The Benefits of Catalog Sales For Your Business:
Things to watch out for when selling your product in catalogs.
by Jim Tilberry
www.catalogrep.com
Giving away the farm.
Many catalogs will ask for a multitude of discounts and concessions
before they even place one order. You give them a set price for
your product. But they insist on a lower price. They expect you
to pay freight. They want an "advertising allowance."
They ask for a volume discount, a catalog allowance, and a photography
fee. The requests for concessions go on and on. But beware of this
game. If a catalog truly likes your product, they will usually pick
it up without requiring a ton of concessions.
Being stung by mistakes.
Review a catalog's rules and shipping requirements closely. Mislabeling
your master cartons, shipping late, or failure to follow any of
their vendor requirements could cost you. Penalties are typically
enforced through deductions off invoices. A few deductions here,
a few there, and you can kiss your profit goodbye.
Falling behind with orders.
The only thing worst than having a product no one wants to
buy, is having one that so many people want you can't keep up with
the deluge of orders. If you've never had insomnia, this scenario
is guaranteed to cause it. When thinking about your production needs,
think as optimistically as possible. Make sure you're capable of
handling production if the catalogs are successful with your item.
And always have backup suppliers lined up -- just in case.
Products that boomerang.
Returns from catalogs are an inevitable part of the equation when
figuring out your profit. If you have a good, well-built product
that delivers on its promises, you have little to worry about. However,
high returns are often the first warning sign that there are problems
with your product. It breaks easily when shipped, customers think
it's overpriced, or assembly instructions are confusing. Any number
of issues can be red-flagged by high returns.
Placing your eggs in one basket.
Many catalogs ask for an "exclusive." This agreement guarantees
that the catalog will be the only one carrying your product for
the length of the exclusive. Generally this is not a good deal for
your company. Naturally an exclusive with one company locks you
out of the rest of the market. If you do grant an exclusive, keep
it as short as possible. Six months is plenty of time for an exclusive.
Doing business with deadbeats.
Let's face it, the main reason you do business with a catalog is
so they will pay you for your product. How frustrating it is then
when they don't live up to their end of the deal. And it happens.
Like all businesses that are strapped for cash, when a catalog is
experiencing lean times, they will delay payment to their vendors.
So keep a close eye on when an invoice is due, and don't let them
slide too far past. Any invoice more than a month past due could
indicate trouble. Your best recourse is to hold up shipments to
that catalog until you get paid. You can even ask for payment up
front on new orders.
Credit: Jim Tilberry is President of Tilberry Direct
Marketing. His business specializes in helping inventors and small
companies sell their consumer products through mail order catalogs.
www.catalogrep.com
/ tilberrydm@aol.com
/ 800-413-0679
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