Mail Order Business: Features, Advantages, and Disadvantages

Mail order business is a unique form of retailing conducted through postal services. It involves the direct sale of goods to consumers

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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.

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Features of Mail Order Business

A Mailbox. Image Credit: 杨 宏博 on Unsplash.
  1. Postal Transactions: The core of mail order business is carried out through the postal service.
  2. Intensive Advertising: Extensive advertising efforts are employed to attract customers to purchase remotely.
  3. Payment Methods: Cash With Order (C.W.O.) and Cash On Delivery (C.O.D.) are the primary payment methods.
  4. Warehousing: Large warehouses are required to store and manage inventory.
  5. Agents’ Involvement: Mail order business can be conducted through agents who facilitate transactions.
  6. Limited Workforce: Few workers are needed to operate a mail order business effectively.

Read: Differences Between a Wholesaler and a Retailer

Types of Mail Order Business

  1. Manufacturers Mail Order Business: Manufacturers bypass intermediaries and directly sell to the public.
  2. Department Stores Mail Order Business: Department stores engage in mail order business to complement their brick-and-mortar operations.
  3. Specialist Mail Order Business: Retail groups specialize in mail order services to cater to specific consumer niches.

Advantages of Mail Order Business

  1. Direct Sales: Goods are sold directly to consumers.
  2. Operational Flexibility: The business can operate from a warehouse, eliminating the need for a physical store.
  3. Cost Efficiency: Minimal expenses for fittings and equipment are required.
  4. Bulk Purchasing: Direct bulk purchases from manufacturers lead to reduced rates.
  5. Limited Staff Requirement: Few sales assistants are needed for operations.
  6. Wide Reach: Customers from various locations can be reached.
  7. Reduced Risk of Bad Debt: C.O.D. and C.W.O. systems minimize the risk of non-payment.
  8. Quality Assurance: Quality is guaranteed through the C.O.D. method.
See also  Department Stores: Features, Advantages and Disadvantages

Disadvantages of Mail Order Business

  1. Expensive Advertising: Advertising for mail order business can be costly.
  2. Inefficient Postal Services: In areas with inefficient postal services, the business may not function well.
  3. High Operational Costs: Mail order business can be financially demanding.
  4. Limited Patronage: The business may not attract a high level of customer interest.
  5. Elitist Nature: Mail order business might cater primarily to certain segments of the population.
  6. Risk of Missing Goods: The remote nature of transactions may result in cases of missing goods.
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