Reduce Your Direct Selling Expenses

16 Actionable Tips

What can you do to reduce your selling-expense-to-sales ratio? One way is to increase revenue without spending more money … easier said than done. Another way is to reduce your direct selling expenses. Following are a few suggestions to consider:

1. Use square-inch analysis to plan your page count. Be careful not to over-circulate pages. For consumer catalogers, the page count should vary depending on the season (i.e., holiday vs. summer). Circulating too many pages will increase your costs, because the productivity of those extra pages may not be enough to offset the additional cost.

2. Don’t over-circulate catalogs. If your selling-expense-to-sales ratio is too high and your bottom line is suffering, reduce circulation. Determine your incremental break-even point and eliminate mailings to outside lists and to segments of your housefile falling below your established criteria.

3. Alter your catalog trim size. If yours is a pound-rate catalog (weighs 3.3 ounces or more), a slight reduction in the physical trim size of your catalog will reduce your postage costs.

4. Decrease paper weight to lower postage costs. Test lighter-weight papers, and self-covers vs. heavier separate covers. Following are the actual results from a recent test using 34-lb vs. 32-lb paper:

Both the response rate and the average order size for this test to the 0- to 12-month buyer file were not negatively affected. The revenue per catalog mailed in both cases came out about the same—$3.62 vs. $3.60 per book. Consider a reduction. Paper is sold by the pound. If you use fewer pounds, you may save money.

You also can save costs on postage by using lighter-weight paper, provided your catalog mails at the pound rate. A simple change from a 34-lb, #5 basis weight to a 32-lb, #5 basis weight will save about $12,000 in postage on a mailing of 1 million 80-page catalogs.