This remarkable success is typical of many other early mail-order campaigns. Observing these suc cesses, people began to think that anything could be sold by mail, and at relatively small cost. This is not true. Some things cannot be sold profitably by mail, and the cost of making mail sales seems to be steadily rising. Swoboda had conducted his mail-order busi ness for about ten years before he found that the cost of obtaining an inquiry and of converting it into a sale was increasing so greatly that it was no longer wise to rely solely on the advertising and the mail follow-up to close sales; in many cases it was cheaper to send salesmen to get the orders after inquiries had been secured thru advertising.
3. Requirements of mail-order specialty house.— As has been said already, not everything can be sold profitably by mail. In considering the advisability of launching a mail-order specialty business one of the first questions to be asked is, "Are my possible cus tomers near enough to me so that the transportation charges on the smallest unit will not materially affect my price in competition?" When the parcel post was established, many new opportunities were opened for mail-order specialty houses. The specialty shoe house is an example. By shipping by parcel post, one mail-order shoe house found its average cost of transportation was eleven cents a pair, against a previous charge of thirty cents. The difference allowed a good profit and induced many concerns to go into the business. While some advertised in the farm journals, most of them bought special lists of names and then advertised di rectly with catalogs and letters.
The matter of transportation cost, however, is only one of the many expenses to be considered in selling by mail. Most things can be sold by mail if enough money is spent in the process. The great problem of the prospective mail-order advertiser is: "Is there a sufficient margin between the cost to manufacture and the price at which I can sell my goods by mail to pay all the expenses of this kind of selling and still leave me a profit?" Many mail-order campaigns have failed because this question has not been prop erly considered in advance. A manufacturer once at tempted to sell a talking machine attachment by mail for one dollar. His manufacturing cost was less than fifty cents, and he assumed that the difference be tween cost and selling price was ample to cover all expenses, and leave him a good profit besides. He found that it actually cost seventy cents to make each sale ; he was losing twenty cents on every article sold.
4. Influence of style centers.—One of the reasons why people buy wearing apparel by mail is that they feel they get better styles when they buy, sometimes from distant firms, thru the mails than when they buy in their own communities. Because New York is
supposed to originate, or to be the first to import, styles in women's clothing, such mail-order houses as the National Cloak and Suit Company and Bellas, Hess Company do a large business with women all over the United States. The desire to buy in the style centers is responsible for much mail-order buying.
Within ten years one New York mail-order house has built up an exclusive ladies' ready-to-wear mail order business with 2,500,000 customers, and is spend ing over $2,000,000 a year on catalogs and other advertising. This company issues five catalogs—a large one for spring and summer, another large one for fall and winter, and three smaller catalogs for special lines. The large books go out in editions of 2,500,000, and cost $750,000 for each of the two sea sons. Five to ten per cent of the mailing list "dies" every year.
As is usually the case with those who sell by mail, this company gives an absolute guarantee of satisfac tion or money refunded. Only one garment in fifty is returned for alteration or exchange. The average order is for about six dollars' worth of goods.
Style is the first consideration, and the business is built on this principle. Magazine advertisements offer "leaders" at attractive prices in an effort to get orders for the leaders, and thus to establish trade re lations. After this relation has once been established, catalogs are sent to the customers each season. If a customer has not ordered for two seasons, it is cus tomary to drop her name from the list.
5. Costs of mail-order specialty advertising.— There is no other kind of business in which returns from advertising can be so accurately checked as in the business of the mail-order advertiser. By care ful tests he can find out exactly the particular size of space he can most profitably use and the particular appeal and wording of the copy that brings the great est returns. Different sizes of space are experi mented with, and the cost per inquiry and the cost per sale are carefully tabulated for each size. The space that results in the most profitable proportion between cost and returns is then adopted as the stand ard. Every word in the copy is carefully scrutinized. The change of a single word may mean the differ ence between profit and loss. When the advertiser has once found a piece of copy that results in max imum sales, he often uses the copy unchanged as long as it continues to "pull" satisfactorily.