Instead, we went to our vendors ... Coach, for instance, and told them that if they wanted to help us sell their handbags in our catalog, they could pay $29,000 a page, and get immediate access to 2,000,000 customers. In essence, that's a cost of $14.50 per thousand pages circulated. If you mail a 96 page catalog to a co-op name, the co-op is charging you an effective rate of $0.63 per thousand pages circulated, just to give you a comparison point.
In other words, if we mailed a 96 page catalog and were able to sell every page to our vendors, we could generate $2.8 million in ad revenue, which essentially paid for the entire variable catalog cost (postage, paper, printing).
Now, these catalogs performed poorly. But the financials were acceptable, at least from a profitability standpoint.
Of course, we didn't drive demand - our vendors paid $29,000 for a page, they wanted to get the creative aligned with their interests, and this combination of creative strategy and vendor-centric merchandise selection (i.e. choosing the products they liked, not the products that sold the best) cut productivity by 67%.
But the strategy was more profitable.
So maybe it is time to ask a simple question ... "Can't Somebody Else Pay For It?" If your ad-to-sales ratio is out of control and you sell branded merchandise, figure out how to get your brands to help you out.
