Anatomy of a Startup

Understand the dynamics of a catalog business. For example, it’s unlikely you’ll be able to prospect at or above the incremental break-even point. The catalog business depends on repeat purchases. Keep expected response rates realistic. Mr. Hambleton won’t get 3 percent or 5 percent from prospects. There are differences between a retail customer and a mail order catalog buyer. He should start the catalog with 300 SKUs. The number of SKUs and the page count will be important considerations. He’ll need to learn more about the key ratios of a catalog business.