Effectiveness of promoting a new e-commerce site with bulk print media / direct mail?

That's not really what the word "profit" means. In this example you are breaking even. You are not profiting. In any case I think .2% is a little high to expect since you have a built in barrier to entry - there's too many steps.

A lot of the direct mail I get tells me to call a number, which is a bit less effort than "go type this url in" especially if you have tracking like http://url.com/chicago2

That said, I see TV ads all the time for "general appeal" stuff where the CTA is "go online" so it must work to some extent - maybe because they know 50% of people who are watching TV are online at the same time.

I dunno - seems a little risky to me. If you can afford to be out 10k, then give it a go, see what happens.

Sorry I worded it wrong!

What I meant was, if marketing costs $10,000 then with a 0.20% response / conversion rate, I will generate $10,000 worth of profit from the products being sold.

So, essentially: for however many dollars I spend on marketing (direct mail), as long as I get a 0.20% conversion rate I will cut even. No profit, no loss.

So if you are right about 0.20% being too high - then I may be at a big loss. However, maybe I am a bit silly but I think 0.20% is achievable (well, higher.. because otherwise I don't make a profit).

IE - If I was promoting iPads through direct mail and had a relatively attractive offer, I don't think it would be too hard to sell 1 per 500 homes who receive the flier - considering there is on average maybe 2 or so people per home as well.

Also, I won't be putting 10K into direct mail immediately. I will test the waters by hitting up 1,000 homes per run and measuring conversions to see how it goes. If I can consistently turn a profit on multiple smaller mailings of 1,000 homes - then it will give me the confidence to expand and mail 100K+ homes.

It also seems like a good way to grow your own ecommerce store/brand. The marketing is getting paid for through the sales of the products. You make a profit (if conversions are good) all while getting your store out to a lot of people!

PS: The ecommerce store I am thinking of setting up will be selling electronic items (or at least one in specific). The item will appeal to people who won't have a problem jumping online as the item appeals to those who are most likely good with the computer/net.

The idea you are going after should work. The piece you are missing is capturing the customer and their value to you over 6 months, or multiple mailing campaign.

For instance you break even on the first mailing, you send them to a website they see the product or products you are promoting. 100% of buyers are captured for future marketing, and 25% of non buyers are captured for future marketing.

You now focus your efforts on three fronts present customers, tire kickers and those who need a second date with your marketing campaign. This is where the real money is going to be made. You have reduced buyer friction on two fronts and possibly on a third.

So let's get back to your campaign.

Front one Past buyers- You email your past purchasers cool stuff they like. Let's say you get another sales bump from them within thirty days of 20% of your last mailings gross =$4,000

Front two. Tire kicking non buyers who raise their hand for you to market to later. After 5 emails over 30 days you convert 10% of original mailing list revenues that is $1,000.

Presently after 30 days are in the black $5,000 - list hosting expenses say $200= 4,800 net profit for the month. Obviously, this is a great thing!

Front three remailings- For simplicities sake let's say you break even or even lose a $1,000 on the next mailing but you still in and around the same numbers as before plus revenues created from the people who are still on your list and buying from you. You do the math and start to understand the money is not made on the first or second mailing but on the list you are creating.

Thanks Morpheous. I knew it was not as simple as (cost-profit) on the first run. People will buy not just once from the site, they will buy more than once. They may spread the message, etc. You could offer them a free upgrade to express shipping if they share you online (FB or twitter), so things like that can easily bump up your measly conversion rate.

As you said, capturing the emails of people is awesome. You can capture the emails of all people who ordered (buyers) and also of those who do not buy but sign up under your list. Then you can promote a special discount etc to those on the list (who have not bought yet) and make them buy, etc.

You seem to know a lot more than me on the topic, but I just wanted to clarify that I was aware it was not just the initial cost and profit that I was taking into account - but even if that were the case (ie - no additional revenue down the line, a once-off profit only) the campaign, I think, would still be profitable.

Again, all depends on the item and how appealing it is to the general populace.

There are people that say post card marketing to promote websites is very profitable.

They target consumers who have bought online products in the same price range. There are targeted lists available. They test first with the minimum amount of leads you can rent. When they find a list that works, they rent a larger amount of leads.

Most of these people don't take phone calls; they just use the url. If you have a list of people who have previously bought a similar products for a similar prices, you stand a good chance of having a sucessful campaign.