Mail order business is a unique form of retailing conducted through postal services. It involves the direct sale of goods to consumers without the need for a physical storefront.
This approach often relies on extensive advertising and can have impact on the role of small-scale retailers. It demonstrates the influence of wholesalers on retail dynamics.
Features of Mail Order Business
- Postal Transactions: The core of mail order business is carried out through the postal service.
- Intensive Advertising: Extensive advertising efforts are employed to attract customers to purchase remotely.
- Payment Methods: Cash With Order (C.W.O.) and Cash On Delivery (C.O.D.) are the primary payment methods.
- Warehousing: Large warehouses are required to store and manage inventory.
- Agents’ Involvement: Mail order business can be conducted through agents who facilitate transactions.
- Limited Workforce: Few workers are needed to operate a mail order business effectively.
Types of Mail Order Business
- Manufacturers Mail Order Business: Manufacturers bypass intermediaries and directly sell to the public.
- Department Stores Mail Order Business: Department stores engage in mail order business to complement their brick-and-mortar operations.
- Specialist Mail Order Business: Retail groups specialize in mail order services to cater to specific consumer niches.
Advantages of Mail Order Business
- Direct Sales: Goods are sold directly to consumers.
- Operational Flexibility: The business can operate from a warehouse, eliminating the need for a physical store.
- Cost Efficiency: Minimal expenses for fittings and equipment are required.
- Bulk Purchasing: Direct bulk purchases from manufacturers lead to reduced rates.
- Limited Staff Requirement: Few sales assistants are needed for operations.
- Wide Reach: Customers from various locations can be reached.
- Reduced Risk of Bad Debt: C.O.D. and C.W.O. systems minimize the risk of non-payment.
- Quality Assurance: Quality is guaranteed through the C.O.D. method.
Disadvantages of Mail Order Business
- Expensive Advertising: Advertising for mail order business can be costly.
- Inefficient Postal Services: In areas with inefficient postal services, the business may not function well.
- High Operational Costs: Mail order business can be financially demanding.
- Limited Patronage: The business may not attract a high level of customer interest.
- Elitist Nature: Mail order business might cater primarily to certain segments of the population.
- Risk of Missing Goods: The remote nature of transactions may result in cases of missing goods.