by Katie Muldoon
When teaching a catalog course, a question that often comes up is whether you have to go through putting a catalog together yourself or if there's anyone who will take care of all or most of the steps for you. As with many things, the answer is yes and no.
Syndicated Catalogs
Yes, you can have someone provide the merchandise, the creative and the printing. Such catalogs are most often called syndicated catalogs. The syndicator provides everything up to the list but does not cover postage, product fulfillment or customer service. The syndicator goes to a variety of manufacturers for merchandise. Those manufacturers pay the syndicator to be in the catalog. The catalog is then sold to retail stores. The most common industries where syndicated catalogs crop up are in jewelry, gifts and collectibles.
Say a jewelry catalog is supplied by the syndicator to a jeweler so the jewelry store can send the book out to its customers. In return, the store must buy the stock featured in the catalog and is charged a fee for the book. The catalog need not look just like those from other retailers; today's technology allows users to have customized individual pages and covers.
The National Association of Limited Edition Dealers found that, when queried about syndicated catalogs, “41% of respondents said they participate…mainly for better vendor terms (39%) and for availability of exclusive products (38%).”
Some manufacturers supply the catalogs directly to their customers without going through a syndicator; they tend to view the relationship as a partnership and often do provide better terms and conditions than for those they don't have such an arrangement with.
Syndication is considered a win-win for most involved as the syndicator makes money from the sale of the catalog and by charging those manufacturers who appear in it. Besides the benefits already mentioned, the manufacturer of the featured product gets additional exposure and sales and the retailer gets a cost-efficient mailing for soliciting more sales.
Third-Party Catalogs
With third-party catalogs, the cataloger sends its printed catalog with a third-party endorsement to the third party's list. In this case, the cataloger provides creative, production and merchandise. The third-party partner furnishes the list and/or the endorsement.
For instance, we once created a catalog of compiled lists offered by a famous company called, for our purposes here, ABC List Co.
Part of ABC's mailing went to rented lists using just the ABC List Co. name. Another part of the catalog drop was sent to companies ABC List had a partnership with; those firms also provided their lists. The latter version had an endorsement from the third-party partner on the cover so it said something like “AAAA Club brings you the ABC List Co.” With this endorsement, the response increased significantly. Therefore, the major advantage of a third-party catalog is the implied endorsement by a known entity. It's like having Tiger Woods wear and endorse Nike products.
You'll feel much better realizing third-party endorsed catalogs don't cost anywhere near the $40 million (over five years) that Nike paid Tiger, but they aren't free, either.
The Spiegel Group has been providing third-party opportunities to marketers since 1981. For Spiegel-owned Newport News, for instance, you can adapt your catalog and mail it to Newport News buyers to suit your own mailing schedule. You must offer the Newport News charge as a payment option, but this makes sense. After all, the affiliation is the strong point and offering the charge provides respondents with another form of payment that just might increase an average order.
Affiliation is such a strong weapon that Martin Johnson, president of Catalog Marketing Inc. in Oakbrook, IL and a longtime consultant for the Spiegel Group, says that according to tests they've run, mailings with the endorsement do two or three times better than the same creative and merchandise without an endorsement. A higher average order and greater response are very good things, since the customers you obtain from this venture are not yours to mail again without the endorsement.
Johnson assures that Newport News and Spiegel “did $100 million in sales in the third-party business in [2001] because our partners make money. They make money because we value the cost of circulation. Our mailings are extremely targeted to the best of the file based on response and being able to target customers by what they are buying.”
You can put a toe in the water via small (as low as 50,000-copy) catalog mailings or test the idea through an insert program. Either way, you'll be responsible for all the areas mentioned here plus receiving, processing and fulfilling orders, primary customer service and administrative links with the host company.
Probably those companies that will find the most success with a third-party endorsed program are those that have minimal or no brand ID. Riding with a firm that has a following could be a smart way to get a jump-start on a catalog entry or expand into an avenue where your brand is weak.
Licensed Catalogs
If you want somebody to do it all, then what you really need is a licensed catalog. Although very similar to third-party catalogs, some companies, such as DMSI of Chicago, are different in that they license the rights to use a name, such as Sears. For Sears, DMSI does all the work: the creative, production and merchandise, as well as fulfillment and customer service. DMSI, which pays Sears a royalty on sales, has four home-related catalogs in which the merchandise is sold only through the catalogs or on the Internet. Sears' involvement is, essentially, to supply the list, advise on circulation, and provide input on creative and merchandising.
Beware…
Often people get confused trying to identify these three types of catalogs. As with any partnership, you should fully understand who is going to do what.