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It's in the mail - successful mail order companies - Cover Story

Entrepreneur, Feb, 1997 by Heather Page, Debra Phillips

How mail order can boost your bottom line

Welcome Addition

Making your business more profitable with mail order

For years, the J.W. Renfroe Pecan Co. in Pensacola, Florida, existed solely as a wholesale pecan dealer. But when times got tough in the early '70s, the company began looking for other revenue sources. In 1972, it opened a retail location to sell its premium pecans directly to consumers. And in 1976, the owners purchased a small catalog company and began offering their pecans and pecan-related products through the mail.

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The move wasn't nuts: During the busy holiday season, the J.W. Renfroe Pecan Co. draws hundreds of orders for its chocolate-covered, spiced and glazed pecans. While the family business is still primarily wholesale, chairman John W. Renfroe estimates the mail order side of the business now accounts for roughly 15 percent of total sales.

Adding mail order to your existing company doesn't have to be a complicated business. "Think of mail order as just another way of doing business," says John Schulte, chief manager of the National Mail Order Association. "It's really just another method of selling, marketing, advertising and promoting."

The first step to consider? Developing a complete database of your existing customers, says Schulte. In addition to starting your mailing list, the database can also be useful for other things, such as determining which best-selling items to include in a catalog or zeroing in on your most loyal customers to offer them special promotions.

When building your database, err on the side of collecting too much information. A clothing store, for example, might want to consider tracking a customer's name, address, telephone number, amount purchased, size, color, product description and anything else you deem useful. Systems should also be in place to make sure all entries are uniform (such as all capital letters or no capital letters) and that no duplicates are entered.

As for catalogs, the best advice is to start small. It's better to test the waters with just a few products directly related to your core business, says Schulte. Then you can move up to a larger product selection and a snazzier mail piece. It took years for the J.W. Renfroe Pecan Co. to grow from a two-page black and-white mailing to its cur rent 16-page color catalog. "We try not to be too sophisticated," says Renfroe.

Once you've made the commitment to developing a mail order business, be sure to back it up with the necessary resources, says Schulte. In some cases, this might include finding extra office space or adding personnel to process phone calls and fill orders. Renfroe, for example, eventually built a second facility to support approximately 40 full-time and temporary personnel who handle calls as well as enter and fill orders.

If you're willing to do it right, chances are you'll find that adding mail order to your existing business boosts sales - and a whole lot more. "More people know about us because of it," says Renfroe, "and the name recognition helps [sell our] product."

Perfect Fit

Physical addictions Inc. wasn't an overnight sensation. On the contrary, the Indiatlantic, Florida-based vitamin wholesaler came close to shutting its doors.

"It was a nightmare for about two years," says co-founder Rick Martis of his and 43-year-old partner Frank Heinze's early entrepreneurial struggles. "But we didn't give up. We kept working really hard."

Happily, the pair's hard work paid off. Former workout partners, Martis and Heinze first flexed their business muscles in 1989 by leasing the vacant store next to their gym. "We had always worked for other [people]," explains Martis, 43, "and were both looking for something to do on our own."

At the outset, says Martis, the idea was to sell vitamins and aerobic gear to the fitness crowd. Exercise enthusiasts though they were, Martis and Heinze had to hit the books to boost their sports nutrition knowledge.

To keep afloat financially, Martis moonlighted in a variety of sales jobs - but even that didn't fully cover expenses. "I had three roommates," he recalls. "I rented out my whole house just to help pay the mortgage."

So what turned the tide? Martis was leafing through classified ads in fitness magazines one day when it occurred to him that Physical Addictions should place a few ads of its own to expand beyond its retail store. "Sure enough, the phone started ringing," says Martis. "We started with two and three orders a day - and we thought that was a big deal."

Big or not, it was enough to keep then-3-year-old Physical Addictions going. And, slowly but surely, Martis and Heinze began to pump up the sales volume. By promising to beat any price, providing free shipping and handling, and, perhaps most critically, using knowledgeable phone operators who could help consumers make educated purchases, Physical Addictions broke $1.4 million in sales in 1995.

Although Physical Addictions still operates its retail store, mail order sales derived from the ads now account for 95 percent of revenues, which reached $2 million in 1996. This year, Martis expects sales of $3 million.

Business Services Industry

It's in the mail - successful mail order companies - Cover Story

Entrepreneur, Feb, 1997 by Heather Page, Debra Phillips

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