This is my plan to send a catalog full of cool internet brands to 50,000 US homes.
Around May of 2020 I was kicking around new business ideas. One of the few I landed on was All Sorts.
The concept: A direct mail catalogue that is printed and mailed to tens of thousands of targeted households featuring cool, internet-first brands (DTC).
As of this writing, the project is make or break by January 25th, the deadline for brands to commit. I have one or two back-up plans if I’m not able to hit the critical mass to make it viable, but for now I’m writing a summary of how I got to where the project stands today, and what I’ve learned so far.
Where Did the Idea Come From?
The concept was inspired by Pop-Up Grocer (PUG), which Brett tipped me off to, a 30-day pop-up that bounces from city to city featuring hundreds of small, DTC, food brands.
PUG exists for three reasons
- Selling online is expensive, acquisition costs keep going up and up.
- Internet first brands often move to brick and mortar to retail as they exhaust digital channels. Many open their own retail stores (Warby Parker, All Birds etc.) this isn’t within the budget of smaller brands.
- Getting shelved in retailers is tough for small brands due to shelving fees, MOQs, insurance requirements and the basic proof that the products will sell through.
PUG solves the problem of small brands accessing retail, opening an alternative channel from online.
We kicked around ripping PUG off in Toronto, then Covid happened.
Retail was no longer an option. How could I achieve the same thing as PUG in a different format? Enter print.
- It’s an alternative channel to online acquisition.
- A catalog allows multiple brands to share the costs of this more expensive medium.
All Sorts solves the problem of small brands accessing direct mail, opening an alternative channel from online.
Why else I love mail
A few other reasons mail is a uniquely effective channel:
- Mail Stands Out: Direct mail was once a dominant form of advertising but has taken a backseat to online ads. Now digital devices are crowded while mailboxes are mostly empty. Boomers are nostalgic for the catalog and millennials treat mail as unique and important.
- Mail is Trustworthy: Print advertising has demonstrated in surveys to be trusted by 82% of readers, compared to 25–65% online.
- Mail Converts: 30% of respondents to another survey say they looked up a product online after seeing it advertised in print.
Before I make the pitch to brands I needed:
1) Pricing and a business model
2) A website
3) A sample catalog
Pricing and Business Model
In the beginning I was set on a pay for placement model. I didn’t want to get into revenue sharing or a significant upfront investment of my own… been there, done that.
I first reached out to an old friend, Ilan, the only person I know who has any connection to the post game, via his company Postalgia. He got me a quote from his mail vendor. I got a second quote from another vendor in Toronto, both were competitive and averaged at $1 USD a piece for print and mail depending on volume, pages and paper quality.
Next, step what to charge? As a rule, I don’t believe anyone who tells you there is a formula for pricing. I take my approach from Blue Ocean Strategy:
I found that local Penny Saver flyers charge a $50 CPM while Vogue charges a $180 CPM for a full page colour ad. I see All Sorts as a catalog on par with Vogue, but sticking with a price closer to Penny Saver was more realistic, I locked in an $85 CPM.
After a few conversations I learned that overall price would be a key consideration, so I decided to keep that to under $5,000 USD. The catalog would go to 50,000 homes, costing advertisers $4,250.
To break even we would need to sell 13 full priced units. Above 13 profit margin would increase with each unit sold, quickly becoming quite lucrative.
At the heart of a great catalog is amazing creative design. I am not a designer, but my friend Chris happens to run the boutique agency, August. I pitched him on the concept and he quickly agreed to be a partner, contributing some time from his crack designer Bjoern.
The Selling Process
Out of the gate I knew ZERO people who actually ran DTC brands, not exactly a good place to start. I was walking into a sector with no relevant experience on either side of it, but that hasn’t stopped me before.
I started by reaching out to two people I sort of knew who were in DTC. Sheena at Tease Teas, who I had spoken to once before regarding a previous business of mine, and Naomi of alder apparel, a friend who I hadn’t spoken with in 10 years. Both conversations were helpful and validated my basic premise yet neither resulted in an immediate sale.
Next stop was building a really big list for cold outreach, to do this well I relied on two tools: Hunter.io to look up and validate email addresses and LinkedIn’s Sales Navigator to find the key contacts to reach out to.
I started with the most obvious well known brands like Away, Casper, Warby Parker etc. No luck out of the gate.
I then broadened my search to small brands which fit more into our central thesis to begin with. I pulled every name from Pop-Up Grocer and Design Milk, a list that worked out to about 1,000 brands, and started working them through Hunter and Sales Nav.
The first mistake I made with the outreach process was using a brand new email address that was unrelated to All Sorts. My thinking was that with a few projects on the go it would be nice to have one central email address, BloomLabs.me. The problem, new email addresses need some time to warm up, otherwise spam filters weed them out.
The next mistake was to use my Leaf Forward email address. email@example.com had been my primary email for the past few years, it was well warmed up. BUT, as one lead pointed out to me “This seems cool but u dont have the domain name or twitter handle that’s on the example. Your email is also a Candaian cannabis vc firm….”
Point taken. I caved and got an All Sorts email and grabbed the social media handles.
Chris and I are both quite proud of the URL we landed on, loveallsorts.com. It perfectly flows with our dual meaning name — referring to the products and the people who buy them. It takes all sorts.
After warming up the new address I started outreach again, this was the single biggest “growth hack” in the process, response rate when way up.
An effective cold email starts with a subject line, I landed on “Cool new (old?) growth channel…it’s the mail.”
I like it because it’s a little funny, and directly tells the recipient why I’m emailing them while leaving a little bit of mystery.
In version A of the cold email, I included the scope of the mailing, the timeline, the sample, a quick reason why mail is effective (followed by a longer explanation below), the price and a request for a phone call.
The second iteration cut out the “Why Mail?” section at the bottom. Making the message shorter apparently helps get around spam filters and saves me some content that could be used in follow-up discussions.
A growth manager at a prospect brand suggested I cut the price out altogether from the cold email. Good suggestion, cutting out the initial sticker shock led to more conversations which allowed me to make the case for the investment.
Adjusting On the Fly
The first major adjustment I had to make was pushing seasons. Although originally dreamed up in May, sales in earnest didn’t start until October. I naively thought this would give me enough time to fill a catalog before Christmas, it did not. By mid-November the call was made to target a mailing at the end of February. As I’m learning now it’s still a tight timeline!
Allowing for Affiliates
The second major adjustment was to open the door to a mixed payment model. A big problem I was facing through the sales process has been answering the question of who else is participating. Given the nature of a catalog it’s not possible to sell one at a time, the product is only real once enough pages are sold. Giving the deadline of January 25th was a big mistake because now I’m stuck waiting for brands to commit in order to attract other brands.
The solution has been to allow for certain brands to participate on a revenue sharing basis, plus a significantly reduced CPM base cost. I’ve only made this offer to select brands who either add credibility to All Sorts, or have high enough price points that a small portion of sales is pretty lucrative.
Back Up Plans
I’m optimistic that an iteration of All Sorts Plan A will be a success, but just in case I’ve hatched several back up plans:
- Big Corporate Advertiser: Ask a big corporate like Amex to cover the cost of the catalog as part of their Shop Small or similar campaign. We’d feature independent small brands who, of course, accept American Express.
- White Label Catalogue: I pitched a friend at a big retailer on the above advertising partnership, she promptly rejected it. BUT, she had a good idea of working with larger brands to curate a catalogue of independent products that are complementary to their own.
- Create An Affiliate Product: Another idea that is not my own… Partner up with a magazine or newspaper publisher to print and distribute the catalog. We would be responsible for design, curation and negotiation of revenue share with each product. I brought this idea to Hearst, the publisher who may do distribution, and they couldn’t wrap their heads around it. Mostly because All Sorts is tiny (non-existent) and they are the largest magazine publisher in the world.
Where All Sorts Stands Today
As of this writing on January 9th, I have one full priced contract signed. Not exactly where I’d like to be. But given the deadline I set for decision making it’s no surprise leads are waiting until the end. Over the next week I plan on nailing down several attractive revenue share partners in order to make the offering more attractive to full priced advertisers.
I have also found a number of ways to reduce cost, including switching from direct mail to onserts with magazines and downgrading my paper selection slightly (while maintaining a high quality.)
Two weeks to go, I’ll provide an update on where I end up!