How to Start a Mail Order Business

Want to go retail but don't want to deal with the hassles of a storefront? Follow the paths forged by Wards and Sears by starting a mail-order company.

Mail order is one of the hottest industries right now. It's not new--in fact, it can be traced back more than a century. But it's in demand, by consumers and entrepreneurs alike. Why? Reasons abound, both personal and commercial.

In today's marketplace, most customers can easily access any number of retail stores, but they don't have the time. More and more Americans are part of a two-income household, a team stretched taut between work and child-raising, with scant time for leisure--much less shopping. These people want to spend their off-duty hours in more rewarding pursuits than traipsing through the mall. Single parents, stretched even further to be in several places at once, have reached the same anti-shopping conclusion. And Americans as a whole have shed the more-is-better consumerism of the 1980s in favor of meeting their profound desire for simple quality time at home with family

Instead of spending your precious free time at the mall, you can pore through the pages of mail order catalogs that offer just about everything you can imagine--with your feet up, a cup of coffee at hand, and the kids and spouse either "shopping" with you in similar comfort or somewhere else in the house happily going about their own affairs.

From A Business Perspective

So far, we've discussed mail order from the consumer's perspective. Now let's take a look at the industry from the businessperson's point of view. What do we see? An industry that's potentially lucrative for the savvy, hardworking entrepreneur and has the advantage of requiring relatively little in the way of start-up expenses, specialized skills or intensive apprenticeship--as opposed to, say, professions like brain surgery, high rise construction or even restaurant management.

In order to be successful in mail order, you'll need a generous measure of hard work; a concerted and constant study of the industry as a whole, as well as your particular niche; and the ability to roll with the punches.

Mail order offers the option of starting your business part-time. In fact, many direct marketers insist that moonlighting is the wisest way to go. John Schulte, chairman of the National Mail Order Association (NMOA), believes traditional and Internet-based mail order are the last frontiers for the little guy. "You can find ways to make things happen part-time from your kitchen table," says Schulte.

If you start out part-time, you can allow yourself on-the-job training without on-the-job financial anxieties. And if you don't want to sever the ties with your full-time employer until you know you can make it on your own, mail order is an ideal business for you.

What else makes mail order shine for the start-up entrepreneur? You don't need a lot of inventory. You can sell merchandise through a drop-ship arrangement, in which a third party such as a manufacturer or wholesaler sells you the merchandise but keeps it in his warehouse and delivers it to your customer for you after you've made the sale. You can also start out with one product or service and keep your inventory manageable as you grow.

Mail Order Vehicles

The Direct Marketing Association (DMA) estimates that each year more than 131 million Americans order a product or service by phone or mail. Why are we including phone sales in our mail order figures? Because mail order is actually an inaccurate moniker for direct marketing, which includes any form of shop-at-home-or-office order placement, from mail to telephone, fax and e-mail.

What are other forms of mail order sales?

Direct mail is really just another name for mail order, but it usually refers to anything that's not a catalog. This includes sales letters (like Publishers Clearing House), brochures, fliers, postcards and any other sort of printed materials you can send through the U.S. Postal Service to elicit a mailed, telephoned, faxed or e-mailed customer response.
The Internet ranks as the most exciting mail order vehicle since the invention of the catalog. More and more mail order entrepreneurs are turning to the Internet as a supplement to their catalogs or are foregoing paper catalogs altogether. Potential customers have come to expect companies to have a Web presence, especially for any computer-related product or service. But even if your company isn't technology-based, a Web site makes sense. Everything from gift baskets to insurance to concrete--even airplanes--can be purchased online, and people who are Net-savvy use the Web the way they would their local Yellow Pages.
TV commercials are another form of mail order: you know, the ones that advertise knives that slice through concrete or the greatest recording hits of your parents' generation and provides the ordering information on screen. TV advertising can be less expensive than you might guess. The price of TV time depends on various factors, including the size of the market, the length of your ad, the time of day or night your ad airs, the program rating and how much advertising you buy. Prices also vary according to whether you're advertising on a local independent station, a network affiliate, a cable channel or public access television.
Radio commercials also constitute mail order. Advertising on big stations in major markets can be cost-prohibitive for mail order newbies, but you can buy effective and affordable ad time from more intimate local stations for less money than you might think. These smaller stations make up the majority of commercial radio stations in the United States. Their low-power signals limit their geographic reach, but this isn't necessarily a minus. Since the programs on local stations are specifically designed to appeal to their own regional audiences, your advertising can be more closely targeted as well.
Classified newspaper ads usually run from three to 10 lines in length, are one column wide, and excel at minimalism: They have no line art, no photos, no graphics of any kind, and the verbiage is as brief and concise as a Vermont farmer's. So what makes them valuable? For starters, they're very inexpensive yet cover a relatively wide audience. And because they're so inexpensive, they're a terrific way to test new products and markets.
The display ad is a vehicle of a different sort. Because it's larger and usually incorporates photos or some other type of artwork, it's more expensive, but it can be extremely effective if you're advertising a high-end product.More>>here