question_answer 14)

Explain the usefulness of mail orders houses. What type of products is generally handled by them? Specify.

Answer:

Mail order houses are the retail outlets that sell their merchandise through mail. There is generally no direct personal contact between the buyers and the sellers in this type of trading. For obtaining orders, potential customers are approached through advertisements in newspapers or magazines, circulars, catalogues, samples and bills, and price lists sent to them by post. All the relevant information about the products such as the price, features, delivery terms, terms of payment, etc, are described in the advertisement. On receiving the orders, the items are carefully scrutinized with respect to the specifications asked for by the buyers and are complied with through the post office. Advantages of Mail Order Houses (i) Limited Capital Requirement Mail order business can be started with relatively low amount of capital as it does not require heavy expenditure on building and other infrastructural facilities. (ii) Elimination of Middle Men The biggest advantage of mail-order business for consumers is that unnecessary middlemen between the buyers and sellers are eliminated which results in savings to the buyers as well as to the sellers. (iii) Absence of Bad Debt Since the mail order houses do not extend credit facilities to the customers, there are no chances of any bad debt on account of nonpayment by the customers. (iv) Wide Reach This system has a wide reach as a large number of people throughout the country can be served through mail and the goods can be sent to all the places having postal services. (v) Convenience This system is very convenient for the consumers as the goods are delivered at the doorstep of the customers. Mail order houses usually deals only in the goods that can be (i) Graded and standardized (ii) Easily transported at low cost (iii) Have ready demand in the market (iv) Are available in large quantity throughout the year (v) Involve least possible competition in the market (vi) Can be described through pictures etc.