CHAPTER 2
THE INNER AND OUTER CIRCLES OF MAIL ORDER -
2 DIFFERENT WORLDS
WHERE DOES THE INNER CIRCLE COME FROM?
Full-page ads in national publications scream such promises as
"$50,00 This Year From Your Answering Machine", "Make $9000 By
Filling Out A Simple Form" (the originator of that one, I'm
happy to note, has been arrested), and "Secret Banking Flaw
Can Make You A Millionaire". These are all empty dreams. These
plans do not create wealthy people. They create, among other
things, the inner circle.
The plan pusher sends you his "offer" which will supposedly
make you rich, and also sells your address to other dealers.
That means that if you live in the U.S.A. you can soon expect
a deluge of mail from people trying to sell you more of the
same (quaintly called "Business opportunities"). And so the
inner circle is formed, as people are convinced that they will
be able to make money by making sales to other people who are
basically in the same boat as they are. The vast majority of
inner circlers are in and out of business in less than 90 days
(which, incidentally, makes marketing to them a challenge, to
say the least). This constant flow of people in and out
provides income for those with more staying power who provide
mailing lists, printing, typesetting etc.
Another way to end up in the inner circle (if not as a
participant, then at least on the receiving end) is to
advertise anything for sale by mail, especially in a small
circulation publication. A mailing list broker will put your
address on his list and before you know it, you'll be
bombarded with inner circle offers.
The real world of marketing is scary. It's a cold and lonely
world where you spend $1000's on advertising that nobody
responds to. It's a world where you can ask a hundred
different catalog houses to stock your better mousetrap, but
none of them want it. It's a world where you look for an
investor for your invention and can't find one. This, too, is
part of the reason why the inner circle exists. People like
to believe that there must be some way that they can get what
they want. So they delude themselves into believing that the
inner circle, with it's almost free advertising, it's larger
than life sales pitches, it's instant-marketing print&mail and
mailing lists, is where they will finally make their first
million dollars and retire in bliss, marketing realities be
damned. This is why people often stay in the inner circle for
years even though they continually lose money. It is, if
nothing else, interesting - something like state lotteries.
And it's never lonely - there are too many people constantly
trying to sell things to you. Having said that, I believe
there is an even more important reason why the inner circle
exists. If human behaviour were rational there could be no
inner circle since 1) rational thought precludes the
possibility of believing in something for nothing, and 2)
people, if they were rational, would not continue to do things
which obviously cost a lot and give nothing back in return.
But much more human behaviour is AUTOMATIC and ADDICTIVE than
rational. The essence of addiction is the continual use of
something the person knows is hurting them but which they
can't seem to stop doing. I speak from my own experience and I
know a lot of people who will back me up when I say that inner
circle mail order participation can be a bona-fide addiction.
Consider, for example, the very earliest days of my publishing
a newsletter. The techniques I used were irrational. Simple
math would have told me that even with a 5% response and an
average $30 purchase (neither of which I could have possibly
attained) I would still have been slightly losing money. But
month after month the unshakeable fantasy continued: that this
time I would sell enough stuff to make money. It was nothing
less than an addictive fantasy, unfounded in reality.
WHY THE INNER CIRCLE IS A MONEY PIT
The mainstay of the inner circle is all those 8.5x11" "money
games" circulars where you pay $10 or so to receive a copy
with your address typeset, ready to take orders from other
people, so that you can keep half and send half to the prime
source (the "prime source" of a product, service, or money
game, is the person who created it, makes most of the money
from it, and controls how it is sold). People getting their
hands on these circulars then use print&mail, rented mailing
lists, or advertising to try to sell their wares to other
people, many of whom are trying to do just the same thing.
There are multitudes of money games which have been around
for decades and will continue to be around as long as there
is postal service. What you end up with is a situation where
...
- the prime sources make money (sometimes) at the expense of
all those people that are doing the marketing for them
- the printers, typesetters and publishers, mailing list
renters, print&mailers make money providing "essential"
services
- the hard-working people trying to sell the money games lose
a lot of money
Ironic, isn't it? That's the inner circle, folks!
If you want proof that the inner circle of mail order is no
place to get rich and that most of the really popular
advertisers (the ones with all the 1" ads) are just hobbyists,
call one of them during a week day. Assuming you've called a
man, you'll sometimes be answered by his wife, who will tell
you that he is at work. That is, he works for a living
(assuming he is not retired) and does mail order as a hobby.
Now, if these veteran dealers have not found a get-rich quick
plan (or even one that makes at least enough money per year to
live on, so that they don't need a day job!) after years or
decades in the inner circle, what does that tell you?
Go ahead and try this for yourself if you must - it will help
you to believe, really believe, that there is no easy money in
this world and that you might as well stop looking for it
right now.
Another way to prove to yourself that nobody's getting wealthy
in the inner circle is to consider the furor raised over
postal increases. If the people involved in promoting get-rich
plans were making the money that their ludicrous sales
documents claim, then a raise of 1 cent or even 10 cents in
postage would make no difference.
Some of the advice you read about mail order talks about the
percentage of mail that gets thrown in the trash without being
examined. Be careful when reading this material, for what's
really being discussed is outer circle "junk mail". If you are
marketing in the inner-middle circle, have no fear - your ads
and salesletters and circulars will be noticed and read.
Everybody examines everything, although sometimes the
examination can be awful quick - the first thing I do when I
go through my mail each day is throw out the chain letters and
everything else I've seen before. But no opportunity seeker
or dealer will just throw an entire envelope in the garbage,
unopened. As an inner circle dealer, you will have many
worries. This is not one of them.
THE HOBBYISTS AND THE BUSINESS PEOPLE
The HOBBYIST stays in the inner circle, does not approve of
dog-eat-dog competition, sees mail order as a picnic that
will hopefully never end, never makes money, whines about 5
cents here and there and requests stamps for checking copies
when you buy advertising space from him or her. The hobbyist
is often 50, 60 or even 70 years old (or older), and is
merely focussing on making just enough money back to
continually support their hobby. They really enjoy their
mail order hobby and are usually very friendly and helpful
(don't forget that) but without the ambition of people in
their 20's and 30's who are trying to build an empire. When
you ask for their advice, remember that they'll tell you the
truth, but they won't tell you anything that will make you
rich. For the hobbyist, mail order is an activity that
replaces or complements the usual American pastimes of
watching soap operas, fishing, golfing, etc.
The BUSINESSPERSON in mail order is often young to middle
aged, and the focus is on making money - as much, and as
quickly, as possible. She will eventually learn the
limitations of the inner circle and use the friendships,
knowledge and "streetwise-ness" (streetwisdom?) she has
acquired and apply them in the outer circle (either that or
just quit).
One more important distinction - the mail order hobbyist does
not need a computer (although she would be better off having
one), while the serious mail order businessperson MUST have
one, eventually.
It is common for advocates of the inner circle to insist that
there are millions of dollars to be made in it. Dream-peddlers
need not exaggerate the income side of mail order (although
they usually do). What they usually ignore, however, is the
fact that this income is usually diluted down to nothing or
less-than-nothing by marketing expenses, production and
postage costs, and commissions paid to prime sources.
The dynamics of the inner circle are such that it just isn't
possible to "get rich". There's too many salesmen, not enough
buyers. I will remind you, however, that to live in this
country, it is not necessary to possess $1,000,000. For those
who merely want to avoid being tied down working for other
people, a nice clear profit of $20-30,000 a year is sufficient
to live off of, unless you have heavy financial commitments.
For now, let me relieve your anxiety by stating that yes,
there is money to be made in mail order and no, it won't cost
you a fortune to conduct business outside of the inner circle.
The typical inner circle advice giver will tell you to buy
reports with reprint rights, sell other people's books, mail
commission circulars, market through print&mail and mailing
lists of opportunity seekers, and join MLM plans. What they're
not admitting is that by doing so, you would merely be joining
a collection of people all doing the same thing, all trying to
sell the same stuff to the same people (to each other, as well
as to lists of largely uninterested people). All wasting
their time. The reason he wants you to join this pack is that
(surprise, surprise) he sells mailing lists, reports with
reprint rights, MLM plans, etc.
THE MIDDLE CIRCLE - CLOSE, BUT STILL TOO FEW CIGARS
It is not likely you'll find your fortune in the inner
circle. In the middle circle, there is a glimmer of hope -
it has the inner circle benefit of cheap advertising, and
the outer circle benefit of bringing you in contact with
people that are willing to buy from you instead of always
trying to sell to you, but it shares the inner circle's
problem of being too easy to get into and therefore far too
flooded with competition. Both the inner and middle circle
are the "money-making opportunities" field.
As I write this book there are a couple of middle circle
tabloid publishers who are charging top dollar for adspace and
still growing by leaps and bounds. Inner circle advertisers
are turning to them and benefitting from the outer circle
prospects the publisher is reaching, and the publisher
benefits from the advertisers' repeat business. They have
found a true success formula in hard times.
THE OUTER CIRCLE
The use of national or local advertising for marketing money-
making opportunities or consumer items, is the OUTER CIRCLE.
When L.L. Bean sends you a catalog, that's outer circle
marketing. If I advertise a money-making opportunity, or
miniature satellite dishes, in Popular Science, that's outer
circle advertising. The Book-Of-The-Month Club and Columbia
Record House are outer circle companies. They are businesses
selling to consumers. The businesses sell stuff. The consumers
buy it. Period.
The inner and middle circle exist because people are addicted
to the idea of getting their hands on lots of money. The outer
circle of mail order has this side to it, too, but also
involves the sale of plans for making moonshine in your
basement, shoes, candy, and just about anything else that can
be mailed (including lobsters, believe it or not). The outer
circle is, in short, the business arena of the serious direct
marketer and/or mail order marketer.
If someone asks you what sort of business you run and you say
"mail order" and they ask "Great, but what do you sell?" and
you respond by staring stupidly at the floor, then chances are
you are in the inner circle. Outer circle marketers know what
they're selling, because the product, and the needs of the
market, come first.
The money, if you do everything right, comes second.