What can a high-profit buyer remail do to boost your bottom line? Compare a circulation plan before and after adding a buyer remail. When you take the financials all the way down to the bottom line, you can see the dramatic change in profitability you can achieve.
Buyer remails are such a leverage point in a cataloger’s business model because catalogers can often add a small circulation remail to the very best buyers and maintain strong sales per book and deliver a high profit mailing.
Catalogers need to know if their buyer file can be mailed to more frequently and still deliver incremental sales. Most buyer files are robust and can be leveraged to support additional mailings to the best buyer segments.
Here are the financials for a mailing before adding a remail to the circulation mix:
| Buyers | Prospects | Total | |
| Circulation | 120,000 | 100,000 | 220,000 |
| Sales per book | $8.00/catalog | $1.40/catalog | |
| Sales | $960,000 | $140,000 | $1,100,000 |
| Catalog Cost | $.90/catalog | $.90/catalog | |
| Catalog Cost | $108,000 | $90,000 | |
| Margin % | 60% | 60% | |
| Margin | $576,000 | $84,000 | |
| Contribution to fixed (Available for overhead) |
$468,000 | ($6,000) | |
| Total Contribution To fixed |
$462,000 | ||
| Overhead | $380,000 | ||
| Profit | $82,000 | ||
| Percent | 7.5% |
Here is a pro forma profit and loss after you add a buyer remail:
40,000$8.00/catalog$960,000
In this example the profit percentage and the profits double with the addition of a small circulation buyer remail.
Test your best buyers and you’ll find the profit potential in remailing your best buyers more often.
Jim Coogan is president of Santa Fe, NM-based consultancy Catalog Marketing Economics.
| Buyers | Prospects | Buyer Remail |
Total | |
| Circulation | 120,000 | 100,000 | ||
| 260,000 | ||||
| Sales per book | ||||
| $1.40/catalog | $7.00/catalog | |||
| Sales | ||||
| $140,000 | $280,000 | $1,380,000 | ||
| Catalog Cost | $.90/catalog | $.90/catalog | $.90/catalog | |
| Catalog Cost | $180,000 | $90,000 | $36,000 | |
| Margin % | 60% | 60% | 60% | |
| Margin | $576,000 | $84,000 | $168,000 | |
| Contribution to Fixed (Available for Overhead) |
$468,000 | ($6,000) | $132,000 | |
| Total contribution to fixed | $594,000 | |||
| Overhead | ($380,000) | |||
| Profit | $214,000 | |||
| Profit % | 15.5% |