Most people who go into mail order shouldn’t. In fact, less than one in twenty we see receives a recommendation from us to proceed. This quick test is designed to quickly weed out at least 15 of the 20 mailers that shouldn’t waste any more of their time on that project.
- Rule 1. Just because your spouse likes it, doesn’t mean it will sell.
In mail order, it is the mass market that counts. If you can’t quickly relate to the small town prospect in mid-America, you shouldn’t be making judgment. I’ve got a formula that works for me. If I like it, it won’t sell.
What does sell? That is hard to answer. One clue might help. Don’t look at the product. Look at the ad that will be used to sell that product. Will it sound exciting; provide a basic benefit? Mail order is the opposite of retail. Judge the ad, not the product, as the decision to buy will be made before the product is ever seen.
- Rule 2. A four-time mark-up is not enough.
A four-time mark-up means you sell it for four times your cost. Some products, especially books, can survive on four times. But, because you’ve probably forgotten some costs, stick with five times.
- Rule 3. Beat the competition’s lowest price.
It is true you don’t have to always be the lowest price. But mail order prices on hot items tend to go down, not up-double digit inflation notwithstanding. The chances are that by the time you get launched, prices will come down.
- Rule 4. Plan what you are going to sell to your customer next.
Other than in publishing, what mail order successes do you know of that have made it on just one product? Very few. Would you believe that most mail order space advertising you see is designed to capture you as a customer at a loss? They will make it up on a catalog of products or reorders that they will sell you in the future. That is why you see so many catalogs and not many single items.
The whole mail order world builds around your customer list. You may get 5-10-20 times the response from your customers over cold prospects. It is inexpensive to advertise to your customers and expensive to prospects. To make money over the long pull, you’d better be able to sell again and again to your customers.
- Rule 5. You will go broke under $19.95.
Maybe an exaggeration! We think not. Low ticket (priced) items, even with a good mark-up, don’t have enough allowance for advertising and overhead. For example, if your advertising budget is 50% of selling price, you’ve got $1.00 for advertising on a $2.00 item-but almost $10.00 on a $19.95 item. You must sell an awful lot of $2.00 items to cover your advertising costs.
- Rule 6. Find a market you can reach inexpensively.
If you have a product that appeals to people who have no unifying profile, you will have a hard time finding them. For example, you may have the most wonderful recipe for raspberry jam. But how do you isolate people who really like raspberry jam? On the other hand, if you’re selling a new swimming pool cleaning device in Southern California, you can obtain a mailing list of every swimming pool owner in Southern California. Every person you advertise to is a potential customer.
A wise mail order expert once said: “It is better to select an audience and fit mail order products to it than to find a product and fit an audience to it.” There are many catalogs that have done just that: cooking products, sewing products, unusual carpentry tools, to name a few.
If you can pass all these rules, your pot of gold may be nearer than you think.