Q:I own a two-year old catalog that sells products specifically, and only, for caged birds (parrots, cockatoos, macaws, etc.). We have had good growth over the last two years, growing our mailing list from 3,000 to 36,000 names. We are currently experiencing all of the problems that most start up mail order companies experience. Your help in answering any of the following questions would be greatly appreciated.
A:i think you need to look at your customer's buying cycle. Perhaps, EACH customer's buying cycle. You'll probably see clusters, like a bunch buys, every month, while another bunch will buy every other month, etc. If you're not doing so already, you should track each customer: what they order, how much they spend, etc. You know there's that 80/20 rule, 80% of your business most likely comes from 20% of your customer base. I own a callcenter in the Netherlands. We do mostly selling by phone, appointment setting and research. Also a lot of catalogue-follow up! Some tips.. 1 - Always call after your catalogs with special promotion offers. Do a test with a telemarketing company and make a deal-per-scored item based on that test. We like to call this Cure-And-Pay. 2 - Sell subscriptions to your 'fast-movers' like bird seed. Sell better stuff for a sharper price. This can be done by phone as well. 3 - Get names through your targetgroup. Add a card on which they can fill out 5 to ten names for a prize (colour tv?). You'll be amazed by the reponse. 4 - Financing. Don't use too many banks aren't there any venture-capitalists where you live? Since the prior answers already addressed the marketing issues, I thought I'd add my opinion on the financing and cost issues you addressed so that you can stay in business. First of all, as Duvekot suggested, I would not expect a banker to finance a start-up like yours, unless you happened to be one of their frequent golf playing buddies or married their daughter. You need to find a venture capitalist who would be willing to finance you, usually in return for equity in your business. You would need to prepare a detailed business plan with financial projections detailing the sources and uses of funds. There are numerous websites and newsgroups that attempt to connect financers with entrepreneurs. Unfortunately you might end up spending lots of time on the net without success because ppeople like to pump the flesh before they give you their money. You might be better served by going to the small business bureau as well as talking to people in trade organizations in your city - in other words, try networking. I'd like to emphasize another point, don't go overboard with mailing catalogues since the response rate can be notoriously low, and you will find yourself burning up your money faster than you can make it. There's no point in sending all those catalogs if you don't have enough working capital to cover your operating costs and overhead. I have seen this happen in too many businesses. It's commendable that you have broken even for the last two years so you must know what I am talking about. Also, did you break even from a cash flow point of view or a profitability point of view? Encourage feedback from your customers so that the best ones get preferential treatment. Encourage them to call you or mail back a response card by offering to enter them in a sweepstakes or giving them a discount. Maintain a database by using Access or some other datebase program so you can add data for each customer and sort them by various criterion. This will come in useful when you approach a venture capitalist.