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!
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:
How To 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.
Examine Your Pricing
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:
- The pre-established price by owner or manufacturer.
- Actual dollar value based on production costs.
- 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.
Creating A 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.
Important: You’ll want to 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.
Managing Your Success
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 by 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.
Increase Your Odds of Selling Your Product
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!