OCTOBER 2012
Greetings & Salutations:
How the ol'pros really do mailorder.
Let me tell you a true story ...
Some years ago, a very dear friend of mine (retired; living
on Social Security) came to see me. He had with him a mailorder
"drop ship dealer" program he wanted to get involved
with and wanted to use some of my mailing list.
The offer he wanted to mail was for a $20 "how to make
money" book. The flyer was exceptionally well written
and appeared to offer a good value for those who bought the book
(I read it). So, I gave my friend 1,000 names and addresses
of my customers for his mailing.
About a month later, my wife and I had dinner with my friend
and his wife. Over dinner, I asked him how his mailing
had done. His response was, "It only pulled 43 orders,
so I decided to look for something that sells better."
I thought nothing more about it until the next day. - Sitting
at my desk, eating my sandwich for lunch, my wife remarked that
it was too bad our friend hadn't made any money on his mailing.
- That started me thinking.
Forty three (43) orders on a 1,000 piece mailing ... at $20
per order ... produced a gross revenue of $860 (86¢ return
on every envelope mailed).
After sending 50% to the publisher of the book, my friend
had a gross profit of $430 (43¢ return on every envelope
mailed). - NOT big money ... BUT ...
Back then, First Class postage was only 10¢ ($100 to
mail 1,000 pieces). A 1,000 name mailing list rented for
$35. Envelopes were about $14 per thousand. Reply
envelopes $8 per thousand. Printing was $16 per thousand.
And, reply postage was 14¢ per reply envelope received.
In other words, my friend had spent about $180 (including
the $35 list rental he didn't have to pay me) on his 1,000 piece
mailing (18¢ per envelope mailed), to produce a gross profit
to him of $430. - A net profit of $250 (25¢ for every envelope
mailed).
If my friend had put the same $180 back into another 1,000
piece mailing, his profit for the 2,000 pieces would have been
$680 ... the next 1,000 piece mailing; for a total of 3,000 pieces,
would have left $1,110 profit ... on and on, building his profits.
The only "out of pocket" money my friend would have
spent would have been the first $180. The cost of his future
mailings would have been ONLY that same $180; which would have
been returned to him again and again on each mailing ... to use
for more mailings.
After I ran the numbers, my mouth was watering. I called
my friend and told him how profitable his mailing had been.
But, since he was already involved in something else, he didn't
want to pursue the project. So ... I asked him if it would
be okay if I pursued it. - He agreed.
Unfortunately, when I contacted the publisher, they had discontinued
their drop ship program. - It seems some of their dealers were
collecting the $20 orders and not sending the orders and money
to the publisher for fulfillment. - To punish those few crooks,
the publisher cut-off their own nose ... punished all of their
dealers for the actions of a few ... and eventually went broke
from a lack of sales.
Now ... if you will re-read (and re-read again) the story
about my friend's involvement in mailorder, you will clearly
see how most of us who made millions in mailorder did it - and
- why most people who get involved in mailorder don't.
While you are re-reading, take note that all of the costs
and revenues are stated in "dollars" (or cents). -
And the costs and revenues are broken down to a "per envelope"
dollar value. - That's because all of us who really made money
in mailorder didn't put any value in "percentages."
Our real costs and revenues were calculated in dollars and cents.
- Remember: 100% of nothing is still nothing.
One of the real secrets to making money in mailorder is to
find something (anything) that produces a profit (even a very
small profit). Then, keep mailing it ... over and over
... building a larger and larger customer list. (The
same holds true in Internet marketing.)
Dreaming about accidentally hitting that One-Time (lucky)
Big Success is part of the intrigue of mailorder ... we all did
it ... but, those of us who really made money in mailorder (every
day), didn't let that dream overcome our on-going profits.
Believe it or don't, TODAY the opportunities in mailorder
are growing bigger and bigger every day because the competition
is almost non-existent.
Can you stump the old master? --
Betcha can't!
Over the past 50 years (man and boy), I have made bundles
of money in direct selling, service contracting, wholesale merchandising,
entertainment (I was a professional Trumpet player, vocalist
& Radio Announcer), freight forwarding, import/export, retail
merchandising, warehousing, real estate, electronics manufacturing,
finder's fees, closeout merchandising, financial brokerage, business
consulting, steel fabrication, gold and coal mining, offshore
banking, mailorder, writing, and publishing. -- That being the
case ...
No matter what business you're in ... whether you're just
starting, well on your way, or at the top of the heap ... I've
probably been where you are, done what you are doing. -- So ...
Anytime you have a question about 'how' to do something in
your business - or - if you have any comments about anything
I've said in issues of this e-Letter; or if you want to add your
2 cents worth ... just "ask" me or "tell"
me.
Send your Questions, Comments or 2 Cents Worth
to ...
with "Question" - "Comment"
- or, "2 Cents Worth" in the SUBJECT.
If I, personally, don't have an answer to any question you
may ask, I will contact some of the professionals in your field
of endeavor (I will probably know one or more personally) to
get the real 'skinny' for you.
Note: If you want to ask a question anonymously
just tell me so when you send in the question. -- Nobody but
you and I will know who asked the question.
Copyright - 2012, J.F. (Jim) Straw. All rights reserved.