And now, to increase the sales and revenues, some of the more enterprising direct marketers use their catalogue to screen for the best performing brands. Then they purchase space in magazines and run full page, four color advertisements for the brands. This can push up reach and sales levels enormously. Another direct marketer, the Magellan Group , bypasses the catalogue route altogether, and uses magazine advertising exclusively. Catalogues can supplement, but not replace the the major retail channels.
Some catalogues impose intimidating contracts, demanding exclusivity in the direct response channel.
The suppliers may be required to have at least one million dollars of product liability insurance, which they can't afford or justify. Some catalogues, while not charging for space, may impose a photography or creative fee, which can erode a company's profits, especially if response levels are not exceptional. Increasing Role For The Internet 1999 is expected to be the year direct response sales achieve a critical mass of volume on the Internet. To date, this new channel has been a minor adjunct to catalogues' core business, but some catalogues are anticipating an important increase in sales online. They are waiting to see whether these sales will be supplemental to their current base levels, or simply be a switch of current clients from paper to electronics.