Mail Order Pitfalls And Profit Tips

(c) Marty Foley

When it works right, Mail Order (or Direct Marketing) is an ideal business. Briefly consider some of it's advantages:

*It can be used to expand and increase the profits of many different types of existing businesses;
*You can start with little investment and low risk;
*You can start in your spare time and build into full time;
*You can test an offer, product or service inexpensively to find out if it's a winner;
*It can be operated most anywhere you want to live, as long as you have access to postal service;
*Using the tremendous power and reach possible through direct response marketing techniques, you can run a national, even a multi-national enterprise from the convenience of your own home;
*It can be quite profitable.

But let's face some cold, hard facts: A vast majority of newcomers jump into the mail order waters with both feet, before they get a basic education about what works and what doesn't... and they usually end up drowning.

All too often, instead of being given the honest, sobering facts they really need to succeed, they get excited by a lot of hype and get-rich-quick schemes promoted by some in this business. They run an ad here, mail a few flyers there, etc., then sit back and wait for the big profits to roll in . . . and wait . . . and wait . . . only to realize they've wasted their time and money on an expensive (but largely avoidable) mail order education.

Instead of finding profits, they find disappointment and soon give up. So that you don't end up in the same unfortunate position, here are some common mail order mistakes and tips on solving them.

DISREGARD THEM AT YOUR OWN RISK!

Mistake: Not Selling Products That You Control

Now don't get me wrong; you can make money selling products produced by others. It's a fast way to start, and a good way to expand your product line (another key to success - stay tuned for more on that), but consider the advantages your own products give you:

*You get all the profit;
*When you have exclusive rights to a product, there is no direct competition. True, there may be similar products on the market, but to get your unique delivery of the information, people must go through you - directly or indirectly - to obtain it. Either way, you profit.
*The best mail order products are unique, or at least not easily obtainable elsewhere. Information products that you have exclusive rights to fit this category. (Tip: You can get exclusive rights to information products by creating and copyrighting them yourself, hiring someone else to create them for you (while maintaining exclusive rights to them), buying the rights for existing products from someone else who has already created them.) Some other advantages of information products are:
*Inexpensive to test;
*Low production expense/high profit margin;
*Hold up comparatively well under rough shipping and handling;
*Lightweight and compact, and so require little storage space and are inexpensive to ship;
*Potential to make you money for years; These advantages make information products among the best around. Mistake: Expecting to Get Rich Quick With Little Effort Just recently I received a letter promising me that I could learn how to make an easy $50,000 within just 90 days, from the comfort of my own home, if I only paid them so much money for their system.

If such schemes are so profitable, why can't they afford to have their marketing materials printed professionally, instead of what so often looks like cheap, tenth-generation photocopies? If so lucrative, why do they put forth so much effort trying to sell the system to me, when they could be making more money working the system themselves?

A healthy dose of skepticism is needed when it comes to such "business opportunities," because not all are legitimate. Let me let you in on a little "secret" that many mail order promoters either won't tell you, or don't want you to know: Although big money can be made in a short time in mail order/direct marketing, as proven by many real life examples, that is the exception, rather than the rule.

So beware of inflated claims and get-rich-quick promises. I'm not trying to scare you away from mail order. I just want you to have realistic expectations, instead of expecting too much too soon. Success in mail order, more often than not, takes time, knowledge and patient persistence. If you're willing to do what it takes, you can succeed, but if you expect to make a lot of fast money with little effort, the odds are stacked against you. Save yourself some disappointment by not getting involved in it. (It's better that I lay the facts out on the table now, before you learn them from bitter personal experience.)

Since you probably won't get rich quick in mail order with little effort, you need to:

*Exercise patience and persistence. Remember that such persistence pays. Too many quit when success is just within their grasp, if they would only keep trying. On the other hand, you need to know when to quit. Don't continue to throw money away on a losing proposition if it isn't working out for you after thorough testing. Go on to something else.
*Move slowly and cautiously. As I mentioned earlier, one of the advantages of mail order is that you can test inexpensively to find out if you have a winner. Even if a test fails, it's not a total loss. Although experience isn't always the best teacher, you gain insight into what works and what doesn't. You can steadily expand on your successes and revise or drop what doesn't work for you. Remember that one success can more than make up for several failures.
*Keep your expenses to a minimum (without sacrificing quality where quality counts) following the guidelines I'll suggest shortly.
*Reinvest most or all of the money you bring in back into the business until you build sufficient capital to use as a 'safety cushion.'

By doing these things, you'll have a better chance of being able to endure your mistakes (which are bound to occur) so you can continue testing, refining and improving your operation until you come up with a profitable formula.

Mistake: Not Seeking Out And Implementing The Most Cost-Effective Ways To Operate A Mail Order Business

Especially when you're new to mail order, you need to be extra cautious with the way you use your limited capital. To get the most value from your limited resources, you've got to look at all areas of your operation with a critical eye for ways of accomplishing the same (or better) results for less cost.

Consider the following techniques of reducing some of your major expenses: marketing and postage.

1) Take advantage of free publicity and other forms of low-cost promotion. These cost little, but are valuable for marketing products and services.
2) Develop a catalog of related offers. Lawson Traphagen Hill (founder of two multi-million dollar mail order catalog companies) wrote: "...almost all successful mail order businesses, sooner or later, end up with a catalog." As Julian Simon said in the fourth edition of his book, How To Start And Operate A Mail Order Business, "

In truth, operating without a catalog of offerings is likely to be impossible for most mail-order ventures." Your own catalog can start out as a small mini-catalog promoting just a few related offers, and grow from there.

Why is a catalog the way to go? Here are several reasons:

#Valuable time, effort and expense are invested in gaining customers. This can be one of the largest expenses in direct marketing. Many marketers toss this investment out the window by selling one thing to a customer, one time, and forgetting about that customer forever.
#The best customer is a satisfied previous buyer, because people like to do business with those they know and trust.
#Additional sales to previous customers are often easier to make and more profitable than the initial sale. A relationship of trust has been built, provided the customer is satisfied with his/her purchase and with the service received. Furthermore, there is no cost involved in acquiring the name because it's already on your mailing list.
#It's more profitable to sell, not just one, but several (even dozens) of related products/services. Unfortunately, in the real world, there are relatively few products that will bring you sufficient income by themselves. Unless you stumble across one of those rare products, you will need to offer a line of related offers to make any real money.
#A selection of related products/services means greater variety. In turn, greater variety means more prospects will become buyers, buyers will tend to spend more per order, and more buyers are likely to buy from you again in the future.
#Your per-item marketing expenses are reduced as each new offer is added to your line. While it's true that a catalog costs more to mail than, say, an 8-1/2" X 11" flyer, a catalog reduces marketing expenses by reducing your per-item marketing costs.

Here's what I mean. Suppose your cost to have an 8-1/2" X 11" flyer printed on one side, offering one product, was three cents each. Let's say you add to that the expense of a cover envelope and a return envelope, along with a first class stamp, which brings your in-the-mail marketing cost to offer one item, (not counting any other possible costs, such as envelope stuffing) to a total of fifty-cents each.

Now let's consider another scenario. You prepare the same exact mailing, except you have your flyer printed on both sides this time, each side promoting a different (but related) product, which costs you a total of five cents each. While your cost for the mailing increases just two cents, you are now offering two products, at an in-the- mail marketing cost for each product of twenty-six cents each, compared to the original mailing offering just one product at fifty-cents.

Then if you added three more flyers to the mailing (each offering a different product on each side of the sheet) at a cost of five cents each, your total mailing cost increases to sixty-seven cents, but you are now offering eight products, which reduces your marketing expense for each item to just over eight cents each.

When you sell more than one item per page, such as in a catalog, the reduction in marketing expense per offer is even more dramatic. And this doesn't take into account the likelihood of prospects buying, and buying more per order, when you offer them several things to choose from, instead of just one.

This no doubt is one of the reasons Julian Simon wrote in his well-known book, How To Start And Operate A Mail Order Business, "In truth, operating without a catalog of offerings is likely to be impossible for most mail- order ventures."

If you're serious about mail order success, a catalog is the way to go.

#You can test the sales potential of new products as you continue to make money from all previously profitable ones. Now that we've established that a line of related offers is crucial to success, consider the following ways to build such a line.
#Sell more of your own products/services. Your own products/services are generally the most profitable, but they can take a considerable amount of time to research and develop (or otherwise acquire). To build a related line rapidly, you can begin by selling only one or a few offers of your own, along with items produced by others.
#Sell other people's products which you have drop shipped.

How does drop shipping work? The dealer obtains prepaid orders for products through advertising, free publicity or other promotional methods, and then sends the orders (including payment, and usually a shipping label showing the dealer as the sender) to the drop shipper that stocks inventory. The drop shipper then drop ships the products directly from his inventory to the customers of the dealer.

The difference between the full price and the dealer's discount price (usually around 40-50% off retail) minus any other charges such as shipping, is the dealer's profit. The profit on drop shipped items is less than you get with your own products, but it's profit nevertheless, which won't get if you don't offer such related items.

#Sell other people's products which you carry as inventory. Buying other people's products in quantity to stock as inventory will generally give you greater discounts than drop shipping - and thus greater profits - but inventory investment ties up capital that may be better used elsewhere, not to mention the risk of stocking too little or too much inventory. With this being the case, when should you consider stocking inventory of products produced by others?
1) When it cannot first be tested by drop shipping. Some companies simply don't offer drop shipping services.
2) After a drop shipped product has proven to be a good seller for you, in order to take advantage of greater discounts that may be available, and the ability to give your customers faster service.

Persist at building your product line, both with your offers, and those of others. As your catalog grows and improves, your profits will increase accordingly. Building a catalog of related offers will, of course, reduce your postage cost per item offered. In addition, here are some other ways to slash your postage costs:

#Take advantage of a "free ride" to sell more to customers whenever possible. As you fill orders, include catalogs, flyers, or other inserts promoting related offers in the envelope or package. As long as you stay within the same weight classification, there is no extra postal or shipping expense.
#If you have and use email, develop an in-house email list. Use it in your follow up efforts.
#If your mailings are frequent and sizable enough to warrant it, bulk mail can also be used to reduce your postage costs, allowing you to send even more marketing materials. Check with your local post office for the latest information on bulk mail.

Mistake: Not Using Time Management Techniques To Maintain Peak Productivity And Profitability

As you might expect from the author of an audio program on time management entitled HOW TO GET MORE DONE WITH LESS TIME AND EFFORT: A Streamlined Time Management Course, I've come to appreciate the crucial importance of utilizing time effectively.

Everyone has the same 24 hours to use daily. At the end of a given day, some have made significant progress toward their important goals, and others have little or nothing to show for it. It all boils down to the way each one manages their time. This, of course, applies to you, your mail order business, and in fact, to every facet of your life.

It's all up to you; You can approach the tasks you need or want to get done in a time-efficient, organized, and more productive manner, or you can approach them haphazardly . . . and suffer accordingly. If you really want to get maximum benefit from the limited time you have to get things done in your mail order business, or any other area of life, you simply must become a master of time management . . . period.

There's no way around it. Not that it's that difficult, because it's not. It's just a matter of scrupulously following proven time management principles, such as:

*Setting your goals;
*Keeping a prioritized To-Do List and using it constantly;
*Always focusing on higher-priority tasks before lower-priority ones;
*Streamlining your routine activities;
*Eliminating as many non-essential tasks as possible.

When you manage your time well, you'll achieve more, and you'll look back on your work with satisfaction that you got the most important things done, instead of looking back with regret.

Mistake: Trying To Reinvent The Wheel

Multi-millionaire John D. Rockefeller is reported to have said: "When you hear of a good thing - something already working for the other fellow - don't delay but get in while you can." You can learn a lot from other successful mail order operations; everything from ideas for products, marketing, operating methods/policies, pricing, even mistakes to avoid. Be a creative imitator.

Don't copy others too closely or copy something that can cause problems for you. Aim to refine and improve on the ideas you glean from others. Who knows, you may even come up with something better! You've just read some tips on overcoming mail order pitfalls, which could take you considerable time and money to learn from the "school of hard knocks."

Now you don't have to make the same mistakes!

Resource Box Article by Marty Foley, author of Internet Marketing Goldmine:
http://profitinfo.com/catalog/v3.htm?rb
His ProfitInfo Newsletter reveals proven, often overlooked strategies to build your Internet profits now:
Subscribe@ProfitInfo.com.