Three Years and $3 Million to Break Even

Is “breakeven” a fixed point for a catalog?

No. There are actually two basic points at which a cataloger chooses to break even.

The first is when the housefile (prior buyers plus catalog requesters) has grown just large enough to generate enough profits from each mailing to pay for designing, printing and mailing the next catalog drop to housefile names only. This is the first break-even point a new cataloger will reach, and most catalogers will choose to ignore it, since achieving breakeven at this early point requires stopping all prospect mailings. However, many non-catalogers (e.g., bank loan officers) become excited when they see this break-even point arrive, and recommend (or even insist) that a cataloger stop and achieve minor profitability at this point, by stopping all prospect mailings. This leads inevitably to a shrinking housefile and eventual business collapse (yes, I’ve seen it happen).