To Spam or Not to Spam

Q: Our shop specializes in American-made crafts. We like to send out full- color postcards to the 2,000 customers on our mailing list whenever we have a new show. But lately the cost of these mailings is becoming prohibitive. We'd switch to email, but don't want to contribute to the avalanche of spam.

A: I can appreciate the fact that you don't want to send unwanted emails — we all hate getting spam. Still, email is by the far the least expensive way to reach your customers. And when a customer asks to be on your mailing list, you can be assured that a message from your shop will be welcome, unlike the daily barrage of advertisements for cheap prescription drugs and body part enhancement. This type of permission-based emailing does, however, require a few rules of etiquette.

• Promise customers you will not, under any circumstances, share your list.
• Make sure your return address and subject title clearly indicate that the message is from your shop.
• Send all your emails as blind copies, hiding the addresses of other recipients.
• Indicate in every message that you're emailing because the customer has requested information. Also point out that if such messages are no longer desired, the customer can unsubscribe by hitting "reply" and stating "remove."
• Don't overuse the list! One or two messages a month are plenty.

Be sure to include a link to your own website in the email. This allows customers to see a preview of your new merchandise, and even gives them a chance to order products online. Make sure that the calendar on your website is up-to-date, and includes information about whatever you're promoting.

There are two main drawbacks to email. First, not everyone uses it, so certain customers may not be reachable through email. Second, email addresses can change with no forwarding address or address correction. For that reason, you'll constantly be adding new addresses to the list. Keep forms for taking customer information at the cash register, and be sure to leave adequate space for those very long email addresses.

All things considered, your traditional mailing list is still one of the most valuable assets at your disposal. Keep using it occasionally to bring loyal customers back to your shop. Email may be the wave of the future, but there's still room for the tried-and-true methods.

Q: I'm new to retailing, and I'm finding all the specialized terms on invoices very confusing. How do I know when my bill is really due?

A: Let's take a look at some of the basics of dating in retail. (Unfortunately, there's no bachelor or bachelorette involved in this game.) Your first purchase with a vendor almost always requires payment by credit card. However, don't make the common mistake of not paying the credit card balance in full. Credit cards are not an economical way to finance your inventory.

If you don't want to use a credit card, first time orders are usually sent pro forma or COD. In pro forma orders, an invoice is sent for payment prior to the goods being shipped. This is the worst arrangement for retailers, and may cause problems if the order isn't shipped in full. When a shipment is sent COD, you get to hold on to your money until the goods arrive. There is usually a service fee for COD shipments, however, and the vendor has the option of requiring cash instead of a check.

Once you've passed the credit test, the terms are usually "net 30." This allows you to have the goods in your store almost a month before paying for them, which is a beneficial arrangement for retailers. For the vendor, however, it is fraught with risk, because some retailers don't pay on time — or at all. Also, be aware that the 30 days begin when the merchandise is shipped (invoice date), not when it arrives.

Extended terms are even better than net 30. By special agreement, you may be allowed 60, 90, or even 120 days to pay. A discount may also be offered if you choose to pay earlier than required. For instance, "net 60, 2 percent 10" means that you have 60 days to pay, but can get a 2 percent discount if you pay within 10 days. If you have the cash on hand, this is a smart move.

Many vendors of seasonal goods offer holiday dating. This gives you several months to sell seasonal goods before paying for them. Usually, you have to take shipment at a time that is convenient to the vendor, instead of right before the holiday. This helps vendors manage their seasonal shipping. Holiday dating and merchandise discounts on orders placed early in the year ("early buy") give vendors who import ample time to receive merchandise from abroad. Early orders can give an indication of what the hot-sellers for the year will be.

You might also see the term FOB on an invoice. This refers to whether you or the vendor will pay shipping charges. If an invoice says FOB and then the location of the vendor, it means the vendor will get the goods "free on board," and from then on you'll be paying. A freight allowance may be offered as special incentive, especially with a large order. Half freight means you can deduct half the shipping costs if you pay on time. Full freight means that you can deduct the whole amount.

These terms and discounts can add up, and affect the profitability of your business. So be sure to read the fine print on all invoices, and take advantage of whatever specials you come your way.