Selling products via mail order or catalog is an attractive way to start a retail business from home without the need for a storefront location. Sometimes referred to as a catalog business since you need a catalog to advertise your products to customers, very few retailers are going down this path these days. With the advent of online retail, at a minimum, retailers who are utilizing mail order or catalog sales are doing it as part of an overall omnichannel strategy.
Read on to learn some of the advantages and disadvantages of using catalog and mail order sales to distribute your products.
The main advantage of selling through catalogs is the ability to reach hundreds of thousands of readers with just one mailing. This dramatically increases a retailers exposure to potential shoppers.
With mail order sales, the catalog is essentially your "store" and the copy is the salesperson. Instead of waiting for the customer to come to you, your catalog is written, designed and mailed purposefully to a particular target demographic. This requires that you write powerful copy to attract your customers.
To reduce the amount of risk and expense, a catalog business can grow slowly. This allows retailers to focus on marketing a small amount of merchandise in the beginning and then let the catalog evolve as more customers are acquired. Because payment is received in advance, retailers may not need to stock the merchandise and tie up their cash flow.
In addition, you want to control your advertising expense. Use targeted and controlled mailings. Do not try to blanket the market. It is an expensive proposition and has little to no real return on investment. And since you are spending all of your money on bad advertising, your cash is drained as well. Think of it this way. You could put up a billboard in the stadium advertising your store. But if only 20% of the people in the stadium would ever buy from you, you just paid a ton more money than you needed. If, on the other hand, you had delivered a catalog to the exact customers in the stadium who would shop with you, your ROI would go way up. It would cost more, but not as much as a billboard.
Selling via catalogs does have a lot of initial expense. Besides the production of the catalog, retailers must purchase lists of prospective customers in order to generate new sales. Low response rates and high postal costs may also discourage a retailer from sending follow-up mailings.
Mail order retailers cannot easily change prices in response to market conditions. The product copy must be extremely well written as it serves as the only enticement for the customer to purchase the product.
Finally, every day more and more online-only retailers are learning the power of having a place for customers to try the products before they buy. When you are competing with stores who have a brick and mortar presence, then you are at a disadvantage. The customers can try there before they buy. Often times, this means your only competitive advantage is price - which we all know is not an advantage just a fast way to the poor house.