You Can Profit From Your Own Catalog, Whether You're In MailOrder Or Most Any Other Business

By Marty Foley

As Julian Simon said in the fourth edition of his classic 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."

So if you're serious about making money in mail order (direct marketing), a catalog is the way to go. Many other types of businesses can profit from direct marketing techniques by developing a catalog, as well. (The basic principles apply online as well.)

Don't be intimidated by the thought of developing your own catalog. It doesn't have to be an expensive and elaborate four-color production like those put out by the giant catalog companies. Yours can start out as a small flyer or 'mini-catalog', offering just a few related products that you include in outgoing orders, and grow from there.

Let me share a real-life example of this with you. Some time ago I suggested to the owners of a printing company that they implement a package insert program. I designed an 8 1/2 X 11" flyer (in effect, a mini-catalog) that lists other printed forms, specialty items and services they offer, which is enclosed in outgoing package shipments and invoice mailings. Just by letting new and existing customers know of other offers, this simple, low-cost idea has resulted in increased sales.

Many types of businesses (not just those involved in mail order) can do the same. Here are some reasons a catalog is a key to greater profits in a wide variety of businesses: --You Get More Profit From Your Valuable Customers Acquiring a customer is a valuable investment of time, effort and expense.

Too many marketers toss this investment out the window by selling one thing to a customer, one time, and forgetting about that customer forever. Instead of such "hit- and-run" marketing, smart marketers aim to turn as many customers as possible into repeat buyers.

This makes a lot of sense because the best customer is a satisfied one that has previously bought from you, (people prefer to do business with those they know and trust), and additional sales to previous customers are often easier to make and more profitable than initial sale.

One way repeat business can be developed is by selling products and services that naturally lend themselves to repeat business, i.e., those that customers will eventually need or want to buy more of.

Some examples are typesetting, printing, food, and office supplies. Another way to develop repeat business is to diversify by building a related line of products and services. A selection of offers means greater variety. In turn, greater variety means:

1) More prospects will become buyers, because prospects are more likely to find something they want;
2) Buyers will tend to spend more per order, and
3) More buyers are likely to become repeat customers.

For best results, no matter how many different products or services in your line, all should be related to one another. In other words, the most successful catalogs have a theme. Every offer in them is connected to, and reinforces, all of the others. If the line is a disconnected mixture of unrelated offers, confusion will be created as to the theme or purpose of the catalog, and sales will suffer.

It's pretty obvious why all products/services you sell should relate to one another. For example, someone who buys a book on auto repair from you is much more likely to buy other offers related to the automotive field, than an unrelated product, such as a set of golf clubs. All buyers of the auto repair books have expressed interest in the automotive field, but you don't know if any are interested in golf. A small percentage may have an interest in the sport, but probably not enough to make such offers profitable.

--Each Additional Offer Reduces Your Per-Item Marketing Expenses Many of your marketing costs are the same whether you promote one offer, or several. For example, you can mail one 8 1/2 X 11" flyer advertising a single product in a #10 envelope for the price of a first class stamp.

But for the very same first class postage expense, you can mail an envelope containing a small catalog weighing up to a total of one ounce (the equivalent of five sheets of 8 1/2 X 11" paper, 20 lb. bond) offering dozens, even hundreds of products. In this example, the costs of the postage, the envelope, and of name acquisition remain unchanged. The only difference in cost is in the enclosed printed matter, since it obviously costs more to print marketing materials offering several items, than for just one.

For only a modest increase in cost, you can market many more offers, with each additional one sharing the marketing expenses with all the others. I don't know about you, but it certainly appeals to me to be able to so dramatically slash my marketing costs! A good catalog is much more than just a tool for selling products and services.

You can also use one to: Sell Ad Space In Your Catalog Calculate how much it costs to produce your catalog, and from that determine how much a given amount of space is worth. Then markup the value to allow for profit (50% or so is not unreasonable), and let others know it's for sale, your guidelines concerning the ads you will accept, and the preferred format (camera-ready). Barter For Things You Want Or Need Consider others that may want to reach the same markets as you, and what they have that you're willing to trade space in your catalog for, such as products, services, ads, mailing lists, and so on. Then make them an offer that can be mutually profitable.

--You Can Test New Offers While Profiting From Your Proven Ones Since you can run test ads for new offers right along with ads for your already proven sellers, you can make money even even if the test offer fails. You might think: "Sounds good, Marty, but how can I come up with a line of several related offers to build my own catalog?" To that, I would say: "You can build your line with your own products and services, as well as products of others. That combination is hard to beat."

Let's look at some pros and cons of each.

1) Sell Your Own Products And Services An ideal situation would be to have a related line of several of your own offers (both products and services). Consider some significant payoffs of this:
*You get all of the profit, compared to only about 40-50% from other people's offers;
*If you deliver exceptional value, giving your customers more than their money's worth, many will want more of what you offer;
*You gain greater control. The more of your own offers you sell, the more control you will have, and the less you will have to depend on others (who may not always be as reliable as you would like);
*If a product is unique, and especially if you have exclusive rights to it, such as through a patent or copyright, you have your own little "monopoly."

There is no direct competition with others selling the same thing. People must go through you - directly or indirectly (through one of your dealers) - to obtain it. Either way, you profit. (TIP: You can get exclusive rights to products by: Creating them yourself, and having them patented or copyrighted; Hiring someone else to create them for you (while maintaining exclusive rights to them); Buying the rights for products someone has already created.)

While selling your own offers certainly has it's advantages, it takes time to research and develop (or otherwise acquire) them. Of course, it takes longer to develop some types of products (or services) than it does others. Some can be developed in a relatively short time, others may take months or years. But don't forget the time involved in a much more crucial aspect of creating a successful product: market research.

This tells you whether sufficient numbers of people are likely to be interested in buying your product or service. (IMPORTANT NOTE: Market research should be given serious consideration before developing a product or service, not just afterward.)

2) Sell Other People's Products Even when you have a related line of several of your own products/services, you can still supplement your profits by selling products of others. The major benefits of selling other people's products are that you can build a related line of offers faster, easier, and with less risk.

While the profit on other people's products is usually less than you get with your own, it's profit nonetheless, which you won't get if you don't offer related items. Your own products should therefore be given greater prominence in your marketing, but you can still take advantage of related products of others to expand your line and complement your own offers, thus bringing you additional profit. Two variations of selling products of others are:

A) Having them drop shipped.
B) Investing in inventory.

Drop Shipping Versus Carrying Inventory Drop shipping, as you may know, is a unique marketing method which lets you expand your line rapidly, with no inventory investment. Since the customer pays for the products in advance, little cash outlay is required. It's also a simple, low-risk way to test the sales potential of a product. Testing a drop shipped product can be as simple and inexpensive as making space available in your catalog, and seeing how well it does. How does drop shipping work?

The dealer obtains prepaid orders for products through advertising, free publicity or other promotional methods (such as a catalog), 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, in turn, 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. Buying other people's products in quantity to stock as inventory will generally give you greater discounts than drop shipping them in single units - and thus greater profits - but there are some risks involved in inventory investment worth taking note of.

Inventory costs money . . . not only for the inventory itself, but it can also cost you to ship, store, maintain, protect, and insure it. There is also the risk of stocking too little inventory. If you receive more orders than you can fill within a reasonable period of time, this will result in disappointing your customers and perhaps losing them, as well as loss of profits due to refunds if the delay is too long. There is also the risk of buying too much inventory. If something doesn't sell as well as expected, or becomes outdated, you may be forced to cut the price, or sell it at a loss to recover some of your investment. Inventory investment also ties up precious capital that may be better used on other aspects of the business, such as marketing.

On the plus side, by carrying inventory, you can ship faster and include bounce-back offers (package stuffers) to promote repeat sales. When you decide to invest in inventory, do so cautiously. It's usually better to buy too few units of a product, than too many. You'll be better able to estimate how much inventory of a given product to invest in after you gain experience, based on it's past sales record. Persist at building your product line, both with your own products/services, as well as products of others.

Continually expand on your successes, and revise or drop what doesn't work for you. As your catalog grows and improves, your profits will increase accordingly.

Considering all the benefits catalogs can bring to a business, it's no wonder that Lawson Traphagen Hill (founder of two multi-million dollar catalog companies) wrote: "...almost all successful mail order businesses, sooner or later, end up with a catalog."

Since a catalog is such a powerful profit tool, not only in mail order, but in a wide variety of other businesses, wouldn't it be smart to consider developing one, if you haven't already, and if you have one, make sure you're using it profitably?

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.