Catalog Start-ups: What You Need to Know
A catalog business starts with the right merchandise. Most often, the entrepreneurs who start catalogs have a passion for their products. They are merchandise-oriented individuals who eat, sleep and breathe the products.
(I started teaching a second-year MBA course on direct marketing at Indiana University in 1997, and I always told my students that if they didn’t know the answer to a question, simply write “merchandising,” and I’d give them 50-percent credit.)
Assuming they have the right product, why do some start-ups fail?
Retailers often don’t have a housefile to leverage. Perhaps they’re capturing names and addresses at the point of sale. But these names are of little benefit since retail buyers aren’t necessarily mail-order catalog shoppers.
Typical problems associated with retailers starting catalogs are as follows:
Spin-offs are catalogs started by existing catalogers. The odds for success are much greater, because the company already is in the business of catalogs with at least one title (assuming the spin-off title is related to the existing catalog). That is, the cataloger already has a housefile that can be leveraged.
Finding segments or pockets of your current housefile that can support another catalog title will add incremental revenue without increasing fixed costs. For example, a gift cataloger may notice that a product category continues to grow, even after it’s been expanded a few times.
- Companies:
- Lett Direct Inc.
