How to start catalog trading?

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Shopping by phone has long been a habitual activity for Western consumers. They won’t waste their time buying needed but well-known items, like gallons of drinking water and breakfast cornflakes, juice boxes, or laundry detergent. Because of this it is enough to go to the Internet or pick up the phone. Consider the last option – phone shopping as an option for your business.

Before you start selling catalogs, you need to do a little research. Most importantly, define your audience and its ability to pay. This can be done in several ways: collect statistics on the purchase of apartments or cars in the city, or watch the buyers in the city supermarket, estimating the average cost of a set of purchases, because the store itself is unlikely to provide you with this information, but you can talk to those buyers you represent with its own potential audience. Only questions should be reasonable because it’s probably clear that the motivation for the behavior of men and women in the store is completely different.

A man will rarely spend significant time shopping and standing in line at the meat products department. Women, on the contrary, are ready to spend their time on this, but are not at all eager to purchase (or rather, pull home) huge bottles of drinking water or juice packages. Ask how they will react to the fact that someone will bring everything
to their doorstep, and how much they are willing to pay extra for such a service. At this stage, your task is to find out what products, how often, and in what quantity your audience is ready to purchase.

Catalog Trading: Pre-Launch Phase

After you decide on the basic concepts of the future business, you can actually start. There are a lot of ways to start, depending on how much you have for the first investment. Consider an option that is close to the minimum, because from it everyone can fantasize about their own business plan, based on the available funds.

First of all, you will need a car, preferably a small van, like a Gazelle. Its purchase will be the most serious item of your expenses in the first months of work. You can paste over the car with a bright logo or the name of your company, information that it is engaged in free delivery of goods, and, most importantly, a telephone. This will surely interest passers-by and will be written to them somewhere on a subconscious level.

The second option is to hire a driver with a private car for a full time job. It will set you back $400, which includes gas and possible repairs.

If the car is your own, then you will need at least one more person as a dispatcher on the phone. At the initial stage, if the funds are not enough, you can limit yourself to a home phone and a relative as a dispatcher. But still try to avoid this option, because later you will have to increase the number of incoming telephone lines and change the number, which is not very desirable in this business.

The next stage of preparation is the compilation of the assortment. This is where in-store customer surveys can come in handy, regarding their preferences and the items they don’t want to carry home from the store themselves. Obviously, in this case, the goods should be standard and easily described (for example, mineral water XXX 0.5 liters or apple juice YYY 1 liter). It is worth focusing on drinks, semi-finished products, packaged confectionery products or alcohol. Try not to mess with perishable or subjective goods, such as vegetables and fruits, boiled sausages or dairy products, because in this case you risk not getting money for the goods.

Catalog trade: Suppliers

The next step after determining the exact range of goods is the search for suppliers. It is better to immediately build your relationship with a wholesale company, from which most of the city’s stores buy products. Perhaps this will not be the only company, but several at once. The main task in communicating with representatives of the wholesaler is to convince them of the seriousness of your intentions and confidence that during the year you will make purchases from them for such amounts that will allow you to qualify for maximum discounts. The second important point of negotiations should be the question of your possible crediting by the wholesaler in the agreed volumes. Shamelessness is quite appropriate here: it may not work the first time, but the issue is, in principle, solvable.

At least at the level of one-day credits (when you come to a wholesaler with a list of ordered goods, collect them on credit, and the next morning, having collected money from yesterday’s customers, pay and collect them again). This will allow you to significantly increase the potential volume of serviced
orders per day, managing with minimal working capital.

Later, as your business develops, when the preferences of buyers become clear in practice, it will be more logical to buy best-selling goods in large enough quantities to last, for example, for a week. Then you will have to think about a small warehouse, and about your own logistics, security, and much more.

Catalog Trading: Pricing

Pricing is a very important process in your business and should be approached with the utmost care. Do not rush to set prices lower than most shops in the city. This is one of the most common mistakes new entrepreneurs make. There are at least two reasons for this. Firstly, you do not enter into conflict with these same stores. On occasion, they will certainly complain to your supplier, accuse you of dumping (or, even worse, suspect the latter of giving you special preferences), and the latter will only have to take retaliatory steps.

Secondly, your customers are not at all the audience that goes around the store after store in search of the best price and is clearly not bought for a discount of a few rubles. All of them are busy and wealthy people, and they simply don’t remember the prices for most products. In addition, if you leave the prices at the store level, buyers will still be grateful for the delivery, which they will perceive as free.

There are many other tricks that can be used to attract buyers. For example, assuming that customers don’t remember all the prices, you can choose two or three popular items and reduce the price only on them. In parallel, you raise the prices of other products, and still, everyone will be sure that you have them lower than others.

Trade by catalogs: Catalog

Finally, the most important part of a new business is the catalog. Showcase your virtual store.

The development of the design of the future catalog should be entrusted to an advertising agency. You will pay for the design once, then you will simply make changes to the layout (changing products or prices), which is much cheaper. An advertising agency can also be entrusted with organizing the printing of the catalog. For the first print run, printing on an A3 sheet is enough, which will only need to be folded correctly: you can get a good eight-page A5 brochure that contains enough headings. Products presented in the catalog should be in pictures (ideally in color), do not try to cram long lists of all the additional products that you offer there, it is better to discuss this by phone.

It is necessary to type up the catalog so that the most important aspects are evident on the first page: free shipping, door-to-door, and super price. This presentation of the material will force the potential client to look inside the catalog, and not get rid of it right at the mailbox.

In the future, you will be able to recoup the cost of printing the catalog by selling advertising there. The catalog can be seen as quite an effective advertising medium due to its decent circulation, long life span (unlike periodical magazines), and attractiveness to a potential audience. The first candidates for the role of potential advertisers in your catalog are the manufacturers of goods that you have included in the catalog.

The circulation of your catalog can be determined only based on the population of the city and the primary research described at the very beginning of the article. The cost of printing depends on the size of the print run – the larger it is, the cheaper the print. But in the first stages, you should not print the catalog in large quantities, since there is a high probability that you will not be able to cope with incoming orders, then the client will be lost almost forever.

And finally, the last step in starting a new business is to distribute the catalog to a potential audience. There are two options here: use an already established free distribution system, like a newspaper delivery service for free ads, or start building such a system yourself. The first option is less time-consuming – all the work is done by a third-party service. But its main disadvantage is the blurring of the target audience – most of your products fall into hands that are completely unnecessary to you, and besides, its implementation is quite difficult to control. The second option, in this sense, is much more effective and strategically more correct – you yourself choose elite housing, company offices, business centers, and expensive shops. Its minus is the cost, both financial and resource. But in this case, organizing your own delivery service,

Well, the last. Remember that retaining a customer is no easier than attracting one. Use all the methods you know and develop new methods to convert your potential customers into regular customers: discounts, discount cards, gifts, everything is in place here.