Strategy How to Use Selling Expense Ratios

What effect do mailings to the housefile have on direct selling expenses? The last section of the chart details the selling expenses. The cost to mail a catalog to the housefile (not to prospects) is $0.55 in this example. Therefore, you calculate the direct selling expenses by multiplying $0.55 times the circulation. As you can see from the chart, the selling expense to sales ratio from mailings to the 12-month buyer file for a year is only 16.1 percent. Yet, the direct selling expense ratio resulting from mailing the 13- to 24-month buyers is a whopping 65.3 percent and 48.4 percent from the 25-plus buyer file. Total selling expense to sales ratio is slightly on the high side at 30.7 percent (before returns & allowances).