In this article we will discuss about:- 1. Characteristics of Mail Order Business 2. Different Types 3. Suitability of Goods 4. Advantages 5. Disadvantages 6. Popularity.
Contents:
- Characteristics of Mail Order Business
- Different Types of Mail Order Business
- Suitability of Goods for Mail Order Business
- Advantages of Mail Order Business
- Disadvantages of Mail Order Business
- Popularity of Mail Order Business in India
1. Characteristics of Mail Order Business:
Mail order business is a kind of retail trading in which a seller receives orders from the consuming public by post and delivers the products by pest. It is referred to as ‘non-store impersonal retailing’. It is, thus, a ‘retail selling by post’ from the seller’s end and a ‘shopping through post’ by a customer.
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According to F.F. Clark, a mail order house is that type of retail institution which solicits patronage by means of catalogues sent through the mail and containing detailed descriptions of merchandise offered for sale.
The basic characteristics of a mail order business are:
i. There is no direct contact between the buyers and the sellers.
ii. The products are delivered at the very doors of the customers and the services of the middlemen are not taken.
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iii. The seller introduces the product to the prospective customers by sending printed catalogues or circulars, or other publicity media.
Iv. The business is conducted through post office, railways, or airways, as the channels of distribution.
2. Different Types of Mail Order Business:
The MOB can be grouped under three types as under:
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(1) MOB-Manufacturing type:
A manufacturer sets up own agency to market and sell the goods by mail direct to the public without the services of middlemen.
(2) MOB-Departmental type:
A departmental store sets up another department to execute orders received from outside.
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(3) MOB-Middlemen type:
Middlemen like wholesalers, on receipt of orders or in anticipation of orders by post, purchase the goods from the manufacturers and dispatch the same by mail (post office or railways or airways) to the consumers. This type is called a proper mail order business.
3. Suitability of Goods for Mail Order Business:
For the purpose of mail order business, the goods should possess the following characteristics:-
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(i) The goods should be durable, gradable and of standardised qualities.
(ii) The goods should have a trade mark or a brand name and be of weight suitable to be sent by mail.
(iii) The delivery costs should be very low in comparison to the price of the goods.
(iv) The description of the goods should be clear so as to be easily understood by the customers.
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4. Advantages of Mail Order Business:
The MOB offers the following advantages:
1. From the customers’ view-points:
(i) The goods which are not readily available in the local markets can be ordered and received through mail by a customer.
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(ii) The customers are benefited as the goods are delivered at their very doors.
(iii) The customers save the time and expense of shopping.
(iv) The customers get tire to arrange for money to be paid till the goods are delivered by mail.
2. From the seller’s viewpoints:
(i) The business could be operated from any place where the mailing facilities are available.
(ii) The business could be undertaken even with a small amount of capital.
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(iii) The MOB has potentiality to widen the markets and to discover the untapped markets.
(iv) There is no bad debts as the payments are received before delivery.
(v) The establishment and its costs are minimum.
(vi) Prior assembling of goods is not necessary as this can be done as and when the orders are received.
5. Disadvantages of Mail Order Business:
The MOB suffers from the following disadvantages:
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1. From the customers’ point of view:
(i) The customers do not get opportunity to inspect and select the goods before purchase.
(ii) The customers do not get credit facilities.
(iii) The customers do not get the goods quickly even when urgent because of order-processing time at the seller’s end.
(iv) After-sales services are out of question.
(v) The customers may not get exact idea about the product characteristics from the printed catalogue.
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(vi) Sometimes the goods become damaged in transit causing loss to a customer.
2. From the seller’s point of view:
(i) Advertising and publicity expenses may be high with certain products.
(ii) The products requiring demonstration before the customers cannot be sold.
(iii) The seller has to bear the expenses even when the customers do not take delivery of goods by mail.
(iv) Potential but illiterate customers cannot be approached by a seller.
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6. Popularity of Mail Order Business in India:
In India, the mail order business has become very popular in the case of books and periodicals, such as Readers’ Digest, India Today, penguin Books, etc.
It could not make much headway in other trades because of a variety of reasons as stated below:
(i) General public do not have faith in mail order system as there is a considerable scope for fraudulent dealings by the dishonest sellers.
(ii) Credit facilities are totally absent.
(iii) After-sales services are out of question.
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(iv) There is no opportunity to inspect and select the goods before purchase on the part of the customers.
(v) The printed catalogues do not elicit the full information about the product characteristics.
(vi) The products requiring demonstration before the customers cannot be sold through the system.
(vii) The potential but illiterate customers cannot be approached simply through the printed catalogues.
(viii) Agricultural products which account for the bulk of the trade in India cannot be marketed and sold under the system.