So You Wanna Break into the Catalog Business ...
Last week, I got an e-mail from a former student of mine telling me he was starting a company with mail order as one of its distribution channels. He had a neat idea, and I thought the items he was about to sell had merit. Clearly he had his product line thought out well.
It pleases me to no end when this happens: a budding entrepreneur, about to stake his claim in the business world. Then I get the question that I dread: “How do I buy a list so I can grow the business?” How do I buy a list? Oh man, haven’t I taught you anything?
So I politely start hammering him with questions I always ask businesspeople in start-up mode:
* Do you have a budget?
* Who is your target market?
* How much margin do you have?
* And, of course, do you have a business plan? (Thankfully he said he did, but direct mail was not in it!)
As a consultant, I’m consistently amazed by the startling lack of understanding people have for some of the most basic basics of what’s needed to start a business.
But that’s OK; entrepreneurs often are the very dreamers we need in this world to think up the new products and services that drive consumer demand. And there are plenty of resources available to start-ups to help them move forward.
Are you in start-up mode? Or are you a retailer looking to branch off to the direct/catalog channel? Here’s a short (and by no means complete) list of the basic core competencies you’ll need to start (dreams not included).
1. Have a plan, a business model, with at least three years of financials (though five is better) and cash flow projections. It should be tailored to the exact niche you’re about to enter. (Boilerplate just doesn’t cut it in my book.) If you’re not sure how to write one that’s speaks to your market and/or distribution channels, find someone in the industry who does. It doesn’t necessarily have to be a consultant; you always can find a mentor who’s already in the industry.
2. If your business is going to include a catalog, include mailing plans and schedules in your business plan. Build your plans from the bottom up; start with your estimated average order, estimated response rates and all of the lists you’ll want to target. Then build your mailing plans up from there. Bone up on your Excel skills or find someone proficient in building spreadsheets.
3. Want to find a wealth of industry information? Join your local mail order club or direct marketing trade association. You’ll meet plenty of vendors and other marketers who can help.
4. Start reading the business publications and their associated Web sites. Of course, you’re already reading the best one, CatalogSuccess.com, which is a good start. Subscribe to the magazine, too, if you don’t already receive it.
5. Make contact with the vendors whose ads you find. Pick their brains as much as you can. Many will be all too happy to help!
6. If you’re going to go “catalog” as part of your multichannel strategy, the basic vendors you’ll need are creative/graphic design, premedia (what was once known as prepress), printing (in most cases, they also do mailing services) and a good list broker. I’ve written many articles here in the past year about list vendor selection, so you may want to go back and read them.
7. Have cash! I can’t tell you how many great, fantastic, amazing business ideas have never gotten off the ground because they were undercapitalized. If you do have money, make sure your plan, budget and cash flow statements match up with your cash.
8. Have more cash! Don’t go reed thin on your marketing budget. NEVER make the mistake that just because you have great products, buyers will find you. You’ll have to push and push to find them.
As to the question, “How do I buy a list?” I’ll discuss the multitude of things that are wrong with that question next week.
Speak to you then.
Jim Gilbert is president of Gilbert Direct Marketing, a full-service catalog and direct marketing agency. You can reach him at email@example.com or 561-302-1719.
Jim Gilbert has had a storied career in direct and digital marketing resulting in a burning desire to tell stories that educate, inform, and inspire marketers to new heights of success.
After years of marketing consulting, Jim decided it was time to “put his money where his mouth was" and build his own e-commerce company, Premo Natural Products, with its flagship product, Premo Guard Bed Bug & Mite Sprays. Premo in its second year is poised to eclipse 100 percent growth.
Jim has been writing for Target Marketing Group since 2006, first on the pages of Catalog Success Magazine, then as the first blogger for its online division. Jim continues to write for Total Retail.
Along the way, Jim has led the Florida Direct Marketing Association as their Marketing Chair and then three-term President, been an Adjunct Professor of Direct and Digital marketing for Miami International University, and created a lecture series, “The 9 Immutable Laws of Social Media Marketing,” which he has presented across the country at conferences and universities.