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The Check's in the Mail:
How to Start a Home Based
Mailing Services Business
by Jim Erskine
jim.erskine@bgamug.org
Have you been searching for a real "down to earth" way to make money with your computer...from home...without a large investment? Believe it or not, you probably passed by the simplest and best way to earn money with your computer long ago. But look again! I want to point out to you the true potential of a very basic and much in-demand business: providing mailing services to local businesses clients.
Now, folding, stuffing and licking stamps all day is nobody's idea of stimulating work, but it can be an excellent source of income for a home-based enterprise, particularly if you offer a full range of mailing services, including zip code sorting, renting mailing lists, printing personalized form letters, stuffing and sealing envelopes, use of your postal permit, etc.
What Are Mailing Services?
The term "mailing services" includes several activities which can easily be provided by the home-based entrepreneur.
The simplest level of service is "mail handling" (also known as "lettershop services"). This consists of physically preparing materials for mailing: folding, collating, inserting, sealing envelopes, attaching labels and postage, sorting and bundling the mail for quantity (bulk mail) discounts. "Mail handling" requires no specialized equipment at the outset, though you may later desire to add specialized equipment such as a postage meter or labelling machine.
Addressing mail and updating mailing lists (mailing list management) is a computer-based service. If you currently have a computer and printer and can locate a good mailing list software program (there are several shareware programs available), you can also offer this service to clients. You can work with lists supplied by clients, create your own mailing lists, or rent from list brokers. You can then offer (for a price): peel and stick labels for future mailings, automated zip code sorting, enhanced addressing (using mail merge), continuous updating and purging of mailing lists, and all sorts of extras.
Advantages of a Home-Based Mailing Service Business
- There is little risk involved. If you already own a computer and a printer, then you have all the equipment you need to get started in this business. You can obtain your first clients via a highly effective "shoestring" marketing technique for under $50. You can hold off on obtaining a bulk mail permit and other supplies until after you already have paying clients.
- Mailing and managing mailing lists is a service, not a product. It requires no outlay for inventory, nor any overhead for a storefront or additional help. Full service mailing services can easily be offered by the home based entrepreneur. And if you get a huge pile of work at once, you can simply draft your spouse or kids to put in a few hours of simple labor.
- Once you have a client, you have an ongoing source of income. Mailing services is a repeat business. Once you have a client and he\she is satisfied with your work, you can expect additional jobs to come your way. Some clients may mail on a regular monthly basis. Others may mail sparodically. Big jobs may be interspersed with smaller jobs. And clients for whom you manage a mailing list will depend on you to maintain their lists on an ongoing basis.
- If you are already offering some sort of word processing or desktop publishing service, these same customers are excellent candidates for a mailing service. The customer base for both services is identical: small businesses, social groups, philanthropic organizations, individuals. The Direct Marketing Association estimates that over 65% of printed materials is eventually mailed. If you are producing the piece, you can mail it as well.
- You can be your own "guinea pig" client. If you are currently involved in some other business, you are probably (or should) already mailing out your own marketing materials on a regular basis. If this is your first business venture, you can utilize your own services in marketing your business. You have the unique opportunity to practice your service on yourself before offering it to customers.
- You will have relatively little competition. Large-scale lettershops and mailing services make their profit on volume mailings. They do not solicit smaller "retail" jobs under 5,000 pieces. Most other "cottage industry" workers who do mailing work do not offer mailing list management and similar services. Not to mention that they are almost impossible to find.
- Smallest business mailers, who may have anywhere from 100 to 1000 pieces to mail at a time, are an almost completely unserved market. This "micro" mailing market is completely untapped and can yield the highest profits for you.
- The Post Office (bless their souls) have created a demand for mailing services, especially among small business owners. While touting the need for direct marketing, they also inadvertently keep those same business people from using direct mail because it is so difficult to learn postal regulations. Businesses who would like to use direct mail are excellent prospects for your mailing services.
- You save your customers both time AND money. By automating a customer's mailing lists, you can qualify the mailings for postage discounts. You can even send out a mailing for a customer CHEAPER than it would cost them to do themselves--even with your fees included!
Your Niche as a Home-Based Mailing Service
The best niche for the home based entrepreneur is in small business mailings. You don't want to get involved in huge mailings like those sent out by professional lettershops and direct mail companies. Instead, you want to work with clients with mailings that rarely exceed 2,000 pieces. (Most of the jobs you pick up will be 1,000 pieces or less.) Unlike most lettershops, you can accept any size mailing--although you will have a minimum limit of 200 pieces to qualify for bulk discounts. You will be able to handle both first and third class mailings, using your postal permit or that of your customers.
Who are your prime prospects? Any small business person who uses direct mail in their business. Realtors, retail businesses, chiropractors, car salesmen, social groups, non profit organizations, other home based businesses...the list is really endless.
Getting Started
Getting started in the mailing services business involves three steps:
Research - Gather information about the mailing business in your community. You will want to check out the market for mailing services in your area. Who are your competitors and what type of services do they offer? What are the going fees for different services in your area?
You will also need to educate yourself regarding USPS mailing rules and regulations. If you haven't had previous experience with bulk mailing, it may seem a confusing process at first. However, the sorting, packaging, and sacking process follows a logical sequence that can be learned quickly.
Business Set-Up - After completing your education in the field, your next task is to bring together the elements you will need to operate and market your business effectively. Some of the elements to be considered at this point are writing out a business plan, setting up your equipment and software, obtaining appropriate state and local business licenses, set up of your working area, ordering supplies, and most important, producing effective marketing materials. At this stage you also compile lists of potential clients for your service.
Setting Your Business in Motion - If your planning and preparation has been done carefully in the previous steps, this phase should be very smooth. You will know who your best potential clients are and how you plan to reach them. You will be familiar with the services you offer and will be ready to tackle jobs as they come to you. Initiate your marketing plan, then sell, sell, sell.
Income Potential
The potential income from this type of service is tied largely to your own initiative and how effectively you market your services. It can be approached either as a part-time or full-time venture, depending on your circumstances and desires. You will definitely fine all the work you want to handle.
Although every job you do will be different and have several variables, following are some examples for consideration:
For initial mailing list management, you can expect to earn $200 - $250 for every 1000 names entered into your system.
On average, for mail handling only (not including mailing list management), you can expect to average from six to eight cents in gross revenue for each piece you handle. Therefore, for a typical 1000 piece mailing, which would take approximately 3-4 hours to process, you could expect an average gross revenue of $60 - $80.
On average, full-time mailing service providers can expect to earn from $200-$400 per week. Part-time entrepreneurs can expect to pocket from $100-$200 per week.
Jim Erskine has written a full business plan on starting a home based mailing services business. Send him e-mail at: jim.erskine@bgamug.org for ordering information.
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