Mail Order: Costs and Benefits

Mail Order: Costs and Benefits

Mail order is a distribution method in which customers place orders for goods through a printed or online catalogue. This approach has distinct costs and benefits for businesses. Here's a brief overview:

Costs:

• Catalogues and Advertising Expenses: Creating and distributing catalogues, as well as advertising to attract customers, can be costly. Designing appealing catalogues and marketing campaigns requires financial investment.

• High Levels of Bad Debt: Offering credit facilities to customers can lead to the risk of bad debt, where customers fail to pay for their purchases. This can result in financial losses for the business.

• High Level of Returns: Mail-order businesses often experience a relatively high rate of product returns. Customers may not always be satisfied with their purchases, leading to product returns and associated costs.

Benefits:

• Cost Savings on Shop Rental: Mail order eliminates the need for physical retail locations, saving businesses rental expenses. This can lead to significant cost savings.

• Convenience for Customers: Customers can shop from the comfort of their homes, offering convenience and accessibility. This can attract a broader customer base.

• Credit Facilities: Offering credit facilities can encourage larger purchases, as customers have the flexibility to pay over time. This can boost sales and customer loyalty.