Sino Treasures Expects Trove of Loyal Customers

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Sino Treasures achieved the goals set for its first holiday catalog, but the president of the catalog of products connected to Chinese culture said the book succeed in unanticipated ways.

"It was the second catalog we produced, and we hit our goals in terms of response rate times average order size equaling revenue, but we got it differently than the way we expected it," Dan Litwin said.

"We are still getting orders from [the holiday catalog], including repeat buyers who ordered before the holidays. The key thing about this business is the customers are hard to find, but once you find them they are yours for life. They are loyal, and they don't return products."

The response rate of slightly less than 1 percent for the holiday book was offset by an average order of $175. That total equaled the average order of Sino Treasures' first catalog, produced for fall 2002.

Litwin and his wife, Georgia Chu, started the company in May "on a couple hundred thousand dollars." With the holiday and fall books each going to a different 100,000 recipients, the company used virtually the same layout for both with just a few changes to the layout and product mix. Both books were 32 pages.

"Since it was a start-up, 99 percent of recipients were prospects, and the strategy was to use freelancers so we could tap into some of the best quality people without paying fees associated with a full-service agency," he said. "We just had a concept, bought some product and hired some of the best catalog consultants we could find."

Litwin estimates that 95 percent of the catalog's buyers are not of Chinese descent. The lists included names from upscale catalogs that had some similarity with Armonk, NY-based Sino Treasures' product lines.

"We used between 10 and 15 lists for the holiday catalog, and the idea was to use enough lists so there would be a statistically meaningful result in which you could compare performance," he said. "The best list did 20 times better than the worst list in terms of revenue per book mailed for both catalogs.

"We are more interested in Chinese affinity than typical demographic considerations or channel preference. Going forward, we will spend less on rented lists and focus more on our proprietary prospect universe."

About 100 SKUs appear in the holiday catalog as Litwin consciously avoided what would have been a "cramped" book.

"We spent more time looking at the product categories than individual products," he said. "What we saw was a lot of disparity between the good and mediocre performers, which again will help us going forward to focus on the best performers."

The holiday catalog's best-selling items were hand-painted Koji ceramic cats ($79), a Sung Dynasty scarf ($59), bride and groom hand puppet set (on the back cover, $59), Koji plate wall hanging with tassel ($79) and Brother Elephants Deluxe Si Ji Chun Oolong Tea ($29). The Koji ceramic cats and Sung Dynasty scarf were also among the best sellers in terms of dollars.

Roughly 75 percent of the holiday catalog's orders came via phone with 15 percent through mailed order forms and 10 percent via Litwin wants to see more orders shift online.

"The average order coming in over the phone takes about five minutes and costs me an average of $4.50 for the call," he said. "But factoring in calls that do not produce an order, and that channel costs me between $7 and $8 per order."

The toll-free number and Web site are displayed on the front cover and at the bottom of numerous pages.


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