How To Start A Mail Order Business

How To Start A Mail Order Business - Background Info:

If you would like to get into the retail business but a mall kiosk or retail storefront doesn't thrill you, a mail order business could be just what you're looking for.

Since 1888, when Richard Sears first used a printed mailer to advertise watches and jewelry, the mail order business has been a thriving one.

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.

Tasks And Skills Needed To Run A Mail Order Business:

Business Specific Tasks:

If you are planning to do all the business tasks or hiring or subcontracting tasks, here's a list of tasks that need to be attended to when it comes to the business side of running a mail order business:

Inventory management and control

Customer service, good phone skills

Bookkeeping, records of transactions

Retail sales

Shipping and receiving

Industry Specific Tasks:

Same as above if you plan to do everything yourself or get help, here are some of the tasks necessary to operate a mail order business:

Ability to compose simple yet professional letters to suppliers, some of which could be overseas
This task is Performed As Needed

Study of the mail order industry
This task is Performed Daily at Varying Hours

Research of suppliers and drop-shippers ( A drop-shipper stores the stock and ships to your customers as orders come in.)
This task is Performed Daily at Varying Hours

Review of best-sellers and trends
This task is Performed Monthly

Approximate Daily Hours Needed to Run a Mail Order Business:

General Hours of Operation: - When your business is open - Your mail order business is conducted on your own terms, even part-time to start out. Remember that there are many forms of a mail order business: direct sales through flyers, home parties, or a website. Therefore, hours are variable.

Hours Needed to Prepare - Before Opening and After Hours Activities - If operating your mail order business with a home sales or party-type of approach, your preparation time will be approximately two hours to pack your samples or products, order forms and other supplies, and give yourself enough time to arrive at the home and set up your display.

Number of Employees Needed To Run This Business:

Minimum Number of Employees - During the Start Up Phase: You can run this business by yourself fairly easily.

Number of Employees - Once Your Business is Up and Running Successfully:

Bookkeeper

Warehouse supervisor

Inventory manager

Webmaster

Customer service

Skill Requirements for This Business:

Bookkeeper

Warehouse supervisor

Inventory manager

Webmaster

Customer service

Shipping person(s)

Product scout(s)

Licenses:

Though each state/province city and town have different laws, you must contact your local business administration and government offices for import/export licensing as well as a tax I. D. number and business license to operate in your area.

Note: A drop-shipper will carry the import/export license but you will be required to have a tax i. d. in order to work with them.

Approximate Minimum Start up Cost:

Bare essential: - Avon, for example, is essentially a mail order business with a personal touch and to become a representative costs less than $100 to start. The sales of imported items will initially cost closer to $2,000 to purchase your items to start with unless you're dealing with a drop-shipper.

Minimal exposure - You will want to create flyers, newspaper inserts, and get business cards to start. You can also post ads in newspapers and other related websites. This will cost approximately $1,000 to start a very minimal advertising campaign.

Necessary Equipment to Run this Business:

Necessary Start-Up Equipment:

Telephone and/or cell phone

Computer

Inventory software

Merchant account or online payment processor such as Paypal

Printer/Scanner/Fax machine(s)

Storage for products

Supplementary Equipment: - Equipment that you can acquire to once your business is off and running:

Toll-free and international phone number

Filing cabinet

Warehouse

Commercial printer

Postal scale, meter, and national/international shipping service account

Monthly Expenses To Consider:

Internet access
Office and/or warehouse rent
Employee wages and pertinent insurance
Accountant
Shipping services, packing/handling time and packing materials
Applicable phone service
Printing
Advertising: newspaper, flyers, radio, television
Web hosting
Bank services/merchant account

Special Requirements For This Business:

Consider business insurance, especially if warehousing products at your place of residence
A large customer base

Pros And Cons:

The Pros of Running a Mail Order Business:

Low start-up costs

Can start part-time

Can use a drop-shipper instead of warehousing and shipping products yourself

Opportunity to develop a unique and profitable niche

Ability to add new items easily and as trends dictate

The Cons of running a Mail Order Business:

Often having to counter the notion that your imports are cheaply manufactured

Customer returns can be difficult, especially if dealing out of the country

Shipping times vary according to distance, weather, and other factors that may hold up customers receiving their items or you receiving items when expected

Keeping track of different tax rates according to location

Products can be broken upon arrival

Type of Customers You Need to Attract:

The mail order business has always been strong and keeps growing due to ease of shopping, time- and gas-saving factors, and discount pricing.

Especially in busy or out-of-town households, mail order continues to thrive.

Mail Order Business Statistics:

According to the National Mail Order Association, Internet sales recently netted $2.4 billion in annual mail order dollars.

The hottest products are computer-related, books, recorded music, gifts, financial services and general merchandise.

For additional statistics, please go to Catalog and Mail Order Business Stats.

Revenue:

Depending on how aggressive you are with advertising, profits can range from $1,000 a month or more or per sale, depending on the product(s).

Resources:

Industry-Specific Websites:

National Mail Order Association (information/materials/forum)

Courses:

Start and Prosper in Your Own Mail Order Business

Supplies:

USPS (shipping supplies)

Forums:

Mail Order Business Forum

Associations:

National Mail Order Association

New England Mail Order Association

Other:

Mail Order Business Kit

Related Businesses:

Gift services
Party-planning services
Corporate event planning
Specialty/logo designed gifts