How-to: Running a mail-order business in the age of the internet
In the not-so-distant past, it was common to find your mailbox stuffed with catalogues from national department stores and small mail-order businesses.
Their pages held everything from toys to furniture to clothing, all available with nothing more than a few pen strokes, a self-addressed envelope, and a few weeks of patience.
Now, with posted catalogues largely replaced by spam emails and one-click, same-day-shipped purchases, the mail-order business model is, counterintuitively, far from dead.
Email has nearly killed the act of sending letters, but technological advancements have made starting a mail order business easier — and perhaps even more profitable — than ever.
But this doesn’t save mail-order businesses from unique challenges. They have to quickly identify and attract customers, select the right products, and ensure they establish themselves as market leaders quickly. Otherwise, these businesses run the risk of simply becoming another rarely-visited website, or a catalogue in the bottom of a recycle bin.
John Schulte is the president of the National Mail Order Association, an American organization that provides current and prospective business owners with information about mail-order businesses. He says it’s important to narrow your focus when starting, and that picking a certain subset of products will help draw customers to a catalogue.
“You have to sometimes find the niche in the niche,” he explains, saying that becoming known for a particular type of product, whether it be baby clothing or gourmet preserves, is essential when trying to stand apart from other companies. It’s only once you become widely known for that particular niche, he says, that it’s worth considering expansion.
Mary Brittain owns The Cottage Gardener, a family-run, mail-order seed business in Crooked Creek, Ontario, which she started in 1996.
She has first-hand experience in earning big dollars through small-market focus.
The business began by selling perennial plants in a traditional storefront setup. But Brittain shifted her focus to selling seeds in 2000, and the store underwent a radical transformation.
She focused on heirloom seeds, which are seeds from older plants — a very niche market. This cut down her potential customer base, at least locally, but also ensured she wouldn’t lose marketshare to more generic home and garden stores. She also dropped the storefront and greatly expanded her customer pool by converting into a mail-order business that could serve people far outside the boundaries of her hometown.
“We are specialized, so we don’t appeal to a broad range of the market in a small area,” she says. “We actually appeal to a very narrow segment of the gardening market, but across a broad geographical area.”
Revenues — which had been decreasing — shot up 100 per cent once the brick-and-mortar store closed, and Brittain has seen consistent double-digit increases every year since.
You’d think the internet would be a threat to this businesses growth, but Schulte says this isn’t true — the web is simply the next step in a long line of mediums improving the industry.
“You’re still selling with pictures; you’re still selling with words, you (just) get to add video now,” he explains. “The whole progression has been like a dream.”
Breanna Musgrove is the owner of Scout & Catalogue, a mail-order business that sells accessories for women. A former creative director of marketing at women’s clothing retailer Aritzia, Musgrove started designing and selling scarves and bags on online handmade product marketplace Etsy in 2009. She was living in Mexico at the time, but brought the business with her when she moved back to Toronto one year later, and it has continued to grow ever since.
Musgrove says her mail-order model, which includes both online stores and a digital catalogue, allows her to cut down on operating costs — including expenses like rent and employee wages.
“I have less overhead, and I can move faster,” she says. “I also don’t have to invest as heavily, because I can do smaller orders, get an immediate response from my buying public, and see what’s working and what isn’t working.”
However, Musgrove says the mail-order biz does have its drawbacks. No store means no foot traffic, and there can be a slight difference between how products appear online and in-person.
“You get feedback that your clientele expected it to be a certain way,” she says. “Because they were only interacting with it online, when it arrives they are surprised. Sometimes they’re elated, and sometimes they are disappointed.”
In 2004, The Cottage Gardener’s static website was updated to facilitate online shopping. Brittain says today, 80 percent of sales are made online website, with the rest coming from physical, mailed-out catalogues. But she has no plans to go 100 per cent digital.
“A lot of our customers are rural, and they don’t have access to high-speed internet. It’s not easy for them to navigate through a picture-rich website,” she says. “Yet at the same time, we also know and recognize that we’re trying to attract a newer customer base that’s very computer-savvy, with social media as a regular part of their lives.”
As such, she says, the company started a Pinterest account, and will also be focusing on Twitter and Facebook.
Identifying and connecting with current and future customers is essential for running a successful mail-order business, Schulte says. He explains that there are three things each prospective mail-order company needs to ask themselves:
- are your potential customers easy to identify?
- are they easy to reach?
- and are there enough of them to support your business?
Schulte says that even though the barriers to entry are low, it’s essential to remember that planning is crucial for growth. He adds that some entrepreneurs believe running a mail-order business means throwing together products on a website and waiting for customers to reach out to them.
“There’s so much hype with the internet, people forget about the traditional methods of marketing, which are certainly needed,” he says.
Methods like direct mail, renting mailing lists from businesses, or advertising in specialty magazines and television programs are still vital for a growing mail-order business, Schulte says.
And, he adds, for those willing to put in the time and effort, now is a great time to start a mail-order company.
“There’s tonnes of opportunity all over,” he says. “I wish I was 25 again!”