MILLIONS OF MAIL ORDER CATALOGS
An average mailing by a small, one person mail order company is
generally about a thousand pieces, and many such operators
rarely mail more than a hundred pieces per week. If you know
your conversion statistics, you know that the order return on
mailings is about 1% to 2% when using a rented list of names, up
to 5% or more when mailing to your own customer list.
Using those figures, the response rate would be about 2 orders
from a mailing of 100 when using a cold list, and about 5 to 10
orders when mailing to your own customer list for each 100
pieces mailed.
Contrast this to a major catalog mailing house such as Miles
Kimball, Hanover House, Lillian Vernon, Johnson-Smith or L.L.
Bean, each of whom might consider a mailing of six million
pieces a month or every few months.
Keep in mind that these are catalog merchandisers - mass
mailers, not manufacturers. Not publishers. Mailers!
They BUY what they sell from somebody. It could be from you!
WHAT ARE THEY LOOKING FOR?
Catalog houses are owned and operated by extremely sharp people
and they are highly selective in the products they choose for
inclusion in their catalogs, so to even be considered, your
product must pass some pretty rigid tests:
1. Since some catalog companies specialize in a certain type of
merchandise, they will choose only what they think their
customers will buy.
2. Virtually all of them will want to test-market a product
(possibly only a hundred or so) before making a complete catalog
mailing. If the test shows promise, they will purchase a large
quantity (1,000 to 5,000 or more) for their roll-out mailings...
and continue to purchase such quantities as long as the product
continues to sell.
3. Catalog mailers want to deal as close to the original source
as possible, such as inventor, the patent owner, copyright
holder, manufacturer or publisher. The reason for this is simply
that these are people who can offer them the largest discount on
quantity purchases. If you are merely one of many dealers who
had to purchase the product from a wholesaler who purchased from
a distributor, who purchased the product from the manufacturer,
you would not be in a position to offer the lowest price to the
catalog company.
4. The item in question should be new and unique, not something
that's been around for years. Naturally, it should be a good
mail order item.
HOW YOU CAN QUALIFY FOR ACCEPTANCE
First and foremost, you must look and act the part of an
established, professionally operated business. This means you
must have printed stationery with a company name that coincides
with the products you are offering, and all correspondence must
be typewritten.
If that seems trite and elementary, you would be surprised to
see how many companies receive scribbled hand written notes on
ruled paper with wording such as "I would like you to include my
product in your catalog." Sorry, it just doesn't work like that.
Even if you are not the actual inventor or manufacturer of the
product you are selling, you can qualify to have it included in
a large mailers' catalog where everyone can profit from it.
Imports are very popular catalog sellers, for instance, so if
you locate a new item from overseas, you can arrange to become
the U.S. distributor. Yes, it means a sizable investment for
stocking inventory, but if you have faith in what you plan to
sell, it should be worth investing in.
Before offering it to any catalog mailer, however, it would be
in your best interest to test-market the item yourself. You
certainly don't want to offer a "loser" to a major catalog
mailer. You'll want to be sure this is something that will sell,
so everybody is happy with the deal. Perhaps even more
importantly, it will bond your relationship with the catalog
companies and they will be eager to do business with you the
next time you come up with a new product.
PRICING YOUR PRODUCT
This is crucial. A price that's too high means it will not be
accepted; priced too low and you will not make a profit - no
matter how many are sold.
Keep in mind that some catalog mailers specialize in low priced
($10 or less) items, while others have geared their sales to the
higher bracket of $50 or more. When making a list of catalog
houses to approach, check their catalogs for prices of their
current merchandise.
There are three basic levels of retail prices:
1. The pre-established price by owner or manufacturer
2. Actual dollar value based on production costs
3. Perceived value by prospective buyers
If you are not the primary source for your product, the
manufacturer may have already set the retail price along with
distributor and wholesale discounts, so you will have to work
those figures in any deals made with catalog companies.
Assuming you have pricing control (granted by the original
source, or you are the originator) you can set the retail price
according to the production costs which can be a 5-to-1 or 10-1
ratio. If the item costs $1 to make, you can set a retail price
of $5 or $10 on it, depending on what you think it is worth to
the consumer.
SIMPLIFY YOUR PRICE STRUCTURE TO COMPANIES
The most common price structures are usually set in various
quantities like dozen or gross; or, 100, 500, 1,000, etc. Don't
use these price structures when trying to interest catalog
companies in your product. Right from the start, give them your
rock bottom lowest possible price.
For examples, if your usual prices are:
100 @ $4.50; 500 @ $3.75; 1000 @ $2.75 and 5,000 @ $1.95
give them your 5,000 quantity price no matter how many they
order for their original test. Even if they only want 100 for
testing, give them your $1.95 price - but be sure to tell them
this is your lowest price that is for regular 5,000 quantity
purchases, so they know they're getting the good deal.
TIME TO CREATE YOUR PROMOTIONAL PACKAGE
Company buyers are busy people, so you'll want to make your
presentation quickly, clearly, and distinctly, eliminating all
fluff and extraneous material or wording that might tend to bog
things down.
Here's what you'll need:
Descriptive folder or flyer about the product (Information sheet)
Glossy photo of the product
Possible advertising copy (although they will probably re-write
it)
Terms of your sale, including freight charges
Brief cover letter
(Optional) Sample of your product IF it is small, light weight,
inexpensive, and if you think it will impress the company.
Send this mailing package via First Class Mail!
How many of these promotional packages should you mail? Only you
can answer that question, but here's a tip: Don't expect only 10
or 12 to produce much response for your product. It might
require 50 to 100 or even 500 such mailings before you begin to
see worthwhile results. Of course, a lot depends on the product
itself and whether it is for the general public or restricted to
a more selective audience.
Whenever possible, try to determine what type of merchandise
each catalog house offers before sending them your offer. If
they cater only to men and your product will be used primarily
by women, why waste time and money? The same would apply to a
low priced item such as $5 offered to a catalog house whose
clientele happened to be sophisticated or wealthy people
accustomed to buying merchandise in the hundreds of dollars.
Match your product with the catalog company's line as closely as
possible.
HANDLING THE BUSINESS
If your product is a good one and if you have made a good
impression in your promotional materials, sooner or later you
will get an order for a trial quantity.
Fill the order promptly. Use sturdy boxes and have your own
shipping label (printed with your company name & address) on
each carton, typing the catalog company's name and address with
the customer's shipping number above the name.
SELLING ON CREDIT
Unlike the conventional mail order business, selling to catalog
houses is not a cash-with-order type of operation. It's
conducted on credit, so you'll need invoices to send to your
customer after shipment has been made. There are a few
variations of credit terms, but the best for you will be
"Payment due EOM or 2% discount within 10 days. "EOM" means end
of the month following the date of shipment.
Use your best judgment whether you will ship prepaid or bill
your customer for the shipping charges.
HERE'S A FINAL TIP
If you can get some free publicity for your product along the
way, it can help you reach catalog houses in addition to
bringing you additional sales.
Check magazines that are read by the type of people who will use
your product and look for departments such as "New Products."
Many magazines carry such a department under different titles.
Send a publicity package to the editors which will include the
glossy photo of your product, News Release that tells who will
be interested in the product and why, and a brief cover letter.
If you get a few magazines to accept your offer, they will give
you a mention in their New Products department. This will in
turn bring you a few or a few hundred orders, depending on the
circulation of the magazines and how much demand there might be
for your product.
More importantly, it can link you up with some catalog houses.
They often scan magazines looking for new products to be
featured in their catalogs. Thus, instead of you contacting
them... they will contact you.
The end result is that it can bring you many retail orders as
well as attract a few catalog house buyers who will ultimately
sell your product in their catalogs.
If each catalog house mails 10 million catalogs a year, and your
product is featured inside, I shouldn't have to tell you how
many products can be sold this way. Better stock up now!
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