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Why Niche Marketing is the Best Way to Make Money in Mail Order

Over fifteen years ago, one of my earliest sales mentors said to me: when everybody's your customer, nobody's your customer. I wrestled with that for a while before appreciating its profound importance. I appreciate it a little more as each year passes. It could be worth a great deal to you, too.

I'm going to use myself as an example. In one of my businesses, my mail order publishing business, we publish and market books, cassettes, newsletters and other "information products" on entrepreneurial, marketing and self-improvement topics, and we suffer mightily from this very problem: just about everybody COULD be our customer. This makes the initial cost of finding and obtaining a new customer very high. This requires a sizable investment in getting new customers. We have to either buy expensive advertising in large circulation magazines, newspapers or go on television or rent other company's buyers and subscribers lists - and we do all those things - but, because of the costs and investments involved, we grow slowly.

But, in one division of our business, we publish and market very specialized business materials for chiropractors, and that part of our business is significantly more profitable and significantly less capital intensive than the broader publishing business. Why? Because there are only 38,000 chiropractors in the country. Their names and addresses are readily available from directories, Yellow Pages directories, and as a compiled rental list which costs about one third of what a rented list of buyers or subscribers costs. The trade publications they read offer inexpensive advertising.

In the first scenario, I have to invest in advertising just to separate the people who are interested in what we offer from those who are not interested in what we offer. THEN I can invest more in ad and marketing to the now-identified, interested minority. In the second scenario, I get to skip the first investment. Every chiropractor is interested in information to attract more patients.

Because of all this, my advice to most mail-order beginners is to find and capitalize on niche markets.

The $50,000.00-A-Month Home-Based Business

Let me tell you a marvelous, success story about a young man and his wife. Jeff and Peggy Paul first came to one of my $2,995.00 per person Direct Marketing Super Conferences in October, 1991. They came with a project they were failing with, but it had a number of very promising ingredients. Jeff is a former, very successful Certified Financial Planner with unique methods for attracting clients. He has specialized information he can target-market to a specialized, niche market. Given some new direction about packaging and pricing his information, creating a sequence of direct-mail pieces, and an "attack plan" from our conference, Jeff went home and applied what he learned brilliantly: his first month he went from $1,000.00 to $13,000.00 in sales. Then $30,000.00, then over $50,000.00 in sales, in A MONTH from his home-based mail order business.

Now, let me make this point: Jeff is NOT a trained or experienced advertising copywriter or direct marketing expert. He's not a "natural". He has worked hard to learn what he has learned. He'll tell you how much he got from our conferences. But the point is, in a very short time, this young man created a huge financial breakthrough for himself with the very same ideas I'm sharing with you in this article.

Is Jeff Paul a "freak"? No. What he is doing, I believe just about anybody can do. I am currently working with a very successful private detective on a project marketing a "how to attract clients to your detective agency" to his profession; with a very successful real estate agent, marketing a course on how to make $100,000 a year in real estate without "cold prospecting" to other realtors. In each instance, the perfect match of highly specialized information and credibility to a highly specialized niche market exists.

This "match" is what YOU should look for too.

By being able to bypass the "find the ideal, qualified prospective customer" stage, you avoid enormous amounts of expense, capital investment, experimentation and frustration. You minimize your risks. By focusing on a niche market, if you do advertise, you can use small, specialized circulation trade magazines, where small dollars buy big ads. By focusing on a niche market, you can usually get good compiled lists to use for direct-mail at modest cost. And in writing sales letters, brochures and other marketing messages addressed to a niche market you can speak their language, talk about their SPECIFIC needs, interests, experiences and desires. Last, a specialized product sold to a niche market can command a much higher price than a general product sold to a mass market.

Fool's Gold Vs. A Realistic Approach to Mail-Order Success

I will undoubtedly irritate some promoters with this advice, but I believe trying to make it in mail order with other peoples' products and "plans", with products lots of people are advertising and selling, or with ads to the general public is difficult enough to be called fool's gold. This is just not the way to get rich.

Recently, I was consulting, on marketing, with a fellow who owns a small charter airline. After finishing that work, he asked me about mail order. He said that he'd always been fascinated with mail order and was interested in trying it "on the side." He'd sent away for a "plan" from some company, which gave him ads to run and flyers to send out, to sell that company's books: he would get the orders, keep half the money, send half to the company. and they would fulfill the orders -- he didn't even have to have any inventory. He wanted to know what I thought about all that.

I bluntly told him that he would lose money running ads or mailing circulars to sell something he only had a 50% discount, ie. 100% mark-up on. He would generate SOME orders, so the other company would make money, but he would lose money in the process.... He was shocked and disappointed.

With rare exception, you need at least a 4x (400%) to 8x (800%) mark-up on anything you are going to sell by running ads or using direct-mail. If it costs you $1.00. you can NOT sell it for $2.00 and make a profit. (You CAN use these dropship situations, with 50% discounts, as secondary offers, sold by you to your established customers, through literature packed in with shipments, in "big mails", in catalogs, where your marketing cost is much lower).

Your "lead products" need to give you a 4x to 8x, or higher, mark-up. To get that, you need to create and publish or produce your own, original proprietary products.

With that in mind, my "quickie prescription" for the airline fellow was to focus on his best available niche markets with his own, original, specialized product. This gentleman had done it all: had a crop-dusting business, run a charter airline, a flying school, now hired out to fly over oil spills and apply dispersant chemicals. I told him: there must be a large number of ex-military pilots, retired pilots, pilots who've lost their jobs, thanks to the airline industry's bankruptcies and down-sizing, even amateur pilots who'd like to know a lot of the things you know -- like how to buy used airplanes, fix them up at the lowest possible cost and maintain them; how to build a crop-dusting business; how to make money with charters, etc., etc. And there are probably small circulation magazines these folks read. Clubs they belong to, with directories you could get your hands on. So, you could write a manual or manuals, reports, booklets, record audio tapes, make a video tape, and sell your "experience" to this niche market.

My "quickie prescription" for this is a realistic approach to making it in mail order. Maybe it should be your prescription too.

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