The Mathematics of Circulation Analysis
For example, in a highly competitive catalog business, such as brand-name hunting and outdoor equipment, the gross margin ratio is typically in the low 30-percent range. Selling expenses for this type of business can be as low as 20 percent of net sales.
However, for a catalog business like personalized stationery, which typically has a gross margin of 70 percent or higher, the direct selling expense-to-sales ratio can range from 35 percent to 40 percent of net sales. Although the key ratios shown on this chart will vary from business to business, they serve as a useful guide for any consumer catalog company.
- Companies:
- Lett Direct Inc.
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.
