Developing Profitable Product Concepts for Starting a Mail Order Business

National Mail Order Association

Developing Profitable Product Concepts

It’s very hard to describe how to develop the merchandising ability of looking at things and automatically seeing how it could be sold. It’s part experience, part learned knowledge, part natural instinct. I can only write examples when they come to me.

Hopefully through example you will learn to relate and assimilate. You must practice your product development skills every day. You have to develop the habit of looking at things in special ways. Like; “how would I sell that?” ...“how could it be improved” ... “could I use it to enhance what I’m currently selling”... “could it be repackaged and sold to a different group of people than it’s being sold to now”... “what could be sold to the people that bought it?” My goal is to make this process a part of your being...an instinct... something that happens automatically, without conscious effort.

Let’s start with this one statement; In direct marketing, as with any business, it’s always best to have as many products as possible in your line that lend themselves to repeat sales, or multiple purchases. For small companies it’s absolutely essential. And you can’t make money for long selling junk.

Here are some examples. My daughter has a charm bracelet; of course she buys charms for it. You see how the charm bracelet lends itself to future sales. You could probably give the bracelet away free, or at very low cost and make your money selling the charms. (Just like giving away a razor and selling the replacement blades.)

You could offer the bracelet free of charge when you agree to buy three more charms in the next year. Or how about, “Charm of the Month?” See what I did? I automatically... without conscious thought...incorporated the negative option sales technique to the product.

By the way, that’s why you should continue to read and learn as much as you can from successful marketing experts, if you didn’t know about the negative option technique*, you wouldn’t know how to apply it to your product would you.

Back to the example. This is also an example of niche marketing. Charms and charm bracelets are a specialty niche, a niche of the jewelry industry. Can you give me an example of a niche in a niche?

What would be a niche in the charm niche? Don’t read further now ... think for a few minutes. What did you come up with?

I came up with animal specialty charms. e.g. “Just Cat Charms,” every breed for the cat enthusiast. It could be dogs, horses, any animal that certain people just love. It could be Saints, Presidents, or Famous Musicians. Want some others? How about...just; boats, cars, states, countries, dolls, or flowers. And there’s more!

See how a simple item that we’ve all seen a thousand times, just expanded into an entire division or business. Residual income, that’s what we want. When you look at things in this way you will learn to develop products that create big and long term profits for your company.

Don’t worry if your ideas sound bazaar. It’s practice that we’re after. And remember, when you brainstorm it is actually a large quantity of ideas you want at first, not quality; refinement comes later, and sometimes the goofiest ideas bring forth big results from stimulating other thoughts and concepts more practical.

I was at a party the other day, and in one of the rooms was three giant wrought iron candle holders, floor models, one was about three feet high, the next a foot taller, and the next another foot taller. They were topped off with big beautiful candles.

The thing is, these candle holders and candles were some of the coolest candle holders I’ve ever seen. I then thought, I bet there’s lots of cool candle holders’ being made, or that could be made. I then noticed that this person had many different candles and holders around the house, some in each room. So then I figured that people that like candles... really like candles... and buy more that just a couple, sometimes a whole house full.

I then figured that there must be many people that love candles. My next thought automatically said catalog, a catalog with nothing but beautiful and wonderful candle holders. Oh, and of course the candles....candles that burn away.

Some final qualifiers to refine your new product concepts. Does the product fill a need, a basic human desire, or enhance a person’s life in some way? Can you readily identify and reach the people that might buy what you have? Is the total number of these prospects large enough to support the investment or business? Can the products be easily delivered and serviced? And last but not least, does it lend itself to repeat or residual sales?

* The Negative Option Technique is where you send monthly product choices and the customer needs to send in the card if they don’t want to buy it. They have to make a negative choice; they have to say no. If they want it, they do nothing and it will be automatically sent. Invented by Maxwell Sackheim to sell books.
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John Schulte is a Small Business Consultant and Direct Marketing Strategist. He is a 30-year veteran of advertising, marketing, publicity, promotions and sales. He is an internationally recognized expert in the areas of mail order, direct mail, cataloging and overall direct marketing. He is one of the few people in the United States that has been certified by a United States Federal Court as a Direct Marketing and Catalog expert, able to act as an expert witness in federally related corporate disputes. John is also president of the National Mail Order Association and author of Direct Marketing Toolkit for Small and Home based Business. This article is an excerpt from this book.

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