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Get Started in the Mail Order Business
How Much Does it Cost?
INTRODUCTION [related books]
This report was written as a service to those individuals
who are considering to get
started in the mail order business. To get any business started
successfully takes many
ingredients. However, all requirements, more or less, fall into
one of the following four key categories: 1. Desire, 2. knowledge,
3. time, and 4. available funds.
This report deals only with the financial requirements of
starting a mail order
business. Hopefully it will help the reader to evaluate whether
he is financially able to
embark upon a business venture that will bring about success.
It is generally true that it
takes substantially less money to get started in many mail order
businesses than in a
variety of other businesses. Many a promoter will want you to
believe that it is possible to get started successfully for $50.00,
$100.00 or $200.00. This is totally false. It does take more
than that. How much more depends on many factors which I will
try to define as much as is possible here.
Since the mail order business covers a vast number of services
and products I would
like to define the contents of this report to deal with the selling
of information products. This is where my expertise lies. While
the same or similar conditions may apply to any number of other
mail order businesses, there may however, be some differences
to selling information products such as books, etc.
The following makes a number of assumptions. The most important
1. The operator (or operators) of the new mail order business
is employed or has
other means of income. He will not need to derive any profit
from his new business for a period of time. How long will depend
on many factors.
2. This is a home based business which has no employees.
3. The business, at the start - until volume reaches $3,000
to $5,000 per month - will
utilize the drop shipping
services of a wholesale company.
4. Basic office equipment such as desk, file cabinet, typewriter
or computer, etc. are
As you are getting started in planning and setting up your new
business which in my
experience is one of the most enjoyable and satisfying experiences
of a lifetime think and act with caution when it pertains to
any expenditures. This is one of the most difficult things to
do since you are probably very enthusiastic and want to do everything
today. So you need to learn HOW TO CONTROL YOUR ENTHUSIASM or
it is going to cost you lots of extra money.
In this state of enthusiasm we tend to think that there is
nothing we can do wrong
and since we will be making lots of money in a few months lets
get all necessary and often unnecessary supplies and equipment.
It would be much better to wait until profits of the business
make it possible to acquire what is needed. In the meantime you
can make do with less. To be able to do so is a most important
quality for the owner of a small business. If you are a parent
think of your new business as a child. There will be a never
ending sequence of surprises. And as the business grows so will
its demands, and yes its expenses.
START-UP EXPENSES -- INITIAL STAGE
The below listed expenses will be incurred in the very early
stages of setting up your
business. This is at a time when you probably are not sure as
yet what you will be selling. You will be writing to different
companies for information to come up with the right product selection.
Once you have decided what it is you will be selling you have
to line up reliable suppliers. This is also a good time to buy
a few books to help you with your mail order education. Although
most expenses incurred in this phase are relatively small they
will add up quickly.
Stationery and envelopes 50.00
P.O. Box rental (per year) 60.00
Misc. office supplies 30.00
START-UP EXPENSES -- SECONDARY STAGE
You have now reached the point at which you have decided upon
one or more
reliable suppliers for the product you wish to market. You may
also be ready to have some promotional material printed. In addition
you may be placing one or two classified ads for testing purposes.
Promotional material (brochures,etc.)50.00
Printing (order forms, sales letters,etc)90.00
Classified Ad (national magazine100.00
Business or trade license 30.00
Until now you have only had expenses for your new business.
You have not derived
any revenue yet. In the next and final stage of starting your
business you may have some revenues. Stage one and two may take
from approximately 3 to 6 months.
START-UP EXPENSES -- THIRD STAGE
You have now reached a stage were you will expand your advertising,
you may go the direct marketing route and work with mailing lists.
The comparison of
expenses and revenue results of a direct marketing effort versus
classified advertising need to be carefully evaluated. Refer
to special report:
Since expenses for a direct marketing effort are generally
higher than for a small
advertising campaign, the below listed expenses focus on an advertising
Advertising -- 3 classified ads 280.00
Postage for several hundred inquiries derived
from adverting effort 75.00
Miscellaneous office supplies 30.00
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The combined expenses as listed above total just under $1000.00.
They are based
on broad estimates and may vary somewhat by area of the country
circumstances. The figures are reflecting a minimum amount. I
am sure some individuals may be able to cut expenses further.
Since this planning period takes several months the expenses
as shown above can be allocated over a period of 4-6 months.
The above figures represent a conservative start. For those
who want to get started
more aggressively expenses would be higher. While many of the
basic start-up costs would be the same the expenses that would
increase would primarily deal with additional advertising, printing
and postage expenses. By how much would largely be an individual
Since most new businesses fail because of lack of funds, it
would be advisable for
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anyone who does not have the necessary funds to get started to
wait until he does. In
addition to the basic start-up expenses an individual should
also consider that most
businesses will loose money for several months and sometimes
for longer than that.
Unfortunately no matter how well you plan, circumstances often
change and we must make allowances for those eventualities.
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