acquisition cost

Why Direct Mail IS the Answer for Handmade Businesses

Wait! Doesn't this contradict your other post about why I shouldn't use direct mail? No, no it doesn't. And here is why.

The only time I've had success with direct mail encouraging orders is when I have a true prospect list that I have honed. Let's use the example of wholesale clients.

I have a list of retailers all over the United States that have seen me at various wholesale shows. I've gotten their contact information by scanning their badges.

No, I do NOT rely on retailers having business cards or try to remember their information. This is a very bad practice I see with a lot of handmade businesses. Don't miss sales because you forgot to write down the store name or State. Use the best practice of scanning badges.

This list of scans means that this person was at my booth space long enough for me to gather their info by ASKING if I could scan their badge. After each wholesale show, these lists of scans are exported, and added to our database of potential retailers. Additionally, our wholesale interest form collects the same information on our website.

I've got quite a list of retailers that have at least heard my name and were interested enough in our products to give me their information.

This is a great list to use for direct mail.

I know that a little effort on my part could pay off in a big way. By mailing to folks on my list, I remind them of who we are, where our next show is, and of any specials I have going on for just our new wholesale clients. It's perfect. Plus, the cost per acquisition is low.

Using the postcard at 6"x11"and printing 200 units front & back, the cost, pre-shipping, is $102.83. Postage for each postcard is $0.49 or $98.

Running total: $200.83

Since this is going to folks I've met before, I'm going to use a photo of our booth on the postcard and design it myself using Canva or another tool. The other side of the post card will be text about the offer. If I were to send this to a designer, my running total would be $700.83.

Direct mail sent to a prospect list that you've been cultivating, has a much higher response rate of 3.7% with equals 7.4 stores with our hypothetical list. Now, because this is a prospect list, I expect 50% of these stores to place an order - if not more. My minimum order is $300. With 3.4 folks purchasing, I expect to earn around $1,200 if they just place a minimum order. Now, this is just on their first purchase. Most stores will order again and again so that $300 purchase can easily catapult into a $600 purchase during the holidays; pushing my revenue up even further. Plus, that for all 3.4 buyers.

My cost of acquisition per each buyer is dependent upon wether I use a designer, and ranges from $59-$206.

For $200 I could have a new wholesale client that orders multiple times? Sign me up!