The days of launching a new business from retail premises on the high street are mostly behind us and now you can start trading with minimal upfront costs, by running your business from home.
Mail order used to be about supplying goods to customers who were based in more rural areas and did not have access to the shops selling what they wanted, but the internet has fundamentally changed how we all shop and even if the high street is right on your doorstep, the chances are you are going to look for what you want online.
This is why starting a mail order business from home is such as sound business idea, provided you are offering what people want and give them the level of service that will keep them coming back for more.
Lower cost and higher profits
The basic principle of why mail order can work as a business model for you, is the fact that if you are able to focus on products that are cost-effective for you to obtain and supply, your costs will be lower if you supply them via mail order, meaning you should earn higher profits.
Lower costs and higher profits are what every business sets out to achieve and one of the most effective ways of growing your business and maintaining profit margins is effective customer retention.
Never underestimate the importance of achieving repeat sales through existing customers. Return customers can account for as much as 80% of your sales and because they are returning to you, your marketing costs are much lower than the expenditure associated with finding new customers, so your profit margins should be higher.
Rules and regulations
As with any type of business venture, there are rules and regulations that you need to comply with in order to win the trust of your customers and stay on the right side of the law.
Mail order is covered by distance selling regulations and these apply to selling by mail order and includes all online and telephone selling that involves the sale of goods or services, where there has been no face-to-face contact.
There are several types of businesses that are excluded from the Distance Selling regulations such as business to business sales and sales of financial services or auction sales for example. The vast majority of mail order transactions will be covered by Distance Selling rules and you should therefore make yourself familiar with them.
Returning customers
There are often questions that need answering when it comes to Distance Selling and one of the common questions asked is do the regulations apply if you had face-to-face contact previously and then sell to the customer via mail order?
A typical scenario for this would be to provide a customer with your brochure in person and then receive a subsequent order without seeing them again. This counts as distance selling and it is generally safer to assume that transactions are going to be covered by the regulations rather than not, when it comes to mail order.
Clear information
You will almost certainly be using a site like Merchant Services UK in order to take card payments from customers over the phone or directly via your website and you will need to provide clear information regarding the transaction before they complete the purchase.
Some of the rules to achieve compliance include providing your business name and your postal address, if you are requesting payment in advance.
You should also clearly state the total price and include details of any delivery charges, as well as providing information about their rights to cancel the transaction and what your refund policy is.
New rules came into force in June 2014 that give customers the right to cancel a transaction up to 14 days after the delivery of goods, so make sure your business is set up to comply with all that distance selling involves.
Finding your customers fairly
Customers are of course the lifeblood of any business and you will need to use various marketing methods and initiatives in order to win new customers and raise the profile of your mail order business.
Any advertising you use either online or via mailshots, will have to comply with CAP codes. The Committee of Advertising Practices has been updated to include social media sites like Facebook and it is well worth reading an online version of the code, so that you know how to find your customers fairly.
Launching a mail order business can be very lucrative and rewarding, so make sure you understand the rules that allow you to sell products in this way.
Poppy Hyde works as a personnel director. She loves to write about her experiences online. Her posts can be found mainly on business and entrepreneurial sites.
