Using Postcard Marketing

I am an entrepreneur. I own a little business. I have yet to get any customers.

I was evaluating the different possibilities for marketing my little business. The business owns a couple of affiliate websites. I asked some people here on this site if it was legal to use safelist marketing to develop my own safelist. You responded with a notice that that is not a legal method. I even asked my attorney and he told me the exact same thing that you said.

So, now I am asking a similar question but with the content of the question changed: "Is it possible to market the business with Postcard Marketing?"

The idea is to send a lot of postcards at a price of eleven cents each, and then hope for customers and people who want to sign up for my mailing list.

To the best of my knowledge this is a legal plan of action, because sending through the mail is not in the same legal category as email.

Isn't that legally correct? Please tell me.
Leonard GojerCAD Technician/ProgrammerAsked:
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Scott Fell, EE MVEDeveloper & EE ModeratorCommented:
Yes, you can purchase a list of addresses or demographics and send out snail mail.

With any marketing, doing something once is typically does not do any good.  Make sure you have the budget to continually do "something" on an ongoing basis.    

With direct mail, think about what kind of response you need to break even.  I used to spend a lot of time in this realm.  My rule of thumb was if you can break even with 1/10 of 1% of your list making a purchase, it is worth it to use direct mail.   If you send out 5,000 post cards and it costs you $1,500 (30 cents each total) and you can break even from 5 people (you have $300 profit per item) it is worth the gamble.   With that you may also take into account residual/repeat sales.  

It would be good to hear more about your business and perhaps we can give you more detailed advice.
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aadihCommented:
My bad.  Sorry.  :-(

"... Posting links without any accompanying explanation is generally frowned upon. You’re welcome to post links that will help solve the question, but please be sure to include your own summary of each link, and a description of how it applies to the question."

Thanks for your link.  :-)

Now I know. :-)
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aadihCommented:
Yes. Postcard marketing is legal. Many small businesses find in it a low-cost productive way to advertise their product. You can also find many helpful hints, on the Internet,  on how to use postcard marketing effectively.
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Leonard GojerCAD Technician/ProgrammerAuthor Commented:
Thank you for all of your responses.

I'm glad that that is a plan of action that I can take.

Yes, I have to figure out the math of the budget.
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aadihCommented:
Thank you,  lgojer123.

You made me feel better after my serious error.  Much obliged.  :-)
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Leonard GojerCAD Technician/ProgrammerAuthor Commented:
The whole issue with my business is that I work for someone else and this activity that I proposed would be a second job that I perform from home. I am working out the details of how much to invest in the idea and the time and place of the labor tasks, etc... so it won't be until many months from now that I really have a "work-at-home" business.

When somebody opens up a store on the street, (like say "The Gap") they figure out a maximum amount of money to invest in the project, like say six months operating costs, and then if it is exceeded in six months without a profit, they close the business.

I am doing something similar in my calculations. I am trying to see how much of a window of opportunity I should devote to such a venture. Should it be six months? a year? more?
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aadihCommented:
[Understood.]  Thank you for the opportunity to learn about the policy about blind links.

A teacher needs no explanation for his teaching.  :-)

Thank you, padas.
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aadihCommented:
The duration of your effort depends upon many factors: (1) your financial health (2) the capital you'll invest in this venture, and more importantly (3) how does it go in the first few months (1Q).

A new venture, by definition, has uncertainties and adduces an unsettled feeling. The tenacity for purpose is the only antidote, especially in the beginning months when things have a tendency to fluctuation.
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Scott Fell, EE MVEDeveloper & EE ModeratorCommented:
Ok, I remember your past question now.  Think about inbound marketing.   I am not advocating using hubspot but they do a good job talking about what inbound marketing is and they practice what they preach.   http://www.hubspot.com/  Also study how Compendium talks about content marketing http://www.compendium.com/blog/.

Inbound or content marketing is not something you can just turn on and see the fruits of your labor instantly, it takes a lot of time and analytics.   One strategy would be to build up your site over 3 to 6 months and possibly use an online ad network like google adwords to help fill in.  

Because google is placing more emphasis on quality content, it raises the bar.  Most people are adverse to writing good content on a regular basis and opt for an easy route such as copying or buying content.   Google is not giving credit to copied or purchased content.  This means the few people that will take the time to write or hire a good writer can get a head start.  

Good luck!
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Leonard GojerCAD Technician/ProgrammerAuthor Commented:
I have certain skills in my current job, but this is a situation where I am learning new skills.

I am willing to do the work.

Do you think that there is a shareware or spreadsheet program somewhere out there on the internet that is capable of giving true numbers on the type of "six months" answer that you tried to estimate for me?

If such a piece of software did not cost more than $30, I would buy it.
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Leonard GojerCAD Technician/ProgrammerAuthor Commented:
For example, I have textbook on business theory that mentions a mathematical model for computing the hypothetical success of a new company, but the thing that is wrong with it is that is meant to be for a factory business. This type of business is not a factory, so the model has to be adjusted with new equations to make it get the right numbers.
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Scott Fell, EE MVEDeveloper & EE ModeratorCommented:
Whatever is built into that model, there is not going to be one thing to switch to make it work for another type of business.   There are just too many factors.   With manufacturing, there is a lot of science behind things like supply chain management for instance, that I don't think transfers to what you may be trying to do.

After working with a couple hundred small and medium size businesses, one of the common themes I found for being successful as far as marketing is going all in smartly.    Or as Yoda said, "Try not. Do." http://www.youtube.com/watch?v=BQ4yd2W50No.  At the core is a good product.
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Leonard GojerCAD Technician/ProgrammerAuthor Commented:
Here's what I did to make an approximation of the idea: I have a spreadsheet for WACC, (Weighted Average Cost of Capital) that cost me $5. Then I have another spreadsheet for computing the price of the product necessary to break even; it cost me about $15. I put the two together in my personal theory. The result is that it shows the economic proposition that when you have a small business you are supposedly making a profit off of the cost of capital of about 20%, (if the theory is really true). That's the element of profit derived from converting your labor that would otherwise be worth a salary wage in somebody else's business if you did not have a small business. Then, I have to decide if that element of profit is worth the risk of the amounts of money stated in the spreadsheets.
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Scott Fell, EE MVEDeveloper & EE ModeratorCommented:
The amount of profit you are "supposed" to make is as much as the market will bear.  There are averages each industry makes.  Typically the higher volume, higher competition, easier to make money on will have the least profit and those items that are low volume, low competition and require a lot of energy and risk will have the highest profit.

As a small business you should also take into consideration the actual dollars and time it takes to turn your money over and not look at just the percent.    

For selling widgets, 20% seems kind of low to me or maybe if that is your net profit it could be acceptable.  

Working backwards, if your goal is to make $50,000 in the year, you would need to end up with $250,000 in sales using  your 20% theory.  Selling your $15 product for $18.75 means selling 13,333 widgets with a total cost of goods sold just over $200,000.  You will need to have a high turn over in order to have a low initial investment.     One months inventory would cost $16,666.  If you can get very fast turn around from your supplier, you could start with a half month's of inventory but then your shipping costs go up a little.

My guess is the 20% is the net and not gross margin.  In order to end up with a 20% net profit, you will probably have to end up selling your $15 widget for about $30 because you will want to cover your marketing, customers returning items that you can not get credit for from your supplier, credit card fraud/charge backs,  professional (lawyer/accountant) ,  tax's/cost of running your business.  If you are selling that many widgets, you probably will need some help.

This is why I don't think it is worth talking theory until you know what the product is.  From there you can research averages of running that type of business, determine the competition, areas of opportunity.  Beyond what theories and modals show, they typically will not take into consideration what the individual running the show is capable of.    Taking risk = profit.
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