Starting A Business From A Mail Order Kit

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1993 by Home Business Publications

A mail order business kit is a package of equipment or materials and instructions to start a business. Sometimes the difference between licenses, franchises and kits is very slight because one often tries to disguise itself as the other.

The general rule is that a franchise is the right to open your own "branch" of an established business, such as Dairy Queen. A license is the exclusive right to handle a given brand or line of merchandise (usually within a defined territory) such as a line of cosmetics or burglar alarms.

A kit is simply a package that enable you to go into business. The kit can be equipment to manufacture a product, provide a service or any combination of the two. It usually contains instructions, starting supplies and often, equipment.

There is no guarantee that your next door neighbor won't order exactly the same kit or you that may find several competitors in your community, all selling the same products -- and all being supplied by the same mail order supplier. With a business kit, there is no fee for rights, no territory and no company investigation to see if you qualified or financially equipped to make a profit.

In short, the company makes a profit when they sell you the kit -- and they make more when and if they sell you supplies.

Your "support" is the instructions that come with the package and a long distance telephone number. This is often adequate because some kit operations are relatively small and continuing instructions are not all that necessary.

An example would be a knife sharpening service. You really don't need a territory because you can easily see how many services there are in your area. Once you learn how to operate the equipment, all you have to do is put up a sign and place an ad.

As your new business prospers, you will undoubtedly want more sophisticated equipment and supplies, but by that time, you will be able to make these judgements on your own-- you will be buying selected items from various suppliers.

There are hundreds of honest, reliable companies that sell legitimate, workable
business kits and many people are well satisfied with both the equipment and instructions they received. Unfortunately, there also some in the business to hoodwink the unsuspecting -- and many more in between.

At first, it may seem difficult to tell the "good guys" from the bad, but your own common sense and a little research can serve you well.

A deal that sounds "too good to be true" usually is. Many of those full page ads that will make you a millionaire overnight have one thing in common; the person who placed the ad claims to have made a fortune, and is willing to pass along the "secret" -- which turns out to be placing the ad!

Actually he wants to share the EXPENSE HALF of the venture: he sells you the "secret," some copy-ready ads (his cost: a out a dollar) and YOU pay for the full page ads ($500 & up EACH) and share the profit when the dollars roll in! Your "partner" then sits back and collects his half with no further effort or expense. Isn't that a good deal?

Envelope stuffing, home assembly and chain letters are the most flagrant examples of sellers who really have nothing to sell. They just take your money and string you along.

The legitimate envelope stuffing industry is BIG BUSINESS: they use machines that stuff and address thousands of envelopes per hour, sort them into zip code order and dump them into bulk rate bins. To have even a chance of making money on this one, you must be able to stuff flyers into envelopes you are already mailing.

Notice how you sometimes get advertisements in your electric or phone bill? This is how they can afford to stuff envelopes -- they certainly cannot make any profit mailing out one ad at a time!

Some plans offer you the opportunity to become their dealer for $10 to 50 or so, which entitles you to "dealer rights" and pays for the copy ready flyers they provide you (they cost a fraction of a cent each when printed in large batches).

You pay to have them reproduced locally, buy envelopes, a mailing list and stamps (or a $200 bulk permit). Often the same company "suggests" a good mailing list supplier, who may well be their brother-in-law. You have no way of knowing where the names came from (yours will probably be added), how old they are, or how many others have been sold the same list. This is why most mail order sellers use only reputable mailing list brokers.

Home assembly is easy to understand once you think about it. How could any company possibly afford to pay postage to mail parts to total strangers (with no knowledge of their honesty or capability), have them assembled by untrained novices, pay for the labor and return mailing -- and not pay at least DOUBLE what it would have cost to have them done locally?

The answer is obvious: THEY CAN'T They SELL you the parts (your deposit is the selling price), which you assemble and then TRy to sell back to the company. They almost always sell them back, unless you give them a big order of more parts.

Another sham is chain letters. All of them are illegal because their intent is to profit from signing up members. The fact that they purpose to "pay to get listed," sell you a recipe, or that some lawyer (usually not licensed in your state) gives his OPINION that this particular one is legal does not influence the postal inspectors. They know them as rues!

The "pros" that work these lists don't start at the bottom like they want you to because they know that they seldom get to the third level, and only rarely to the fourth.

Remember the old saying: "never give a sucker an even break"? The ones who make the money from chain letters START THEM; they put their names on top; accomplices in the second and third positions and mail them from small towns.

While they're at it, many of them brag up a favorite mailing list -- you guess it -- the same shady deal as the envelope stuffing plans! They are enthusiastic not because the names are "hot," but because they get half the mailing list
"haul" too!

Note we are covering the negative aspects of this subject first, which was to alert you to be careful. Now that is out of the way, it is time to talk about some of the plans that might interest you.

Most kits offered in todays mail order are beginner kits. Often this doesn't matter because the main purpose is to test and learn within a limited budget.

Sometimes the equipment in these kits amounts to little more than a toy when compared to a commercial equivalent, and totally inadequate for business use. On the other hand, you may well get your money's worth just by learning more about the subject and practicing a few operations.

After receiving your business it you may discover that you must purchase more equipment and more supplies to produce items that you could really sell. The advertisers are not necessarily dishonest; they want to keep the startup price as low as possible to encourage you to buy it. They just don't bother to emphasize that you will need much more for any kind of business.

The reason legitimate business operators don't complain about this practice is that amateurs who buy inferior equipment and materials at inflated prices are not competition.

In practice, only a few who buy the "starter kits" ever actually go into the business -- but they still buy the kits. For example, a young man on a farm in Montana will soon discover there is not much of a market for buttons and badges in his locale. But, if he operated a booth at a large flea market, they might be ideal!

When considering a kit, think about what is being offered -- is it something that by itself can found a business? Does it produce enough volume and variety of products to sustain a business? is the machinery built to last, or is it just a toy; is the product something that can sell in your community, and make you a profit?

The largest single category of mail order kits is for sales -- primarily books and merchandise. These business kits merit very careful investigation. Some companies sell memberships that include instruction manuals and the privilege to buy from them at "sub-wholesale" rates.

Part of their plan may be for you to recruit sub-dealers who buy from you at "wholesale" rates (maybe they haven't seen the ad you answered?0. Others sell courses in importing or services that are intentionally oriented to products sold by the people who sell your course.

Contrasted with these approaches are a number of companies who sell general merchandise at about the same prices, or those who specialize in job-lot or close-out merchandise.

Some of these have minimum purchases, but they do not sell memberships of courses. Before joining a membership sales plan, check their "wholesale" prices against what you can buy the same products from without having to join or pay a membership fee.

Book suppliers can be PUBLISHERS, PRIME SOURCES, both or "none of the above." A true publisher prints the books. He usually also has some form of selling rights (there can be many with sales rights for any one product).

A prime source controls all rights even though he may also sell or lease rights to others for cash or reciprocal rights. The reminder own no copyrights -- they simply buy and sell books, either wholesale or retail.

Some of the latter might be called "pseudo publishers" because they are booksellers who try to appear as a publisher in order to make customers think they are getting the lowest possible price.

Many individual book dealers pay a publisher for the "right" to buy books wholesale and resell them by mail.

Unfortunately, many would-be book sellers find themselves with some expensive rights that turn out to be worthless. They pay $75 or so for rights and membership.

As members, they receive instructions (how to sell these particular books), advertisements (to add their name and have reproduced), and sources for mailing lists.

They soon discover, however, that some of these books have been on the market for years, and that "everyone and his brother" is trying to sell them under the same plan.

One book on the market today is offered by all of the above categories and sells for $9.95. It has a 1952 copyright and is available to wholesale dealers in lots of 100 for $1.25 each. Regular "member" price just under $5.

The best way to go into business with a mail order kit is to do your homework BEFORE sending in your money.

Two of the button makers (see Sources) offer kits: Mr. Button and Badge-A-Minute. The latter charges $26.95 for their basic kit - that makes 10 badges.

In this case, get prices and full details from both of these companies, plus three others that sell parts: Manchester, Badge Parts, and Instand.

After studying all of the offers, you will be in a position to make a much wiser decision about what to order from whom.

If you just order from the first ad that" sounds good" (whether it is button maker, stamp outfit or doughnut machine) without checking first, you will probably be disappointed.

In summary, the kit approach to a home business can be wise decision that can help launch you into a successful business. If you research the subject and check with as many different suppliers as possible, your chances of success will be multiplied.

When you see a kit advertised that sounds interesting, write for details - but also write to other companies with similar products at the same time. Then, spend some time in your library reading about the subject.

Look up other manufacturers in GALE'S DIRECTORY, a reference set in your library, and look for trade journals that cover that business (try the STANDARD PERIODICAL).

Most legitimate suppliers advertise in trade journals, not opportunity magazines.

What you learn will not only help you avoid buying inferior equipment at inflated prices, it will serve as good foundation for starting a successful business.

BUSINESS SOURCES

GALES' DIRECTORY OF AMERICAN MANUFACTURERS. Library reference set lists virtually every major manufacturer in the nation by product, company name and geographical area.

PREMIER PUBLISHERS, Box 16254, Ft Worth, TX 76113. Publisher & Prime Source (for some books - check their copyrights). A general selection of mail order books. Offers book sales plan with special discounts for dealers who pay a yearly membership fee.

SELECTIVE PUBLISHERS, Box 1140, Clearwater, FL 33517. Wholesale books for mail order sales.

WILSHIRE MAIL ORDER BOOKS, 12015 Sherman Way, North Hollywood, CA 91605. Wholesale books for mail order sales.

MANCHESTER STAMPS-BUTTONS, 723 Main St.,Manchester, CT 06040. Button making equipment; free lists.

NORMAL FORREST & CO., 127 Valley Rd.,Monclair, NJ 07042. 201/883-7777. Catalog and sales kit for selling indoor stock signs - $40. (Check with other stock sign companies before ordering this kit).

CUSTOM CASE SUPPLY CO.,9329 De Soto Ave.,Chatsworth, CA 91311. Kit to make and sell custom cases (for instruments, etc.).

DON LING'S REMOVABLE TATTOOS, Box 309, Butterfield, MN 56120. Sells business kit to "invest $50 to $1,000 in up to 200 designs; set up tattoo booth."

MR. BUTTON, Box 68355, Indianapolis, IN 46269, 317/872-7000. Two size button making machine - $160.

BADGE-A-MINUTE, 348 N. 30th Rd.,Box 800, La Salle, IL 61301, 815/224-2090. Starter badge kit for $26.95.

BADGE PARTS, INC.,2320 W. Greenfield Ave.,Milwaukee, WI 53204, 414/654-7540. Designs and makes all kinds of machines and parts - promotions, campaign buttons; parts for all machines. Claims best prices in the country.

FOLEY-BELSAW INSTITUTE, 6301 Equitable Rd.,Kansas City, MO 64120. Key making course and equipment. Also sharpening equipment.

GOLD MAGIC,MAGIC SYSTEMS, INC., Box 24153, Tampa, FL 33623. Sells kits for gold stamping, hot stamping, rubber stamps and bumper stickers. Initial gold stamp kit is $230 without supplies and all necessary equipment. Compare prices and quality before ordering from this company.

THE KELSEY CO.,Box 941, Meriden, CT 06450, 203/235-1695. Wholesale printing supplies, hot stampers, calligraphy and block print supplies. Old, reliable trade supplier.

TV FOCUS, INC.,One Anderson Ave.,Fairfield, NJ 07022. Kit and support to publish a local TV Schedule. $500 down; $3,000 capital needed.

U.S. SCREEN PRINT, 740 E Refield, Scottsdale, AZ 85260. Screen printing kit for caps and T-shirts.

GREGORY MFG. CO. INC.,Box 1303, Jackson, MS 39205, 800/647-7152. Wooden stamp and name tag holders, plaques. Reputable trade supplier.

SUPERIOR MARKING EQUIPMENT CO.,1800 Larchmont Ave.,Chicago, IL 60613, 800/621-1205. Established trade supplier for rubber stamp makers and embossing equipment sellers.

JACKSON MARKING PRODUCTS, Brownsville Rd.,Mt Vernon, IL 62864, 800/851-1334. Trade supplier for rubber stamp equipment - good source for logos.

MASON SHOE MFG. CO., 1251 First Ave.,Chippewa Falls, WI 54774. Kit for shoe business from home.

KNAPP SHOES, One KNAPP Center, Brockton, MA 02401. Kit for shoe business from home.

U.S. SHOE CORP.,1250 Broadway, New York, NY 10001. Wholesale shoes.

NATIONAL STOCK SIGN CO.,Box 145, Santa Cruz, CA 95603. Wholesale indoor plastic signs; free sales kit.

SEND-A-STORK BABY ANNOUNCEMENT CO.,Box 12303, Portland, OR 97212. Kit to rent yard signs announcing new baby.

INSTAND BUTTON MACHINE MFG. CO., 18 Seldon St.,Woodbridge, CT 06525. Wholesale button machines, components and supplies.

JOHN WRIGHT PUBLISHING CO.,2334 Ocean Park Blvd.,Santa Monica, CA 90405-3204. Mail order books; kit of 10 "how-to" with reprint rights and sales kit for $36; $13 more for his book. Caution recommended.

CRP LTD.,861 Arcadia Dr.,Eugene, OR 97401. Info kit on how to repair carpets for yourself and as a business.

PYRAMID FOUNDRY SETS, 3736 South 7th Ave.,Phoenix, AZ 85041. Foundry kits in $2 to $500 range for aluminum, bronze, iron and jewelry metals.

CASTOLITE, Box 391, Woodstock, IL 60098. Liquid resin kits for casting, coating, fiber glassing, etc.

QUILL CORPORATION, 100 Schelter Rd., Lincolnshire, IL 60917-4700, 312/634-4800.
Office supplies.

ZPS, Box 581, Libertyville, IL 6048-2556. Business cards and letterhead stationery. Will print your copy ready logo or design, even whole card.

WALTER DRAKE, 4119 Drake Bldg.,Colorado Springs, CO 80940. Short run business cards, stationery, etc. Good quality, but no choice of style or color.