The Business Master (3rd Edition)/The Business Master (3rd Edition).iso/files/busition/mailordr/mailch3.doc

Text File | 1992-01-11 | 13.6 KB | 299 lines

                                     CHAPTER 3




                             YOUR PERSONAL TREASURE MAP



                  Before you start out on a trip of any size you should
             have a map. Marked on the map should be a clear route from
             the spot from which you are starting and the destination.
             In between should be the pauses, the diversions and the
             hazards.

                  When starting any business venture you need such a map.
             Many people form the map in their mind, but no matter how
             experienced you are with regard to business, you are better
             off with a clearly defined, detailed, down-on-paper route
             map.

                  If you ever approach a bank for a business loan, they
             will want to take a look at that map.  They will want to see
             your destination, usually in the form of projected dollars
             profit, they will require information on how you intend to
             get there, and they will want to know what supplies or
             assets you will have when you start out.

                  Make yourself such a map.  On a piece of paper write
             down your assets, your goals and the methods you intend to
             use to attain them.  Put it somewhere that you can reach for
             it easily over the next few days so that you can make
             changes and alterations as they come to mind.  When you are
             satisfied that what you see is what you want to achieve,
             file the map away where you can find it because I want you
             to take a look at it now and then.  It will give you encour-
             agement when you need it and quite a few surprises.

                  I said for you to write down your assets,  Too many
             people start out with that underestimation of their worth.
             "I don't have any assets," they say. You do have assets,
             everyone has assets, they start building the day you are
             born.  They are the things you know, your skills, your
             experiences, your "street smarts".







                  If you have material assets, money in the bank, stocks
             and shares, properties dotted all over the United States, so
             much the better. But it is what you know that is even more
             valuable, and when you are running your own business, that
             knowledge is like gold bars hidden under the mattress.

                  Other than just a mention in passing, I will leave you
             to make your own decisions with regard to a business name
             and registration.  The main thing to bear in mind is that in
             Mail Order, your new customers know nothing about you other
             than your letter heading.

                  You rarely meet with your customers face to face so
             they must judge your honesty, your efficiency, the quality
             of your products and the size of your business simply on the
             material you send them.  If your letter heading looks ama-
             teurish or just plain sloppy, that is the opinion they must
             form about your business, so spend some time polishing your
             shop window.


                  *  The Basis Of Business

                  In a nutshell, business is simply buying and selling.
             You buy at the lowest price possible and you sell at the
             highest. The cash between is your profit.  It is PROFIT, not
             gross income, that feeds and houses you, allows you to buy
             still more product and eventually allows you to expand your
             business.

                  You cannot run a business without making a profit - not
             for long, anyway, although some people seem determined to
             try.

                  Let's examine those two major aspects of business, the
             buying and the selling, in detail.  The entire book deals
             with those two aspects in one form or another, but for now
             we'll break them down to their basic parts and take a closer
             look at them as they apply to this specific business.

                  For now I will ignore the service aspect of Mail Order
             business, services such as Tuition or Schooling by Mail, but
             as they are an important part of Mail Order, we must appre-
             ciate their importance and I'll get to them later.

                  *  What, Where & How to Buy Mail Order Products

                  This is the meat of the Mail Order business.  You will
             find some suggestions for the 'What' to buy and 'Where' to
             find it throughout the book, but for now consider the fol-
             lowing.

                  Your choice of product will be governed by the 6 Golden
             Rules, rules that I'm sure you will break on occasion, and






             every time you break them you will expose yourself to risk.
             By that, I mean your ability to grow will be slowed and even
             at times, grind to a standstill.

                  If, or should I say, when you meet one of those periods
             of slow-down, never lose confidence.  Just determine that
             for every step back that you take, you will positively take
             two steps forward.  Take another look at your map and remem-
             ber the determination that filled you when you drew it.

                  The 4 Golden Rules:

                  1.  Your product should, if possible, be exclusive.

                  2.  You must be able to buy that product at a very
             competitive price.

                  3.  Before you buy, you should have a specific market
             in mind.

                  4.  You MUST have a guaranteed supply.



                  Rule #1.  Exclusivity.
                  This is a tough one at first, but when you get the
             knack, and I think it is a knack, you will find that finding
             exclusive products is much easier than you would presently
             think.  We will cover this a little more thoroughly in the
             section dealing with where to buy.

                  Rule #2. Low Price Purchasing.
                  This is usually a matter of bargaining.  Huge stores
             such as Sears Roebuck and Montgomery Ward are able to buy in
             enormous quantities and with this power are able to push the
             manufacturer down to his lowest price.

                  It is here that your small size can be turned to advan-
             tage. Think of yourself as a lone guerrilla fighter facing a
             well nourished army.  You will use the weapons available to
             you and be able to strike where and when it is to your
             advantage.

                  Your biggest weapon is cash.  The big guys inevitably
             buy on credit and this tends to cripple the smaller manufac-
             turer.  Small firms, - and these are usually entrepreneurial
             people, the type who develop unusual products, - need a
             steady flow of ready cash.  They live hand to mouth.  Be-
             cause of this, many of these smaller firms can be tempted to
             sell you a product at unbelievably low prices when you offer
             them cash on the barrel head.

                  Your second weapon is in that other huge asset, exclu-
             siveness. The big people are hoist on their own petard when
             it comes to new products.  They find it difficult, or un-






             wise, to order a 'strange' new product in the quantities they
             are required to buy. The buyer for a major store chain who
             loads his company's warehouse with half a million 'Wizzi-
             gits' that they discover no one wants to buy, will soon be
             looking for another job.  To say that he is cautious is an
             understatement.

                  You, on the other hand, with your smaller list of
             customers, (and a much more intimate knowledge of the type
             of product they are buying), are in a much better and safer
             position.  You can complete a short test run while the big
             companies are still contemplating buying.  Very frequently
             the larger stores will wait until a product has appeared on
             the market and will then join in with a cheaper or similar
             item. This gives you a fair number of weeks or months with
             an open market.

                  Rule #3.  Know your market.
                  Three of the most important steps in selling are:

                       A.  Know your product.
                       B.  Like your product.
                       C.  Know your market.

                  A surprisingly large number of people who enter the
             Mail Order business, start with products with which they are
             familiar. Hobby products or personal interest products - car
             accessories, fishing and camping equipment, children's toys,
             collectibles, books, classical music, computers.

                  Because they are familiar with these products on a
             personal basis, they are also aware of other people or clubs
             with similar interests.  They have an accurate and pre-
             formed idea of the type of people who would be interested.
             In other words, they have a working knowledge of their
             markets.

                  When you buy and when you sell, your first customers
             are going to come from a market familiar to you.

                  I mentioned a few minutes ago that some Mail Order
             houses specialize, and although diversification gives you a
             much wider choice of products, specialization brings a line
             of customers to you that might otherwise go to a competitor.

                  Typical areas of specialization could be:

                  1.  Children: - Toys, Books, Computer Educational
             Programs, School Materials.

                  2. Sports: - Fishing, Hunting, Skiing, Boating, Hang
             Gliding.

                  3. Hobbies: - Books, Embroidery/Needlepoint Materials,
             Collecting, Computing, Photography, Gardening, Genealogy.







                  4.  Women/Men Products: - Clothing, Toiletry, Maga-
             zines.

                  5. Pets - Specialized Foods, Toys, Accessories.

                  The above selections merely scratch the surface.   I
             include them to start you thinking.

                  Rule 4. Guaranteed supply.
                  This is of vital importance.  Never spend money to
             advertise a product that has no guaranteed continuance of
             supply. You would be very unhappy to spend a considerable
             amount of money on advertising and receive cash and orders
             for 5000 items,  only to discover when you went to buy
             further supplies, that the manufacture of that product had
             been discontinued.

                  Where possible, put yourself in the position of being
             able to control supplies.  This sometimes means buying in
             sufficient quantity to have stock on hand.  This has obvious
             pitfalls.  Never load yourself with a warehouse filled with
             'chancey' products.  Before you buy in quantity, test mar-
             ket, - and even then, buy back-up stock with extreme cau-
             tion.

                  NOTE:  Some items such as books and magazines can be
             purchased with a return-if-not-sold option.

                  Some Mail Order specialists will go into the business
             of manufacturing a product themselves so as to be sure of
             regular supplies, but this comes only after a product has
             been successfully marketed over a long period of time  and
             assuming there would be no copyright or patent infringe-
             ments.

                  There are exceptions to Rule 4.  You may have the
             opportunity to buy a quantity of an item that has been
             discontinued or is about to be discontinued.  If you possess
             this knowledge beforehand, you can direct your advertising
             and sales accordingly.

                  "Limited Supply"
                  "First Fifty Customers Only."
                  "Buy One - Get One Free.  While Supplies Last."
                  "Limited Time Offer Only.  Will Not Be Repeated."