Reduce Your Direct Selling Expenses
For a consumer catalog company, this ratio should range between 25 percent and 30 percent. For a business-to-business cataloger, a lower ratio in the range of 17 percent to 20 percent is more typical. Rule: The lower your gross margin ratio, the lower your direct selling expense ratio.
In a highly competitive catalog business where name-brand merchandise is sold and prices are easily compared, margins tend to be low. But demand generally is greater, which helps drive down the selling-expense-to-sales ratio. Businesses of this type might include fishing and hunting supplies or consumer electronics.
Steve Lett graduated from Indiana University in 1970 and immediately began his 50-year career in Direct Marketing; mainly catalogs.
Steve spent the first 25 years of his career in executive level positions at both consumer and business-to-business companies. The next 25 years have been with Lett Direct, Inc., the company Steve founded in early 1995. Lett Direct, Inc., is a catalog and internet consulting firm specializing in circulation planning, plan execution, analysis and digital marketing (Google Premier Partner).
Steve has served on the Ethics Committee of the Direct Marketing Association (DMA) and on a number of company boards, both public and private. He served on the Board of the ACMA. He has been the subject of two Harvard Business School case studies. He is the author of a book, Strategic Catalog Marketing. Steve is a past Chairman of both the Catalog Council and Business Mail Council of the DMA. He spent a few years teaching Direct Marketing at Indiana University in Bloomington, Indiana.
You can contact Steve at stevelett@lettdirect.com.
