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INTRODUCTION
This report was written as a service to
those individuals who are
considering to get started in the mail order business. To get any
business started successfully takes many ingredients. However all
requirements, more or less, fall into one of the following four
key categories: 1. Desire, 2. Knowledge, 3. Time, and 4.
Available funds
This report deals only with the financial
requirements of
starting a mail order business. Hopefully it will help the reader
to evaluate whether he is financially able to embark upon a
business venture that will bring about success. It is generally
true that it takes substantially less money to get started in
many mail order businesses than in a variety of other businesses.
Many a promoter will want you to belive
that it is possible to
get started successfully for $50, $100, or even $200. However, it
is totally false. It does take more than that. How much more
depends on many factors which I will try to define as much as is
possible here.
Since the mail order business covers a
vast number of services
and products I would like to define the contents of this report
to deal with the selling of information products. This is where
my expertise lies. While the same or similar conditions may apply
to any number of other mail order businesses, there may however
be some differences to selling information products such as
books, etc.
The following makes a number of assumptions.
The most important
ones are:
1. The operator ( or operators) of the
new mail order business is
employed or has other means of income.. He will not need to
derive any profit from his new business for a period of time..
How long will depend on many factors.
2. This is a home based business which
has no employees.
3. The business, at the start - until volume
reaches $3,000 to
$5,000 per month - will utilize the drop shipping services of a
wholesale company.
4. Basic office equipment such as desk,
file cabinet, typewriter
or computer, etc... are on hand.
A WORD OF CAUTION AT THE START AND RESOURCE
AVAILABLE TO YOU
THis is an exciting business and it can
b extremely profitable
once it reaches a certain momentum. However, like almost all
businesses it is a very cost sensitive business. For a detailed
analysis of the key mail order expenses and their impact on your
business refer to my special report:
CONTROLLING YOU MAIL ORDER EXPENSES
A thorough discussion of mail order's 4 key expense areas -
Product - Postage -Advertising - Printing
Order #4118----------------------------------------$5.00
As you are getting started in planning
and setting up your new
business which in my experience is one of the most enjoyable and
satisfying experiences of a lifetime think and act with caution
when it pertains to any expenditures. This is one of the most
difficult things to do since you are probably very enthusiastic
and want to do everything today. So you need to learn HOW TO
CONTROL YOUR ENTHUSIASM or it is going to cost you lost of extra
money.
In this state of enthusiasm we tend to
think that there is
nothing we can do wrong and since we will be making lots of money
in a few months lets get all necessary and often unnecessary
supplies and equipment.. It would be much better to wait until
profits of the business make it possible to acquire what is
needed. In the meantime you can make do with less. To be able to
do so is a most important quality for the owner of a small to do
so is a most important quality for the owner of a small business.
If you are a parent think of your new business
as a child. There
will be a never ending sequence of surprises. And as the business
grows so will its demands, and yes its expenses.
START-UP EXPENSES -- INITIAL STAGE
The below listed expenses will be incurred
in the very early
stages of setting up your business. This is at a time when you
probably are not sure as yet what you will be selling.. You will
be writing to different companies for information to come up with
the right product selection. Once you have decided what it is you
will be selling you have to line up reliable suppliers, This is
also a good time to buy a few books t help you with your mail
order education. Although most expenses incurred in this phase
are relatively small they will add up quickly.
Stationery and
envelopes.........................................50.00
P.O. Box rental...................................60.00 per year
Miscellaneous office supplies.....................30.00
Postage...........................................50.00
Educational.......................................45.00
TOTAL............................................235.00
START-UP EXPENSES -- SECONDARY STAGE
You have now reached the point at which
you have decided upon one
or more reliable suppliers for the product you wish to market..
You may also be ready to have some promotional material printed.
In addition you may be placing one or two classified ads for
testing purposes.
Dealership or distributorship (1 or more)................80.00
Small supply of brochures or catalogs....................50.00
Printing of sales ltr,order form,Return env,etc..........90.00
1 test ad, classified (national magazine)...............100.00
Business or traders license..............................30.00
Postage..................................................25.00
TOTAL...................................................375.00
Until now you have only had expenses for
your new business. You
have not derived any revenue yet. In the next and final stage of
starting your business you may have some revenues. Stage one and
two may take from approximately 3 to 6 months.
START-UP EXPENSES -- THIRD STAGE
You have now reached a stage were you will
expand your
advertising, or alternately you may go the direct marketing route
and rent a mailing list. The comparison of expenses and revenue
results of a direct marketing effort versus classified
advertising need to be carefully evaluated. Refer to my special
report:
#4118 How To Control Your Mail Order Expenses
This report compares the actual expenses
of a specific mailing
against an advertising effort.
Since expenses for a direct marketing effort
are generally higher
than for a small advertising campaign, the below listed expenses
focus on an advertising campaign
Advertising -- 3 classified ads.......................280.00
Postage for inquiries derived from adverting ..........75.00
Miscellaneous office supplies..........................30.00
TOTAL.................................................385.00
ANOTHER IMPORTANT RESOURCE AVAILABLE TO
YOU
If you are planning to advertise on an
ongoing basis you need
my special report on
HOW TO SET-UP YOUR OWN IN-HOUSE ADVERTISING
COMPANY
#4113.......................................$6.00
It shows you how to save 15% on all your
adverting expenses from
day one by setting up your own agency.. Every mail order pro does
it. Its easy to accomplish. Necessary sample advertising
insertion order forms are part of the package as well as a
special bonus
List of Top 50 Mail Order Publications
for Classified Ads
SUMMARY
The combined expenses as listed above total
just under $1000.
They are based on broad estimates and may vary somewhat by area
of the country and individual circumstances. The figures are
reflecting a minimum amount.. I have no question that some
individuals may be able to cut expenses further. Since this
planning period takes several months the expenses as shown above
can be allocated over a period of 4-6 months.
The above figures represent a conservative
start. For those who
want to get started more aggressively expenses would be higher..
While many of the basic start-up costs would be the same the
expenses that would increase would primarily deal with additional
advertising, printing and postage expenses. By how much would
largely be an individual decision.
Since most new businesses fail because
of lack of funds, it would
be advisable for an individual who does not have the necessary
funds to get started to wait until he does. In addition to the
basic start-up expenses an individual should also consider that
most businesses will loose money for several months and sometimes
much longer than that. Unfortunately no matter how well you plan,
circumstances often change and we must make allowances for those
eventualities.
