Mail Order Houses

Learning about mail order houses can help you understand how businesses work and how products reach customers without physical stores. Let’s break down the key points, elaborate on their significance, and give you relatable examples and story-based questions to boost your understanding.

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Key Point 1: Definition and Working of Mail Order Houses

Elaboration:

• Mail order houses are retail outlets that sell products through mail, not through physical stores.
• There is no face-to-face interaction between buyers and sellers.
• To get orders, these businesses contact customers using advertisements, catalogues, circulars, samples, and price lists sent by post.
• All product information like price, features, delivery, and payment terms are clearly mentioned in ads or catalogues.
• When an order is received, the business checks the order and then sends the product by post to match what the buyer wanted.

Examples:

1. Suppose a person sees a blender ad in a magazine and sends an order form by post. The blender is checked and shipped to the buyer’s address.
2. You receive a toy catalogue at home, select a toy, fill in the order slip, post it, and later get the toy by post.
3. An old stamp collector finds a rare stamp in a mailed catalogue, orders it, and receives it without meeting the seller.

Fun Fact: Long before e-commerce websites, people shopped for clothes, gadgets, and even seeds by looking at colourful catalogues!

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Key Point 2: Payment Methods in Mail Order Houses

Elaboration:

• Payment can be done in three major ways:

  1. Full advance payment: Customers pay the whole amount before the goods are shipped.
  2. Value Payable Post (VPP): The post office delivers the goods only when the customer pays for them.
  3. Bank delivery: Goods are sent to a bank, and the bank gives them to the customer only after getting full payment.

• These methods minimize the risk of bad debt as the seller gets money before or during delivery.

Examples:

1. A customer wants a set of books. She sends the full price by money order, and the books arrive at her doorstep.
2. A buyer orders electronic goods, delivered by VPP. The postman collects money before handing over the parcel.
3. A man buys a costly watch by ordering via bank delivery. He pays at his local bank and then collects his watch.

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Key Point 3: Suitable Products for Mail Order Houses

Elaboration:

• Not all products are suitable for mail order.
• Suitable products have these traits:
  1. Can be graded and standardised (e.g., books, gadgets).
  2. Easily transported at a low cost (e.g., pocket calculators).
  3. Have a steady demand (e.g., stationary items, popular books).
  4. Available in large quantities all year round.
  5. Face little competition in the market.
  6. Can be described using pictures and ads (e.g., toys, non-perishable food packs).

Examples:

1. Ready-to-assemble furniture sold in parts, easily packed and shipped.
2. Packaged seeds for gardening, which don’t spoil quickly.
3. Standard-size clothing like school uniforms, easy to describe in catalogues.

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Key Point 4: Advantages of Mail Order Houses

Elaboration:

1. Limited capital requirement: No need for fancy buildings or large premises. Low investment is enough.
2. Elimination of middlemen: Direct sales to customers save money on extra commissions.
3. Absence of bad debt: Since goods are paid for before or on delivery, sellers don’t lose money on unpaid bills.
4. Wide reach: Anything that can be mailed can reach buyers anywhere with a post office.
5. Convenience

   meaning of word here
   : Goods are delivered to the customer’s doorstep.

Examples:

1. An entrepreneur with low funds starts a business selling art prints through catalogues, skipping the costs of a shop.
2. A farmer in a remote village receives vegetable seeds directly from a supplier via mail.
3. A person saves money by ordering directly from a mail order house, avoiding the markup of local shops.

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Key Point 5: Limitations of Mail Order Houses

Elaboration:

1. Lack of personal contact: Buyers can’t see or touch the product before buying, which may lead to trust issues.
2. High promotion cost: Heavy spending on advertisements and catalogues is necessary to reach new customers.
3. No after sales service: Once the product is delivered, it’s hard to get help for problems.
4. No credit facilities: Only cash purchases; no “buy now, pay later”.
5. Delayed delivery: Waiting for goods can be frustrating, as postal mail is slow.
6. Possibility of abuse: Some sellers may make false claims or fail to deliver as promised.
7. High dependence on postal services: Without a reliable postal system, the business can’t run smoothly.

Examples:

1. A buyer receives a damaged vase but cannot return it easily since there is no after-sales support.
2. A person orders a gadget from a mail order ad, but it arrives much later than expected.
3. A customer in an isolated village cannot order goods because there is no reliable postal service.

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Step-by-Step Activity: Start a Mini Mail Order Exchange

Objective: Understand how mail order houses work by creating a small exchange system in your classroom.

Materials Needed:

• Paper
• Envelopes
• Stamps (or use classroom "token" money)
• Small sample items (like paper bookmarks, badges)
• Printed catalogues made by students

Steps:

1. Form Teams: Divide the class into sellers and buyers.
2. Catalogue Creation: Each ‘seller’ designs a simple catalogue of 2-3 items with descriptions, prices, and pictures.
3. Advertisement: Sellers distribute catalogues or ‘advertisements’ to buyers.
4. Order Placement: Buyers choose products, fill ‘order forms’, and post them to the sellers using envelopes.
5. Payment:
   • Option 1: Advance payment (buyers give ‘token’ money with the order).
   • Option 2: Simulate VPP (buyers pay when they receive the product).
6. Product Check & Mailing: Sellers match the order to their inventory and send products through the classroom ‘mail system’.
7. Delivery & Observation: Buyers receive goods at their desk.

Observations to Discuss:

• How was the communication between seller and buyer?
• How easy or hard was it to advertise the product?
• Did anyone face delays?
• Was any order incomplete or miscommunicated?
• Who felt most satisfied with the exchange: sellers or buyers? Why?

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Scenario-Based Questions

1. Scenario: Your friend received a damaged product ordered via mail.

   • Question: What challenges might your friend face in getting help or a replacement?
   • Answer: Due to lack of after-sales service and no direct store, it’s hard to return or replace the product. Communication may be slow, and the seller may not respond quickly.

2. Scenario: An entrepreneur wants to start a business with little money.

   • Question: How can a mail order house advantage help him?
   • Answer: He does not need to rent a shop or hire many staff. He can advertise and sell products directly to buyers using just a catalogue and the post.

3. Scenario: A person living in a remote area wants new kitchen utensils.

   • Question: Is mail order a good option for him? Why or why not?
   • Answer: If there is good postal service, mail order is ideal because physical shops may be far away. But if postal service is poor, it can be difficult.

4. Scenario: A customer orders a new type of gadget after seeing it in a catalogue.

   • Question: What risk does the customer face before delivery?
   • Answer: He cannot touch or try the gadget before buying. There’s a risk it might not meet his expectations or description.

5. Scenario: A seller receives many orders from one region due to an ad in the local newspaper.

   • Question: What advantage is the seller gaining?
   • Answer: By reaching many people through advertising, the seller gets more orders without needing a physical shop or many employees.

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Engagement Tip: Try designing your own simple product catalogue as a fun homework. Trade with classmates using pretend money and see who can "sell" the most!

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