In this occasional series, Catalog Age follows the progress of catalog start-up Bel Tesoro. The first part appeared in the May 2001 issue, the second ran in the September 2001 issue, and both articles can be found online at www.CatalogAgemag.com.
After a few funding problems, merchandising hiccups, and international shipping woes — nothing new to start-ups — Ruggiero Palmieri finally launched its Bel Tesoro catalog in October. And although he would not release dollar figures, operations manager R. Scott McIntosh says Bel Tesoro’s sales are 25%-30% above target.
Founded by brothers Phil and Robert Palmieri, along with McIntosh, Ruggiero Palmieri originally planned to launch its Bel Tesoro catalog in May 2001, one year after its Website debuted. But a lack of funds to rent enough names and some merchandising snafus forced the Albany, NY-based company to push the mailing back five months.
Bel Tesoro sells Italian imports such as pottery, textiles, and leather products. The first catalog offered nearly 200 products, with an average price point of $80-$85. Since October, Bel Tesoro has expanded its line, mainly on its Website, with lower-priced merchandise, such as personal care products and tabletop items.
Ruggiero Palmieri originally planned a 24-to 30-page catalog, but ended up with a 36-page book. “We definitely went with a larger number of pages to add to the appeal and success of the catalog, based on recommendations from consultants in the previous articles in this series,” says president Phil Palmieri.
But the fledgling mailer didn’t have the resources to do everything that the experts advised. For instance, consultants had suggested that Bel Tesoro mail to more than 20,000 names and up to 250,000 names, but the catalog went out only to 13,000. About 23% were Web customers and requesters; Hackensack, NJ-based list firm Mokrynski & Associates selected the rest, targeting upscale females ages 30-50.
“Funding is the classic small-business and start-up problem,” McIntosh says. “If we were a pure-play dot-com five years ago, it would have not been an issue; I’m sure we would have been swimming in dough and trying to figure out how to spend it.”
Ruggiero Palmieri is now weighing the merits of borrowing money to rent more names. “We’re aiming with our future catalog mailings toward 100,000 names,” says Palmieri. Since the fall mailing, the mailer has collected about 3,000 additional names.
“It’s not even the actual renting of the lists” that would warrant the need to borrow money, McIntosh notes. “Renting is not the biggest expense.” Printing and mailing the catalogs is, “and postage is not a negotiable price point.”
Ruggiero Palmieri also had difficulties getting its Italian vendors paid in a timely fashion. International logistics problems bogged down the transfer of funds between the U.S. and Italy. But those issues have been resolved, McIntosh says. “We have established a relationship with the clearinghouse that allows me to use a Web-based interface. I enter all the payment information to the suppliers, and it’s executed directly from my desktop.”
The shipping woes
Another international issue, that of shipping to customers in Canada and Europe, was also a concern. These buyers had heard of the catalog via the Website. At first, Bel Tesoro had published blanket shipping rates for all customers, but those rates didn’t cover the costs of shipping overseas.
To avoid having to pay the balance, the company decided not to give customers from outside the U.S. the exact shipping cost at the time of the order, McIntosh says. “We would have to determine that cost once the package was all together and on its way, and we would bill them at that point.”
For its next edition, which will mail in the fall, Bel Tesoro will target upscale catalog buyers rather than women, McIntosh says, since 35%-40% of orders came from men. Typically, men ordered one high-priced item, such as the $1,265 Delfino bowl, whereas women bought several lower-priced products.
The company, which at press time was planning to open a store in Albany in April, credits its success so far to input from others. “It’s so important to speak to people who’ve been there and get their insights,” Palmieri says.
“We’ve called competitors and said, ‘Hey, come talk to us,’” McIntosh adds. “They may not view us as competitors at this point, but they’ve been very gracious.”