Mail Order Business Definition & How It Works

What is a Mail Order Business?

A mail order business is a retail business that sells merchandise, by accepting and fulfilling orders by mail . Under the NAICS, It belongs to the category of non-store retailers, particularly “Electronic Shopping & Mail-Order Houses”. According to this classification, these businesses do not have a physical retail store.

Mail Order Catalogue

At the heart of mail order retailing is the product catalogue.

These catalogues are produced periodically, for example every season, and are sent out to a list of customers, who can then choose the products and place their orders from the retailer.

The catalogue will include all the information necessary to place an order, such as product description, sizes and prices.

How It Works

A catalogue is prepared, with the most recent collection for the season
The business prints and mails out this catalogue to a list of customers, using postal services
Customers browse the catalogue and select the products they want to buy
They then either fill out a form with product details and send it back to the retail business by mail or place their order by phone
The customer receives the products to their designated shipping address

Evolution of The Business

The model initially started in the 1800s to serve customers in rural areas, who didn’t have access to nearby stores that sell the type of merchandise they needed. At that time, it was an innovative solution for a problem faced by many consumers. In the U.S., the first catalogue was the Blue Book by Tiffany, which came out in 1845.

A lot of big name retailers, such as Sears, Bloomingdale’s, Next and JCPenny had their own mail-order operations, in addition to their brick & mortar operations.

With the rise of the internet, however, a lot of businesses replaced the printed catalogue with an online hosted catalogue or a PDF version, to save on printing and mailing costs; and some have moved the entire operation altogether to an online retail business.

Having said that, there are still some areas where the traditional model is used, such as book clubs and collector’s items, and the segment is still a $100+ billion market in the U.S.