I think about 99.9% of mail order dealers who have been in business 5 years or longer (myself included) started out thinking mail order was an easy business to get into. I used to lay awake at night calculating all responses I would get to my ad.
"Let's see - if I advertise to 1,000 people I should get a minimum of 10 orders, basing my figures on overall 1% response rate. In addition, if I advertise to 1,000,000 people I should get a minimum of 1,000 orders - using same 1% response rate. It's inevitable, I have to sink all my money into advertising because orders will start pouring in within a week or two."
I even went on to fantasize: "So, if I advertise to 1,000,000 and generate 1,000 orders, and my product sells for only $5 - I will have $5,000.00 coming in within only a few short weeks. It certainly costs less than $5,000 to advertise to a 1,000,000 circulation - so it's a sure thing that I'll make a bunch of money in mail order."
This approach sounds very logical and statistical, but it doesn't happen like that in "real world" of mail order! Well...maybe once in a blue moon, but most of time - it just doesn't happen. It's not always because your offer is bad or price is too high. And it's not always because your mailing list was bad. Often times, reason lies in fact that you and your company are unknown.
But one of most important reasons this statistical data only works well on paper is that most beginners are not skilled in area of TARGET MARKETING. Yes - that word is vital to money your business will make.
Target marketing is when you "know" people you are advertising to. It has nothing to do with product you are selling. For example, I get lots of mailings for products that I have no interest in or need for. Just last week I received a mailing for infant products and a magazine. The products were presented well and were items needed by people who had babies in their household. However, there is no infant at my home and, therefore, I had no interest in products - regardless of how great they were or how little they cost. The mailing went into garbage can.
Another mailing a couple of months ago was a catalog of items I could order if I were a large manufacturing firm. If I had need for disposing of chemical waste, I certainly would have ordered from this company. But their mailing went in trash also. How many times have you got a mailing that went in trash just because it was selling a product or service you have no interest in? See what I mean. If company mailing these catalogs and advertisements would have pre-qualified you or I and target-marketed their items correctly - we would have never received them. It is wasted money for company!