The catalog industry is somewhat unique in that it has built itself on collaboration. Whether by plan or by accident, the strategy of renting one anothers’ customer lists has helped — and continues to assist — the industry to grow. But most importantly, this practice helped to build larger universes of good quality, mail-order buyers who became responsive to the convenience of shopping from their homes. A catalog company won’t prosper in the long term if it’s unable to add new customers to its file. Simply stated: Growth is essential to success. You grow by getting more sales from your existing customers and
Phil Minix
Opt-in e-mail campaigns continue to be a cost-effective way to generate sales and traffic to your Web site. If you execute your own campaigns in-house, the cost practically is zero. Even if you use an outside e-mail marketing firm, the cost to send each e-mail is miniscule compared to the cost of a mailed, printed piece. However, as consumers get more and more frustrated with inbox clutter and shady offers, it’s even more important that you ensure your offers are effective and provide value and/or interest to your customers or prospects. Otherwise, the cost to you may not be in simply executing the
Since the beginning of the calendar year often is the start of a budget year, I’ll discuss some ways to save your company money and improve your bottom line in 2005. Hopefully you’re finishing a great holiday season, and instead of needing these savings to make ends meet, you can use them to increase circulation or catalog page count for next holiday season. In addition, these ideas may help you offset the impending postage increase. (For more, see this month’s column by my colleague, Stephen Lett, page 39.) Here, I’ve listed the ideas in order of potential magnitude, with the last ones
If you work among the creative staff at your catalog company, you may hear the following discussion from time to time: Merchant: “I need this item to be pictured a little smaller for it to pay for itself.” Art director: “If we just cut the copy, we probably can make the picture a little bigger and still take up less total space. People don’t read anyway.” Copywriter: “I’ve already cut the copy three times, and now there’s barely enough room to give even the product dimensions and SKU number.” Many people say nobody reads anymore, so you might as well show bigger pictures
Direct importing of merchandise may be a way for you to increase margins and improve your bottom line. Both financial institutions and overseas vendors are becoming more accustomed to working with importers and exporters. This, along with advanced technology, often can simplify the importing process. Following are key elements to help you decide if direct importing is right for your catalog company. Sourcing vs. Importing If you currently buy imported goods from domestic suppliers, distributors or resellers, you may be offering products at good value to customers, but you won’t enjoy the higher margins that come from importing products directly. But before
To produce profits, you first must scrutinize overhead expenses. And since payroll often accounts for most overhead expenses, each staff position within your catalog must be justified and optimized. With current trends focused on keeping employment as flat as possible, it may be tempting to either eliminate a merchandise manager’s position or to not add one as your company grows. But I argue that this should be one of the key positions in your company. Remember, you are, after all, a merchant. Your catalog exists to sell products. All the rest of the things you need to do are in support of your
In times when response rates suffer and average order values decline, earning a profit in cataloging can be more of a challenge than normal. In this environment, your expenses (e.g., marketing costs, overhead, fulfillment) become a larger percentage of sales, thus leaving few, if any, percentage points left for profit. Although there are many things you can do to check overhead expenses and keep marketing costs at a minimum, there’s one line on your profit and loss statement that can have the biggest impact on your ability to make money: cost of goods sold (COGS). Before taking the steps to improve your
Many catalogers use their marketing databases to look at response data for list analysis and segmentation or for data modeling — all good stuff that can benefit your campaign results. But there may be dozens of other benefits you can reap from your data — benefits that come from analyzing transactional information of what’s being purchased along with the response information of who is buying. Then you can use those data to build a more effective catalog. Five Steps to Success Following are five steps that can help you get the most out of your marketing database. 1. Look at what’s
A few years ago, vendor “partnerships” were all the buzz. Then confusion about the lingo developed, and corporate attorneys grew concerned about the inference of equity from the word. As a result, usage died down. But the spirit of the term should be alive and well in your company. The days of keeping all your information close to the vest and trying to extract every cent out of a vendor contract without regard to a long-term relationship should be long gone. Instead, foster a spirit of cooperation and mutual success, because if both parties aren’t making money, the relationship soon will be over.
With world conditions and the economy in upheaval, business has been tough for most catalogers lately. This month I’ll focus on several ideas to improve your bottom line. Although it’s always important to stay focused on long-term growth and strategic development of your business, some of you obviously will have to take action now to ensure short-term profitability. The following suggestions may produce only a temporary increase in your profitability, however, so be cautious about any potential impact down the road. Cut Cautiously 1. Improve your margins. The No. 1 expense line on your profit-and-loss statement (P&L) most likely is cost of goods.
A large portion of your catalog’s success is in the hands of its merchants. They are, after all, the ones responsible for finding, developing, pricing, placing, analyzing and ensuring delivery of all those great products you offer. Of course, other staffers are important, too. Success comes from the contributions made by all team members. But I believe special attention should be paid when hiring or developing merchants since they’ll be integral to your success. This month I’ll examine the key traits to look for in merchants. Analytical Ability The most effective merchant is skewed more heavily toward the analytical side than the intuition
As a cataloger, you must comply with several regulations. Yet I often encounter catalogers who unknowingly do not comply with Federal Trade Commission (FTC) and other regulatory agencies’ rules. The following is an overview of the major regulations to follow when developing your merchandising, creative and operational guidelines. Remember, all of these rules apply to both your print and online catalog operations. FTC’s Mail Order Merchandise Rule This law covers the representation you make regarding merchandise and when customers will get the products. And it covers appropriate remedies when those expressed representations aren’t met. Substitutions. This is an area in which I
By Phil Minix Handle with care. Here's how. (960 words) Many catalog managers have an idea of what they want their brand to be, only to learn through trial and error that what they want it to be may not be what it is. Likewise, in an effort to deliver something exciting to a catalog client, many creative agencies suggest remaking a brand to become more appealing to a different audience (e.g., younger, hipper, wealthier). Certainly, there may be legitimate reasons to redo your brand, but understand that it's a difficult and complex process requiring thought and expertise
Many catalog managers have an idea of what they want their brand to be, only to learn through trial and error that what they want it to be may not be what it is. Likewise, in an effort to deliver something exciting to a catalog client, many creative agencies suggest remaking a brand to become more appealing to a different audience (e.g., younger, hipper, wealthier). Certainly, there may be legitimate reasons to redo your brand, but understand that it’s a difficult and complex process requiring thought and expertise to execute. Making an abrupt change and unveiling a new creative or merchandising concept could
The most successful catalog merchants have learned to focus their merchandise concept and offerings. Even a general merchandise cataloger that sells products in several major categories learns there must be a focus to what it sells (e.g., value, credit, lifestyle). Consumers have a “mental filing cabinet” in which they store retail and catalog brand names. They organize the information by subject (e.g., type of product, type of store), not by company name. So customers must be able to put a label on your catalog to know where to “file” it. If they can’t determine that, or if they don’t have affinity
