Mail order business is a kind of retail trade wherein business is done through post. The seller gives advertisements in newspapers, etc., and sends catalogues, circulars, etc., to prospective customers.
Buyers place orders through the post. Goods are delivered through Value Payable Parcel (V.P.P.). The seller receives payments through the post office.
From the customer’s viewpoint it may be described as shopping by post. From the seller’s viewpoint it is selling through post.
Mail order business developed in the West during 19th and 20th centuries due to spread of population in far flung areas, high rate of literacy, wide circulation of newspapers, lack of proper local shopping facilities, increasing income of rural people, better postal facilities, facility of money back guarantee, prompt services, etc. In India, mail order business has not become popular due to poverty and illiteracy of people.
With the spread of education and postal facilities and standardization of quality, mail order business has a bright future.
Mail order business is not suitable for all types of goods. Goods having the following characteristics are suitable for mail order business.
(i) Goods that can be understood fully from catalogues and actual inspection of goods are not necessary. Goods those are light in weight but valuable.
(ii) Goods should be durable and not perishable in nature.
(iii) Goods should be in regular demand and reasonably priced.
(iv) Goods should be available in large quantities round the year.
(v) Goods that can be packed and transported without damage or loss.
(vi) Goods should be standardized, branded, and of uniform quality.
(vii) Goods that offer sufficient margin of profit after covering cost of advertising and postage.
Books, magazines, hosiery products, stationery, toys, cutlery, cosmetics, drugs, watches, readymade garments, footwear and small household appliances, etc., are suitable for mail order selling.
Mail order business can be successful under the following conditions:
1. Good postal facilities:
Cheap and efficient postal service must be available in all parts of the country.
2. Large and scattered population:
Mail order business can be successful in a vast country with its population spread over at different areas.
3. Heavy advertising:
Highly developed sense of advertising is essential for growth of mail order business. Regular advertising is necessary to keep the public informed of new arrivals. Advertisements should be clear, detailed, timely and attractive so as to convince the consumers to purchase the advertised goods.
4. Suitable Products:
Mail order business is best suited to products which are standardised and which can be understood fully from the description and which are easily portable.
5. Reasonable prices:
The prices charged must be reasonable. The seller must adopt the attitude of ‘honesty is the best policy’.
6. Money-back guarantee:
Buyers should be given the opportunity to return the goods and get back their money within a reasonable time. This will help to win the confidence of public.
7. Prompt service:
Correspondence must be handled promptly and correctly. Courteous style and timely dispatch of goods are necessary. A proper office organisation is necessary for prompt and efficient service to customers.