So You Want to Start a Catalog

“Give me a place to stand and rest my lever on, and I can move the earth.”

—Archimedes

No doubt you’ve heard the phrase “starry-eyed,” but have you ever seen it? I did, in a young married couple I’ll call Mary and Joe. They dreamed of owning a catalog, and when they came to see me about a launch, their eyes sparkled in anticipation.

”We’ve done lots of research. We’ve built a business plan and sales projections. And we’ve saved enough for the initial investment.”

A good start, I thought. These folks have a realistic plan. They’ve got a chance for the stars in their eyes to become real.

In working with startups, I’ve noticed that success often begins with some leverage that delivers profitability in an easier, cheaper and faster fashion, such as a pre-existing mailing list of store customers, exclusive designs or great margins, if they’re the product manufacturer. I was hoping Mary and Joe, with their careful planning and research, also had a lever.

We looked at their marketing concept, product line, operations plan, cost and sales projections. Each item was OK, but nothing that took my breath away and made me gasp, “By golly, this is going to work.”

If the stars and their catalog were going to align, it was going to take a lot of work and money, and it would come with no guarantees. In the old days of cataloging it was possible to start a title on your kitchen table. What about today? What about for Mary and Joe? Impossible? No. But darned hard? Yes.

A small company is a lot better off if it can begin with some kind of leverage to reduce risk, capital needs and time to profitability. How about a big company? Is it easier when the pockets are deeper?

You Can’t Leverage Illusions

I walked with Bob, head of the U.S. division of a company, through his firm’s sparkling new headquarters. It had an elegant, quiet, almost Zen-like quality, complete with wood lacquer screens, Asian art and gorgeous posters of the products the company sold. Everything exuded quality, luxury and credibility. Even better, Bob understood and advocated leveraged marketing. Or so I thought.

After the tour, we met in his office. “We feel we have many parallels to Stash Tea,” he said. “Like them, we want to build a catalog-based program to help us leverage retail distribution through guerrilla marketing.”

Excellent! I thought. Stash Tea had a great leveraging success story, and I would’ve been lucky to be on board during its glory years. Starting as a tea supplier to restaurants, Stash Tea built a consumer database via catalog requests advertised on its tea bag wrappers, and thus gradually built a successful consumer book. Later, when Stash expanded into retail grocery stores, it used the catalog to showcase dealers and do new-dealer notices. And it mailed store announcements and coupons to local-area names from the catalog database. That model could work for others, I thought.

I asked him: “Do you currently mail any catalog or brochure?”

“No, nothing,” he said, which was not surprising since that’s why we were meeting.

“Do you have a consumer customer list built yet?”

“No list yet. We definitely need to build one,” he said.

This was a bit disappointing to me, since we’d need to gather names right away, probably change the company’s packaging to solicit catalog requests to build the list lever.

“What about restaurant distribution? How extensive is it?”

I asked. I wanted to scope out the size of its potential start-up customer base.

“We have no distribution of any kind yet.”

Whoa, that blew my catalog solicitation plan lever.

I asked, “But where are consumers seeing your product now?”

“There is nothing yet for consumers to see.”

Huh?! “You mean you haven’t got any product?”

“Not yet, but we will. Here on this map is where we’ll build our bottling plant. We want pre-built demand when it’s ready.”

“Then you’ll need to spend a lot of money,” I said.

Bob had missed a key point about leverage. If you want to leverage catalog growth, your lever already ought to exist. Because Bob wanted to do guerrilla marketing (read: under-financed), and because he lacked pre-existing levers that might have compensated for a small budget, he was forced to start small and slow. The explosive growth hoped for never materialized, and the program fizzled after two or three years.

A big company can do it right though, and on a limited budget, too. But it needs the right levers.

Don’t Need a Contact Center or Fancy DC

Stuart was fifth-generation in his famous-brand, family-run company. “Department stores used to be solid for us, but now they’ll carry only a fraction of our line, and at terrible terms. Plus, they’re replacing our bestsellers with their own private-label knockoffs. We need to go direct to consumers with a catalog.”

I asked about budgets.

“None of the divisions will kick in from their budgets until we prove this thing works. We’ve got to keep the budget bare-bones. But even though we lack cash, maybe we can put some of our other resources to work instead. Let’s see, we own about 30 of our own boutique stores nationwide …”

Internal resources can be a great source of leverage. You may be surprised at what you can put to work. Stuart’s budget-saving program was complex to manage, but delivered like a dream. It worked like this: All mailings were ZIP code divided by store location. Each catalog was inkjetted with only the location and phone number of the nearest boutique. If a customer wanted to place an order, he or she could only call the nearest store. In each store, employees took the phone orders and, during slow periods, packed and shipped those orders from store inventory.

The result? A new catalog launch with zero costs for a contact center or distribution center (DC). What a great start-up lever!

By the time the catalog business had grown enough to begin burdening the store personnel, it was also large enough to warrant funding by participating divisions and the opening of a dedicated contact center and DC. This was a creative, cost-saving use of stores to support a new catalog launch.

Don’t have your own stores? Look for other levers. Do you have lists of customers from warranty cards who might be ripe prospects for your catalog, or a Web site that looks promising but needs the push a catalog can bring? How about a DC serving your wholesale market and that could take on extra catalog business?

I know of many small companies that started with levers and now have thriving catalogs.

“Oh, and I Speak Fluent Mandarin Chinese”

Greg, an entrepreneur with jack rabbit-like energy and turtle-like perseverance, had built a successful small business selling large equipment to a niche market.

“I’ve got a list of happy customers but nothing extra to sell them,” Greg said. “I have an idea for a catalog of add-ons, upgrades and tangential products that could give them a reason to keep buying from me for several years.”

Wow, I though. A built-in list of happy customers to start the catalog off with a bang. It doesn’t get any better than this.

“I can get all my stuff at great prices from China,” he said. “I spent years there, and I’m fluent in Mandarin and have good connections with factories.”

I was on the verge of being blown away.

“And if you could teach me the ins and outs of catalog copy, I’m a pretty good writer. I used to write a lot of reports on China when I worked for the government.”

A triple-header! This company had three big levers: A built-in list of happy customers, fluency in Mandarin Chinese to better communicate with factories and in-house writing expertise. This catalog was on the road to success.

Look for your own levers. You may have more going for your catalog than you think.

Susan J. McIntyre is president of McIntyre Direct, a full-service catalog agency and consulting firm based in Portland, Ore. She can be reached at (503) 286-1400.