The Features and Limitations of Mail Order Business.
Characteristics/ Features
The following are the essentials of mail order business:
- There is no direct contact between the seller and the buyer.
- This business involves moderate amount of capital for its start.
- This business does not necessitate the maintenance of large merchandise.
- This type of business can be started at any place and there is no need of locating the office in a central place.
- This type of business secures orders by advertisement.
- All the goods are not traded by mail order business houses. Only such goods which can be graded, standardized, not fragile, not perishable and not to heavy are sold under mail order business houses.
Image Source: globalbusinesscafe.com/wp-content/uploads/GBC-Business-Development-May-15-2014.jpg
ADVERTISEMENTS:
Mail order business ensures wide market for the products and the consumers residing at a far off places are benefitted by mail order business houses. These business can be started with less amount of capital.
Limitations
Even though mail order business houses bring many advantages, it is not free from limitations. The disadvantages or limitations of mail order business are as follows:
- There is no personal contact between the buyers and sellers.
- The buyers are deprived of inspecting the goods before purchasing.
- There is a great deal of scope for fraudulent dealings.
- This type of business is not suitable for goods requiring demonstration.
- It tends to increase overhead cost on account of correspondence cost and cost of packing.
- The execution of order require a substantial time and as such most of the customers do not preder to have goods on mail order business they will wait for long period.
- This type of business fails to achieve success in case of illiterate customers.
- Credit facilities are not allowed and as such it cannot attract a large number of customers.
Inspite of the above limitations, mail order business has occupied a significant position in retail trading. It has not received so much importance in a country like India because of the following reasons:
- There is mass illiteracy among the people of India and as such selling through post has not been able to reach among those illiterate people.
- There is a great deal of fraudulent and deceitful dealing in this type of trade and as such it becomes difficult to reach among the people.
- Poor postal service in India has created obstacles in the path of mail order business.
- The people of India are very poor and people cannot afford even one square meal.