Is a Mail-Order Business the Answer?

Is a Mail-Order Business the Answer?

How can I make money from home? Is there a way to set-up a truly profitable business working solely from home? Can I start a real, legitimate business without the huge over-head of a brick and mortar business? If you have considered any of these questions and have done some research, you have probably come across the idea of setting up a mail-order business. But, is this really the answer to your financial and career dilemmas?

Well, the answer to that depends on a number of factors which we will examine closely within this article. Keep in mind that businesses are not one-size-fits-all. So, as you examine the information presented here, be realistic and honest. Only YOU can determine the type of business that best suits you. That said, let’s look at the facts.

What is a mail-order business?

Simply put, a mail order business is one in which you provide a product or service which is delivered directly to the customer’s home. The customer has the advantage of purchasing and receiving the goods from the comfort and convenience of his/her house. Mail-order business can incorporate the use of catalogs, direct mailings, the internet or a combination of all three in order to present the product to the target audience.

Your job, as a mail-order business owner will include selecting and securing the product or service, marketing and advertising so that your product can actually be found by potential customers, and, of course, shipping or delivering the item to the customers once they are purchased. You could also start a mail-order business by manufacturing your own product. In that case you have some additional work. You need to concern yourself with obtaining the necessary materials, production details (such as an assembly line, and packaging), zoning restrictions and laws, and patent and copyright issues.

The Benefits of a Mail-Order Business

First off, you DO get a lot of freedom of choice in creating a mail-order business. You have the choice of manufacturing your own product. If that is not within the scope of your vision at the moment, you can also pick from a myriad of products available out there. A simple query in Thomas’s Register of American Manufacturers will give you a good idea of the vast array of merchandise you can actually incorporate into your business.

You can also freely determine whether you want the business to run completely out of your home, or whether you want to set-up an office for the business. In that respect, you also control the amount of over-head you carry. You could actually decide to run your entire business through the internet.

Another clear benefit of a mail-order business is that you can determine the pricing, and as a result, the earning potential for the products you sell. This is NOT a commission based business. You are the owner, so you can decide how much to charge for your products or services. Of course, you should be fair in the process. While many mail-order business owners charge up to 200 and 300% over their cost for the product, you do not want to bring the price over what your target market is willing to pay. There’s no use is a potential profit of even $100, if nobody is willing to pay the purchase price.

The Downside of Mail-Order

The biggest potential downside to a mail-order business is the problem of handling inventory. As mentioned before, part of your job within this business will be to ship purchases to your customers. So, you will probably need to keep and manage inventory. You will also need to set up a shipping system which ensures that your customers will receive the product or service as soon as possible, and within the promised time-frame. Although drop-shipping, and arrangement in which the manufacturer or a third party handle the shipping and storing of the inventory for you, IS sometimes an option, there are always certain fees and or surcharges involved. So, weigh those options carefully.

Selecting a winning product is not all that simple either. In order to really be profitable your product or service needs to be new and unique. You will not succeed with a product that is available at the corner store. It also has to solve a problem. People are really not interested in buying anything. All they want is to find a solution to a particular problem. So, unless your product can provide real solutions, it will not give sell. Plus, the product has to be easy to ship with a short lead time. So, finding a product to meet all these criteria can be a bit tricky.

Handling customer care issues is the main factor that turns people away from mail-order. What happens if there is an issue with the shipping? What about if the customer chooses to return the product? What about a person who has very technical questions about the proper use of the product once it is delivered? These are all situations that will arise at some point during the run of the business, and it is extremely important that you have a system in place to handle each one.

The BIGGEST Downside

Perhaps the biggest downside to a mail-order business is that the potential for residual income is virtually non-existent. What this means is that you will only make money based on the actual sales you make. These products, while some need to be repurchased every month, do not typically come with a built-in passive income. In other words, if you don’t make a sale, you don’t get paid.

Bottom line, mail-order businesses DO have some very interesting and enticing aspects. Those who enjoy the challenging aspects of selling, and who have good managerial and organizational skills, might find this type of business to suit them extremely well. For the rest of us, a mail-order business might prove more stressful than profitable. So, we go back to where we began, the final decision depends on your interests and the type of lifestyle you want to create.

Source by Marcy Amaro

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