Starting A Mail Order Business

What Is Involved In Running A Mail Order Business?

A mail order business starts with the product that is to be sold, which is located either in the business' warehouse or at a separate location for distribution.

A number of mail order businesses do not store products in their own warehouse, instead they order directly from the manufacturer. However, direct order is not always an option, so adequate warehouse space is necessary to store items.

Mail order businesses receive orders through the mail, over the telephone and through their online catalog. The online catalogs must be updated frequently with the latest products, closeout sales, special deals and other options that may or may not be available through the print catalog.

Both the online catalog and the print catalog need to be updated often to ensure prices, availability and options are listed accurately.

Some of the orders are easy and require nothing more than entering information into the company computer, collecting payment and sending the order to be filled. Others are more complicated with customer issues, backorders and bulk orders.

Once orders are processed, the products are retrieved from the warehouse or distribution center, packaged with a copy of the order invoice and shipped on to the customer.

Equipment Necessary To Run A Mail Order Business:

Computer with Internet access
Website
Print/online catalog
Storage space
Product mailing lists
Shipping materials
Invoicing/bookkeeping software
Reliable transportation if you plan to pickup and deliver products
Telephone service with a toll free number

The Cons Of Running A Mail Order Business:

Image of an Empty Box

Some people are leery about ordering from a mail order business
May have to make an upfront investment is storage space

The Pros Of Running A Mail Order Business:

Presents a huge marketing opportunity
Easy to run
Possible work-at-home opportunity
Opportunity for expansion

Skills Necessary To Run A Mail Order Business:

Business skills
Communication skills
Sales skills

Licenses Necessary For Running A Mail Order Business:

You will most likely need to obtain a business license and register for a tax ID to do business with most suppliers and manufacturers. Check with local ordinances to determine any additional permits or licenses that may be required to run a mail order business in your area.

Associations:

National Mail Order Association

New England Mail Order Association

Mail Order Traders' Association of Great Britain

Employees & Job Requirements:

You may also want to hire someone who can help you with the administrative side of the business. The person you hire needs to be able to handle the telephones, take orders and provide basic assistance when required. You can enlist individuals to scout for products, deliver orders to customer, pack and ship products as well.

Approximate Minimum Startup Cost:

Startup costs for this type of business can range anywhere from $5,000 to more than $250,000, depending on the type of mail order business you want to start.

You can start out small with a brochure or print ad to keep costs low, or you can go all out with a 50-page catalog and send it out to hundreds of thousands of people if you have greater financial backing.

12 Steps To Starting A Mail Order Business

Before You consider a Mail Order Business, see 16 Questions to Consider Before Starting a Business
1. Ensure A Mail Order Business is for You!

You have a choice as to what business you're going to start, so start one that's right for you. Getting into the right business can dramatically increase your success. Get into the wrong business and your success rate drops. Read Five Secrets to Getting into the Right Business for more information.

2. Understand How A Mail Order Business Operates

How can you run a Mail Order Business if you don't know much about the business? What if you run into an issue that you can't or won't deal with? Then what? You're in a business that you hate working in and that's a problem. See Understand How a Business Operates for more information.

3. Make Sure there is a Profitable Market for Your Business

What's the use of starting a Mail Order Business that is not profitable? You'll be putting all your effort in something that can't support itself or you. There are a variety of issues when it comes to setting the stage for profitability. See Tips for Identifying a Profitable Market.

4. Create a Business Plan For Your Mail Order Business

A business plan is a must for any size business because it helps you stay focused, see the big picture, and get funding. It's something that you create when you start your business and then update as your Mail Order Business evolves. Read our free online guide on How to Write a Business Plan

5. Set up your Business Team

Setting up your team includes finding the right employees and professionals that will help you run your Mail Order Business.

You don't need to employ everyone you work with, but you will need a team of people you can depend on, which could consist of a lawyer, accountant, banker, and consultant, as well as professionals in your industry. See Creating a Business Team for more on this subject.

6. Get a Small Business Loan if You Don't Have the Money to Start

If you don't have the money to get started, then you'll need the necessary financing or you won't have the opportunity to start your Mail Order Business. This can be done as a small business loan, a personal loan, or other small business financing options.

For more on financing your Mail Order Business see our guide on Financing Your Small Business

7. Legalize Your Mail Order Business

In order to run your Mail Order Business legally you'll need to abide by government rules and regulations on the state and local level.

You'll need to do your research, determine what type of business (sole proprietorship, corporation LLC, etc.) to register, create and register your business name, and register your Mail Order Business with state and local authorities.

To go through the business registration process, see Chapter 6: Making Your Business Legitimate, starting with 6 Easy Steps to a Good Business Name.

8. Get Equipment for Your Mail Order Business

In order to run your Mail Order Business successfully and efficiently you'll need to acquire the right type of equipment. How can you run an online business without a computer? You can't! This is an important issue. See Acquiring Equipment for more on this topic.

9. Insure Your Mail Order Business

Make sure you have the proper insurance for your Mail Order Business. Without the right coverage you could lose everything you've worked for. For tips on insuring your Mail Order Business, see our free online guide: Insuring Your Small Business.

10. Prepare To Accept Money

You'll need a way to accept money, you can't depend just on cash or checks. You'll need to accept plastic: Visa, MasterCard, and American Express. To do that you'll need to apply for a merchant account. See Setting Up a Merchant Account for more on this topic.

11. Set up Your Accounting System

Running a Mail Order Business requires you to collect taxes, and report your earnings. So it's best to set up an accounting system in before you start your Mail Order Business. See Setting Up Your Accounting System for more on this topic.

12. Acquire Customers for your Mail Order Business

In order to exist, every business needs customers. Getting customers is one thing you'll need to be good at. If you can master the tasks of getting customers, it's just like turning on a cash machine almost any time you want. See Acquiring Customers for more on this topic

See Also: Our Free Online Guide to Starting A Business

Mail Order Business Issues's:

Estimating Startup Costs - Find out if you're forgetting something

Business Location - Choosing A suitable one For Your Mail Order Business

Build or Buy A Business? - Buying an existing Mail Order Business

Mail Order Business Research:

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Business Builders For Your Mail Order Business:

Business cards for Your Mail Order Business

Business Plan for Your Mail Order Business

Business Insurance for Your Mail Order Business

Small Business Loans: Finance Your Mail Order Business

More Business Ideas:

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