What is Mail Order Business ?

Mail Order Business 

Meaning of Mail Order Business

Some things are produced at a particular place, but their consumers are far away from the place of their production. Goods can be made available to consumers with the help of the middlemen. But in this system, there is no need for any middlemen. The consumer himself purchases the goods through the mail. The consumers are introduced to the goods through advertisement. The interested consumers send their mail orders and they receive their goods through the medium of postal department at their home. While receiving goods the payment is made to the postal department. Sale-purchase including the payment is all done through the mail.


# Definitions of Mail Order Business

(!) According to S.E. Thomas, '' Mail order business may be briefly described from the buyer's point of view as 'shopping by post'.
(!!) According to Asplay and Harkners,'' Mail order business is a retail establishment that receives its order and makes its sales by mail.''
(!!!) According to P.H. Nordstrom, ''Mail order business is the business which sells from catalogs.''

#Features of Mail Order Business

The mail-order business has the following few features:

(1) Trading by Post: In this system, there is no personal contact between the purchaser and the seller because the order is placed and goods are received only through the mail. These orders are supplied through VPP (Value Payable Post).

(2) Cash Trading: Under this system, the customer has to make an immediate cash payment on the receipt of the goods. If the purchaser does not make a payment, the postal department sends the goods back to the seller.

(3) Trade Without Shop: The seller does not need to establish any shop in the market because his trade is carried on through mail. He runs his trade through his workshops and godowns. His address is made known to the buyers through the medium of advertisement.

(4) Less Capital Requirement: Under this system, a business can be started with the help of a little capital. These traders purchase their goods both on credit and in cash but they sell their goods only in cash.

(5) Effective Advertisement: The basis of this trade is an advertisement. Therefore, modern methods of advertisement should be adopted.

(6) Wide Market: The market for this type of trade is very extensive. This trade does not remain confined to just one country. It spreads to foreign countries also.

(7) End of Middlemen: This trade, like the multiple shops, also does not need middlemen. The manufacturers themselves make things available to the consumers.

  • Origin of Mail Order Business

This system originated in the United States of America in 1872. Then it started gaining popularity. These days the system of mail business is found in almost all the countries. The quick development of this type of trade is the outcome of modern advertisement and communication.



Procedure:

The following is the procedure to do mail order business:

(1) Preparation of Mailing List: The retailers of this type of business have got to be more active. The seller is at a distance from the actual consumers. Therefore, he himself has to send information about his own self and his goods to the customers. In this way, the seller prepares a list of possible customers. The names and addresses of these customers are collected with the help of the documents like the telephone directories, trade directories, yearbooks, lists of the members of different clubs and government records, etc.

(2) Regular Advertisement: Regular and effective trading is very important for getting success in the mail-order business. The information about the things to be sold is given by sending price list and printed material. Advertisement is published in the newspapers, on the radio and television. Advertisement is mostly made with the help of mail.

(3) Receipt of Orders: The intending buyers send their orders. On the receipt of orders, the seller makes arrangement for sending the goods.

(4) Execution of Orders: If the seller himself is the manufacturer of things and goods are available in the stock, the supply is made immediately. Otherwise, the arrangement for the preparation of goods is made. If the seller is not the manufacturer, the things are purchased from the market and the supply is made to the consumers. The goods are well packed according to the orders and sent to the post office.



(5) Receiving Payment: The price of goods is received either along with the order or at the time of delivery. All the old and reputed sellers adopt this very system. In such a situation the goods are sent through the registered parcel. The buyers do not send money along with the orders to the new sellers because of the lack of confidence in them. In such a situation things are sent through VPP The customer receives his goods through the post office and makes his payment.

  •  Advantages of Mail Order Business 


This system of retail business benefits both the buyers and the seller. The advantages of the mail-order business can be described in the following way:

Advantages to Customers

The mail-order business confers the following advantages on the customer:
(1) Home Delivery: The facility of home delivery is also available in other systems of retail trade. But under those systems, the customers have to go to the shops to buy goods. In this system, however, one has simply to send an order through mail and get the home delivery of goods.

(2) Availability of Non-available Goods: Those things which are not available to the consumers from the nearby areas can be got from distant places through this system of trade.

(3) Easy Money Arrangement: There is a time gap in the placing of orders and the delivery of goods. This difference is of 8-10 days. The customer can make arrangement for the necessary money during this period.

(4) Price Comparison Possible: Price lists of various things from different sellers are received. A comparative description of these lists can be made and then things of good quality can be purchased at the minimum prices.

(5) Cheap Products: With the elimination of the middlemen, the price also declines which directly benefits the consumers.



Sale, Shopping, Shop, Buy, Retail


(6) Saving of Time: The customers do not have to waste their time in searching out the goods they need because they get all the things at their home.
Advantages to Sellers

The sellers get the following advantages through the mail order business:

(1) Less Capital Requirement: Under this system of retail trade, money is mostly received along with the order. In case it does not happen, it is received with the delivery of goods. Therefore, very little capital is required to run this type of business.

(2) No Expenses on Shop: A trader carrying on trade under this system does not have to purchase a shop in some market does not have to pay any rent either. On the other hand, expenses on decoration and expenditure on sellers are also saved.

(3) Wide Trading Area: Under this system, the work area is not confined to any city or state. It may extend to the whole country or even some foreign countries. This brings benefits to more sales.

(4) No Fear of Bad debts: There is no fear of bad debt because of cash transactions.

(5) No Need of Godowns: Generally, the goods are prepared after the receipt of orders. Therefore, there is no need to manufacture things beforehand and store them in godowns.

(6) Direct Contact with Customers: There is direct contact between the trader and the customer. Therefore, the customer can easily send his complaints and suggestions to the seller.

(7) No Need of Middlemen: Since there is direct contact between the buyer and the seller, there is no need for any middlemen. The amount of commission to be paid to the middlemen is thus saved for the sellers.

(8) Quick Payment: Under this system, the goods are sent through VPP. When the customer receives the VPP, the money reaches the seller within 2-3 days. In this way, the payment is received very quickly.



Ecommerce, Selling Online, Online Sales


  • Disadvantages of Mail Order Business

The buyer and the seller get many advantages. Even then this system of retail trade suffers from many disadvantages which are described below:

(1) Lack of Credit Facility: The basis of this system is sales in cash. Those who want to buy things on credit remain deprived of these services. As a result, the total sales decline.

(2) No Quick Delivery of Goods: A lot of time is consumed in ordering things and getting their delivery. That is why the consumers who require things quickly do not use this system.

(3) The problem in Making Mailing Lists: The sellers write letters to the consumers from the point of view of advertisement. It is difficult to know who can be possible buyers.

(4) More Advertisement Expenses: The basis of this trade is the only advertisement. The advertisement is done on a large scale and in a modern way. So much so the advertisement has to be carried to foreign countries.

(5) Increase in Price: The net price of the things gets inflated because the mail expenses are added to the actual price.


Coupon, Coupons, Discount, Money

(6) Possibility of Fraud: The basis of the mail-order business is an advertisement. Sometimes tricksters mislead the innocent public through advertisement and exploit them. Once the goods sold, there is no facility of returning them in case they turn out to be defective.

(7) No Selection Facility: A thing is generally selected after examining it from various angles but in this trading system the things are not present before the customers. Therefore, there is no facility for a selection of things.

(8) No Facility of Returning Goods: In case the goods are not liked by the customer, there is no facility for returning them.           

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