Selling by Mail Order
This publication provides basic information on how to run a successful mail order business. It includes information on product selection, pricing, testing, writing effective advertisements, etc. It also provides a list of other publications and trade associations for persons interested in learning more about mail order selling.
Mail Order Successes
Almost a hundred years ago Richard Sears and Julius Rosenwald got together to build Sears, Roebuck and Company into what would eventually became a $10 billion corporation. Meanwhile Aaron Montgomery Ward started his own company, which would become a multimillion dollar operation. These three entrepreneurs became the world's first mail order millionaires.
Since that time, countless part-time and full-time entrepreneurs have been attracted to the mail order business. Many have failed. However, a surprising number of businesses have succeeded in both good times and bad. Today, you can buy everything from clothes to insurance to live lobsters from Maine, all through the mail.
What Qualities are Required?
For marketing wizards, mail order can be highly profitable. Melvin Powers, a famous mail order publisher, started with a single book. Today, he has more than 400 books in print and has sold millions of copies. Another marketing genius, Richard Thalheimer, built a multimillion dollar company, The Sharper Image, starting with a chronograph watch and an ad in Runner's World. He now sells not only by mail but also through major retail outlets across the country. Although everyone cannot expect to achieve the same level of success as these exceptional entrepreneurs, your chances for building a profitable mail order business are increased if you possess the following essential qualities: imagination, persistence, honesty, and knowledge.
Imagination. Imagination is needed to visualize the special appeal that will compel a potential customer to buy your product. One mail order expert with imagination is Joe Cossman. In his book How I Made $1 Million in Mail Order, Cossman described how someone once brought an unsuccessful mail order product to him with an offer to sell the rights. The product consisted of earrings with little bells attached. Cossman managed to turn this mail order loser into a mail order winner simply by renaming the product "mother-in-law earrings" and selling them to newlyweds.
Persistence. Persistence is required because success is rarely instantaneous. There are always obstacles and setbacks. Cossman struggled over a year before making his first success. While holding down a full-time job, he worked at his kitchen table, tackling false leads, problems, and failures. He did nothing but lose money. Less persistent entrepreneurs would have quit much sooner. But when he finally was successful, his first product made him $30,000 in less than one month.
Honesty. Absolute honesty is necessary because a successful mail order business is built on trust, satisfied customers, and repeat sales. Cheat your customers even a little, and you've lost them forever. Without repeat customers, you might just as well invest your money in a dry oil well. The potential for a successful enterprise is gone.
In addition, Federal, state, and local government agencies, as well as the Better Business Bureaus and consumer groups constantly watch advertising and are quick to take action against unsubstantiated claims or infractions of any laws.
Knowledge. Without knowledge--the how-to's and the why's--your chances for success are small. Success stories like Ward's, Sears', and Cossmam's, are built around that individual's constant search for knowledge--knowledge that answers two critically important questions:--What works? What doesn't?
You must continue increasing your knowledge if you are to succeed. You cam increase it through both reading and experience. Experience is valuable, but it is also the most expensive way to learn. Because you can save time and money through the experiences of others, extensive reading is highly recommended. Joe Cossman says that he spends at least one full day a month at the public library.
You can also learn from successful competitors. Make a thorough study of magazines and newspapers, and review the ads appearing there over a period of time. Note ads that run consistently month after month or several times a year. Answer ads that are particularly interesting. Careful study the catalogs, sales letters, brochures, and sales literature received. Study particularly all follow-up mailings. You should know what the competition is doing.
It may appear that you can sell almost anything through the mail, but this just isn't true. To develop ideas for products, you may want to study trade publications, attend product shows, contact manufacturers, and answer ads. To increase your chances of picking a winner, look for a product that is light weight; nearly unbreakable; has a broad appeal to a large, specific segment of the population; and has a large margin for profit.
This last requirement means you have to be able to buy low and sell high. You should select a product that allows you to sell it for three to four times the cost. This is a much higher margin than for goods sold by retail merchants, who usually sell at about twice their cost. But you need this margin to make a profit because of the high cost of advertising. Although you can't get this kind of mark-up with all products, you can charge even more for many products. If customers won't pay the price that you need to make a profit, find a different product to sell. However, many mail order advertisers are willing to lose money on initial sales to obtain the customer's name. They hope to more than make up for the loss by selling a satisfied customer many additional products in the future. Without the high cost of advertising, direct mail repeat sales can be made at much higher margins. Again, this is one of the reasons that honesty and efficiency in mail order operations is so important.
How you structure your offer is also important. You may have the right product and the right price but still lose simply by the way you present it.
For example, you want to sell a product called a widget at two for $1.00. You could advertise your offer just like that, or you could advertise one widget for $1.00 and a second widget free. Or you could sell one widget for $.99 and offer a second one for $.01.
All of these offers are exactly the same. However, they are perceived differently by your customers. Tests have shown that there can be a 600 percent difference in response by presenting an offer in different terms. Unfortunately, because every situation is different, no one can tell you which is the best offer without knowing the product and project intimately--and without doing extensive testing.
Always be on the cautious side in forecasting sales. Your breakeven point (the number of units sold at which a project stops losing money and begins to make money) should be set very low at least while you are testing your probable level of response. For example, if your break-even point is five percent of the names on a mailing list up to five percent of the people can respond to your offer and you are still not making a profit. Keep your expectations reasonable. For many businesses, one quarter of one percent is an excellent response.
The same idea is true in forecasting orders from magazine advertisements. One famous advertiser is happy if he gets 1.25 times the cost of his advertisements in sales. This means that if the advertisement cost $100, he is delighted if the resulting sales amount to $125. For one publication, this means 1/10 of one percent of the readership responded. However, many advertisements don't even bring in 1/100 of one percent of their readership.
Testing--Mail Order's Secret Weapon
Successful mail order operators test almost everything. They test the results of offers...copy appeals...mailing lists...formats...prices... advertising media...and any other variable that has a direct influence on the response to an ad or mailing. Testing is a scientific approach to mail order selling. It is an effective secret weapon that permits a mail order entrepreneur to fail with four out of five products and still walk away with big profits on the fifth product.
How is it done? Spend a small amount of money for a test ad or mailing list. A complete failure tells you to drop the whole project. Marginal results tell you to experiment and rework some aspect of the project. A major success gives you the green light for a larger investment.
In this way, you can afford to lose money on several dismal failures. But when your testing indicates a clear success, you can move immediately to capitalize on what you know to be a winner. The idea is not to risk a lot of money until you are more certain of success.
Nothing determines the success of a mail order enterprise so much as its advertising, whether it be magazine, newspaper, radio, TV, direct mail, or some other form of promotion. Writing advertising copy, preparing art, selecting media, determining price, and other factors usually require expert skills. If you decide to work with an advertising agency, select one primarily on the basis of its successful experience in producing profitable mail order advertising.
Whether you decide to use an agency or go it alone, below are some important concepts to remember.
Where to Advertise
It is important to recognize that everyone is not a good prospect for your product or service. Concentrate your efforts on the segments of the market that are more likely to buy than others. For example, if you have a new type of cooking pot, you may think everybody would be a prospect because everybody cooks. Wrong! Many individuals are not interested in cooking and do not want to try something new. Some people may think your price is too high (or too low), and some won't buy anything through the mail.
A good strategy is to advertise in the same place where similar items are advertised. This is true whether the media you are considering is a magazine or a list of names for a direct mail campaign.
When You Should Advertise
The month in which you advertise a product or service can have a great effect on the results. For general guidelines, the following is probably true:
Although most products can be advertised all year, some usually should be advertised and sold only during certain seasons. For example, you probably should not try to sell garden hoses in December.
Major events can affect the results of your promotion. For example, November is usually a good month for most products; however, depending on what you are selling, November sales may be better or worse in an election year. Similarly, a war, the death of an important person, or other major events will affect the results of a mail order promotion.
Whatever your product, some months are better for sales than others. You can only find out the best months for your product by testing. Generally, as compiled from various sources, the best to worst months for mail order sales are the following: January, February, October, November, March, September, August, April, December, July, May, and June.
When starting off a new product or service, advertise during the logical months, considering your product and the season of the year. Then analyze your response. If you test in a good month, the results may be much better than you can expect in an average or poor mail order sales month. In the same way, if your test ad appears in a bad month and the results are only marginal, you may get better sales in other months.
Depending on the strength of the response, you can estimate the most effective frequency for advertising. For example, if the response was strong, you may decide to advertise your product frequently. If the response was only moderate, you should probably advertise less frequently--perhaps every other month or once a quarter or only during certain peak months. Finally, if the response was profitable but weak during a good mail order month, possibly you should advertise this particular product infrequently.
What To Put In Your Advertisements
The words (or copy) in your advertisements are critical. They should not be just a casual consideration. In his book Tested Advertising Methods, John Caples described two ads that were the same size, that used the same illustrations, and that were in identical publications. Only the copy differed. One ad sold 19 ½ times as many goods as the other. This is not just the difference between failure and success; it can be the difference between failure and a small fortune.
There are many different formulas for developing copy. Initially, you should write your advertisement according to a definite copy structure. Once you know that you can write good mail order copy, you can experiment with less structured forms of communicating. The Copyright Checklist included in this pamphlet lists several important considerations. One good basic structure to begin with is described below:
Show the benefits and advantages of your product or service.
Build up and maintain credibility.
Deliver a call to action.
Get Attention. The most important element of your ad and copy is the headline. This is how you gain attention. Yet, many copywriters, who spend hours writing the words in the body of the ad, will spend just a few minutes on the headline. The weekly magazine Advertising Age once related that Maxwell Sackheim sold 500,000 copies of a book by changing the title, and therefore the headline, from Five Acres to Five Acres and Independence.
All good headlines have certain things in common. First, a good headline appeals to the reader's self-interest and stresses the most important benefit of the product or service. If the copywriter can arouse the curiosity of the reader or present startling news or suggest a quick and easy way that the reader might obtain an important benefit, the stopping power of the headline is enhanced.
The second characteristic that good headlines have in common is the use of key words that are psychologically powerful in attracting potential readers. In Confessions of an Advertising Man, David Ogilvy, says that the most important of these key words are FREE and NEW, but there are many other powerful words. Here is a list of some words psychologists have discovered to be powerful in stopping readers and getting their attention:
amazing announcing at last
bargain challenge easy
how to hurry important
just arrived last chance miracle
power remarkable revolutionary
secret sensational success
wanted who else why
Develop Interest and Demonstrate Benefits. Once you have gained the reader's attention, demonstrate the benefits of buying. The benefits must override the cost of the product and the trouble involved in finding a stamp and envelope, writing a check, and mailing the order. Don't sell product descriptions. Sell benefits. A customer at a restaurant buys the taste, smell, and sizzle, not a piece of meat. It is your job to describe your product in terms of taste, smell, and sizzle.
Build Credibility. Credibility is very important in making your copy effective. Regardless of what you say about the benefits or advantages of a product, if your potential customer does not believe what you say, he or she will not place an order.
Testimonials can be very helpful, particularly if you have permission to use the name of an individual whose testimonial is on file. An alternative is to omit the name or use only initials.
Other means of achieving credibility are identifying a bank, accountant, or attorney who is willing to be a reference. Even showing a picture of the building that houses your business can add credibility, especially if it is an imposing structure.
Call to Action. A basic law of sales is that a face-to-face salesperson must ask for an order. As a salesperson selling through an advertisement, you should also call your customer to immediate action. You don't want your customers to cut out the coupon and put it away for another day. You want your customers to order immediately. Research has demonstrated that regardless of initial intent, in most instances, if your prospects don't order immediately, they don't order at all. Include incentives, such as a statement on limited quantities or a limited time offer.
Does the headline appeal to self-interest, offer exciting news, or arouse interest?
Is the headline positive, rather than negative?
Does the headline suggest that the reader can obtain something easily and quickly?
Does the headline make use of the powerful words of mail order advertising?
Does the headline stress the most important benefit of the product?
Does the headline stop the reader and cause him or her to read further?
Is the headline believable?
Does the headline tie in with the copy?
Are all the elements of the offer present in the copy?
to buy Places
Do you gain interest at once by use of a story, a startling or unusual statement, a quote, or news?
Do you show benefits and advantages that appeal to emotional needs so that your offer is irresistible?
Do you establish credibility with your reader through the use of testimonials, statements by your accountant, or some other means?
Do you encourage immediate action by listing a reason to order now (limited quantities, time limit on offer, etc.)?
Is the copy written in a conversational tone?
Does your copy move right along?
Do you use short words, short sentences, and short paragraphs?
Do you use lots of subheads throughout your copy?
Top quality advertising costs more, but it usually brings the best results.
However, don't overspend on advertising, direct mail, and other promotions.
Don't invest in full color printing when one or two colors will do the job. There is no need to use the costliest papers, elaborate art, or other extravagances to sell profitably.
Keep Good Records
A word of caution: to succeed in mail order pay close attention to details. But don't get bogged down in them. Keeping accurate records, results of ads, advertising costs, printing, postage, cost-per-order, and other figures are important to the success of the business. However, do it in the simplest, easiest, least time-consuming way possible.
Repeat Business--Key to Maximum Profits
Continuous profits come from continuous sales. As already suggested, rarely is a profitable mail order business established on a one-time sale. In a previous version of this publication, Paul Muchnik, president of Paul Muchnick Company in Los Angeles, offered the following as methods to stimulate repeat orders at minimal cost:
Never Forget the Customer. The list of customers built up is a most valuable asset. Use it to send offers of merchandise at frequent intervals.
Use Package Stuffers. A regular catalog or a special offer rides "free" in outgoing orders. Since postage and packing costs already are being paid to ship the merchandise, package enclosures can bring in new sales and profits.
Offer Quantity Discounts. Get larger orders by offering savings on quantity purchases. Everyone loves a bargain. A discount or a special price, a premium for an order over a given amount, and singular incentives stimulate larger orders. Furthermore, gift certificates are often used profitably too, especially during Christmas and other holiday seasons.
Advertise on Envelopes. If you are enclosing advertising in the envelope, consider using the envelope itself to feature one or more special offers. The additional printing cost could prove insignificant compared to the extra sales produced.
Mail order can be a profitable and interesting full or part-time business. But remember, you will probably lose money before you start making it. So don't make major investments until you have gained experience and until you have found the right product at the right price and the best means of communicating it to the most receptive market.
U.S. Government Publications
The following selected titles of publications are listed under the names of issuing agencies. Some are free; others are for sale. Request the free publications from the issuing agency, giving the publication's title and series number (if shown). Request many of the for sale publications from the U.S. Government Printing Office (GPO) as described below. Also, check local libraries for further listings of Federal publications and reference copies of some of the titles. Many public libraries keep selected publications provided through the Federal Depository Library System.
Superintendent of Documents
U.S. Government Printing Office
Washington, D.C. 20402
Many for sale publications can be ordered through GPO. For a current price list write to the above address. Give the publication's title, its series number (if shown), and the name of the issuing agency.
U.S. Small Business Administration
Washington, DC 20416
SBA issues several series of management and technical publications designed for owner-managers and prospective owners of small businesses. Listings of publications may be requested from SBA, P.O. Box 15434, Ft. Worth, TX 76119.
Ask for SBA 115A Business Development Pamphlets and SBA 115B Business Development Booklets. The lists are free and may be used for ordering the pamphlets from SBA or the booklets from the Superintendent of Documents (GPO).
Library of Congress
Washington, DC 20540
A mail order operator, one who prepares materials to sell by mail, frequently needs to copyright printed materials. A list of copyright publications is available upon request from the Copyright Office, Library of Congress, Washington, DC 20450.
The Copyright Law of the United States of America. Request price from the Superintendent of Documents.
Federal Trade Commission
Washington, DC 20580
List of Publications. Free. Includes listings of publications such as trade practice rules for many industries.
U.S. Postal Service
Washington, DC 20260
The following booklets supply general information on post office services, rates, and various office sizes. Some of them are available in large post offices and local libraries.
International Mail. Request price from Superintendent of Documents. Contains detailed information about postage rates, services available, prohibitions, import restrictions, and other conditions governing mail to other countries. The countries are listed alphabetically, with the specific requirements applicable to mail addressed to each of them. Sold on a subscription basis only, which includes the basic book in loose-leaf form, and changes issued as required for an indefinite period.
Directory of Post Offices. Request price from Superintendent of Documents. List of post offices, branches, and postal stations by States, counties, and alphabetically by name.
Postal Bulletin. Issued weekly with supplementary issues. Request price from Superintendent of Documents. Covers such topics as: changes in regulations, new developments in postal service, and handling of mail. Intended primarily for postal employees; also of value to larger direct mail advertisers and mail-order dealers.
Postal Service Manual. Subscription basis. Basic book and changes service for an indefinite period. Contains regulations and procedures for public use; explains the services available; stipulates rates and fees; and prescribes conditions under which postal services are available to the public. From Superintendent of Documents.
National Zip Code Directory. Request price from Superintendent of Documents. List ZIP Code for every mailing address in the United States. Arranged alphabetically by State, within each State, complete listing is given of ail post offices. Appendix after each State gives ZIP Code for each address in larger cities, and other pertinent ZIP Code data.
Department of the Treasury
Internal Revenue Service
Washington, DC 20220
Tax Guide for Small Business. Designed to assist business people in preparation of Federal tax returns for the calendar year. Annually in December. Request price from Superintendent of Documents or local Director of Internal Revenue.SUGGESTED EXTRA READING
3307-3322 BUSINESS MANUALS, 10 pages or more. $5.00 each.
3307 How To Start Your Own Business Consulting Service.
3308 How To Make Money With A Business Financing Service.
3309 How And Where To Get Money For Any Franchise Idea.
3310 How To Start And Operate Your Own Bartering Club.
3311 How To Start and Operate Videotape Rental Store.
3312 How To Start A Profitable Resume Writing Service.
3313 How To Start And Operate Firewood Supply Business.
3314 How To Start And Operate Your Own Auto Tune-UP Store.
3315 How To Start And Operate Your Own Day-Care Center.
3316 How To Start And Operate A Paper Recycling Service.
3317 How To Start And Operate A Temporary Help Service.
3318 How To Start Your Own Mobile Locksmithing Service.
3319 How To Start And Operate A Carpet Cleaning Service.
3320 Start Your Own House And Apartment Cleaning Service.
3321 Start Your Own Credit And Debt Counseling Service.
3322 How To Make $5,000 A Month or More With Garage Sales.
3401 - 3425 BUSINESS REPORTS, 2 to 5 pages. $2.00 each.
3401 Reorganize Your Time To Have Home-Based Business.
3402 How To Raise Money For Starting Your Own Business.
3403 The Legalities And Tax Advantages In a Home Business.
3404 Start and Operate A Profitable Home-Based Business.
3405 Survival Tips For All Kinds of Small Business.
3406 How To Get Free Radio Advertising For Your Company.
3407 The Lazy Person's Secrets To Overnight Wealth And Fame.
3408 How To Achieve Excellence In Sales And Salesmanship.
3409 Secrets Of Getting Free Advertising For Your Product.
3410 How To Set Up Your Own Tax-Saving Bookkeeping System.
3411 Questions To Answer Before You Buy a Franchise.
3412 How To Find An Authoritative Background On Any Subject.
3415 Garage Sale Promoting For Quick And Easy Money.
3416 Paper Recycling For An Easy Source Of Extra Income.
3417 Party Plan Sales Programs: How To Develop Your Own.
3418 Bed And Breakfast: The Easiest Home-Business.
3419 How To Start And Operate A sports Memorabilia Shop.
3420 How To Start And Operate A Roommate Finding Service.
3421 How To Start And Operate A Dating And Escort Service.
3422 How To Make A Fortune With Self-Improvemant Seminars.
3423 How To Start a Bulletin Board Advertising Service.
3424 How To Make Big Dollars With Bumper Stickers.
3425 Camera Profits: Using Your Camera For Extra Money.
3501 - 3511 BUSINESS REPORTS, 6 to 9 pages. $3.00 each.
3501 Secrets To Your Million Dollar Multi-Level Empire.
3502 Secrets To Successfully Starting Your Own Business.
3503 How To Prepare A Business Plan That Guarantees Profits.
3504 The Secrets Of Free Publicity For Your Business.
3505 How To Make It Big With Your Own Used Book Store.
3506 How To Start Your Own Video Taping Service.
3507 How To Start Your Own Profitable Catering Service.
3508 How To Start Your Successful Window Washing Service.
3509 How To Start A Highly Profitable Mailing Service.
3510 How To Start A Profitable Shopping Center Paper.
3511 How To Start Your Own Home-Based Secretarial Service.
3601 - 3621 MAIL ORDER BUSINESS REPORTS 2 to 5 pages, $2.00 each.
3601 The Beginner's Opportunity Guide To Mail Order.
3602 The Easiest, Most Profitable Mail Order Business.
3603 How To Get Big Dollars In Your Mailbox ___ Everyday.
3604 Profitable New Techniques For Selling Books By Mail.
3605 The Secrets Of Making Really Big Money With Folios.
3606 How To Start A Successful Co_Op Mailing Service.
3607 How To Write And Sell Money-Making How To Reports.
3608 Big Mails: An Easy Beginning To A Mail Order Future.
3609 The Secrets To Renting Profitable Mailing Lists.
3610 How To Develop A Profitable Worldwide Distributor Network.
3611 How To Write Profitable Classified Ads For Your Business.
3612 The Dos and Don'ts Of Profitable Mail Order Ads.
3613 How To Make Big Money Fast, Renting Mailing Lists.
3614 The Money-Maker's Guide To Easy Mail Order Riches.
3615 How To Recruit Dealers/Distributors To Sell For You.
3616 How To Be Successful With A Money-Making Newsletter.
3617 How To Succeed With Your Own Money Making Ad Sheet.
3618 Secrets Of Chain And Multi-Level Letters.
3619 How To And Operate Your Very Own Pen Pal Club.
3620 The Selling Secrets Of Million Dollar Sales Letters.
3621 How To Start And Operate Your Own Correspondence Club.
3701 - 3709 MAIL ORDER BUSINESS REPORTS, 6 to 9 pages. $ 3.00 each.
3701 How To Make Big Profits In Mail Order, Form Scratch.
3702 Make Any Multi-Level Program Into A Million Dollars.
3703 How And Where To Advertise Any Product Or Business.
3704 How To Get Big Dollars From Your Mail Order Ad Sheet.
3705 How To Have A Successful Circular Mailer Business.
3706 How To Write A Folio From Information That You Know.
3707 How To Start And Operate Your Own Big Mail Service.
3708 How To Write Order Pulling Ads For Your Own Business.
3709 The Premier Directory Of Mail Order Publishers.
Send your order to:
2319 N. 45th. St. #148
- Bruce Milne
Seattle, WA 98103