As ecommerce businesses begin to grow, a dilemma some may face is the decision of whether a catalog is an appropriate multichannel tool.
Latienda.com, which sells a variety of items not generally available outside of Spain, was faced with just such a predicament six years ago. And interestingly enough, Latienda’s decision to eventually produce a catalog was not an internal decision — it came about due to customer demand.
Tim Harris, co-owner of Latienda.com, said while the focus was always on the website, the company could simply no longer ignore the repeated requests for a catalog.
Harris said initially Latienda.com started with a very basic catalog they would design and print themselves, on copier paper, which was then sent to several hundred customers. Those first catalogs, according to Harris, were mainly a one-color pricelist without photos or item descriptions.
Eventually, Latienda.com decided it could do better. “The customers demanded it and then we finally decided after several years, ‘Well, look. If we’re going do this, let’s do it right,’” Harris said. “Then as soon as we did it right, we saw an immediate response, and since then it’s just been the more resources that we’ve devoted to the catalog, the better the return has become.”
Today, Latienda.com distributes a 24-page, full size, four-color catalog four times throughout the year. Annually, the company sends out 800,000 catalogs, compared to 200,000 just three years ago.
Importantly, Harris said the catalogs have in no way reduced the company’s online traffic. “We find them to be extremely effective at driving business to the Internet,” Harris said. “I’d say there was fear initially because we used to be almost 100 percent online in terms of our orders. We’ve got 700 items on the website, and in our catalog we feature only about 100, and the fear was that all of a sudden we might be packed into sort of a typical mail order company that is relying on phones. But it didn’t really happen. People continue to order online and what we know, mostly from anecdotal accounts, is people get the catalog and it reminds them of whom we are. They’ll sit down and circle an item and pass it around the family, and then they go online and order. It’s great. I think it’s a better browsing experience than most people have online.”
Harris did, however, say a company should be generating a certain amount of revenue before considering the addition of a catalog. “I think that the cost of designing, printing and mailing a catalog can quickly run into tens, if not hundreds of thousands of dollars, even for the small cataloger. Our feeling was that we had to be a certain size, so that if it fails, it wasn’t going to ruin the business. My sense is to do a four-color, full size catalog, you would need to have $1 million in sales to make it worth it.”
What Does A Catalog Cost?
We asked American Web, a leading catalog printer, what it costs to print and mail a catalog. We asked for these prices assuming 10,000 copies of a 24-page catalog at a standard size of roughly 8″ x 11″. We also asked American Web to assume standard binding and standard paper stock. Its estimate:
- Design- $3,000
- Printing – $3,100
- Mail Preparation – $366
- Postage (39¢ each) – $3,900
Total Estimate – $10,366
Xtremediesel.com, which started in 2002, is an ecommerce business specializing in Dodge Cummins, Ford Powerstroke and Chevy/GMC diesel performance parts. It grosses more than $9 million annually, and is currently in the process of designing its own catalog to distribute.
Similar to Latienda.com, Xtremediesel.com’s reasons for starting a catalog developed from customer demand, as well as its unique consumer base.
“What started happening is we started to get quite a few phone calls from guys who have never seen our website or didn’t really know much about us, but heard about us from a friend, and our salesmen would spend quite a bit of time on the phone explaining to them all these different products,” said Dan Stewart, a partner with Xtreme Diesel Performance. “So, just from word of mouth we were getting a lot of requests for a catalog, more than I ever thought we would get. So, really, it was kind of the demand of our customers. That was one of the main things. One of the other things was credibility — building trust and loyalty, and definitely brand recognition goes along with that. But also we’re really trying to be a multichannel company and not just, ‘Oh, they’re a bunch of Internet guys,’ or fly-by-night-operation, working out of their house. And even aside from the customer ordering out of our catalog, it’s really a way of showing, ‘Hey, we’re for real. We’re investing in this industry and we’re out there.’”
As for distributing its catalog, Xtremediesel.com already has several channels in mind, starting with a link that allows potential customers to request a catalog. “We kind of feel like those people who spent the time to click that link, fill out their address, and submit it are going to be the most valuable to us,” Stewart said. “Next, we’ll probably hand them out at trade shows, and if that goes well, we might take the approach of sending them out to our entire customer base and, also, include them with each order, but that would probably be last just because it’s such a lengthy list and it’s quite costly.”
Stewart said Xtremediesel.com plans to have its catalog finished in September, and it will be mailed prior to the holiday season. The finished product will feature 12 pages, and all layout and design is taking place inhouse. Stewart said that decision came down to the simple fact that it allows the company to change images on-site. However, he also noted a downside, which includes both an increased workload for the staff, which is handling both the marketing and advertising aspects of the catalog, and knowing when and where to stop.
“One of the major things with this that we found is in the automotive industry, there’s always new vehicles coming out so you almost have to say to yourself, ‘Okay, right now I have to stop,’ because all we keep saying is, ‘Oh, the ’08s are coming out, ’” Stewart said. “So, now we’ll start adding the 2008 products in it. Now, we’re altering the pages and as we add that, another manufacturer will come out with something and all you end up doing is just you keep adding to it and never actually releasing it. So, you kind of have to just say, ‘All right. That’s it.’”