Although the above is hypothetical, it must be understood that returns of higher than 1.5% are rare when using someone else's list. When using your own list, they may be substantially higher.
Therefore direct mail campaigns rarely work unless the average order is in excess of $45.00 or you profit per order is about 500%. Before you undertake a mailing you owe it to your pocketbook to calculate your expected return. Your aim should be to break even at a 1% rate. Our mailings are geared to break even at 0.7%.
1. Response for a well written classified ad in a monthly publication may vary between 60 to 250 depending on the publication and the season.
2. The national average for conversion from inquirer to buyer is between a low of 5% and a high of 12% depending on price and other factors.
In the advertising scenario, you have a good chance to make a little money right from the start. Many mail order companies are satisfied to break even. The initial effort in responding to the inquirer of your classified is only the start. Over the next 12 months you should be sending at least 3 more mailings to those inquirers who did not buy the first time.. And you should mail to
your buyers abut every 6 weeks to 3 months until they have not bought from you for about one year. Now if you had a crystal ball
or a very sophisticated way of tracking the progress of each of the above initial 150 inquiries of your classified ad and could take another look at the results a year later, you would most likely be very pleasantly surprised since the $23 has now grown to several hundred dollars.
The greatest assets of a mail order company are its mailing lists. In the beginning you will have zero names, a few months alter you may have a couple thousand, a year later 10,000 and gets out on a daily basis, the more orders will come in. The more
mail are several important ways you will save money in your advertising:
1. Select well known monthly publications which are ready by individuals interested in what you have to sell. Monthly publications will generate inquirers over many months since they are kept on hand and read by different people. Bi-monthly or weekly publications may be acceptable also. Stay away from Daily Newspapers. They have a shelf-life of a day or less. They should only be used for testing... And above all stay away from "cheapies" like ad sheets, shoppers papers, etc.
2. When evaluating the cost effectiveness of an ad it is not the cost of the ad that counts but the number of inquiries it generates. A very inexpensive $15 ad which generates 3 inquiries, $5 per inquiry, is terribly expensive compared to a $150 ad which generates 200 inquiries, 0.75 per inquiry.
3. To test an ad one insertion is enough. The results will either be very good in which case you should buy 3 insertions the next time for a saving of about 10%, or the results will be average in which case you may want to run another test, or they will be poor which may be caused by any of the following reasons: Wrong publication, wrong heading, or ad, reader not interested in the particular offer.
4. Keep the cost per inquiry below $1.00
5. Write a tight ad. Each word including your address is counted.
6. By all means, set up your own In-House Advertising Agency. It is easy to do and will save you 1% right from the start.
3. Postage Postage is a big expense for any mail order firm.. This cost covers three areas: Responding to initial inquiries, cost of shipping orders to customers (this will include carriers such as UPS) and the cost of repeat mailings to customers and previous inquiries.
The first category of responding to initial inquiries is most often handled via First Class Mail. If the cost of mailing a single piece exceeds 65 cents strong consideration to use Third Class Bulk Mail should be given. This is especially true if catalogs are mailed to prospective customers.
Repeat mailings to previous buyers and inquirers as well as mailings to a rented list should always be sent via Third Class Bulk Mail. The exception to this may be when mailing a piece which weights 1 oz or less. The cost for First Class postage is 25 cents compared to 16.7 cents via Third Class Bulk Mail.
Following is a broad overview of the usage of bulk mail. Your local POst Office will give you specific information. The major advantage of using bulk mail is the considerable savings. The major disadvantages are the time it takes for a piece to reach its destination and the reliability of delivery. Recent surveys have indicated that a sizeable percentage of bulk mail never reaches its destination. This appears to be especially prevalent with light weight pieces such as #10 envelopes.
Basic requirements to utilize the bulk mail rate are that a bulk mail permit has to be obtained. The annual cost is $60.. Anyone can obtain this permit.. Secondly, each mailing must have a minimum of 200 pieces and it must be sorted by zip code according to Post Office regulations.
The rate for the first 3.37 oz is 16.7 cents. Weights in excess of that weight are calculated by the combined use of a per pound and per piece rate. Each piece in a mailing must have the identical weight.
If as an example your piece weights 3 plus ounces your rate to send it via First Class mail is 85 cents. This compares with 16.7 cents for bulk mail... If you were to send 1000 piece per month, First Class cost would be $850.00 versus $167.00 for Bulk rate. This is a very sizeable difference. Even if you lost a few potential customers, it would most likely still more profitable for you to use bulk mail.
Bulk mail will generally reach its destination in a radius of about 500 miles in about 7-10 days, 500-1500 miles, 10-15 days, over 1500 miles 15 to 25 days. Some mail order companies will use a combination of bulk and first class. They may use bulk mail for destinations of less than 1500 miles and first class for greater distances.
If you can not generate at least 200 pieces per week you may want to consider to combine the responding to new inquiries with remaining the same piece to a previous inquiry.
The cost of getting the product to your customer is also quite expensive and needs to be carefully managed.. If you are utilizing the dropship services of a supplier you will not have any control over this expense.. It is advisable that you ship at least some of the orders yourself as soon as your volume makes this feasible.
The Post Office has given shippers of books and certain other bound written material a special rate category which makes substantial savings possible. Special 4th class mail costs 95 cents for the first ounce and 35 cents for each additional ounce.
Unless your customer pays you extra for first class or UPS service, this class of mail should be utilized. It will take a little longer in reaching its destination, but the savings are quite substantial.
UPS rates are generally less expensive in distances of up to about 1100 miles when compared with first class rates. Since UPS charges a basic weekly pick-up rate of $5.00 you may want to utilize the services of an outside company until your volume is large enough to justify daily UPS pick-up.
Printing is another major expense and, unlike postage, a certain percentage of your printing cost may be for material that will become obsolete before the supply is exhausted. This is especially true for beginning mail order operations. You may decide to discontinue promoting an item and find yourself stuck with several thousand useless circulars.
For the above reason it is wise in the beginning stages of your new business to print in small quantities until you know exactly what sells and how it should be promoted.. You may wish to make exceptions for certain items such as envelopes which have continued usage. Printing in small quantities will cost more per piece but it is better than throwing money into a trash can.
As your volume increases and you see fit to have larger volumes of given pieces printed, be very careful in selecting your printer.. In addition to price you will, of course, also be concerned with quality and service. Some printers will provide additional free services with a print job, such as typesetting.. Always obtain several bids when doing larger jobs.. For example, at this time (summer 1990) 1000 11 x 17 pieces (this is a 2 page foldover) imprinted on both sides will cost $130.00 in the Washington, DC area. The very same piece can be done by a printer in a medium size midwestern city for a little as 435.00. This represents a difference of over 8 cents per single piece.
If you are doing business in one of the many high cost areas of the country or in Canada, by all means consider doing business with out of town printers. You will see many ads in mail order publications.. Some of the best prices can be found in some midwestern and southern states. Lower labor and operating costs make these prices possible. Before giving a larger job to an out of town printer test his quality with a small job.
The cost of creating camera ready art work through professional graphic designers is substantial. It is strongly recommended that you utilize the free art work supplied by many suppliers until you are large enough to absorb this substantial expense or are able to produce it yourself through a desktop publishing software program.
Learning how to think on a per unit basis is real important in our business. The cost of printing, mailing and other costs are generally quoted and calculated for 100 pieces.. But to evaluate the cost effectiveness of mailing or advertising, etc get used to thinking in the per unit mode.
An acquaintance of ours who recently did mailing of 32,000 pieces was able to make a small profit on his mailing which was of limited success by making tow changes: 1. He utilized an order form which was built into the piece rather than a separate order form -- saving 2.7 cents. 2. He used a #66 3/4 business return envelope instead of a #9 envelope -- saving 0.4 cents. The saving was 3.1 cents per piece or $992.00 for the entire mailing.
GETTING STARTED IN THE MAIL ORDER BUSINESS - HOW MUCH DOES IT REALLY COST?
by: Robert Drake
Copyright 1994 Mascor Publishing
Published 1994 by MASCOR PUBLISHING CO. Silver Spring, Maryland
This report was written as a service to those individuals who are considering to get started in the mail order business. To get any business started successfully takes many ingredients. However all requirements, more or less, fall into one of the following four key categories: 1. Desire, 2. Knowledge, 3. Time, and 4. Available funds
This report deals only with the financial requirements of starting a mail order business. Hopefully it will help the reader to evaluate whether he is financially able to embark upon a business venture that will bring about success. It is generally true that it takes substantially less money to get started in many mail order businesses than in a variety of other businesses.
Many a promoter will want you to belive that it is possible to get started successfully for $50, $100, or even $200. However, it is totally false. It does take more than that. How much more depends on many factors which I will try to define as much as is possible here.
Since the mail order business covers a vast number of services and products I would like to define the contents of this report to deal with the selling of information products. This is where my expertise lies. While the same or similar conditions may apply to any number of other mail order businesses, there may however be some differences to selling information products such as books, etc.
The following makes a number of assumptions. The most important ones are:
1. The operator ( or operators) of the new mail order business is employed or has other means of income.. He will not need to derive any profit from his new business for a period of time.. How long will depend on many factors.
2. This is a home based business which has no employees.
3. The business, at the start - until volume reaches $3,000 to $5,000 per month - will utilize the drop shipping services of a wholesale company.
4. Basic office equipment such as desk, file cabinet, typewriter or computer, etc... are on hand.
A WORD OF CAUTION AT THE START AND RESOURCE AVAILABLE TO YOU
THis is an exciting business and it can b extremely profitable once it reaches a certain momentum. However, like almost all businesses it is a very cost sensitive business. For a detailed analysis of the key mail order expenses and their impact on your business refer to my special report:
CONTROLLING YOU MAIL ORDER EXPENSES A thorough discussion of mail order's 4 key expense areas - Product - Postage -Advertising - Printing
As you are getting started in planning and setting up your new business which in my experience is one of the most enjoyable and satisfying experiences of a lifetime think and act with caution when it pertains to any expenditures. This is one of the most difficult things to do since you are probably very enthusiastic and want to do everything today. So you need to learn HOW TO CONTROL YOUR ENTHUSIASM or it is going to cost you lost of extra money.
In this state of enthusiasm we tend to think that there is nothing we can do wrong and since we will be making lots of money in a few months lets get all necessary and often unnecessary supplies and equipment.. It would be much better to wait until profits of the business make it possible to acquire what is needed. In the meantime you can make do with less. To be able to do so is a most important quality for the owner of a small to do so is a most important quality for the owner of a small business.
If you are a parent think of your new business as a child. There will be a never ending sequence of surprises. And as the business grows so will its demands, and yes its expenses.
START-UP EXPENSES -- INITIAL STAGE
The below listed expenses will be incurred in the very early stages of setting up your business. This is at a time when you probably are not sure as yet what you will be selling.. You will be writing to different companies for information to come up with the right product selection. Once you have decided what it is you will be selling you have to line up reliable suppliers, This is also a good time to buy a few books t help you with your mail order education. Although most expenses incurred in this phase are relatively small they will add up quickly.
Stationery and envelopes.........................................50.00 P.O. Box rental...................................60.00 per year Miscellaneous office supplies.....................30.00 Postage...........................................50.00 Educational.......................................45.00 TOTAL............................................235.00
START-UP EXPENSES -- SECONDARY STAGE
You have now reached the point at which you have decided upon one or more reliable suppliers for the product you wish to market.. You may also be ready to have some promotional material printed. In addition you may be placing one or two classified ads for testing purposes.
Dealership or distributorship (1 or more)................80.00 Small supply of brochures or catalogs....................50.00 Printing of sales ltr,order form,Return env,etc..........90.00 1 test ad, classified (national magazine)...............100.00 Business or traders license..............................30.00 Postage..................................................25.00 TOTAL...................................................375.00
Until now you have only had expenses for your new business. You have not derived any revenue yet. In the next and final stage of starting your business you may have some revenues. Stage one and two may take from approximately 3 to 6 months.
START-UP EXPENSES -- THIRD STAGE
You have now reached a stage were you will expand your advertising, or alternately you may go the direct marketing route and rent a mailing list. The comparison of expenses and revenue results of a direct marketing effort versus classified advertising need to be carefully evaluated. Refer to my special report:
#4118 How To Control Your Mail Order Expenses
This report compares the actual expenses of a specific mailing against an advertising effort.
Since expenses for a direct marketing effort are generally higher than for a small advertising campaign, the below listed expenses focus on an advertising campaign
Advertising -- 3 classified ads.......................280.00 Postage for inquiries derived from adverting ..........75.00 Miscellaneous office supplies..........................30.00 TOTAL.................................................385.00
ANOTHER IMPORTANT RESOURCE AVAILABLE TO YOU
If you are planning to advertise on an ongoing basis you need my special report on
HOW TO SET-UP YOUR OWN IN-HOUSE ADVERTISING COMPANY
It shows you how to save 15% on all your adverting expenses from day one by setting up your own agency.. Every mail order pro does it. Its easy to accomplish. Necessary sample advertising insertion order forms are part of the package as well as a special bonus
List of Top 50 Mail Order Publications for Classified Ads
The combined expenses as listed above total just under $1000. They are based on broad estimates and may vary somewhat by area of the country and individual circumstances. The figures are reflecting a minimum amount.. I have no question that some individuals may be able to cut expenses further. Since this planning period takes several months the expenses as shown above can be allocated over a period of 4-6 months.
The above figures represent a conservative start. For those who want to get started more aggressively expenses would be higher.. While many of the basic start-up costs would be the same the expenses that would increase would primarily deal with additional advertising, printing and postage expenses. By how much would largely be an individual decision.
Since most new businesses fail because of lack of funds, it would be advisable for an individual who does not have the necessary funds to get started to wait until he does. In addition to the basic start-up expenses an individual should also consider that most businesses will loose money for several months and sometimes much longer than that. Unfortunately no matter how well you plan, circumstances often change and we must make allowances for those eventualities.
POSTAL SAVINGS GUIDE
Published 1990 by Mascor Publishing Co. Silver Spring, Maryland
Any legitimate article of commerce may be sold through the U.S. mails upon truthful and honest representation - and the Post Office welcomes every legal enterprise to the use of the mails.
The purpose of this report is to provide you with practical information on more economical and efficient handling of your mail. With postage costs at an all time high, we belive you will find these suggestions on how to get more for your postage dollar especially helpful. Today, it is more important than ever to establish good mailing practices, practices that will make a profitable difference in your postage handling, and speed up your mail.
A WORKING KNOWLEDGE OF POSTAL LAWS AND REGULATIONS - By the very nature of the business, mail merchandising implies integrity. If a customer has to pay for something before having a chance to examine the article, his confidence is not to be abused. Selling by mail must be kept on a high plane of the dealer is to survive and prosper.
Lotteries, chain letters and schemes to injure or defraud are denied the mail privilege.. Nonmailable materials also include items not regarded as conductive to the public welfare, such as pornography. Excluded, too are materials (as inflammable liquids and chemicals) which could damage the mails or cause injury to postal employees.
Every one who is using the mails to conduct business should become familiar with the postal retirements which apply to his particular enterprise. It is not, however, necessary or advisable for the beginner or small operator to attempt learning in detail all the ramifications of all the Postal Laws and Regulations. To the mail minded person, dealing with the post office is not anything new or strange. As a mail user in the past, whenever you came across something on which you desired information, you simply inquired at the post office. As a small mail order dealer you will be doing the same thing.., and there will not be a great range of questions that will concern you. If you are in doubt about anything relating to your situation,, inquire as to how the matter should be handled. The Post Office will answer all your questions.
PENALTIES FOR USING THE MAILS TO DEFRAUD - A customer should make a formal complaint in the case of misrepresentations and possible fraud with the Office of the Regional Chief Postal Inspector. There are 5 regions. The local Post Office will advise what region is responsible got a given area of the country.
If complaints from different parties have been received, the postal, inspector can ascertain that the seller is at fault. However, the Post Office will give a mail order business the benefit of the doubt and the business is afforded the chance of settling complaints fairly with customers.
Where the intention is clearly to defraud, the case is followed through with a fraud order to be issued by the office of the Postmaster General. Letters are then returned to the senders, marked across the face of the envelope "Fraudulent".. It is not the intent of the POst Office, however, for its inspectors to act as censors on transactions or adjusters of arguments.
In flagrant cases of fraud,, in addition to loss of mail use, a fine or imprisonment, or both, may be imposed. However, any honest individual who operates a mail-order enterprise as a business and not as racket need have no fear.
NEED FOR FAMILIARITY WITH CLASSES AND RATES OF MAIL - Since mailing costs are responsible for a major operating expense -- approximately one fourth of the total expenses of a small mail order business -- the mail-order business has to be able to figure how to get top efficiency for this major expense category.
A mail order business may, for example, save a great deal in the course of a year by knowing how pieces of sales literature can best be mailed and what the weight limitations are for specific postage charges. Among small dealers especially, there is much postage waste by failure to take into account minor details which in the aggregate run to respectable sums. Suppose, as an illustration, a booklet or catalog ready to mail just barely exceeds the limit for one rate and calls for more postage. A minor adjustment in the place can decrease the postage from, for example 65 cents to 45 cents. A thousand pieces mailed per month makes a difference of $200 Dollars in lost profit.
Third-class mail, (also called bulk mail), may be used by anyone, but it is used most often by larger mailers. Basic requirement to mail by bulk mail are that the mailer obtains the proper permit,, minimum number of pieces must be 200 per mailing and all pieces are sorted by zip code. At this time the rate for Basic Bulk Mail is 0.16.7 for the first 3.37oz. Thereafter a combination of pound and pieces rate are applied. Almost all mail order companies use bulk mail when a given piece exceeds 45 cents for first class postage. The savings are substantial. The big disadvantage is the time it takes for delivery. This can vary greatly by region and time of the year. As a rule of thumb mail within a 500 mile range may take from 1 to 2 weeks, 500 to 1500 miles 10 to 20 days and over 1500 miles from 2-4 weeks. Your local Post Office will give you all necessary bulk mail information and the proper application.
The Post Office issues a number of informative brochures which are free and give information on key postal matters. For a list of currently available publications write to:
Consumer Advocate U.S. Postal Service 475 L'Enfant Plaza West, N.W. Washington, DC 20260
Since many prospective small mail dealers are interested in the merchandising of books, it is important for them to know that books can be mailed by preferential rate not enjoyed ny any other commodity. To take advantage of the reduced rates,, packages must be plainly marked "Special Fourth Class Rate", Current special Fourth Class Rate are 90 cents for the first pound and, 30 cents for each additional pound.
KEEP YOUR BUSINESS ABOVE REPROACH - Considering the number of people using the mails and the tremendous volume of business transacted by mail, the Post Office levies relatively few penalties. However, no business of any size can be carried on without some complaints. A policy of "Money Back Guarantee" or "Satisfaction Guaranteed" goes a long way in convincing the Post Office as well as your customers that you are a trustworthy business.
PACKAGING AND ADDRESSING PARCELS AND PACKAGES - Proper packaging and addressing of packages is the best way to prevent damage and loss. Use a container strong enough to protect contents during handling.. Cushion the contents if necessary to make sure they do not move within the container and affix the address information securely. Plastic packaging tape is recommended for closing and reinforcing the flaps and seams... Avoid using wrapping paper. The use of string could cause damage in processing. The address must be typed or legibly written one side only.. Use an address that's designed for efficient post office handling including proper zip code information - with the recipients address more prominent than your own.
USE STANDARD SIZE ENVELOPES - Save time and money. For best results envelopes should be at least a few inches longer then the longest insert plus the combined total thickness of the inserts. When the inserts are thick and bulky, extra allowances should be made.
WATCH YOUR WEIGHT - A truly accurate mailing scale is a must for any mailer - large or small. Otherwise, you run the risk of underpayment of postage - and the irrirritation of mail being returned because of "postage Due". And of course, overpayment of postage can cost you a great deal of money over a period of time, so it is indeed important to have an accurate postage scale.
POSTAGE METER - If you send out much mail from your place of business, it might be practical to consider the convenience of metered mail. Some advantages are - Save trips to the post office. Eliminate the need for keeping loose stamps.. Stamp, seal and postmark quickly. Avoid loss of stamps. Print "meter ads" simultaneously with the meter stamps. Accurate postage affixing.
Postage meter equipment generally consists of tow parts, an office mailing machine and a detachable postage meter, the later licensed for use by the United States Postal Service. Since postage meters print U.S. postage and account for government revenue under official lock and seal, they cannot be sold outright, as are mailing machines, but are leased from an authorized manufacturer who is held responsible to the U.S. Postal Service for their proper operation and replacement when necessary.
KEEP YOUR MAILING LIST CURRENT - Only a "live" list can produce good results - and many nixies on a list can be very costly. So be sure to keep your list constantly up to date. One way to keep your list clean is to print. "Address Correction Requested" on outgoing envelopes. The POst Office notes the reason for non-delivery, or the new address if known. The fee for address correction service is 30 cents per notice issued, for both Second and Third class mail. Undeliverable first class mail is returned free of charge.
SPECIAL HANDLING -Special handling service is available for Third and Fourth class mail only, including insured and certified mail... It provides for preferential handling in dispatch and transport, but does not provide faster delivery.
PRIORITY MAIL - First class and priority mail are one and the same... When first class mail exceeds 11 ounces it becomes priority mail.
WHAT TO DO WHEN YOU HAVE A POSTAL PROBLEM - When you have a problem with your mail service it is best to talk to one of the clerks at the Post Office. If necessary the clerk will refer you to someone else. It is best not to complain to management or file an official complaint at your own Post Office. Be nice with the clerks and try to get known them. They are important partners in your mail order business.
THE BEGINNER'S MAIL ORDER BUSINESS GUIDE
Peter E. Schuender
Published 1990 by MASCOR Publishing Co. Copyright 100- by Mascor Publishing Co. P.O. Box 8308 Silver Spring, Md 20907
Note: This report is intended to relate personal experiences of a mail order operator in order to make helpful suggestions to individuals who are new to the field. No claim is made that the steps outlined would be successful for someone else. Each individual should obtain such professional advice as may be necessary for his particular operation.
The following is designed to provide a check list for new entrants into the mail order field. Each mail order business is different, but there are common elements that apply to most mail order businesses, as well as some specific characteristics that may vary from business to business. The following suggestions were developed to assist you in avoiding mistakes which can be costly. Apply the various points as they may relate to your specific business.
* Select a short, easily remembered name. * Unless you are using your own name, it is required in most jurisdictions that a trade name is either registered with the county or the state. * Before you spend money for printing material, make sure that the name you choose is not already registered to another company. You can usually conduct a name search with an office of the appropriate jurisdiction by telephone. * You may consider using a name that describes your product.
* Most newly established mail order businesses will operate out of their home until the volume of the business requires larger space. * Most mail order businesses prefer not to use their home address as their company address. If you do, you will advertise your home address in regional and national publications. You have two other choices, a Post Office Box (POB) or a postal box located in a commercial enterprise which rents out mail boxes. * A POB is generally the least expensive, both to rent and for advertising purposes. (See below) Some mail order operators claim that it reduces business because people do not trust a POB address. Yet there are just as many mail order operators who prove them wrong. the decision is yours. * If you rent a mail box in a commercial enterprise, (many have sprung up in recent years), your box number usually becomes a suite number in the address. * Almost all publications will charge you a full word charge for each component of your address, except the Zip Code and State which is counted as one word, Example: Information Books, 300 Main Street, Suite 611, Centerville, Md 20910 Or: Information Books, Box 1000, Centerville, Md 20910.
* The first address is counted as 9 words, the second one as 6 words. Since advertising costs anywhere from 50 cents to $10.00 per word (classified advertising) you could save a substantial amount of money at the end of the year.
* Some mail order companies do not show their phone numbers on their stationery, others do. I believe it gives the customer some comfort to see a telephone number, although he may never use it. * You can show your residence phone number in the appropriate printed material, or you can obtain a business listing for your home. * The residence phone is fine, for starters, if it is answered in a professional manner at all times. * If you plan to sell higher priced ticket items, however, (over $15.00) a business listing would be advantageous since a prospective customer may pick up the phone and check with the information operator whether "Company X" is listed.
* Be conservative and frugal in your acquisition of items that you feel are needed. It's always wise to start small, and as inexpensively as possible, and as you build profits, you can buy more and better items. * The basics are a good quality typewriter, (you can rent one for starters for a few months). Business stationery, business envelopes (#10's), and return envelopes, either #6 or #9 is fine. All items should have your business name and address imprinted on them. * You will also need some mailing labels and some miscellaneous office supplies.
* If possible, choose a product or products that people need on an ongoing basis. * Be sure the product is of acceptable quality. Know the product before you sell it. * If feasible, choose an item that is not widely available from retailers. * If you have a difficult time deciding what items or products to select, I suggest you read the following book: "How Mail Order fortunes are Made" by Alfred Stern. This book lists hundreds of different items. It will give you many good ideas. * Develop a line of merchandise. It is rarely possible to make money with just one or two items. The availability of a line of related products is paramount to mail order success. * The more specialized your products are, the easier your marketing becomes. * If you are selling books, for example, it would be impossible, except for a very large company, to sell all types of books. You may decide to specialize in books pertaining to sports, and may want to go even further by zeroing in on football or baseball.
* Your suppliers should provide you with reliable, quality, and reasonable pricing. * Since you probably should provide some type of a money back guarantee (30 days is standard) you should expect the same guarantee from your suppliers. * When buying from out of town suppliers, be sure to include the shipping charge in comparing prices to local suppliers.
* Under a drop-ship agreement which is available from many suppliers for a variety of products, the supplier ships your customers' orders directly under your shipping label. (Suggested reading: "American-Drop-Shippers Directory".) * It is customary that the supplier guarantees not to include any of his promotional materials with the shipment; or to use your customer's name for any future mailings. * Drop-shipping arrangements are suitable for people getting started. It allows you not to have to carry a costly inventory. * As your business increases and you develop a sense of what sells well, you can stock limited supplies of certain fast selling items, and continue utilizing drop-shipments for slower products. Eventually, as your business flourishes, you can carry an inventory of everything you sell. * Handling your own shipments is advantageous for the following reasons: It cuts down your shipping expenses, it decreases the shipping time, and it allows you to include promotional material directly with the shipment. * When you do utilize drop-shipments, be sure to send your customer a note that his order is being processed and he can expect it by, or around a certain date. * It is unnecessary to make your customer aware of the fact that the item is being drop-shipped. Include some promotional material with your letter or note.
* Buy at a price that allows you an adequate mark-up. In setting your prices, allow for all costs: * Cost of product, shipping cost and postage, bank charges including credit card charges, wrapping, bad debts, rejects, refunds, etc. In addition, the other normal overhead costs need to be considered,. Lastly, there is the substantial marketing cost for advertising, and for printing of promotional items. (See following paragraphs) * Your prices of course, have to be fair and in line with your competition. * It is not necessary that you make a big profit on each and every item. the real profit in mail order comes from follow-up orders. * THE 3 BIGGEST EXPENSE CATEGORIES IN MAIL ORDER ARE: ADVERTISING, PRINTING COST, AND POSTAGE. Over 80% of your total expenses are in this area. Watch these expenses very carefully.
* Start with classified ads. As you test them and know what is successful, you can switch to display ads. * To test an offering and a specific ad, run it once in a specific publication and you should get a reading that could be very positive or very negative. It might also be inconclusive. If that is the case, simply run it again. * It is best to test an ad by running it in different publications. * Advertise in publications that advertise similar products. * If you have a sure seller, buy larger space. * Special interest products should be advertised in special interest publications. * Keep on changing the ad and offering until you are satisfied it is right. * Examples of changes you can make are: size of ad, copy, appeal, special gimmicks such as discounts, free gifts or reports, etc. * Remember that a given ad can be 20 or 30 times more successful than another ad advertising the same product. it pays, therefore, to continue testing until it is just right. * Repeat a successful ad until you no longer get a satisfactory return. * The conventional advertising cost is 15% of sales or more in mail order. * To evaluate your advertising cost, think in terms of cost per inquiry. this is calculated by dividing the number of inquiries into the cost of the ad. that cost may vary from about $$0.80 to $2.00 or more. * Be careful when you allocate advertising funds to small mail order publications. The ad may appear to be very inexpensive. However, a $15.00 ad that gets no response is a lot more expensive than a $150.00 ad that gets over 100 inquiries. * Stay away from those publications that have no news or editorial content, and also those that have poor printing quality. * There are a number of quality mail order publications, but it takes time to find the right publication for your product. (See American-Drop-Shippers Directory.)
* Write tight copy. * Write as you speak. You are generally appealing to a mass market. * Prepare your copy carefully. It must fit your specific medium. * The emphasis should be on YOU rather than I, the company. * Be sincere and don't make unreasonable claims, but remember that you are selling. * Try to convince the reader that you are reliable and trustworthy. * Give simple specific instruction. * Key all ads to test their effectiveness. * Check and double check, and have someone else check your ad to make sure everything is correct and easy to understand. * Watch where your competitors are advertising. * Experiment with new publications. * It is generally considered impossible to sell something that costs more than $2.00 - $3.00 direct from either a classified ad or a small display ad. This is because there just is not enough space to convince someone to part with $10.00 or $20.00, for example. It takes a full page ad to do that. * If you use an agency, use one that specializes in mail order, even if it is located out of town.
RESPONDING TO INQUIRIES
* Each inquiry you receive in response to an ad should be answered via First Class, if at all possible, within 24 hours. * The contents of the envelope going to the prospective customer should contain: a circular, promotional flier, or mini-brochure, a sales letter, an order form (the order form can be part of the circular), a return envelope, and other appropriate information, such as a fact sheet, a free report, etc. * In general, circulars should be limited to one 8 1/2 x 11 page. * A sales letter, on the other hand, can be as long as it takes to say everything you need to say to a prospective customer in order to sell him the product. * Sales letters should have an attention getting opening. The idea of the opening is to get him to read the rest of the letter.
POSTAGE AND SHIPPING COST
* Answer inquiries to your advertising immediately and via First Class Mail. Use Bulk Mail for future mailings. * You can save a great deal of money by getting a Bulk Mail permit. The minimum number of pieces per mailing is 200. Mail must be zip sorted. Postage is 16.7 cents for up to 3.3 oz. Get more specific information from your Post Office. * Keep your mailing lists clean - updated. * Utilize all of the various mail classes, such as Printed Mail and Book rate. * Compare costs of shippers other than the Post Office. * Guarantee return postage. * Watch your shipping weight. A fraction of an ounce can make a big difference in a large mailing.
* Very large printers will not be interested in your business. Very small ones, quick printers and instant printers although convenient, are generally too expensive. Their equipment is not large enough to be competitive. * There are many medium sized printers that will give you good pricing and quality printing. Often they have the capability to help you with layout and design. * Don't hesitate to use out of town printers. If you live in a high cost-of -living area, you can probably save a substantial amount of money. Many of these printers advertise in mail order publications. * Utilize the promotional material available from your supplier. * Until you know what sells, print small quantities, even if it is more expensive. * Use colored paper for your promotional flyers to spice up your offer. Use white paper, blue or black ink for everything else.
CUSTOMER PAYMENTS, REFUNDS AND COMPLAINTS
* Accept cash, money orders and checks. * Some mail order companies state in their material that they will not ship for 10 days to 2 weeks when payment is made with an out of town check. This may be an unwise practice because, it can create ill feelings with your customers. NSF checks are rare. * An increasing number of mail order companies accept credit cards - Visa and MasterCard - for payment. It is generally felt that it does increase sales. * If you cannot obtain a credit card merchant agreement with your bank work through a credit card clearing house. A number of these companies advertise in mail order publications. Since these companies generally charge between 6-9%, it may be wise to set a minimum amount such as $15.00 for credit card orders. * Remember, "the customer" is always right. An argument won, is usually a customer lost. * If you receive an order with an underpayment, ship the order and bill the customer for the difference. * Make refunds on overpayments quickly. * Most mail order companies offer a 30 day money back guarantee. Some offer 90 days and even more. * It is unwise to offer money back guarantees on items priced very inexpensively, for example, a $3.00 report.
* As in any business, it is important to keep records. * You need records to tell you what is going on in your business; to evaluate both your revenues and your expenses. * It is also required by law that you keep certain records. * Keep especially good records of your advertising expenses so you can evaluate your advertising on an ongoing basis.
* It is recommended that you do no direct mailings, except to your own list of customers and inquirers, until you have thoroughly tested a specific product through advertising. * Stay away from inexpensive mailing lists, under $40.00 - $50.00 per 1000. * Avoid mailing lists whose owners make unrealistic claims. * Work with a list broker who wants to see your product before he will rent you a list. Lists are rented for one time use. * Lists from professional list brokers rent from $60.00 and up, per thousand names. * The general consensus is that you need to mail a minimum of 1000 names to get a fair reading. 5000 names would give you a more accurate test. * Buyer' names are better than names of inquiries. * The best mailing list is your own list of buyers. Second best is your own list of inquirers.
* The most important factor in mail order is FOLLOW-UP Substantial profits can be generated from this segment, if it is properly handled. * You can generate a lot of sales by including promotional material when filling orders for customers. Other orders are generated from mailings that are made to former customers, as well as individuals who inquired about an offer in the past. * Send out regular mailings to your customers. At a minimum, four times per year. However, you can send out mailings as often as every 6 weeks or so, if you have a new product to offer. * As you build your mailing lists and you send out regular mailings, your orders will start flowing in.
RESEARCH AND EDUCATION
* Whether you are new to this field or not, to stay on top, you must continue your education by reading books and reports on mail order and subscribing to mail order publication. * Always be on the lookout for new products you can offer your customers. * Study the advertising of your competitors. Request their material and study it. * Study all mailings you receive. * disregard the MLM schemes that you receive, chain letters, recipe clubs, etc. they are all the same, a big waste of money. Many of them are illegal. * If you are new to mail order, study the attached information on various publications. Depending on your knowledge of the field, one or several of the books shown may be very useful and can help you to be more successful.
Continue to learn about mail order by reading, experimenting, and talking with other mail order operators. Have patience. Success will not come overnight. It takes time to build a successful business. Start slowly and expand your business from your profits.
MAIL ORDER LAWS AND REGULATIONS -An Overview- by Peter Schruender Copyright 1989 Mascor Publishing
No parts of this publication may be reproduced in any manner whatsoever without written permission from the publisher.
The intent of this report is to give the newcomer to the mail order business an overview of those laws and regulations that most affect the small mail order operator. The intent is not to give legal advice. Such advice should always be sought from an attorney. Only those laws and regulations that apply to the small operator most directly are covered. Advice is given from the perspective of an operator of a mail order business rather than from a legal perspective.
For those interested in an in-depth review of the laws which affect the mail order industry, it is recommended that you read the following book: The Direct Marketer's Legal Advisor, by Robert J. Bosch, McGraw Hill Book Company.
THE 30 DAY RULE
To protect the consumer the FTC has enacted the Mail Order Merchandise rule which is generally referred to as the 30 Day Rule. Many states have enacted similar laws. some of those laws have a more narrow definition than the federal law; the most notable is New York State.
The 30 Day Rule requires the seller to deliver the order within a 30 day period, unless otherwise stated in the sales literature. if the seller, for example, states in the order form that delivery takes 4 to 6 weeks, he has effectively insulated himself from the law. In a practical matter, however, he may have also affected his business in a negative way.
The 30 day period begins when an order arrives and has been properly paid for.
The 30 Day Rule is an easy regulation with which to comply. It should rarely take longer than 30 days to fill an order. If it does, the seller must notify the buyer of the delay and the reason for it.
Some mail order companies delay shipment of orders until checks rendered for payment have cleared. This should generally not take longer than 10 days. If the seller wishes to follow such a policy, he should so state in his literature. From the perspective of a mail order operator, I do not consider this to be a sound policy. NSF and ACCOUNT CLOSED checks are relatively rare and can be minimized with proper controls. If you practice such a policy, you may save a few dollars but in return you will make customers unhappy. I personally do not buy from companies that state in their literature that they hold checks for clearance. Most mail order companies experience very small bad debt ratios. It is recommended that you call the bank the check is drawn on to verify funds on larger amounts; as for example, on orders over $50.
Once the buyer has been notified that an order has been delayed, the seller is automatically granted an additional 30 day delay unless the customer advises the seller that the delay is not acceptable. If he does not reply to the notification, it constitutes legal acceptance of the delay. In general, and in most states, the seller may obtain a second 30 day delay as long as there is a good enough reason.
The New York law differs from the federal law in that it stipulates a maximum period of 65 days (including delays) for an order to be filled. Newcomers to the mail order field residing in New York State should obtain a copy of the New York regulations.
The 30 Day Rule does not pertain to credit card sales. Credit card charges should be processed when an order is filled. If a mail order credit card sale is cancelled, the seller must issue a credit against the account of the buyer within one billing cycle following receipt of the cancellation request.
The federal law pertaining to unordered merchandise is simple. It strictly forbids this practice. Free samples, if so identified, are exempted.
Most states, including New York, as well as the federal law permit sellers to substitute merchandise of similar or superior quality. The law requires it, and it is also a good business practice, to advise the buyer when making a substitution that he may return the merchandise free of charge if he is not satisfied. Certain items, such as merchandise which has artistic value, cannot be substituted. In this regard, for example, a book on how to start a given business may be substituted by a similar book on the same subject, but a book of literature by a renown author may not be substituted.
RETURN OF MERCHANDISE
Unless the seller specifically states that he does not offer a moneyback guarantee or offers, for example, a 30 day money back guarantee, he is required to make a full refund for a period of 60 days if the material is returned in good condition.
My own experience with returned merchandise indicates that it is quite rare. Our company, as an example, receives no more than 1-2 returns for every 120-150 orders. If you are a seller of information products and you sell reports or other information which can be easily copied, you may wish to enact a policy stating that there is a no return policy for reports, etc.
The above laws are the only federal regulations pertaining to the sale of merchandise which are unique to the mail order industry.
HEADLINERS IN ADVERTISING AND SALES LITERATURE
A few words should be said about the proper usage of some of the most common headlines used in advertising. Again, for an in-depth review of laws pertaining to advertising, refer to the book as listed above.
The most common and most effective of these terms are: SALE, NEW and most of all FREE. FREE is a magic word in American advertising used by giant companies and small ones alike. By all means, these terms should be used since they do produce sales. and if the advertiser follows a simple rule of honesty in the usage of these and other advertising terms, he will stay out of trouble.
A sale is a reduction from the seller's own former selling price of a given article. The seller must have sold, not just offered the article, for a reasonable period of time. This simply means if a 50% discount is offered on a $10 book, the book at some previous time must have actually been sold at $10. If it just has a cover price of $10 but was always sold at $7, a $5 price is not a 50% discount.
Free means it is free. To reemphasize, the term is very successful and will generate sales. But if something is offered for free, it should be free. the value of the free item cannot be hidden in another part of the offer, such as charging more for the other items than you would normally charge.
Here is another straight-forward term. It should only be used when new items are advertised. A new book is one which came out in the last 6 months (maybe 12 months, and that would be stretching it) but definitely not 2 years.
HOW TO START YOUR OWN COMPANY
Once you have decided you want to go into business, you must set yourself up to get started. this is not al all difficult. You should have no concerns on this matter. It is easy and inexpensive to do. There are no unusual legal requirements to sell by mail.
There are generally three ways to structure a business entity. the sole proprietorship, the corporation, and a partnership. The sole proprietorship is the easiest, fastest and least expensive way to set yourself up. In most cases this would be the way to start out for a small business.
Corporations have tax benefits that can be more advantageous than a proprietorship, but they also have strict record keeping requirements. As a rule of thumb, a business should be incorporated if it has annual sales in excess of $250,000. It is against the law in most states to use the abbreviation inc. unless the business is incorporated. But you can use Co. Partnerships also have specific legal requirements. Forming a partnership is generally necessary when going into business with someone else. There are advantages and disadvantages in doing this. Besides sharing workloads and profits, the partners must get along well. It is almost always necessary to obtain legal counsel in order to set up a corporation or a partnership.
D.B.A. AND/OR BUSINESS LICENSE
In most cities or towns it is required that a business license be obtained. In addition, you generally need to register your business name if you are using a fictitious name If you are using your own name, it is not required. Call your local city or county clerk's office to obtain the necessary information.
A SUMMARY OF COPYRIGHT LAWS
For those interested in becoming self publishers either by creating their own work or using someone else's, here is a short summary of copyright law.
WHAT COPYRIGHT IS
Copyright is a form of protection provided by the laws of the United States (Title 17, U.S. Code) to the authors of "original works of authorship," including literary, dramatic musical, artistic, and certain other intellectual works. Under the copyright law, copyright protection (for printed works) pertains only to the words and their sequence; it does not pertain to any idea, process, system, etc., regardless of the form in which it is described. that is, you copyright the words contained in the copy, not the content. The copyright law generally gives the owner the exclusive right to do and authorize others to do the following: In the case of printed works, to reproduce the work in various forms such as copying, etc. It also gives the owner the right to display the copyrighted work publicly.
COPYRIGHT SECURED AUTOMATICALLY UPON CREATION
The way copyright protection is secured under the present law is frequently misunderstood. No publication or registration or other action in the copyright office is required to secure a copyright. there are, however, definite advantages in doing so since, in the case of a litigation, it is substantially easier to prove copyright if registration has taken place.
Under the present law, copyright is secured automatically when the work is created, and work is "created" when it is fixed in a copy for the first time.
Registration procedures are simple. In general, to register a work three elements have to be sent to the Copyright Office in Washington, D.C. An application (proper for can be obtained from the Copyright Office), a $10 fee, and a non-returnable deposit of the work to be copyrighted. For more specific information, including a copy of the law, write to: Register of Copyrights Copyright Office Library of Congress' Washington, D.C. 20559
U.S. POSTAL LAWS
In general, it is against the postal regulations to utilize the U.S. mail service to transport hazardous materials, pornographic materials and chain letters involving money. For more specific information, write to:
Consumer Advocate U.S. Postal Service 475 L'Enfant Plaza West, WW Washington, D.C. 20260
You may also obtain a free copy of the Consumer's Resource Handbook. It is designed to help consumers resolve complaints about goods and services with local, federal and state agencies. Write to:
Consumer Information Center Department 532 Pueblo, Co 81009
Other free publications that may be of interest to you: "Selling by Mail" can be obtained from: Small Business Administration Washington, D.C. 20416-1110
"The Mail Order Rule" can be obtained from: Federal Trade Commission Publishing Office, #130 6th and Pennsylvania Avenue Washington, D.C. 20580-0001
A final thought: In the conduct of your business, let common sense and honesty be your guide.
HOW TO WRITE CLASSIFIED ADS THAT GET RESULTS NOW! by Peter Schruender Copyright 1989 Mascor Publishing
SELLING DIRECTLY FROM A CLASSIFIED AD
Classified ads can be used to sell products directly from the ad. This, however, only works for items costing no more than approximately $5. The best use for classified ads is to utilize them in obtaining inquiries. This is called the two step approach. The first step is to get maximum inquiries from the classified ad, in the second step the promotional package is sent to the prospect and as many inquiries as possible are converted to buyers.
CLASSIFIED ADS FOR MAXIMUM INQUIRIES
Classified ads are substantially less expensive than small space ads, but by no means are they cheap. Most national publications catering to the mail order business charge from $3 to $8 per word. A well laid out ad should consist of about 20 words which includes the company name and address. It is important that you remind yourself that only the purpose is to get the prospect to take immediate action and write for more information.
Before you write the ad know exactly what it is you want to sell. You must know very specifically what you are going to accomplish through this ad. Once you have determined what you want to get across to the reader, write it out in one or more complete sentences. For example, you have the reproduction rights for several reports and want to market them. So the objective is: "I want to get the maximum number of responses to inquire about my self-publishing material which has excellent income potential and is easy to market, especially for a newcomer to the business."
This ad may read as follows:
TREMENDOUS PROFITS THROUGH SELF-PUBLISHING! Start part-time. Easy to do. Request free Special Report! XYZ Publishing/E, PO Box 1000, Frederick, MD 20908.
THE OPENING LINE
The first 3 or 4 words-- are critical. Since there are hundreds of classified ads in any given publication you must be able to get the reader who scans all, or some of them, to stop in his tracks when he gets to your ad and read your ad and then take action.
Open any publication and review the ads and you will see that many of those ads have absolutely no purpose. They are a total waste of money. But that is good for you since I am sure you will make a real effort to get your message across. Here are a couple of examples of useless ads:
Still Looking For A New Beginning? Write.......
What do they mean by that? How does any of that pertain tome and what am I supposed to make of that? Here is another one:
The Easiest Business On Earth. Valuable information mailed free.....
Do you think many people are going to write in for an ad like that. Especially not since there are hundreds of other ads in competition for the readers' time.
THE OBJECT IS TO GET THE READER TO TAKE ACTION - NOW!
In less that 25 words you have to create a message that will make a reader stop; give him a reason - benefits to him - why this is for him; tell him what to do - action; and provide the vital information. It is as simple and as complicated as that. Simple because you know what you want to accomplish, but complicated because it has to be done with so few words. I think you can see why it is virtually impossible to sell a $10 or $20 item from a classified ad. You just would not have enough space to tell a story compelling enough to convince someone to part with $10 or $20.
SELF-CENTERED ADVERTISING COPY IS INEFFECTIVE
With some practice you should have no problem getting lots of inquiries from your ads. Stay away from "Self-centered advertising copy", copy that speaks about you. How great you or your company are, or how great your product is.
The only thing the reader cares about is himself. What's in in for Number One! Nothing else.
SOME COST SAVING TIPS
Almost all weekly and monthly publication will charge for each word including your company name and address. Most daily newspapers have a per line rate. Since just the address can take up from 6-10 words here are some ways you can save money.
The following ad has 23 words.
TREMENDOUS PROFITS THROUGH SELF-PUBLISHING Start part-time. Easy to do. XYZ Publishing Co. Dept 12 P.O. Box 1000 Frederick, MD 20908
This ad has 21 words.
TREMENDOUS PROFITS THROUGH SELF-PUBLISHING Start part-time. Easy to do. Free details. XYZ Publishing/E (The E becomes the code instead of Dept 12 PO Box 1000 Frederick, MD 20908
Or this one which has 18 words
SELF-PUBLISHING, TREMENDOUS PROFITS! Start part-time. Easy! Free report. XYZ Publishing/E PO Box 1000 Frederick, MD 20908
Some publications charge 2 words for the zip code and state, some only one. If you live in a city which consists of several words such as Palm Beach Gardens you are only charged for 1 word.
Evaluate the cost effectiveness of your ad by the cost per inquiry and not the cost of the ad. Example a $150 ad generates 170 inquiries $0.88 per word versus a $28 ad which generates 15 inquiries at a cost of $1.87 each.
WHEN THE INQUIRIES START ARRIVING
If you have written and placed an effective ad and the inquiries start rolling in, the most important job, or actually several jobs have to be done. They are as follows:
1. Your sales/promotional package must be ready before the first inquiry arrives and it must be answered promptly, preferably the same day but certainly within 48 hours. The longer you wait the more chances are that a competitor will win out over you. Although some people will wait for weeks before they make a decision, many will act within days.
2. The ad you are placing is just the beginning. The names which are generated from the ad must be used again and again in order for your total advertising effort to be effective in the long term.
3. A percentage of your inquiries from this first ad will become buyers. You need to send these buyers additional offers within several weeks after their first purchase and thereafter mail at least 3 times per year to them. You drop them from your list if they have not bought anything for about 8 - 12 months.
4. The inquiries that did not buy buy this time may still buy at a later time. You can send them the same material again, or a similar offer. It is advisable to send 2-3 more mailing to them.
Many mail order companies may only make a small profit or just break even when the actual sales results are measured against a single ad. But over the life of the customers which are converted from those inquiries and the subsequent purchases from the inquiries who were not converted from the initial ad many hundreds or thousands of additional dollars will be generated.
Wishing you success and many inquiries from your ads!
HOW TO SET UP AN IN-HOUSE ADVERTISING AGENCY
FUNCTION OF ADVERTISING AGENCIES
Most firms turn over the entire problem of advertising to advertising agencies. This practices generally costs the advertiser nothing because the agency receives a commission from the medium in which the advertisement appears. The medium returns to the agency 15 percent of the cost of space sold to the advertiser. With this return the agency can offer its clients other services in addition to placing advertisements, and still make a profit.
Agencies are often equipped to handle every phase of the Program. They may help with research, prepare the advertisements and select the media in which the ads are to be run, and they may also assist in other phases of marketing and even in -product development. However, the primary duty of an advertising agency is to suggest the best media in the best combinations for the advertiser.
YOUR "IN-HOUSE ADVERTISING AGENCY
Enclosed with this report is a starting supply of the "Ad Insertion Form" you will need to use in processing your advertising orders. Before proceeding further, please examine it carefully. It is mainstay, the primary piece of literature that will establish you as an Advertising Agency. You may wish to modify the form to suit your own needs.
An "In-House" agency simply means placing your ads yourself, instead of paying an outside agency the commission. You insert the ads, deduct the commission (usually 15%). However, YOU MUST USE THE PROPER FORM. An order placed under your ordinary business letterhead will not do. Also, it is a good idea to preface your masthead on your FORM with the words "Advertising Agency." For example, Smith's Advertising Agency instead of Smith & Company.
It is also recommended that you have a small quantity of business letterheads printed under your advertising agency designation. You will need these for your correspondence with publishers.
Many publishers stipulate on their rate cards "discount available to recognized agencies only." this is the reason you need the professional FORM - without it - most publications will not recognize you as an agency.
The three essentials in your operation of an "In-House" advertising agency- proper Form - advertising agency masthead - remittance with order.
Before placing ads, obtain current Rate Cards from the publications that interest you. A rate card will show - Display advertising rates. Classified advertising rates. Commissions and frequent discounts. Mechanical and production requirements. Insurance, closing and cancellation dates. Circulation information. Specifications for advertisements. Miscellaneous.
SOME THINGS YOU SHOULD KNOW
Advertisers and advertising agencies assume liability for all content of advertisements including text, representation and illustrations and also assume full liability for any claims against the publisher arising therefrom. Publishers will not assume responsibility for errors in key number and no allowances or deductions are given should such errors occur;;; or any error due to illegibly written copy. Publishers will not guarantee proofs for correction if copy is not received by closing dates. Cash with order unless credit has been established.
Most publishers reserve the right to revise all copy to conform with their standard or to decline advertisements which request any advertiser to submit his literature and/or merchandise before accepting an ad. Advertisers using a post office box number must furnish a complete name and address for recordkeeping.
Generally, rates are subject to change without notice except on contracts which have been accepted and acknowledged by the publisher. Proofs are not submitted on classified ads but correct insertion of your advertisement will, in most cases,be guaranteed.
Original art must be mounted and camera ready. If two or more colors are to be used, they should be attached to black art on an overlay with register markings denoting trim, bleeds, etc.
Advertisements which stimulate editorial content must be clearly defined and labeled "Advertisement."
California law requires all mail order advertising for companies in that state to carry a legal address.
WHERE TO FIND PUBLICATION ADDRESSES ALONG WITH ADVERTISING RATES AND REQUIREMENTS
These are the books professional advertising agencies depend on- in locating publication addresses along with advertising rates and requirements. Because these references are all rather large and expensive (over $100.00 each retail), it is suggested you inquire at your local library for copies. While they cannot be taken out, many libraries today provide a reprographic machine that can quickly copy pages you need from the books. Ask about it.
"BUSINESS PUBLICATIONS RATES & DATA" - Over 4,00 business, trade and technical publications, contains editorial profiles, rates, mechanical requirements, copy regulations, circulation, personnel, issue and closing dates.
"CONSUMER MAGAZINE & FARM PUBLICATION RATES & DATA" - More than 1,500 consumer and 200 farm publishers. Includes editorial profiles, ad rates,mechanical requirements, copy regulations, circulation, personnel, issue and closing dates.
"NEWSPAPER RATES &DATA" 1,600, U.S. daily newspapers, newspaper groups, supplements and comic section. Includes ad rates, special features contract and copy regulations, mechanical requirements and latest circulation figures.
"CO-OP SOURCE DIRECTORY" - Over 2,800 co-op advertising programs. Each includes eligible media, timing, accrual, participation, ad specifications, media requirements, aids available from manufacturers, reimbursement method and more.
"COMMUNITY PUBLICATION RATES & DATA" - All NAAP members, plus other weekly newspapers and shopping guides. Includes personnel, ad rates, closing time, circulation and mechanical requirements.
All these books are published by - Standard Rate and Data Service, Inc.,5201 Old Orchard Road, Skokie, IL 60077. They will be glad to send you descriptive literature and price lists under your letterhead request.
"CATHOLIC PRESS DIRECTORY" - A wide variety of American Catholic magazines with a total circulation of over 30 million. Your client's product or service advertising programs can find a highly responsive audience among American Catholic magazine readers. It's available from Catholic Press Association, Suite 401, 119 North Park Avenue, Rockville Centre, NY 11570.
AS LONG AS YOU HAVE AN "IN-HOUSE" AGENCY" WHY NOT PLACE ADVERTISEMENTS FOR OTHERS AND POCKET THE COMMISSION?
There's a lot of money to be made through placing small ads for small mail order firms- and it's the perfect repeat business. The one thing all have in common is that they must renew advertising to stay in business. The requirements are simple and initial investment is minimal. It's strictly a service business - no stock to carry, low overhead.
For a good idea of how to go about setting up your operation, write to the below small mail order Advertising Agencies, and request copies of their Advertising Guide Books. These you can use for reference in preparing your own ad rates brochure.
Chicago Advertising Agency Columbia Advertising Agency 28 E Jackson Blvd. P.O. Box 1285 Chicago, IL 60604 Richmond, IN 47375
National Mail Order Classified Morlock Advertising Agency Post Office Box 5 188 W Randolph St. Sarasota, FL 33578 Chicago, IL 60601
HOW TO MEASURE PROGRESS
The growth of an advertising agency business can be measured in various ways but the most important item that concerns you is the growth in capital. How much more is the business worth today than it was a year ago or when you first started it? The capital section of the balance sheet will show precisely that. It will help you decide whether the work and worry connected with the business have been worthwhile. It will let you know whether the business is stagnant or is declining. It will disclose the soundness of your financial position. Especially in a small business there is always a danger of "eating into" capital. If you take out of the business from month to month whatever money is considered necessary as operating expenses, you do not know at any time whether you really have earned that money. A comparison of capital figures in the balance sheet over a period of months will show up any tendency to dissipate the agency's capital.
The total of assets is also an indication of what progress you have been making. It represents the total amount of resources under your control and even though they are partly offset by liabilities they are still a pretty good measure of your economic power. For this reason, the size of banks, for instance, is usually measured in terms of their total resources, that is, their assets, rather than their capital alone.
FOUR BASIC STEPS FOR EFFECTIVE ADVERTISING
1. THE WORDING OF YOUR AD is the most important single factor. It's what you say that determines whether your ads work or not. It pays to give a great deal of time, thought and research to the actual wording of the ad. Should the ad have a lot of wording in it, or should it be extremely short? The decision as to the type of wording is the key to more sales. Headlines must have dynamic stopping power. The headlines has to get the reader to look at your ad. Sub-headlines are also important, especially where copy is long. Not only must your headlines have powerful appeals, but the body text should have punch to maintain interest and induce prompt action.
2. SELECT THE RIGHT PUBLICATION or publications to run your ads. The publication in which you run your ad is the market place. When your ads appear in the right publication, you protect your advertising investment. Find out whether mass, class, service or other types of publications are best for your proposition. Should you use large circulation publications or small circulation ones? Should they be aimed at consumer, dealer or particular trade, or a combination of all? Decide whether you will use newspapers, magazines, or trade papers. Where you run your ad is many times the answer to results.
3. BUDGET YOUR ADVERTISING BY MONTH. By deciding how much money you will spend each month for advertising, you make sure that you do no spend too little or too much in proportion to the sales desired and the potential sales obtainable. The correct budget for advertising has a bearing on your profits. It is always wise to divide your budget for advertising according to the periods of the year.
4. DEVELOP A PLAN OF REPEAT BUSINESS from either inquiries or orders received. It is important to get new customers as cheaply as possible and then build them up. Know where you're going and what your sales objectives are. Think out the plan behind the advertising. Decide what a new customer should cost you and how to develop that customer into one who will buy from you again and again.
Effective advertising must be based on a sound product. Misrepresentation may sell goods, but it also builds ill will. Since the advertiser who misrepresents his product harms not only the public but the whole industry as well, organized efforts have been made to prevent objectionable advertising. One of these was the model statute against fraud in advertising drafted in 1911 by the magazine Printer's Ink. The statue has since been enacted by 48 states, in either the original or a modified form,,, and covers 98 percent of the population of the United States.
Further government control over advertising was achieved by the Federal Trade Commission Act (1914), as amended by the Wheeler-Lea and other acts. These gave the Federal Trade Commission, among others (e.g.,the Postal Service), the power to prosecute for unfair methods of competition and unfair or deceptive acts and practices, including false advertising.
Another protection for the consumer is the Audit Bureau of Circulations; its function is to determine the net paid circulation of newspapers and magazines. Practically all major magazines and newspapers which accept advertising submit audited accounts to the A.B.C.
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