Focus On: Merchandising: Show 'Em Your Wares
“In the next few months, we’re testing our first kiosk in one of the stores to show all the places in Colonial Williamsburg where you can shop,” she adds. “We have also started an initiative where our historic trades products from the milliner, silversmith, brickmaker, blacksmith, cabinetmaker, etc. will be offered online.”
No matter what the cause, it pays for nonprofits to train call center and fulfillment staffs to answer questions about their missions and the people/causes they serve. Sales representatives at the National Wildlife Federation are trained not only to sell but to answer questions about clean water, wolf populations, backyard bird and animal habitats, and a host of other NWF issues, according to Carole Fox, vice president of operations at NWF. Scientific or highly technical calls are referred to the pros.
Key financial elements
In order to make money, nonprofit catalogs, like their consumer-based cousins, must manage five financial areas. For-profit catalogs typically earn 5 percent to 10 percent or higher of the net sales after all expenses. While there might be dozens of line items on a profit-and-loss statement, managing for profitability comes down to controlling these five critical elements:
Gross margin. Catalogs typically earn a gross margin that is in a range of 52 percent to 58 percent. In recent years, many organizations have dramatically in-creased the percent of imported products their catalogs carry, which has improved the initial markup.
Advertising costs. This is the total cost of creating, printing and mailing the catalog. As a percentage of net sales, it typically ranges from 25 percent to 35 percent. Admittedly, catalogs are an expensive advertising tool. But when well-merchandised offerings are sent to targeted mail-order buyer lists, they are the most productive way to sell product.
There are fixed and variable components to the advertising costs. The fixed cost to create a page includes the design, copy, models, photography, film, color separations, etc. Catalogs using in-house creative typically range from $1,300 to $1,900 per page, and catalogs using a creative agency can range from $2,000 to $3,500 per page. Many catalogs use a combination of in-house and freelance creative, adding up to costs of $1,800 to $2,200 per page.