How to Start a Mail Order Business
Start-Up Costs
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One of the Catch-22s of being in business for yourself is that you need money to make money--in other words, you need start-up funds. With mail order, you can start off with a much more manageable investment than your peers in retail or manufacturing. Because you can begin as a one-person show in your own home, you automatically eliminate expenses like rent and employees. As an added bonus, equipment costs are relatively low: Your major outlays will be for a computer, software, two to three phone lines, a phone with multiline capability, a fax machine and Internet access. This whittles your other initial expenses down to inventory and advertising--which, if you plan to go the catalog route, can be considerable. But don't get too carried away with the idea of starting on the proverbial shoestring. There's a downside, which is that starting small can limit your company's potential growth. "You really have to have backup in terms of finances," advises Greer T., a cataloger in Canton, Ohio. "It always costs more than you think it's going to. A lot of businesses fail because they don't have the financial backup." For now, let's say you can expect your start-up costs to range from about $5,000 to somewhere over the $250,000 mark, depending on what sort of operation you start with. If you plan to start small, with a brochure-sized catalog or a print ad, your start-up figure will be relatively low. If you decide to start out with a 48-page catalog to rival those of Lands' End and J. Crew and mail it to 100,000 people, you're looking at a lot more money. "It's very easy to eat up $250,000 to $500,000 starting a catalog today," Sroge says. Content Continues Below
"Can people do it cheaper than that?" Maxwell Sroge, a mail order consultant, asks. "Sure." You can do a catalog from your kitchen table, design it yourself on a computer and go with a much smaller mailing. You're not going to go from nothing to Lands' End, with its annual nine-figure revenues, overnight--but then, do you need to?
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