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113 POINTERS FOR THE MAIL ORDER BEGINNER





Introduction



The following is designed to provide a checklist for new

entrants into the mail order field.  Each mail order business is

different, but there are common elements that apply to most mail

order businesses, as well as some specific characteristics that

may vary from business to business.  The following suggestions

were developed to assist you in avoiding  mistakes which can be

costly.  Apply the various points as they may relate to your

specific business.





Company Name



-  Select a short, easily remembered name.



-  Unless you are using your own name, it is required in most

jurisdictions that a trade name is either registered with the

county or the State.



-  Before you spend money for printing material, make sure that

the name you choose is not already registered to another

company.  You can usually conduct a name search with an office

of the appropriate jurisdiction by telephone.



-  You may consider using a name that describes your product.





|Company Address



-  Most newly established mail order businesses will operate out

of their home until the volume of business requires larger space.



-  Most mail order businesses prefer not to use their home

address as their company address.  If you do, you will advertise

your home address in regional and national publications.  You

have two other choices, a Post Office Box (POB) or a postal box

located in a commercial enterprise which rents out mail boxes.



-  A POB is generally the least expensive, both to rent and for

advertising purposes (see below).  Some mail order operators

claim that it reduces business because people do not trust a POB

address.  yet there are just as many mail order operators who

prove them wrong.  The decision is yours.



-  If you rent a mail box in a commercial enterprise, (many have

sprung up in recent years), your box number usually becomes a

suite number in the address.



-  Almost all publications will charge you a full word charge

for each component of your address.  Example:



   Information Books, 300 Main Street, Suite 611, Centerville,

MD 20910 or



  Information Books, Box 1000, Centerville, MD  20910



-  The first address is counted as 10 words, the second one as 7

words.  Since advertising costs anywhere from 50 cents to $10.00

per word (classified advertising) you could save a substantial

amount of money at the end of the year.





|Telephone



-  Some mail order companies do not show their telephone numbers

on their stationery, others do.  I believe it gives the customer

some comfort to see a telephone number, although he may never

use it.



-  You can show your residence phone number in the appropriate

printed material, or you can obtain a business listing for your

home.



-  The residence phone is fine, for starters, if it is answered

in a professional manner at all times.



-  If you plan to sell higher priced ticket items (over $30.00),

however, a business listing would be advantageous since a

prospective customer may pick up the phone and check with the

information operator whether "Company X" is listed.





|Basic Supplies



-  Be conservative and frugal in you acquisition of items that

you feel are needed.  It's always wise to start small, and as

inexpensively as possible, and as you build profits, you can buy

more and better items.



-  The basics are a good quality typewriter, (you can rent one

for starters for a few months).  If you have a computer, that

would be ideal.  Business stationery, business envelopes

(#10's), and return envelopes, either #6 or #9 is fine.  All

items should have your business name and address imprinted on

them.



-  You will also need some mailing labels and some miscellaneous

office supplies.





|Product



-  If possible, choose a product or products that people need on

an ongoing basis.



-  Be sure the product is of acceptable quality.  Know the

product before you sell it.



-  If feasible, choose an item that is not widely available from

retailers.



-  If you have a difficult time deciding what items or products

to select, I suggest you read the following book:  "How Mail

Order Fortunes are Made" by Alfred Stern.  This book lists

hundreds of different items.  It will give you many good ideas.



-  Develop a line of merchandise.  It is rarely possible to make

money with just one or two items.  The availability of a line of

related products is paramount to mail order success.



-  The more specialized your products are, the easier you

marketing becomes.



-  If you are selling books, for example, it would be

impossible, except for a very large company, to sell all types

of books.  You may decide to specialize in books pertaining to

sports, and may want to go even further by zeroing in on

football or baseball.









|Suppliers



-  Your suppliers should provide you with reliability, quality,

and reasonable pricing.



-  Since you probably should provide some type of money back

guarantee (30 days is standard), you should expect the same

guarantee from your  suppliers.



-  When buying from out of town suppliers, be sure to include

the shipping charge in comparing prices to local suppliers.





|Drop-Shipments



-  Under a drop-ship agreement, which is available from many

suppliers for a variety of products, the supplier ships your

customers' orders directly under your shipping label. 

(Suggested reading:  "American Drop-Shippers Directory".)



-  It is customary that the supplier guarantees not to include

any of his promotional materials with the shipment; or to use

your customer's name for any future mailings.



-  Drop-shipping arrangements are suitable for people getting

started.  It allows you not to have to carry a costly inventory.



-  As your business increases and you develop a sense of what

sells well, you can stock limited supplies of certain fast

selling items, and continue utilizing drop-shipments for slower

selling products.  Eventually, as your  business flourishes, you

can carry an inventory of everything you sell.



-  Handling your own shipments is advantageous for the following

reasons:  It cuts down your shipping expenses, it decreases the

shipping time, and it allows you to include promotional material

directly with the shipment.



-  When you do utilize drop-shipments, be sure to send your

customer a note that his order is being processed and he can

expect it by, or around a certain date.



-  It is unnecessary to make your customer aware of the fact

that the item is being drop-shipped.  Include some promotional

material with our letter or note.





|Pricing



-  Buy at a price that allows you an adequate mark-up.  In

setting your prices, allow for all costs:



-  Cost of product, shipping cost and postage, bank charges

including credit card charges, wrapping, bad debts, rejects,

refunds, etc.  In addition, the other normal overhead costs need

to be considered.  Lastly, there is the substantial marketing

cost for advertising, and for printing of promotional items. 

(See the following paragraphs.)



-  Your prices of course, have to be fair and in line with your

competition.



-  It is not necessary that you make a big profit on each and

every item.  The real profit in mail order comes from follow-up

orders.



-  THE 3 BIGGEST EXPENSE CATEGORIES IN MAIL ORDER ARE: 

ADVERTISING, PRINTING COST, AND POSTAGE.  Over 80% of your total

expenses are in this area.  Watch these expenses very carefully.





|Advertising Expense



-  Start with classified ads.  As you test them and know what is

successful, you can switch to display ads.



-  To test an offering and a specific ad, run it once in a

specific publication and you should get a reading that could be

very positive or very negative.  It might also be inconclusive. 

If that is the case, simply run it again.



-  It is best to test an ad by running it in different

publications.



-  Advertise in publications that advertise similar products.



-  If you have a sure seller, buy larger space.



-  Special interest products should be advertised in special

interest publications.



-  Keep on changing the ad and offering until you are satisfied

it is right.



-  Examples of changes you can make are:  size of ad, copy,

appeal, special gimmicks such as discounts, free gifts or

reports, etc.



-  Remember that a given ad can be 20 or 30 times more

successful than another ad advertising the same product.  It

pays, therefore, to continue testing until it is just right.



-  Repeat a successful ad until you no longer get a satisfactory

return.



-  The conventional advertising cost is 15% of sales or more in

mail order.



-  To evaluate your advertising cost, think in terms of cost per

inquiry.  This is calculated by dividing the number of inquiries

into the cost of the ad.  That cost may vary from about $0.50 to

$1.30 or more.



-  Be careful when you allocate advertising funds to small mail

order publications.  The ad may appear to be very inexpensive. 

However, a $15.00 ad that gets no response is a lot more

expensive than a $110.00 ad that gets over 100 inquiries.



-  Stay away from those publications that have no news or

editorial content, and also those that have poor printing

quality.



-  There are a number of quality mail order publications, but it

takes time to find the right publication for your product.



-  Advertising Copy



-  Write tight copy.



-  Write as you speak.  You are generally appealing to a mass

market.



-  Prepare your copy carefully.  It must  fit your specific

medium.



-  The emphasis should be on  YOU THE CUSTOMER rather than I,

the company.



-  Be sincere and don't make unreasonable claims, but remember

that you are selling.



-  Try to convince the reader that you are reliable and

trustworthy.



-  Give simple specific instructions.



-  Key all ads to test their effectiveness.



-  Check and double check, and have someone else check your ad

to make sure everything is correct and easy to understand.



-  Watch where you competitors are advertising.



-  Experiment with new publications.



-  It is generally considered impossible to sell something that

costs more than $2.00 to $4.00 direct from either a classified

ad or a small display ad.  This is because there just is not

enough space to convince someone to part with $10.00 or $20.00. 

It takes a full page ad to do that.



-  Set up your own in-house advertising agency and save 15% on

every ad you place.





|Responding to Inquiries



-  Each inquiry you receive in response to an ad should be

answered via First Class, if at all possible, within 24 hours.



-  The contents of the envelope going to the prospective

customer should contain: a circular, promotional flier, or

mini-brochure, a sales letter, an order form (the order form can

be part of the circular), a return envelope, and other

appropriate information, such as a fact sheet, a free report,

etc.



-  In general, circulars should be limited to one 8-1/2x11 page.



-  A sales letter, on the other hand, can be as long as it takes

to say everything you need to say to a prospective customer in

order to sell him the product.



-  Sales letters should have an attention getting opening. The

idea of the opening is to get him to read the rest of the letter.





|Postage and Shipping Cost



-  Answer inquiries to your advertising immediately and via

First Class Mail.  Use Bulk Mail for future mailings.



-  You can save a great deal of money by getting a Bulk Mail

permit.  The minimum number of pieces per mailing is 200.  Mail

must be zip sorted.  Postage is 23.3 cents for up to 3.3 oz. 

Get more specific information from your Post Office.



-  Keep your mailing lists clean - updated.



-  Utilize all of the various mail classes, such as Printed Mail

and Book rate.



-  Compare costs of shippers other than the Pot Office.



-  Guarantee return postage.



-  Watch your shipping weight.  A fraction of an ounce can make

a big difference in a large mailing.





|Printing Cost



-  Finding the right printing company takes time, so keep

shopping until you find the right one.



-  Very large printers will not be interested in your business. 

Very small ones, Quick Printers and Instant Printers although

convenient, are generally too expensive.  Their equipment is not

large enough to be competitive.



-  There are many medium sized printers that will give you good

pricing, and quality printing.  Often they have the capability

to help you with layout and design.



-  Don't hesitate to use out of town printers.  If you live in a

high cost-of-living area, you can probably save a substantial

amount of money.  Many of these printers advertise in mailorder

publications.



-  Utilize the promotional material available from your supplier.



-  Until you know what sells, print small quantities, even if it

is more expensive.



-  Use colored paper for your promotional flyers to spice up

your offer.  Use white paper, blue or black ink for everything

else.





|Customer Payments, Refunds and Complaints



-  Accept cash, money orders and checks.



-  Some mail order companies state in their material that they

will not ship for 10 days to 2 weeks when payment is made with

an out of town check.  This may be an unwise practice because it

can create ill feelings with your customers.  NSF checks are

rare.  If in doubt, call your  customer's bank and inquire if

funds are available in the amount of ____.



-  An increasing number of mail order companies accept credit

cards - Visa and MasterCard - for payment.  It is generally felt

that it does increase sales, especially if you take telephone

orders.



-  If you cannot obtain a credit card merchant agreement with

your bank, work through a credit card clearing house.  A number

of these companies advertise in mail order publications.  Since

these companies generally charge between 7-10%, it may be wise

to set a minimum amount such as $15.00 for credit card orders.



-  Remember, "the customer" is always right.  An argument won,

is usually a customer lost.



-  If you receive an order with an underpayment, ship the order

and bill the customer for the difference.



-  Make refunds on overpayments quickly.



-  Most mail order companies offer a 30 day money back

guarantee.  Some offer 90 days and even more.



-  It is unwise to offer money back guarantees on items priced

very inexpensively, for example, a $3.00 report.







|Record Keeping



-  As in any business, it is important to keep records.



-  You need records to tell you what is going on in your

business;  to evaluate both your revenues and your expenses.



-  It is also required by law that you keep certain records.



-  Keep especially good records of your advertising expenses so

you can evaluate your advertising on an ongoing basis.





|Mailing Lists



-  It is recommended that you do no direct mailings, except to

your own lists of customers and inquirers, until you have

thoroughly tested a specific product through advertising.



-  Stay away from inexpensive mailing  lists, under $40-$50 per

1000.



-  Avoid mailing lists whose owners make unrealistic claims.



-  The general consensus is that you need to mail a minimum of

1000 names to get a fair reading.  5,000 names would give you a

more accurate test.



-  The best mailing list is your own list of buyers.  Second

best is your own list of inquirers.





|Follow Up



-  The most important factor in mail order is FOLLOW-UP. 

Substantial profits can be generated from this segment, if it is

properly handled.



-  You can generate a lot of sales by including promotional

material when filling orders for customers.  Other orders are

generated from mailings that are made to former customers, as

well as individuals who inquired about an offer in the past.



-  Send out regular mailings to your customers.  At a minimum,

four times per year. However, you can send out mailings as often

as every 6 weeks or so, if you have a new product to offer.



-  Send follow-up mailings of the same or similar offers to

inquirers of advertising who did not buy the first time - 2-4

additional mailings.



-  As you build your mailing lists and you send out regular

mailings, your orders will start flowing in.









|Research and Education



-  Whether you are new to this field or not, to stay on top, you

must continue your education by reading books and reports on

mail order and subscribing to mail order publications.



-  Always be on the lookout for new products you can offer your

customers.



-  Study the advertising of your competitors.  Request their

material and study it.



-  Study all mailings you receive.



-  Disregard the MLM schemes that you receive, chain letters,

recipe clubs, etc.  They are all the same, a big waste of money.

 Many of them are illegal.



-  If you are new to mail order, read various publications that

will improve your knowledge of the field.



Continue to learn about mail order by reading, experimenting,

and talking with other mail order operators.  Have patience. 

Success will not come overnight.  It takes time to build a

successful business.  Start slowly and expand your business from

your profits.



Good Luck!