamentals are grasped, plans can be worked out to make a variety of articles of your own design, for example, useful novelties that will be yours exclusively.
After the primary consideration of deciding what to produce or make comes the question of locating the most favorable source of supply for the ingredients, component parts, packages (bottles, tins, paper containers), labels and shipping cartons, to make a professional-looking job of the venture.
Mail-order goods of your own manufacture fall into two principal groups: 1. Goods made by artisan or craftsman, by hand with simple tools or with the aid of light power machinery, as for example, book ends, indoor dog kennels, knock down furniture, wall racks, seashell necklaces, lawn novelties, throw rugs, tropical products, etc. 2. Chemical specialties which any "mixer" can learn to compound at home, on the kitchen stove, in a small shop or in his garage. This is the so-called proprietary field, where the making and the selling of simple products has crowned the efforts of many limited - capitaloperators with success.
In starting out, pick something in demand which is easy to manufacture, and if possible, choose a repeat article or a "line" of products so that the sale of one item can be used to introduce others. Proprietary manufacture offers a wide margin of profit, the container sometimes costing more than the contents, and yet the compound can be competitively priced. Sometimes common products go well, when promoted with a "new angle".
Remember, when you put up your own goods, do so on a small scale to start. The cost of materials is not the paramount issue in the beginning but if your product is worthy of making or putting together, it can be priced high enough to be within competition and yet be a very good value to the customer.
SELLING MERCHANDISE [related books]
SALE OF BOOKS AND MANUALS. The book business lends itself nicely to mail selling. Only limited stock needs to be carried, with no breakage or spoilage, and a special mailing rate not extended to any other product is available. In the publication of educational materials, the markup over processing cost runs high. A manual costing less than a dollar in quantity to publish often sells for ten dollars or more. The buyer is not purchasing just so much paper and ink, but presumably years of a writer's skill and experience, the writing of which required tedious hours, days, or weeks to make it ready for study by people who want to learn.
COMPUTER SOFTWARE AND BOOKS ON COMPUTERS. For those knowledgeable about computers there is a fast and still rapidly growing market of buyers out there who are interested in reading and learning about computers and various software. Inexpensive software also has a tremendous market.
SALE OF SUPPLIES AND EQUIPMENT. The hobbyist, small craftsman, and the home worker, all purchase materials and supplies to facilitate the making of articles for resale or pleasure. In general, these people need inexpensive supplies and equipment, in small quantities. Most of their orders would be small, but of repeat nature. Moreover, these people often hesitate to try dealing with the large suppliers, who after all do not generally cater to limited quantity users. Getting intimately acquainted with a field of operations, discovering what is required in small enterprises, and preparing to supply one or more of these needs is an excellent plan for getting started in the mail order business.
SALE OF OFFICE SUPPLIES. Begun in a very limited way, some projects of this kind have climbed into the big business classification, and the door is still open. A ready market exists for small-quantity sales of stationery, printing, postal scales, filing and indexing equipment, a variety of computer supplies, especially goods simply and inexpensively constructed. Demand does not have to be created for many of these products, and attractively printed promotional material, will do the job of marketing.
HOUSEHOLD SPECIALTIES. These are good sellers if not so common as to be available at department and discount stores. Those interested in chemical preparations are faced with an analogous situation. A product can be compounded and put up under a distributor's private label by a manufacturing chemist, often at lower prices than an individual could realize when buying in limited quantities at wholesale.
AUTOMOBILE SPECIALTIES. Special washing and polishing aids, automobile "Beauty Packs" (and assortment of car beautifiers), touch-up and car-painting accessories, parts and attachments. All of these are good mail order items when advertised properly.
SELLING INFORMATION BY MAIL [related book]
Selling instructions and information by mail embraces a large field. At one extreme is the correspondence school which aims to bring a university campus to the door, and at the other extreme is the small operator who for a dollar or two will send information about something you like to know or will reveal a "secret" or formula of some kind. In between these two extremes there are many possibilities. Those individuals who are conscious of mail-buying opportunities, and who seek training at home and in spare time will discover many useful pieces of information to be had at a small cost. Mail order operators who specialize in selling bits of education are in a socially desirable enterprise, and a well managed one can produce very profitable and satisfying results.
Little wonder then that for the small operator, selling of "information" is attractive. One authority states: " at least 50 percent of all the beginners start their career in mail order by offering a plan, formula, or information sheet. At least 49 percent lose money in their venture." Some quit then and there because their visions of fast easy money are shattered. Others realize their mistakes, profit by their experience and go on to a successful, profitable mail order business.
HOW TO GET STARTED. An excellent way to get started in selling information is to push what you yourself have written. By having several hundred or several thousand copies made, you can, at small cost, try out the plan. With the right mail selling methods, you may profit, just as many others are doing. In this field the buyer usually gets good value in obtaining something which requires days, weeks, or even months to prepare, and there is a long gross profit on each sale. Reports and manuals which sell for $5.00 to $10.00 and sometimes higher may cost approximately 20 cents to $1.00 to print.
There are many spare-time operators making money year after year in "how-to" courses. The classified columns and display advertising sections of the craft magazines are replete with such offerings.
SELLING FORMULAS. Formulas alone are difficult to sell. Value lies not entirely in the formula, recipe, kink, or knack of getting some result, but also in the plan and the person pushing the process or formula. Well presented with instructions for using, formulas singly or in group sets in report form are being successfully sold by mail. Many of them can be built around successful household operations. In selling a plan, a formula, and the like, work out a setup of your own and merchandise it in a way to build a satisfied clientele.
If you have imagination and vision, mail order enterprises provide a chance to sell your knowledge. Many people posses information for which others would willingly pay a fair price. If you have a special field in which you have reason to believe others would be interested, write up an instruction sheet or folio about it. Information, instruction, or education by mail can be started with a minimum capital, with little mailing costs. Further it is an easy way to get started, and is one of the most profitable areas of mail order selling.
SELLING SERVICES [related book]
Persons qualified in a trade or profession are often able to market their services by mail, very frequently on a part-time basis to supplement regular employment. Here are some typical illustrations:
1. Word Processing and mailing services:
(a) addressing and handling mailings
(b) typing of manuscripts (sometimes with revisions and editing)
2. Assistance in publication work:
(a) writing of sales literature and information folios
(b) editorial aid to authors, and small businesses
(c) printing, and photocopying
3. Skilled trade and professional services
(a) photographic work (as development of film
(b) commercial art work
(c) patent attorney (assistance in securing a patent and rendering of advice in the market of a new invention)
(d) analytical chemistry (consultant chemist specializing in analyzing prod ucts and suggesting improvements, including better marketing policies
(e) economic advisors, as in the line tax relief, especially helpful to smallerm industrial corporations
(f) advertising writers, who help business concerns with advertising problems
(g) mail-order consultants, catering to beginners, also small mail order companies who wish to perfect their methods and expand
4. News and information services:
(a) current information bulletins and special releases, put out by specialized reporters situated in a strategic center
(b) market analysis reports in investment and commodity fields
(c) syndicated materials, as a column for a newspaper
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