Dead Battery is Not an Option

Time after time, there are piled up electronics at the family. Digital cameras, digital camcorders, cell phones, laptops, netbooks…Even my nine years boy had his own everything. Last summer, my oldest son’ laptop battery was not working; he desperately wanted to finish her assignment somewhere else mobile. We spent a quarter price of his laptop to buy him a new laptop battery. I hate to be a complaint mom. We already had three cell phone batteries and two laptop batteries changed. My daughter kept reminding me her digital cameras batteries needs a replacement.

My colleagues have the same experience, going up and down looking for affordable batteries. We are so shocked about how affordable our electronics, how much cost of our electronic batteries at nearby retailing store. Our office plus employees and their families need more than two dozen batteries for each everything we own. We are wondering if we can get our hands on electronic batteries wholesale. One thing for sure is we need electronic batteries wholesalers not the retailers.

Recently we did our homework on searching batteries supplies. And we got something online, unexpected. We thought we could find something at the town. Anywhere, this is drop shippers wholesale site – www.DropShippers.co.za, they sell a lot of cheap batteries for electronics. “Cheap batteries” under my calculation, I can’t see their wholesale price, they only offer the batteries market price and its profit margins. Thanks to keep up good mathematics at school, the wholesale batteries price is a piece of cake. While I see the site catch on Google says I can buy one piece battery at wholesale price, I think I will definitely try to buy one first for my daughter’ unlucky digital camera. Hope things are going to work well. On the DropShippers SA website, they say retailers are welcome to sign up, while I am a public buyer, since there is no limitation on the definition of retailer, I will try to sign up for my colleges, my family and our office for cheap electronic batteries we want so long.

Dealing in coins and medals is, of course, a matter of both buying and selling. Unlike retailing, where goods pass from manufacturer to wholesaler to mail order dealer to the public, the coin and medal business is a ping-pong game between dealer and public, goods moving from the public to the dealer and then back again from the dealer to the public. Sometimes dealers trade among themselves, and sometimes indeed the public do, and there are auctions at which all the combinations of dealer to dealer, dealer to public, public to dealer, and public to public may be found. In the main, however, the coin and medal business is from public to dealer and back again, and the mail order dealer must be able to get his prices right when both buying and selling.

Unlike the retailer of normal consumer products, the dealer can’t establish what the trade price is and then work out his own selling price accordingly, confident that he can always pick up further supplies at a known price if he gets a sudden rush of orders. If the coin and medal dealer gets a sudden rush of orders for a given item, he is likely to find himself having to buy in extra stock at a premium. The dealer has to perform a delicate balancing act if he is to pitch his selling prices attractively and yet cover his costs and show a profit. The balancing act is made the more difficult by the inevitable delays between placing advertising and having it published, and between drafting price- lists and having them printed. And yet if you are knowledgeable and able to deal shrewdly, coin and medal dealing can make a profitable mail order business.

Many people live within reach of a bookshop, and most people live within reach of a shop selling books, but shops of both kinds necessarily cater for the general interest. It is very difficult for the mail order bookseller to compete with the shops for the sale of the most popular titles; the Net Book Agreement ensures that most books are sold at fixed prices determined by the publishers, and so have to be sold for the same price whether the seller is a high street city bookshop or a one-man mail trader operating out of his garden shed. Furthermore, the discount publishers usually allow to booksellers is too small to support a mail order operation, being about a third of the retail price rather than the two-thirds that the mail trader typically needs.

However, mail order is worth thinking about for books of specialist interest, ie ones that are not normally found on the shelves of the high street shops, provided that you can get your advertising to the specialist market and there is a sufficient number of buyers in the market and a sufficient number of titles that you can offer them.

Buying and selling secondhand books within a specialist area is also a mail order possibility, as is the trade in remainders (ie publishers‘ unwanted stock sold off to the trade at low prices and not subject to any kind of resale price maintenance).

Books are easy to pack, easy to mail, and with no working parts to go wrong. Follow-up possibilities are good: more of the same. Keep your customers posted with your latest catalogues.

Most mail ordering bookselling is in fact undertaken by publishers direct selling their own titles. To enter the market by this route, you need to have a good number of titles, and the confidence — and money — to have them printed ready to sell by mail before you have any evidence whether they will sell at all. One possible approach is to start by selling books of similar interest published by other people; then once you are sure that the market exists and you can reach it, you can start publishing your own titles, and one by one substitute your own books for those of other publishers on your list.

Calculators

An enormous variety of calculators is available, some little bigger than credit cards, others large enough to be convenient for desktop work, some that also tell the time, play tunes, print calculations, and so on. At the top end of the market are the programmable calculators, which might fairly be regarded as the bottom end of the computer market, but at the more humble level there are low-priced calculators offering a range of functions to meet most needs, mathematical, scientific, financial, or just plain old-fashioned adding, subtracting, multiplying and dividing.

Most calculators are small, lightweight and easy to mail. The price/weight ratio is favourable. Though calculators can go wrong after sale, most are well made and reliable, and the virtual absence of mechanical parts, except in the printing models, means in practice that most calculators live out a useful life without anything ever going wrong.

Although calculators are widely available, most are sold in a take-it-or-leave-it fashion by shops whose assistants frequently understand little of the capabilities and applications of the products they sell. This is where the mail trader can score. Produce sales literature that lovingly specifies every last thing that the calculator can do, and the way it does it. Give worked examples of different calculations, showing how the problems would be keyed into the machine and how the answers would be displayed.

Use either display advertising for off-the-page selling or classified advertising for two-stage selling.

There are many opportunities for follow-up sales to satisfied customers: more complicated calculators, other microchip-based devices — electronic games, home computers, clocks, watches, and so on. You can also follow up with items of related interest; for example, someone buying a calculator with a number of specifically business-type functions could well be amenable to offers of other business equipment, such as typewriters, telephones, photocopiers.

The mail order appeal of audio equipment is as for many other items which need to be used by the customer before he knows it has the qualities he really wants. Buying any sort of audio equipment in a high street shop is always a lottery: it’s easy to judge which machines look good and have the range of features one seeks, but judging the crucial quality of sound is virtually impossible in the noisy, bustling environment of a shop. The essence of the mail order appeal is Try it in the quiet of your home; return it if dissatisfied.

There is an enormous range of audio equipment on the market, some of it very compact and lightweight and therefore easy to handle and mail, with a good price/weight ratio. Personal stereos are worth considering as particularly convenient to deal with, but larger and heavier equipment need not be ruled out as it is usually well packed by manufacturers and should not suffer in transit unless deliberately mishandled.

Follow-up possibilities include records for record players; cassettes, blank and pre-recorded, for cassette players; and accessories — headphones, extension speakers etc — for everything.

Bags and cases

Holdalls, handbags, briefcases, shoulder bags, suitcases etc are widely available in the shops, so the mail trader must look for some special selling feature in the items he plans to promote. Concentrate on a single item or set of items in your advertising which, ideally, should be illustrated. Look for items with a large number of useful features to which your advertising can draw attention, such things as special pockets for credit cards, passport, cheque book; well-concealed and zipped pockets for cash; cases that can open out at need to form larger cases; cases that can fold down to pocket size when not in use; and so on.

Though some of the large cases are bulky, none is difficult to mail or needs very much packing for secure transit. Sets of cases can often be packed one inside another, thus simplifying despatch.

You can lift your advertising pitch out of the rut by offering to have the owner’s initials embossed on the product. Set up an arrangement with a local firm to do this work for you quickly and at no great cost, and allow for that cost in your all-in price to the customer so that you can offer personalised luggage for no more than the price of the luggage itself.

While most people have only a limited need for large travelling cases, smaller items like handbags, for example, have a strong fashion element to them, and follow-up sales of other designs should be possible.

Bedding

Plain sheets, fitted sheets, pillow cases, blankets, continental

Quilts, eiderdowns — every household has a number of sets of bedding, and though these items are not bought frequently by any given household, the number of households in the market at any one time is very large and spread over the entire population.

Though some of the items are bulky, all are easy to handle and to pack, and short of direct vandalism are virtually damage- proof in transit. Provided you deal only in products of good quality, after-sales problems should be minimal.

The price/weight ratio is acceptable and the prices of the items high enough to justify the cost of a well-mounted advertising campaign. While all items can be sold singly, complete matching sets make attractive mail order offers either as gifts — to newly-weds and others setting up home for the first time — or as necessary items for the buyer’s own use.

Follow-up items include other household textiles and fabrics, and indeed all other items of general household interest.

Money-back guarantee

This is one of the phrases that mail order has given to the English language — and one it can well be proud of. It is quite extraordinary to what lengths high street shops will sometimes go to avoid refunding to dissatisfied customers. Here at least mail order shows the way. It may be a commonplace of mail order advertising; BCAP and the MOPS may require it whether it’s stated or not; the general public may expect it as a matter of course. But still, always mention the money-back guarantee. You’re going to make refunds to dissatisfied customers anyway, so why not say so? The words are comforting to prospective customers, and their use is one of the simplest ways of attempting to turn ditherers into purchasers.

Free offers

Offering the purchaser something additional to the main product at no extra cost can be a powerful inducement to buy. BCSPP warns about the possible misuse of the word ‘gift’, and both it and BCAP require that anything described as `free‘ should be genuinely so, and that the price of a related product should not be increased in order for the ‘free‘ offer to be made.

However, we all know that nothing in life is free — somebody has to pay for it; and in all businesses except those that go bust, that `somebody’ is the customer. If you build the free gift into your advertised offer from the start, you will be able to pitch your product price accordingly without giving offence to anyone. If you add the free gift at a later stage, as a refinement to your offer, you should hold your product price steady, and aim to recoup the increased costs — and indeed enhance your profits — from the additional sales generated by the inducement.

While all markets are different, free offers work best if they have a genuine appeal to the purchaser of the main product. A piece of jewellery offered to purchasers of handbags, or blank cassettes with cassette recorders are the sort of offers to consider. Some advertisers seem to succeed with seductive offers of ‘mystery’ free gifts; and although the mystery, once revealed, is frequently trivial and disappointing — a packet of needles or a plastic comb are typical — the promise still retains its allure for some purchasers. Study the other advertisers in your own market and see what they’re up to.

Limited offers

Most mail order purchases are made on impulse. Your customers buy your product not because they have reflected long and hard on the matter, and have got up that morning thinking, ‘Right, today’s the day I’m going to send off for one of those Whatsits’; it doesn’t work like that at all. Your advertising forces itself upon the prospect’s attention, either because it happens to be on the page of the paper he’s looking at, or because it’s something that’s just dropped through the door. If your sales message interests him at all, his most likely response is to think that he might do something about it later; but ‘later’ almost never comes. Other things catch his attention, and your advertised offer is forgotten. If it is to succeed, it must succeed now.

Whatever the limit, it must be a genuine one; and that makes it something of a two-edged sword. While it may effectively create a sense of urgency, and thus produce a number of sales that might otherwise have been lost, it may also prematurely kill off the ad so that anyone noticing it for the first time after the deadline may well be discouraged from ordering anything at all.

to be continued

On balance, it is usually better to identify the p&p charge separately. In display advertising and illustrated sales literature you can have the best of both worlds by featuring the product price prominently in the main part of your sales message, with the p&p charge appropriately and less discouragingly included in the ordering instructions.

Payment terms

The easier and less risky you can make it for your customers to pay, the more sales you can expect. Unfortunately, anything that makes your payment terms more attractive to your customers also makes them less attractive to you. So choose with care.

Cash with order (CWO)

The simplest and, from your point of view, the best payment terms. The customer sends a cheque or postal orders at the time he places his order, so you have his money in your hands before parting with the goods. Postal orders are normally totally secure. If you have any doubts about cheques, allow 10 days after paying them into your bank before despatching the goods; a bad cheque will have bounced by then.

Cash on delivery (COD)

This is safer for your customer, more troublesome for you, and more costly for both of you. The customer places his order either by letter or phone, and pays the postman or other carrier when the goods are delivered; the carrier then remits the payment to you. If you send your goods by post, you have to complete a special form for each package and hand both form and package across a post office counter. If you use the parcel post, you have the normal postage plus the COD fee. If you want to use the letter post, the package will only be accepted as a first-class registered item, which means a registration fee in addition to the first-class postage and the COD fee.

Giving credit

There is little doubt that offering to send goods in advance of payment will boost the number of orders you receive. But there are three tricky problems that credit selling gives rise to: (a) deciding upon the creditworthiness of those who place credit orders; (b) ensuring that you receive the payments due to you; and (c) financing your business while waiting for payments to come in. All three problems can be solved, but only at the cost of extra business organisation and extra money. Wait till your business is well established before trying to weigh up the advantage of supplying on credit against the disadvantage of having to underwrite the risk.

On approval. In effect all mail order goods are sent on approval. BCAP, for example, stipulates that purchasers should be able to return goods for refund within seven days of receipt. However, expressly advertising to supply goods on approval is generally understood to mean that you will supply them in advance of payment; as already indicated, that is probably not a good system for you in the early days.

Accepting credit cards

Credit cards are attractive alike to buyer and seller. They permit a customer to order by letter or phone, the credit card company guaranteeing the seller that payment will be made, while at the same time affording the buyer some degree of security against the seller‘s possible default. Additionally, of course, the buyer enjoys the opportunity of making purchases beyond his immediate cash resources, and if he does so, the seller finds that rather enjoyable too.

Barclaycard and Access alone have something like 14 million cardholders between them, a very sizeable section of any seller‘s market.

But, of course, there are difficulties for the new mail trader. Before accepting you into their schemes, the credit card companies normally look for a business track record of at least a year. They will probably not be too happy if individual transactions are typically less than £10, or if your total expected volume of credit card business is below about £4000 a year. If they do accept you, you will have to pay a joining fee of about £50 and a commission of anything up to 4.5 per cent of your credit card sales.

Treat all the above figures as rough guidelines only; in all cases it comes down to a matter of negotiation between you and the companies. But as to whether the schemes are worth joining if you can, the unqualified answer must be: yes.

Part payments

This is a compromise between CWO and credit, and the comments made above about those two payment terms apply here also. The customer sends only part of the purchase price with his order, undertaking to pay the balance within a certain period after receiving the goods. This makes the transaction seem less risky to the customer, and so encourages him to send for something he might be hesitant to order on full CWO terms. By the same token, of course, it is more risky for you. If you offer such terms, you should ensure that the initial payment at least equals your cost price and delivery expenses so that if the customer defaults on later payments, you will not be financially worse off than if he had not ordered at all.

This is yet another crude rule of thumb, offered for your use only until you have actual experience and actual results to guide you. So, for example, assume that a £100 advertisement will produce at most 100 sales, and possibly, or even probably, far fewer, depending upon the appeal of your offer and the selling price. If your gross profit margin of two- thirds would not adequately cover your advertising cost, overheads and desired net profit on a sale of 100 items, then pitch your price at a different level or look for a different product.

Most carriers charge more for their services than the Post Office; and the Post Office has a rate scale that increases with weight, and a maximum weight for parcels of 25kg. For higher weights than this you are obliged to use non-Post Office carriers. One way or another, the heavier your product, the more it will cost to despatch.

Whether you separately identify delivery cost in your advertising or embody it in a so-called delivery-free product price, it forms an important element in the mail order calculation, and it must be considered at a very early stage in your product search.

Ideally, delivery cost should be only a small addition to the product price — preferably not more than about 15 per cent — if it is not to put customers off. The higher the price of the product, the less you need to worry about weight; the lower the price, the more important it is.

Note that it is price/weight ratio that matters, not cost/weight ratio. It can well happen, especially if you are the manufacturer, that the cost to you of the product is lower than the cost of shipping it. That doesn’t matter. The figures that have to be weighed against each other are the price the customer pays for the product itself compared with the amount he has to pay to get the product delivered.

How is your profit margin? Are you profit earner?

Most people new to retailing experience a mild shock when they first learn the prices at which goods change hands within the trade compared to the prices at which they are sold to the public. It seems that traders must be making fortunes. Typically, for example, a book selling in the shops for £9 may be available within the trade for £6, or a TV set selling for £250 may have a trade price of no more than £180. With such profit margins, the beginner is tempted to believe he could make his first million in a year at most. It isn’t so, of course. The profit margins illustrated above, though fairly typical, are only gross profit margins. The trader’s real profit — his net profit — is not the simple difference between his selling price and his buying price, but between his selling price on the one hand and his buying price, advertising costs, rent, rates, wages bill, stationery, postage, insurance, heating, lighting, telephone, accountancy, bank charges, interest charges, equipment purchase and maintenance and other overhead costs on the other.

The 3:1 ratio

The new mail trader operating in a small way, and possibly running his business from home, may be spared some of these costs, but advertising and shipping costs alone can be heavy, and the gross profit margin must be large enough to cover these costs and still leave a net profit. The conventional wisdom is that about a third of the mail order selling price is needed to meet the cost of advertising the product. This means that just to break even on your advertising, you probably need a 50 per cent mark-up — that is, a selling price half as much again as your buying price. For example, buying for £6 and selling for £9 will at best allow you to cover your advertising costs but nothing more. Buy for £6 and sell for £8, and you can confidently expect to lose money.

This is, of course, a crude generalisation, and any actual set of results may contradict it. But in the absence of specific evidence with a particular product, earmark a third of your selling price to pay for your advertising.

What sort of gross profit margin, then, are you looking for? Again, the generalisation is crude, but something like a two- thirds gross profit margin is desirable if you are to have a realistic chance of making a net profit. One-third of the selling price, as already suggested, will hopefully cover your advertising cost, and another third will cover everything else and give you a chance of being left with a profit.

For example, if you’re buying for £6, you must consider selling for not less than £18. That may look like an enormous profit, but it isn’t. Most of the ‘profit‘ will go in paying for the promotion, processing the enquiries, and fulfilling the orders.

It comes to this: your selling price will probably need to be not less than three times your buying price if you are aiming to make an immediate net profit from your advertising. This is the 3:1 ratio to keep in mind as you assess likely products. If you’re thinking of dealing in Whatsits, and they are typically being retailed at £12, you can see at once that you can’t afford to pay more than £4 yourself. And again: if you manufacture something yourself for £10, you will probably need to sell it for £30 or more to have a chance of making a profit, and if £30 looks ridiculously high as a retail price — well, back to the drawing board.

Excellence or adequacy?

Because advertising is very well suited to listing the factual specifications of a product but poorly suited to conveying an accurate idea of its quality, you should prefer a product with an impressive number of listable features rather than one which you personally judge to have a high but unspecifiable quality.

Your customers will buy on price, because that is measurable in advance; quality becomes a significant factor only after purchase — that is, in determining whether the sold goods stay sold, and whether customers are satisfied^,‘ enough to make further purchases from you in the future. Just by reading the ads, anyone can see that a £5 product is cheaper than a £7 product. What no one can tell from the ads is whether the dearer product is better designed, better crafted or made from more reliable materials.

What you’re looking for, then, is a product which has the highest quality consistent with the lowest price. Quality and cheapness are characteristics pulling in opposite directions, and inevitably you must compromise. If very high quality means very high price, customers may never buy the product in the first place. If very low price means very low quality, you may well make a large number of sales, followed, unfortunately, by a large number of returns for refund. Somewhere between the two extremes is the target to aim for: a price that is low enough and a quality that is high enough. In other words, quality must be adequate. You will find that a well made item retailing at £5 is easier to sell than an excellently made one retailing at £7.

You buy Product A for £6 and sell it for £9. Profit: £3. You buy Product B for £2 and sell it for £7. Profit: £5.

That elementary arithmetic is easily overlooked. Of course, you will want to think of your possible selling price as you consider different products, but you must also keep in mind the profit margin that the product offers. The selling price matters to your customers; the profit margin matters to you.

Price is a major factor in any selling operation. The lower the price, the more sales you can expect to make, though whether the increased sales lead to increased profits depends upon the make-up of the selling price. For example, if by keener purchasing you reduce your cost from £3 to £2 an item, you can reduce your selling price from, say, £9 to £8, and still make the same number of pounds profit per item sold, with the chance of increasing your number of sales. By contrast, lowering your price from £9 to £8, while still purchasing for £3, must reduce your profit per item, and only testing the market will show whether your lower price leads to a sufficiently increased number of sales to compensate for the reduced profit margin.

The narrow competition

As far as product choice is concerned, you must be able to price competitively, both in competition with other mail order dealers and with the shop trade. Few people will order by post if they can pick up a similar product at a similar price on a local shopping expedition.

The broad competition

Bear in mind also that you’re just one of many people trying to get the public to part with its money. You’re therefore in competition with all other traders, not just those dealing in similar products to your own. People only have a limited amount of disposable cash. Anything spent on booking a holiday in Spain is not available for buying a new wheelbarrow; anything spent on a new wheelbarrow is not available for a new pair of shoes; anything spent on shoes is not available for a crate of beer — and so on. When customers buy your product, they are at the same time denying themselves very different but doubtless equally appealing products from someone else. The less painful you can make this denial, the more disposed people will be to buy from you.

Easing the pain of purchase

Assure the customer that he is not making an irrevocable commitment to your product: if he finds he doesn’t like it, he can return it for full refund. This money-back guarantee helps the customer to feel that he is not really making a final choice: if he is disappointed with the binoculars he buys from you, he can always get his money back and buy a digital watch from someone else.

Another way of easing the pain of purchase is by price. If the price of your product is low enough, the customer may feel it to be only an incidental expenditure that barely influences his other possible purchases at all. But how low is low? The executive on a five figure salary will not have the same view of what constitutes incidental expenditure as a schoolgirl doing a Saturday job in the local bread shop. But most prospective mail order customers would probably consider anything under £5 as a minor outlay, and anything up to £10 as not terribly significant. That defines the price range in which it is easiest to sell.