Three Years and $3 Million to Break Even

Actually, it depends on how large you want your catalog business to become. It’s certainly true that a well-conceived, soundly executed catalog business can reach a point of small but sustainable profitability on a total investment of less than $1 million.

However, the business at that point will probably not be large enough to excite much interest. Experienced catalogers often remark that cataloging only starts becoming comfortable at around $10 million in annual revenue. At that point many economies of scale are starting to work: unit postage costs are becoming reasonably low, fixed costs to create the catalog are becoming low enough to justify more extravagant design and call volume is becoming large enough to justify a reasonable in-house call center and fulfillment operation. How much does it cost to grow a catalog to that size? Answering that takes more space than this article provides—but obviously, it involves the “many millions of dollars” envisioned by our rule of thumb. So maybe our $3 million/three-year rule isn’t so far off after all.