Magazine Startup Operations

Paper Summary:

This paper explains that the primary capital expenses for the start-up magazine, 'Investment and Money Management' can largely be reduced to operating expenses by utilizing contract vendors to perform these functions rather than develop them in-house. The author points out that the printing and distribution business functions are the most cost-prohibitive to establish and are basically not in-line with a magazine publisher's primary line of business, which is advertising and content creation; however, some publications are beginning to outsource production as well. The paper stresses that performance targets for the outsource vendors are critical to the magazine's long-term success. The author includes quality and performance metrics, which should be used for the printing and distribution vendors. The paper lists the vendor contract terms and conditions for the distributor and printer.

Table of Contents:
Abstract
Capital & Operating Costs
Printing
Distribution
Performance Targets for Outsourced Functions
Checklists
Number & Types of Vendors

From the Paper:

"Distribution: no upfront capital expenses are accrued or required. Assuming the 65% capitalization already accrued is based on in-house distribution facilities then by outsourcing these operations this entire cost structure is eliminated and the only cost is the operating expense associated with each publication cycle. If $100k were allocated towards the first year's distribution operations then by outsourcing these operations at a rate of $18000 annually saves approximately $82% of costs."

Sample of Sources Used:

• Baldwin, L. H., & Hunter, S. (2004). Defining Needs and Managing Performance of Installation Support Contracts: Perspectives from the Commercial Sector. Santa Monica, CA: Rand.
• Flagan, A. (2001). Digital Book Design and Publishing. Afterimage, 29(2), 15.
• Greco, A. N. (2004). The Book Publishing Industry. Mahwah, NJ: Lawrence Erlbaum Associates.

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MLA Citation: