April 21, 2013

Dear Catalog CEOs: Urgent Call To Action

Dear Catalog CEOs:

It's a lazy Friday, and then, all of a sudden, the emails pour in from the vendor community.
  • Subject Line = "URGENT CALL TO ACTION: ACT NOW TO SAVE YOUR BUSINESS".
  • Comments:  "POSTAL, TAX CRISES GO FROM BAD TO WORSE, CATALOGERS MUST BE HEARD FROM TODAY".
The original email message comes from the ACMA, an organization trying to protect your future via lobbying efforts.

Unfortunately for the ACMA, almost no catalogers pay the nominal fee to support the ACMA.

Let's tackle two problems.

Sales tax.

It's unimportant.

I worked at Eddie Bauer and Nordstrom - it was my job to analyze the impact of sales tax collection on e-commerce / catalog transactions when we opened a new store in a state where we previously did not have a store.  Yup, you open a store in Omaha, and you have to collect sales tax on e-commerce transactions in Ogallala.  Not Council Bluffs, just a mile away, mind you, unless you have a store in the Quad Cities, five or more hours to the east.  Fun stuff!

After about 90 days, sales rebounded to normal levels, and did not change.

I've analyzed this issue under the MineThatData umbrella - no impact.

If retailers can collect sales tax and not experience a sales decline, so can you.  It's not the end of the world to manage a table of 45,000 zip codes with unique sales tax rates.

In other words, don't listen to the hype and dire predictions.  It's nonsense, validated by data ... Amazon doesn't struggle in Washington State, and your sales won't struggle, either.  If you have data to counter this, please present a white paper to me (email me by clicking here), and if the math is credible (i.e. not a survey of 994 likely customers conducted by a research firm), I'll publish it for 3,000 blog subscribers and 4,600 twitter followers to evaluate.

Issue #2 - postage increases.  Here's the thing - welcome them!  When the increases come, you cut back on circulation among Jennifer/Jasmine, you barely lose any sales, you increase profit, and you reinvest the profit in the online future of your business.  How is that a bad thing?  Your vendors raise prices on you, and you deal with that without lobbying Congress.  If the USPS jacks up rates, stick it to them - mail less - mail much less.  Reinvest the money on Jennifer/Jasmine, and build the online future of your business.

Instead of acting out of fear, why not act out of a position of power?

You have power, not the folks the ACMA is lobbying to.

You decide where to invest your marketing dollars.

Invest in the future of your business.

And if you believe in catalogs as your preferred marketing channel, then why the heck aren't you investing in the ACMA?