In the Maker’s world, markets, or vending events, are a great way to grow your base of customers and inject some quick cash into your business without the hassle of shipping! Learn about the types of markets and my tricks on finding the best ones!
2017 has been the year of mindset training for me. I've noticed myself falling down the path that I really don't want to be going in, so my book recommendations are rather personal. I know there are so many things that I want to achieve in the coming days, months, and years, so it was imperative that I put myself back into the correct mindset for my goals.
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!
The other day I was posting questions in a business related soap forum asking how others promoted their soap making classes. One of the responses truly surprised me. Having working in associations and using this tactic for nearly 10 years when I wasn't footing the bill, it made perfect sense. Plus, the programs I were selling were worth the acquisition cost. What did the person suggest? Direct Mail.
Here is the breakdown on why this isn't recommended as a marketing tool for the average handmade business without a prospect list.
1 - You have to buy addresses for your list.
To mail via USPS's direct mail feature you can select just the folks in your zip code within certain perimeters. Just for my one zip code, the cost of just postage, is $898.16. Needless to say, by being in the DC area, I'll have a few more zip codes that I will need to add and this cost will go up exponentially.
2 - The cost of the piece to produce
Between the graphic designer, printing, and getting the piece to the post office - it all adds up. I work with a few designers and I would be looking at about $500 to just design the piece. To print the postcards (I would go with a 6"x11" so it stands out more) would add another $547.75 before shipping costs.
Running total so far: $1945.91
3 -The response rate
Mailing cold to a list you've never used before will get low 1% response rate according to the Direct Mail Association. We've mailed to 4,908 houses (see pt 1) so that means 49 people will go to the URL on the direct mail. We can then assume that about 5% of the 49 may purchase something from you or 2.45 people. Using the example of my soap classes, that means 2.45 people may have purchased the $75 class earning me a revenue of $150.
But what did it cost to make that revenue?
Let's go back to our numbers. Between the cost of the addresses and the production costs we are at $1945.91. (We'll be nice and say our .45 of a person is actually a 3rd person so we really made a revenue of $225). We divide 1945.91/3 and that means it cost us $648.64 PER PERSON to make $225.
That's right. It cost $648.64 per person. Now, if I was selling recurring memberships to a gym or birthday services or rides to the moon, this cost-per-acquisition isn't unreasonable. For a small business selling handmade items, this money would be better spent elsewhere.