The Internet is Causing Mail Order to Boom…
How any Business Can Be Diversified by Mail Order

Though many mail order businesses are started from scratch, the majority of home-based entrepreneurs can utilize mail order to grow and diversify their ventures with back-end products and/or add-on services.
The National Mail Order Association (NMOA) estimates that mail order sales exceeded $400 billion dollars in 2006, with no slowdown in sight because of the growth of the Internet mail order channel. Mail order in the U. S. is said to have been in existence since Ben Franklin sold science books by mail and in the late 19th Century when Aaron Montgomery Ward and several other companies produced the first mail order catalogs. In the ‘90s, affordable technology enabling entrepreneurs to start home-based businesses, the increase of consumers’ online connections, and the changes in people’s shopping patterns spurred a phenomenal growth in mail order sales that has continued into this century.

The Internet & Mail Order
The Internet is the primary reason for mail order growth because more entrepreneurs are using it to market and sell their businesses’ offerings to customers around the globe. With people’s increased work hours and hectic lifestyles, they have less time to shop in stores, and prefer to order items online and have their purchases shipped to them. For many businesses, mail order has become a profitable new “method” for sales and staying connected with customers.
Buyers feel safer shopping online as ordering and paying becomes easier and more secure. They can save time and money by being able to shop anywhere from their laptops or leisurely browse and purchase through mail order companies’ catalogs and their web sites. Though mail order companies usually charge for shipping, they generally do not have to collect sales tax from customers unless they live in the state where the company’s operations or satellite offices are located. Check with your state department of revenue about your business’ tax obligations.

Defining Mail Order
John Schulte, President of the National Mail Order Association (NMOA) says, “We classify any ‘distant sale’ as being part of mail order, i.e. if it’s promoted and ordered remotely, without being in a “brick and mortar” store, it’s mail order.” Shulte goes on to say that mail order includes; catalogs, web sales, info-commercials and television home shopping, direct mail, and direct response advertisements. He says all these channels share the same underlying characteristics: An order is placed without touching the product, and it’s delivered to the customer by common carrier. Schulte concludes that other than television or radio, the written word is the salesperson in all these channels; even the television pitch people (demonstrators) are scripted. Customers are entered into a database (mailing list) for future promotional offers.
Note: The NMOA says the FTC’s 30 day rule applies to all remote sellers no matter what system is used to promote and take the orders. Visit www.ftc.gov/bcp/conline/pubs/buspubs/mailorder.shtm, to read “A Business Guide to the Federal Trade Commission’s Mail or Telephone Order Merchandise Rule,” as it pertains to the timely delivery of purchased mail order items.

Diversifying Your Home Business with Mail Order
Though many mail order businesses are started from scratch, the majority of home-based entrepreneurs can utilize mail order to grow and diversify their ventures with back-end products and/or add-on services. As a home business owner, mail order is an excellent low-cost and low-risk way for you to develop new income streams, especially with your regular customers. You know their preferences and they are familiar with your products and trust buying from you.

Mail order can also give you an edge over competitors. Using your web site and/or a catalog or telephone, regular and new customers can purchase new or continued products from you in ways that are more convenient for them.

Selecting a Good Mail Order Product
Some of the most popular items purchased through mail order include books, craft supplies and kits, clothing, educational items, technology, sports and hobby equipment, gifts, recorded music, office supplies, financial services and more. If you are a professional or have expertise in a field, you can also sell that knowledge in the form of original newsletters, e-zines, books, e-books, CDs, or DVDs.

Specialization is the key to success. Choose mail order products/services that target a potential customer market that is too small to be profitable for large businesses (but profitable for you). If you tutor special children, for example, you could sell toys and equipment that are designed for these children; or provide a consulting service for parents or institutions, along with your packaged instructional or informational products. Selecting items that relate to your business encourages repeat mail order purchases.

Evaluate your customers’ responses to your initial test-marketing, and add a line of products that sensibly relate to one another, fostering their “need” for your products. For example, if you wrote a book on Italian-American cooking, you could post sample pasta recipes on a web site, along with selling special ingredients or unique cooking tools used in your recipes. Mail order experts advise that you carry more than one product for increased orders and sales; but not so many that would prevent you from handling a sudden demand. Solicit your customers often for their feedback to monitor their needs and buying patterns and to better provide them with the mail order products or services they request.

Starting a Generic Mail Order Business
Mail order is an excellent method to sell a product or service without having a brick and mortar retail store or wholesale warehouse. As mentioned, a mail order business can be a spin-off to an existing venture where sell your own line of original products or others’ new or used products through a catalog, direct advertising, or online or with drop shipping or affiliate programs.

In drop shipping, your supplier ships directly to your customers, but uses your business’ shipping tag. It is one way to get started in mail order and to keep the costs down of buying (or storing) too much inventory. Analyze the products you are selling for their quality and profit potential. Research your suppliers and manufacturers to guarantee they are dependable. Ask for references. Follow-up on sales to ensure your customers have received their products and are satisfied. Your eventual goal is to have a supply of well-selling products on hand that you produce or can purchase and ship from your location.

Designing a Mail Order Business Plan
No doubt, you have read about famous persons who have become millionaires through their mail order businesses, but many people have also lost money. To be successful, you should learn all you can about running a mail order business; and design a mail order (business) plan based on your situation and your objectives.

Your Plan’s Purpose
The reason for a business plan is to first determine if starting your proposed mail order business is a viable option financially, with potential for growth; and to use as a guide. It should include your business’s goals, objectives, and your strategies for achieving them. Use your plan to figure your start-up and operating expenses (advertising, printing and postage are usually biggest costs in mail order); and realistic cash flow projections, especially the break-even point, when your income will equal your expenses.

To create your plan, you can use business plan and or mail order business planning software or contact volunteers of the Senior Corps of Retired Executives (SCORE) that offer free assistance for writing business plans. Visit www.score.org for the location of local offices; and for access to the site’s business plan templates.

Highlighting Your Product
Use your plan to define the most profitable market niche for your business and through market research to highlight the distinctive qualities and benefits of your products and services that will appeal to customers.

Finding Target Customers
Your plan should identify your specific target customers and reveal if they exist in sufficient numbers to support your mail order venture; and are willing to pay the prices you need to make a profit. Once identified, you can plan your marketing tactics to reach them. (SEE Marketing/Advertising). Your prices should be competitive but attractive enough to your potential customers to pay for your product or services, in addition to your shipping and handling fees. Though your goal is to get customers to purchase the first time, remember that in mail order, steady profits come from repeat sales.

Studying Competitors
If your market research reveals that your competitors carry similar products or services to yours, then decide if your offerings differ enough from theirs to attract substantial paying customers for a profitable business. Your products’/services’ exclusivity will be an important factor in marketing and business success.

Going Full- vs. Part-Time
Save up to two years’ living expenses if you decide to launch full-time in mail order. Going part-time has the advantages of keeping the benefits of your regular job while test-marketing your products reception and learning mail order operations. Take the time to follow your plan and build your business at a pace that you can handle, while satisfying your customers. Refer to your plan often to keep your business on target.

Marketing/Advertising:

Marketing includes all the activities (publicity, public relations, and paid ads) that business owners use to communicate to potential customers that they have product or service that is beneficial for them to purchase. Consider these methods:

Effective Ways to Market and Advertise for Mail Order
Use a marketing “mix” of both paid ads and public relations strategies to find the ones that bring the best responses. Launch your mail order business with a well-written press release. Mail it along with an informational packet to the editors of publications whose readership includes your target market. Include your contact information and photos.

Advertising space can be costly, so start with less expensive classified ads. Request publications’ media kits whose readership demographics will help you determine the best placements for your ad. Ask also about advertisers’ special rates for mail order and any other discounts.

Study publications’ back issues to see if competitors have repeated their ads there, an indication that your ads may be successful there, too. Use a marketing calendar to implement and evaluate the effectiveness of each marketing method. Track response rates from your ads by assigning codes to them. Keeping records of your ads, the costs, and responses, takes time, but you will eventually discover the best publications for your mail order business.
Depending on your advertising budget, you may consider purchasing television and radio advertising spots. Rates vary according to the length of your ad, the time of day or night, and if you use local networks and stations. It may be more affordable than you think.

Designing an Effective Mail Order Ad
Sales pieces that are mailed or presented to potential customers should feature the specific products/services that will grab their attention and motivate them to respond. Remember, the more defined your target audience, the easier it is to market your items to them. Your earlier market research should have revealed their preferences and needs and how your products/services can be useful to them.

– The challenge in writing direct mail pieces to be sent, seen (television or display ads), or broadcast (radio) is to make your written words or copy be the best “salesperson” possible.

Here are some tips:

• Write your copy concisely, but in a sincere, conversational tone. Use “selling” adjectives like “best,“ “great,“ “excellent,” effective,“ and others.
• Write about the benefits to “You” (the customer), and include testimonials from satisfied customers.
• Offer a free gift, sample or trial offer; a money-back guarantee; or a discount if they respond within a time limit.
• Urge them to respond with calls, reply cards, e-mails, or attending seminars.
• Emphasize your products’/services’ advantages, but do not make excessive claims.
• Review your ad or pay a copyeditor to check your copy for misspellings, grammar, and readability.
• Incorporate photos or graphics to illustrate or demonstrate your mail order products.

If you need assistance designing or writing your ads, hire an independent copywriter or agency that specializes in direct mail pieces. Revise and test your ads to find the most effective ones and repeat them until they no longer elicit adequate responses.

Your Web Site & Mail Order
If your home-business already has a web presence, consult with your web designer, web hosting service, or an e-commerce expert on the best way to sell and fulfill online orders. Various U.S Small Business Development Centers (USBDCs) offer on-site or online e-commerce seminars (Visit www.sba.gov/index.html and search “Local Resources” for local offices). If your mail order business is a new start-up venture, first establish your business; and then take next the steps for incorporating a commercial web site into your business plan.

To economize, you can use free web site templates or purchase web site creation software. Almost any web-hosting company can carry an uncomplicated site consisting of a few pages of text and simple graphics for a reasonable monthly fee. To accept online payments, you can use online payment companies like PayPal.com or remotely hosted shopping carts that place a “Buy Now” button on your site but take customers orders on their site.

As your mail order business grows, you can develop a more extensive e-commerce site with a catalog, shopping cart, and credit card processing capabilities. In accepting credit cards, you may qualify for your own merchant account or pay a shopping cart service for the right to use their merchant accounts. Buyers tend to make more purchases if they can pay with their credit cards.

Test-Marketing
You can use online auctions sites to test products’ sales potential and to attract customers to your site. Exhibit at industry trade shows and offer free samples to get feedback to reveal your items’ profit potential.

Marketing Your Site
In addition to linking to search engines, market your site by listing your business’s web address on your business cards, promotional literature, and in all your ads. Exchange links with the owners of related businesses’ sites, including your suppliers’ so your customers can get additional information; or if you are earning commissions or selling your own products with affiliate programs web sites.

Web sites need not be expensive, but not having one may mean you will miss sales from potential customers who prefer online shopping.

Direct Marketing: Mail Order Sales Packages
Mail order, also known as (aka) direct marketing, includes postcards, brochures, sales, letters, reply cards, and other printed promotional materials that you can deliver through the U. S. Postal Service to obtain a mailed, phoned, faxed, or e-mailed customer responses. According to the Direct Marketing Association (DMA), marketers spent $166.5 billion in 2006 on direct marketing in the United States… generating some $1.93 trillion in incremental sales.

Typical direct mail sales packages contain sales letters, pamphlets or fliers, and reply cards. It takes an average of seven messages to potential customers before they make any purchasing decisions. Using a combination of the following methods and available technology will help bring in more profits. Here are some tips:

Mailing Lists
Direct marketers mail their sales packages to potential customers whose names they have garnered from advertising responses, trade show attendees, referrals, and other sources; or from mailing list companies that sell lists compiled of target customers.

Update your list twice a year and cut down on mailing expenses with test-mailings and follow-ups to ensure your mailings are reaching your designate targets. Simplify operations by presorting your mail, using barcodes, and mastering database management software for mailing lists. If you prefer and can afford it, you can hire mail consolidation companies to presort your mail and send it to bulk mail centers.

Sales Letters
Creating leads by getting customers to respond using reply cards, phone calls, faxes, or e-mails is the purpose of a sales letter. In one page, write an attention-grabber opening that will compel the prospective customer to read the entire letter; and emphasize the pluses of using your products/services. People often read a letter’s postscript (P.S.) first, so include your basic pitch in it. Encourage fast responses with a no-risk offer of free information with a deadline and a “call to action” with a toll-free number, an e-mail address, or a postage-paid reply card. Review the FTC.gov rules regarding the wording “free” in advertisements at www.ftc.gov/bcp/guides/free.htm.

Brochures
Brochures fulfill potential customers’ requests for more information. Write them with compelling headlines that persuade people to take one. Whether you produce it yourself or hire specialists, your brochures should enhance you and your business’s professionalism and image.

Envelope
If prospective customers do not open your direct mail envelopes, then all the materials within are useless. Place an appealing headline of a question or teaser on your envelope to encourage your reader to open and read it. Test unusual sizes, shapes, or colors, but make sure it is tasteful and reflects your business’s image. Follow U. S. postal regulations regarding the placement of art and copy on your envelopes.

Guarantees
If you offer a guarantee for your product/services, prospective customers may be more willing to trust you, request more information, or try your business offerings.

FTC rules state that if your customer has to pay for your product, you cannot use the word “free” in your sales pieces. However, if you guarantee a refund, you are permitted to say your offer is “risk free.” Visit www.FTC.gov for rules and guidelines.

 Systemized Sales Letter Follow-Ups
A follow-up letter or communication is the direct piece most likely to bring in sales; so have a system of follow-up responses ready before sending out any direct mail packages. In starting out, use your own basic organizational methods to track responses and follow-ups; but as your mail order business grows, you can invest in direct mail business management software to streamline your operations.

As you can afford it, purchase specialized equipment like letter-folding and opening machines, postal meters (some with document inserters), postal scales (some can compare carrier rates), and other equipment as to speed your mailings. No matter what system you use, it is important to send follow-up communications to all persons who respond. Thank them for their interest; offer some new information or another offer; repeat the benefits of using your product or services; and stress that you look forward to doing business with them. Follow-ups remind prospective customers who you are and that you are a mail order professional they can trust.

Incorporating E-mail into Sales Systems
Businesses that sell their mail order items successfully online use e-mail to keep in touch with their current customers and to solicit to new potential ones. They also use e-mail to send follow-ups with thank yous, congratulations (birthdays), reminder prompts (renewals), or for customer feedback and more.

Use interesting subject lines to pique customers’ curiosity in regular e-mails that contain company news (not always trying to sell something) or helpful tips, and make it easy for people to sign-up or subscribe. Respond immediately to any queries or complaints, or use an autoresponder to acknowledge their e-mails when you are away. Consider using automated email management list software to efficiently maintain your business’s emails.

Follow current spam and national privacy laws when collecting any permission-based, customer information, including children. You should also post your own privacy policy regarding your use of any collected customers’ e-mail addresses and other confidential information. For more information, visit these sites: www.FTC.gov; the Electronic Privacy Information Center (www.epic.org/) and the Consumer Information Organization (http://privacy.net/).

Factors for Successful Mail Order Operations

Management Tips
The key to managing a successful mail order business is to perform what you do best, and hire or subcontract professionals, agencies, assistants, or customer service representatives to do what you are not qualified or prefer not to do.

Successful inventory management with accurate records is also crucial for your success and to reduce costs and lost sales. You should always know your present stock status; plus have operations in place to promptly handle back orders and returns. Some popular software for managing a mail order business, including an online store, are Mail Order Manager (www.dydacomp.com/mainmom.asp); Order Pro Software (www.pcinn.com/); and Response (www.colinear.com/). Ask other mail order entrepreneurs for their suggestions, and request free demos from companies to find the best software for your operations.

Monitoring & Analysis
To ensure a positive cash flow and customer satisfaction in mail order, routinely monitor and analyze your business’s activities. Business accounting and/or mail order operational software will simplify the tracking and reporting of your daily financials. Review these figures regularly with your accountant or financial experts to regulate your pricing and expenses.

Solicit feedback from your customers about your products and service with reply cards or questionnaires to evaluate and improve your business’s operations. Check your business plan frequently to see if you are working toward your goals, and revise them according to your customers’ needs and requests. Note your most effective marketing tactics, consult with a marketing expert, or network with other entrepreneurs for new and creative ideas.

Additional Success Factors

Mail order entrepreneurs offer some success tips:

• Sell specialized products/services and ones with which you are familiar and knowledgeable through your education, training, and/or experience and hobbies.
• Offer customers convenient ways to order (and return), pay, and contact you using both on- and offline ordering and toll-free telephone ordering and customer service or help lines.
• Before you ever start planning your mail order business, enroll in business start-up and direct mail courses, attend seminars; read industry publications and books; attend trade shows; learn to operate the software programs you will be using; seek tips from mail order experts and entrepreneurs for tips; or gain experience by working in the industry.

As your mail order business expands, consult with your accountant and other professionals to help you keep pace. Hire knowledgeable and customer-friendly employees to foster good customer relations.

Promptness & Fulfillment
You should respond within 24-hours to all mail order inquiries and orders. Failure to do so will result in increased complaints, cancelled orders, and even fines for not delivering in time (or providing refunds) as required by law. Use the methods that are easy and that the customers prefer: First class mail response; e-mail confirmation; and voice mail to return calls.

In fulfilling orders, research and test the best methods to deliver your products. Visit the U. S. Postal Service’s web site (www.usps.gov) and other carriers for information about package sizes and bulk mailing and other shipping costs. Contact other private or rail companies individually for their rates should you need this type of delivery. United Parcel Service (www.UPS.com); FedEx (www.FedEx.com); DHL (www.dhl.com); Provide customers with shipping choices (carriers, delivery time and addresses, tracking capabilities) when they order. Work closely with your carriers to track shipments and ensure the timely delivery of your products. Notify customers immediately about any delays.

Other Mail Order Considerations

Zoning
Whether you have an existing home-based business or planning to start one, consider how mail order operations could impact your neighborhood as it pertains to your local zoning regulations. To avoid complaints about traffic or parking, try to limit the number of pick-ups, deliveries, or customers’ visits to your home.

As an alternative, you can choose to rent a private mailbox at packaging and shipping stores from which you can send your packages; or rent a unit at a nearby storage facility for dropping off deliveries or for inventory storage. Your home would then be as your mail order business’s operational “headquarters.”

Selling in Catalogs
While some companies are eliminating their mail order catalogs and choosing to sell exclusively through Internet sales, others are using the Internet to complement their existing catalogs. The NMOA estimates there are some 11,000 consumer catalogs and 6,000 business-to-business (B2B) catalogs in existence.

>> Visit the HBM EXPO! Hundred’s of Home-Based Businesses, Franchises & Opportunities to Choose From!

If having a catalog interests you, simply start with a one-page flier listing your products and an order form. Then build your catalog to offering more products as you test them for customer demand. Attend industry shows to keep up with trends, and check out any competitors’ catalogs to see what you could offer differently. Cover the expenses of compiling and mailing by charging your customers for them, and then giving them discounts or refunds when they order. The advantage of sending out a catalog or flier is that potential customers can sit down and take time to read about your items and then go online to place their orders.

If you wish to sell items in other companies’ catalogs, search for ones that sell items related to your business and in the same price range. The National Directory of Catalogs lists some 9,000 North American catalogs. Visit the web sites of likely candidates, or call them about submission procedures. Inquire about the average number of orders they receive to see if you can supply that amount; and whether you can make a profit selling your items to them at wholesale prices.

There are no guarantees you will become a millionaire with a mail order venture, but hard work; a willingness to continually learn about the industry, and a persistence to find those untapped, potentially lucrative niches for your products or services, will increase the likelihood that you will have a successful mail order business with potential customers from all over the world. HBM

Priscilla Y. Huff’s (www.PYHuff.com) latest book is Make Your Business Survive and Thrive! 100+ Proven Marketing Methods to Help You Beat the Odds and Build a Successful Small or Home-Based Enterprise (John Wiley & Sons). Questions or comments: pyhuff@hotmail.com.

SIDEBAR: #1

Questions to Help You Select an Ideal Product/Service for Mail Order

Does it fulfill a specialized market niche by solving a problem or saving time or money?

Is it not easily attained elsewhere?

Are potential customers familiar with the type of product but attracted to its uniqueness?

Are its benefits obvious?

Does it have a strong appeal?

Is it easy to deliver and cost-effective to ship and receive (for customers who pay the shipping expenses)?

Is it profitable to produce/obtain, market, sell, and package?

Is it a product/service of high quality with value to your customers?

Does it compliment your existing home business’s offerings?

Can it be expanded or varied into a line of products or related ones?

Is it a product or service that customers will want/need to purchase repeatedly (runs out or needs replacement parts)?
HBM

SIDEBAR: #2:

Mail Order Resources to Get You Started

Associations

Direct Marketing Association – www.the-dma.org/

National Mail Order Association www.nmoa.org

Books
Building a Mail Order Business: A Complete Manual for Success by William A., PhD Cohen

How to Start a Home-Based Mail Order Business, 3rd ed. by Georganne Fiumara

Web Sites
www.SBA.gov – SBA booklet: “Selling by Mail Order” – Pamphlet # MT-9 (enter “mail order” in search box)

www.TSNN.com – Trade Show News Network – Internet database with information on more than 15,000 trade shows

www.usps.com/businessmail101/; www.usps.com/business – U. S. Postal Service web sites for bulk mailing and postal rates for business owners.

HBM

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The post Why the Internet is Causing Mail Order to Boom appeared first on Home Business Magazine.

Add Mail Order Profits to an Existing Business or Start-Up a Mail Order Business
By John Schulte, President and Chairman, National Mail Order Association (NMOA)
http://www.nmoa.org

Mail Order. These two words that have excited and inspired entrepreneurs for generations. More so perhaps than any other type of home business, mail order conjures up visions of wealth and easy living — offering entrepreneurs a dreamy business model of no commute, no long hours, and the ability to work from anyplace in the world.
Now commonly referred to as Direct Marketing, mail order has a magnetic attraction that draws people to it. The Internet (the newest mail order medium) is drawing people to mail order like never before. Like other types of businesses, mail order has evolved considerably, but still, its advantages are many and disadvan¬tages few. The one thing that has not changed is its share of successes and failures. It is not a quick, easy, effortless road to riches; however, there are countless success stories of people who have not only made a good living selling products and services by mail, but who have amassed fortunes—starting on a kitchen table, in a garage, or spare room. Cabela’s, Sportsman’s Guide, Lillian Vernon, L.L. Bean, Sears, and many others all started from home or as a side line.

There are hundreds, if not thousands of examples, of people just like you that have a thriving mail order operation running right from their home. With the mass availability of low cost technology, starting and running a home-based mail order business has never been easier.

Mail Order’s Share of Sales
Mail order sales continue to outpace total U.S. sales growth, consistently increasing its percent share of total U.S. sales. In the spring of 2008, 45.61% of the total U.S. population made a purchase by mail, phone, or Internet. And that percentage rockets to 73.17% for households with an income of $200,000+.
According to the Statistical Fact Book published by the Direct Marketing Association (DMA), in 2008, marketers — commercial and nonprofit — spent $176.9 billion on direct marketing, which accounted for 52.1% of all ad expenditures in the United States.

Measured against total U.S. sales, these advertising expenditures generated approximately $2.057 trillion in incremental sales. Last year, direct marketing accounted for approximately 10% of total U.S. gross domestic product.

What Is Mail Order?
A mail order business is simply a group of satisfied customers who purchase from you on a regular basis, and that you deal with remotely. As a marketing term, “mail order” could describe any form of advertising or promotional effort that sells products and services at a distance, produces a traceable response, and captures important customer or potential customer information that can be used to further expand sales opportunities. This includes many tools, such as: direct mail, catalogs, infomercials, print advertising and the Internet. All of these tools can be used individually or in conjunction with one another to achieve a desired result. The single characteristic of all mail order marketing is the ability to trigger a direct action, a “measurable action” at the right cost.

How Mail Order Has Grown With The Internet
One of the advantages of mail order has always been the low cost of entry into the business. You don’t need a lot of money to get started. The Internet has once again lowered the cost of entering the mail order business. Now instead of a print catalog, you have an electronic catalog; instead of mailing letters, you email. While you will also need to use off-line media like direct mail and print advertisements, the Internet offers you a low cost “starting point.”
The Internet also creates a global market for the products we sell. While we are reaching out looking for people who need our products, people all over the world are searching for us. It just doesn’t get any better than that.

Mail Order in a Down Economy
While every business is affected by a down economy in some way, mail order has certain advantages that make it easier for the entrepreneur to weather the storm, and actually do better than many other retailers. The mail order operator enjoys low overhead, and the ability to precisely measure advertising efforts and easily eliminate of the non-performing. They have the ability to target narrow markets that others are missing or neglecting.

The Basics On Starting Up A Mail Order Business
The great thing about a mail order business is the simplicity to getting set up. So let’s do a quick outline of getting ready to sell.

Products to Sell
First, you must decide on a category of products you want to sell. It’s nearly impossible to make money selling a single product unless you have exclusive rights to it. If you are like most people, without exclusive rights to a product, you will need to pick a category of products that will sell well together. You don’t want to sell a pet product one week, and woodworking tools the next.
Specialize in one area, so that your current customers will be likely candidates for future products as well. With this in mind, you should start with at least two related products, so when you deliver the first order, you add a flyer for the next product(s) with it.

When choosing a line of mail order products to sell, you should first consider what you already know about, or at least have a keen interest in learning about, so you can become an expert on it. If you don’t know about the products you sell, you will not be a good buyer, and your customers will not stay with you for long. How can you choose, and then sell good golf equipment if you know nothing about golf? You can’t, which is the first mistake to new comers. If you look into it, you will find that many successful mail order companies have started from a hobby.

Important: Stay away from commodity products, unless you have a really good reason people would buy from you. And that will not be price! You must also consider if your potential customers are easy to identify and easy to reach, and if there are enough of them to make money.

Let’s say you are a back yard pond expert, and you have enjoyed raising Koi fish for years and everyone in your neighborhood comes to you for advice on their pond and raising Koi fish. So you have decided you would like to sell pond supplies and high-bred Koi fish. Since you are familiar with the topic, you can easily identify one group of potential customers; they are just like you, people with backyard ponds. Thus, you could easily find out if these potential customers are easy to reach, by looking for magazines, web sites, and blogs about ponds and Koi, cable shows about landscaping and ponds, mailing lists of people that purchased pond equipment, etc. These are the places you could be advertising.
From these sources you could also estimate the market size of potential customers. i.e. subscriber lists, customers of related pond products, mailing list counts, Google searches on the topic, pond trade magazines, and maybe even a pond or Koi owners association. You want to know if there are enough people with ponds, and how much they spend each year on average to keep them. This way you can get an idea if there is enough of a market for you to make the income you need if your idea works. Always remember that repeat mail order sales to your customer list are the key to profits.

Business Name and URL
Once you have chosen your mail order product line, you need to pick your business name and Internet URL. I recommend you putting what you sell in your business name and in your URL. For example, is there any question what “Jake’s Pond and Koi Supplies” sells? Make sure you are checking the availability of URLs as you are coming up with a business name. They don’t have to be the same, just close. Try to use words that describe what you sell in your URL. For example: your business name is, Jake’s Pond and Koi Supplies, your URL could be www.PondsandKoiMadeEasy.com. This is to help optimize your web site for search engines.

Sales Tax ID, Web Site, Online Payment Processor
The next thing you need is your Sales Tax ID Number so you can start searching for wholesale suppliers of the products you want to sell. Almost all manufacturers and distributors will require a Tax ID from you before they give you product details and wholesale pricing. You then need to create a small web site, set up a business checking account, and register with PayPal or a similar processor to accept online payments.

Promoting Yourself
The next thing is to start promoting yourself anyway you can. The best free way is to add informational content to your web site about what you sell. If we use the Ponds and Koi example, you would write all about building a pond and keeping Koi, and each time you mention a product needed, you link to it on your web site for the reader to buy. Search engines pick up on these informational resources and help bring you customers.

Remember that your business is made up of people that have purchased from you, are happy, and will trust you again. The sooner you build up that customer base, the better off you will be. Start local and make sure that everyone you know, knows you’re in business and what you sell. Do everything you can to get in front of groups of people. Community, church, businesses, and charitable and service groups — these people are the closest to you and are the first to trust you with their money.

Solicit testimonials and recommendations from all your customers. Send special offers to your customer list often, no less than once a month. Use classifieds and remnant display ads in magazines. Send out press releases and articles to local media, and national media if you have a good topic of interest. Get good response mailing lists, and use direct mail to reach prime prospects.

Using A Drop-Shipping Service
Using a distributor that is willing to drop ship orders directly to customers will prevent you from having to stock inventory. Drop-shipping arrangements are suitable for people getting started, or with products that are large, have special shipping needs, or are very expensive. As you develop a sense of what sells well, you can begin to stock limited supplies of fast selling items and continue utilizing drop-shipments for slower selling products.

As your business grows, you can carry an inventory of everything you sell. Stocking products can be advantageous for the following reasons: all products can be shipped to your customer together, thus cutting down your shipping expenses. Customers will also receive all their products at one time. Your products are sent out sooner, making for happier customers, and you are able to include promotional materials for other products within the shipment.

When utilizing drop shipments, it can be a good idea to send your customer a note that says the order is being processed and the date he or she can expect it by, or around. It is unnecessary to make your customer aware of the fact that the item is being drop-shipped, although many marketers do make a notation if certain products in their catalog or web site will be sent separately or directly from the factory.

When relying on drop shipments, try to keep as many of your products coming from as few suppliers as possible. If you can use just one supplier when starting out, do it. Let’s say a customer orders three products. If all three come from different sources; your customer will be getting three separate deliveries, you will be contacting three different companies, and you will be tracking three different shipments for one order. You will also pay three shipping charges.

Using Mail Order to Diversify an Existing Business
One of the great things about mail order is that it allows businesses to easily diversify and expand. Every retailer, every kiosk vendor, and anyone that has a store front should be capturing visitors that come in for future promotions. You are missing out on big business if you are not capturing the contact information on every customer that comes into your store. Setting up a customer information capturing device, a drawing, a postcard with each walk in order or simply a guest book, all provide you with enough details to promote new products and offers to current customers.

It doesn’t really matter what kind or type of business you have, the possibilities for adding a mail order component are endless. A good mail order expert or direct marketing consultant can give you plenty of workable ideas. HBM

John Schulte is a Small Business Consultant and Direct Marketing Strategist. He is a 30-year veteran of advertising, marketing, publicity, promotions, and sales. He is an internationally recognized expert in the areas of mail order, direct mail, cataloging, and overall direct marketing. John is one of the few people in the United States that has been certified by a United States Federal Court as a Direct Marketing and Catalog expert, and able to act as an expert witness in federally related corporate disputes. He is also president of the National Mail Order Association and author of Direct Marketing Toolkit for Small and Home Business, a book on how to successfully start and build your own business from scratch. http://www.nmoa.org/directmarketingtoolkit.

Previously published on page 20 in the August 2009 issue of HOME BUSINESS® Magazine, an international publication for the growing and dynamic home-based market. Available on newsstands, in bookstores and chain stores, and via subscriptions ($15.00 for 1 year, six issues). Visit www.homebusinessmag.com

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