If you are looking for ways to distribute your products, catalogs may be an excellent option for you. There are a wide variety of catalogs – from products with universal appeal to specific niches — that can be a natural vehicle to reach your target market. There are a number of these catalog operators who are looking for products that they can include in their publications, and may be willing to work with a small business like you.
However, there are a number of things that you need to watch out for when you sell your items in a catalog:
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.
Recommended Books on Direct Marketing and Mail Order Marketing:
- Successful Direct Marketing Methods
- No B.S. Direct Marketing: The Ultimate No Holds Barred Kick Butt Take No Prisoners Direct Marketing for Non-Direct Marketing Businesses
- How I Made $1,000,000 in Mail Order-and You Can Too!
- Marketing Secrets of a Mail Order Maverick : Stories & Lessons on the Power of Direct Marketing to Start a Successful Business, Create a Brand
- Mail Order Selling: How to Market Almost Anything by Mail (Wiley Small Business Editions)
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