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MAIL ORDER BUSINESS HBS B234
Mail order is a 44 BILLION DOLLAR YEAR BUSINESS -- so far! It combines the advantages of a wide marketplace with low overhead and high sales volume.
The mail order businessman chooses a product (or line), advertises it, and then fills orders that come in. Often he does not stock the product or pay for it until it is sold.
Mail order dealers range from multi-million dollar corporations to kitchen table operations; some do very well and some do not.
The mail order business has more than its share of charlatants. More complaints are filed about mail order companies than any other kind (undoubtedly because the participants never see each other and regulation of either the buyer or seller is difficult). In 1993, the Better Business Bureau reported over eighty-five thousand complaints nationwide!
Some companies sell mail order kits and schemes, such as envelope stuffing. Too often, their only business is selling worthless plans. Others sell plans that the owner thinks (hopes) will work, but hasn't really tested it thoroughly himself.
A few years ago one fellow sold wine "crystals" that theoretically produced wine in 30 days, but in practice, it made vinegar. One has to wonder sometimes that if these plans are so infallible, why don't they use them themselves get rich themselves?
When deciding about mail order business, rely on your own good judgement instead of a fast-talking (or writing) adman's pitch.
Some factors to consider about a mail order business:
First, the competition is much keener
because you are entering a much broader,
even national market. It isn't like having
the only car wash in town.
Second, postage, advertising and/or
mailing list costs can mount up fast. A
small, one time classified ad in a national
publication can cost $150 and up; display
ads start at about $300 (1).
And third, finding the right product isn't
as easy as one might hope -- even for the
pro's
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