by Eric Larsen
There have been millions of words written on the subject of mail order, and millions more are sure to follow. Most books, courses and magazine articles tell you how others have made it big in mail order, citing several examples to encourage the newcomer, but very few get right down to the bare bones of telling you HOW they did it.
A lot has been said for the drop ship method of selling mail, which certainly does have a lot of merit -- to a point. With this method, you merely advertise what you have to sell, take orders, deduct the amount allowed as your commission by the supplier, forward the balance to them and they fill your order directly to your customer. By using this selling method, you can (theoretically) offer a million dollars worth of merchandise thru ads, circulars, brochures and catalogs -- yet never carry a single product on your shelves.
BUT... what the experts don't tell you is this: the high cost of advertising, printing and postage needed to reach your potential market will be enormous, and it will ultimately eat away any major profits that you might otherwise enjoy.
The commission usually allowed on a drop ship basis is about 50% of the retail price, sometimes only 40%...and on a few occasions only 20 to 33%. To operate profitably in mail order you will need a minimum of 50% but 60% would be better, and if you expect to get into high income bracket, you'll have to see about 90% profit per sale.
How in the world can you make 90% profit on every dollar you take in?
By being the originator...the manufacturer, publisher, creator, or PRIME SOURCE for whatever you are selling. These are the people who are making the major portion of profits in mail order. You can be on of them.
It's not as difficult as you might think. First of all, we're not talking about establishing a multi-million dollar manufacturing plant employing a few hundred people. Nor are we talking about a publishing house that prints volumes of books on huge printing presses. You can become a mini-publisher or manufacturer on a very small scale, yet with the capacity of turning out as much product as you can sell.
THE FIRST STEP
Answer these questions honestly:
What would you like to sell? Who would you like to sell it to? Who are these people and how can you reach them? Are you sure they will be interested in what you have to offer? Will they pay the price you will be asking?
These are a few questions you'll have to answer before going any further.
They represent-- Your proposed line
The potential market and their general location
Advertising media necessary to tell your message
The income level or lifestyle of your potential customers
NOW DEFINE YOUR PRODUCT LINE
Select something you are interested in, something you know. Think simple, not something complex that requires an engineering degree to design, and stay away from the medical field. This includes diet plans, energizers, vitamins, etc. These can really cause problems from authorities for those who are not qualified.
Follow the KIS principle: Keep It Simple.
Turn to your own hobbies, interests and activities. Are you handy with a needle and thread or a whiz on a sewing machine? Are you artistically inclined with a pen, ink, oils or watercolors? What about embroidery? Have you studied Calligraphy? Are you a genius at a computer? Handy in your basement workshop? Have a flair for writing? These are all potential money makers that can be the nucleus of a product line.
Let's turn to the workshop. Have you made things for yourself or for friends out of wood, ceramics, other materials? If so, you may have a product line.
Is there something in your career or profession that can be transformed into a saleable product? Does your hobby or spare time activity lend itself to a production product idea? There must surely be something that fits your personality, your skills, background, education or lifestyle. Only you can determine what it is. The next step--
It's not enough merely to be able to make something. It should be something that nobody else is offering to the public. It doesn't have to be totally unique, but it should incorporate some characteristic to distinguish it from the competition , such as an ordinary ashtray with a personalized monogram. Or, unique floral arrangements made from wood shavings, painted and glazed. Whatever it is, it should be something that you can turn out in a matter of seconds or just a few minutes to keep costs low. Of course, if it is truly a work of art, this can bring a higher price.
WHAT CAN YOU MAKE OR CREATE?
Only YOU can answer this question, but here are a few ideas to get your thinking.
Two teenage boys enjoyed making wind chimes as a hobby. They made them out of aluminum tubing in a variety of sizes to produce different sounds. Family and friends admired their handiwork, so they tried selling them to make a few extra dollars. they made only about 10 or 12 a week at first, then sales began to increase. In 1988 sales produced half a million dollars. Remember: it began as a hobby.
A woman in Pennsylvania was interested in wood crafts, and began making wooden toys and crafts in her basements. This was the beginning of a new part time career. She plans to retire from her regular job and devote full time to her newly formed wood crafting business where she can really make some money.
A fellow in California enjoyed making home made wine. Everyone enjoyed it, so he got an idea. He began bottling his special wine and had his own private labels printed and put them on each bottle that he produced. He now has his own little wine shop that has made him independently wealthy.
GET THE IDEA?
What's the common denominator among these people? Each of them began with something they were interested in, a hobby that they enjoyed, they turned it into a profitable business...one in which THEY were the producer, the prime source for their own products.
Got an idea for a new product, an invention of your own, but don't know where to go with it? The United States Department of Commerce Patent and Trademark Office offers these publications: General Information Concerning Patents and Inventions; An Informal Aid for Inventors, and Questions and Answers About Patents. Their address: Washington, DC 20231.
Other helpful books:
HOW TO TURN YOUR IDEAS INTO DOLLARS by Gary Null and Richard Simonson. $4.95 from Pilot Books, 103 Copper St., Babylon, NY 11702.
THAT'S A GREAT IDEA by Tony Husch and Linda Foust. $9.95 from Gravity Publishing, 6116 Mercer, Suite 233A, Oakland, CA 94611.
IDEAS INTO DOLLARS from U.S. Small Business Administration, 1441 L Street N.W., Washington, DC 20416.
QUALITY, QUANTITY AND PRODUCTION COSTS
Keep your eyes on those three important elements.
You'll want a quality product, something you will be proud to offer buyers. It must be relatively easy to make, requiring only a matter of seconds or minutes of your time. You should be able to produce each unit for about 10% of the retail price. A $10 retail item should cost you $1 (or less) to produce.
Should you come up with a winner, will you be able to turn out enough products to meet the demand?--And still keep costs low? Think these questions through before going to far.
Use everything at your command: Your workshop, tools, typewriters, computer, word processor, sewing machine...and your imagination!
PUT IT INTO PRINT
Many mail order millionaires owe their success to the printed word, and have achieved great wealth by writing and self-publishing books, manuals, reports, directories and newsletters. If you have a flair for writing, now's the time to make that talent or experience pay off. Put your words into print and become a self-published author of your own material. A helpful book on this subject is "A Million For Your Thoughts," available for $12 from J.S. Caverly, 216 McLean Street, Wilkes Barre, PA 18702.
EXPAND WITH A NATIONWIDE DEALER NETWORK
Consider the wholesale field. You could eventually have several hundred other mail order dealers selling for you from coast-to-coast. If you decide to take this route, you'll need a special ad to attract dealers...plus two sets of sales literature: one to sell the dealer...the second to sell the consumer.
The advertising to attract the consumer will use benefit-laden copy. The ultimate buyer wants to know what the product will do for him: if it will make him happier, healthier, sexier, wealthier, more popular, etc.
Prospective dealers, on the other hand, are more interested in PROFIT! Thus, your advertising, should stress how much money the dealer can make when he sells your products, using percentage figures and actual dollars per sale. Although a smart and conscientious dealer should also be concerned with the quality of the product he will be selling, and the benefits his customers will receive, his main concern lies in the ease of making each sale and the ultimate profits he can expect from each customer.
Whether you sell retail or wholesale, you can put yourself into the high profit class of mail order by being producer...the manufacturer, publisher or prime source for the merchandise you sell.
You can make money by selling merchandise produced by others, but being the prime source is the only SURE way to make your mail order fortune!
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