As with any business venture, having a carefully constructed plan is vital for starting a mail order business. The more information that can be compiled and analyzed about the competition, the business plan, how to advertise, and how to grow and develop the business, the better the chances are for success.
Planning AheadBefore starting a mail order business, it’s important to have an overview of how the business will work. What products will the business offer? How much inventory will be necessary to ensure timely delivery to customers? Will the business focus on specialty items, or be more general? From these basic facts, develop a business overview to work from as development moves forward.
Another important element to consider when learning how to start a mail order business is administration. How much can be budgeted for advertising? How much insurance is required for the specific business? All business require accounting professionals to help calculate taxes and salary as well as profit margins. Personnel to drive sales is also important, though at the beginning, while the business is small, need for full-time employees might also remain small or non-existant.
Scoping out the TerrainThe existing climate of the market niche of a starting mail order business is also an important consideration. Some items to consider include:
- What is the existing competition?
- How can a new company find a sustainable niche in the existing market?
- Is the existing market currently growing, shrinking, or staying stable?
- What can a new company do to stand out from the existing field?
- What are the geographic boundaries for the business?
Planning for the FutureAs the mail order business grows, a road map for how to handle the additional challenges is also a vital element to keep the business on track. Sometimes, when a business grows too quickly without a well-built infrastructure, what looks like success can actually lead to failure.
Some things to consider as the business expands and the client base grows:
- Using online tools help reduce the need for additional personnel–for example, taking orders through an online store interface rather than on the phone or via mailed-in orders that need to be processed by hand.
- Using drop shipment or other order processing alternatives to reduce the need for a large warehouse.
- Outsourcing tasks as needed rather than hiring full-time employees to handle intermittent needs. A good example of this kind of approach would be outsourcing IT services rather than hiring an IT staff.