Mail order houses are refers to the retail outlets that sell their merchandise by mail. There is no direct personal contact between buyer and seller because the orders of the goods are received by post and goods are despatched by post. Most sellers approach customers through advertisements on different social sides and newspapers circulate their catalogs; send the price list by mail to consumers. All the required information about the products such as price, features, delivery terms, payment sources, and many more provide information through the advertisement. After satisfying the customers, they place the order through the post to seller and buyer gets its product by post offices and Courier.
There are several ways of receiving payments; 1) the consumers may ask for full payment in advance; 2) the goods may be dispatched by value payable post. Under this situation, the goods are delivered through the post under the condition of cash on delivery by consumers. 3) The goods are delivered by the bank. Under this agreement, there is the risk of bad debts because goods are handed over to consumers only after making full payments. There are some important features of the mail-order houses which are following.
- Mail house retailers do not require a large amount of capital at the beginning of the business.
- This type of business can be operated even without owning a shop. It can operate from home and an affordable price. There is no need for an official location for business operation. There is no requirement for a large number of inventories for business.
- This type of business gets orders through advertisement. Mail houses need an attractive and effective advertisement for drawing the attention of consumers.
- This type of business is not suitable for every business such as perishable goods, heavy products, and many more.
Advantages of mail houses
There are several advantages offered by the mail house business. the advantages are listed below.
Less requirement for capital
Mail order houses do not require heavy expenditure on fixed assets and any other infrastructural facilities. This makes it easy to start a business with a low amount of capital.
On the other hand, the mail house business is known for sopping by post. This is a new method of selling goods and services by mailing without any middle man. There is no need to maintain a salesman, large inventory, a large place for business. These things make it easy to start this type of business with a small amount of investment.
In the modern area, the mail-order houses place their services all around the world. They can establish their branches in several places. This will open wide scope for business as a large number of people throughout not only the domestic nation but also other nations as well. Because businesses are adopting modern mechanical devices to handle orders and prompt supply encourages customers all over the world to buy by mail.
This is one of the biggest advantages of mail-order business from the business point of view for cutting down the cost. This is a very important factor in cutting down the cost for the consumer as well. This can result in a lot of saving both for buyers and sellers also.
Reducing the possibility of the bad debts
The mail-order houses do not give credit facilities to consumers and most of the products sell on a case base. In this situation, there are no chances of any bad debts on account of non-payments of cash by the customers.
Under this type of business, they ensure convenience to the consumer. The mail-order house provides goods and services at the doorstep of the consumer. Under this system, the consumer can shop from a catalog from the home. It helps in saving energy and time as well.
Disadvantages of mail-order house
There are several disadvantages of the mail house order such as lack of personal contact, lack in after-sales, high advertisement cost, and many more. Further, we will discuss several disadvantages of the mail-order houses, which are the following.
Lack of personal contact
in this type of business, there is no contact between the buyer and seller under the mail house order. There is an immense possibility of misunderstanding and mistrust between the buyer and seller. The buyers are not able to physically examine the products before buying. On the other hand, the seller cannot pay personal attention to the likes and dislikes of the buyers. The consumers are not able to clear all their doubts regarding consumers.
Huge production cost
This is one of the biggest disadvantages of the mail-order house. They spend a heavy amount on promotion and advertisement for reaching potential buyers of their products.
No after services
In this type of business, the buyers and sellers may be located very far from each other. In this situation, it is not possible to provide after-sale services to consumers. After-sales services play an important role in satisfying the consumers.
This is impossible to immediate delivery goods and services to consumers in the mail order business. Generally, the post services take time to deliver goods and services to consumers.
Dependency on postal services
The success of the mail-order house highly depends on the availability of sufficient postal services at a place of business. many towns do not have postal services yet. This makes the limited criteria for the mail-order business.