Those magazine subscription sites

How exactly does the business model work?

[jleane]

Ok, this is probably a bit of a long shot but does anyone know how those magazine subscription sites work?

I have a couple specific questions and would be grateful for an answer to any one of them:

Is the basic principle to contact individual mag publishers (I assume there would be dozens if not hundreds) and ask them what 'cut' you get for every subscription you sell? Presumably it would be relatively high, otherwise those subscription sites wouldnt be able to offer such generous comissions.

And what about the payment side of things? Do you simply forward the relevant details (cc number, name, address etc.) to the publisher or need you conduct the transactions yourself?

Hope someone can share some light on this area for me.

Cheers :)

[graywolf]

Of the one's I've seen it's one merchant who offers subscriptions to hundreds of magazines. However most people only offer a few per website (ie fishing sites offer fishiong magazines, cooking sites off cooking magazines, etc).

[Michael Anthony]

The UK magazine merchant I work with pays a flat fee per subscription. I send the traffic via an aff link, they identify the visitor as mine with a cookie and they pay me every month.

Makes reasonable money year round, and flies at Xmas time.

[jleane]

Hi fellas, thanks for the replies so far. I guess what I am asking, then, is what is the business model for the magazine merchant? I've been making a reasonable amount as an affiliate, but 8% is a pretty poor comission and the merchant who I'm working for has no real respect for affiliates - I figure they must be pulling in at least double that much for every subscription I sell. I'm therefore thinking of 'going it alone'.

Thanks again,

Jonathan

[antoine]

This is how I understand it.

1. You have a list of magazines on your website. Someone visits your website and purchases a magazine using your merchant account. You accept the funds minus the merchant fees. You continue this process all week.

2. At the end of the week you forward your orders to each independant publisher and pay the remit fee. You pay a fee for each magazine subscription sold. This might be $3.00 for one subscription, and depending on volume you may actually get paid for selling some magazine subscriptions like maxim. The publishers usualy have your credit card on file to automatically deduct the amount you will owe.

3. You continue business as usualy and negotiate lower remit rates.

The problems with having a magazine site is you need a lot of volume to earn a significant income. You should easily be able to pay affiliates 30% or so.

The fees:

10% of what you earn should go to the merchant account, and a 6% roll over for possible chargebacks.

10% or so of the subscription will go to pay the remit, sometimes you will get paid.

Advertising will be the bulk of your expenses.

Hope this helps, take the numbers as an example and dont quote me on them.

[jleane]

2. At the end of the week you forward your orders to each independant publisher and pay the remit fee. You pay a fee for each magazine subscription sold. This might be $3.00 for one subscription, and depending on volume you may actually get paid for selling some magazine subscriptions like maxim. The publishers usualy have your credit card on file to automatically deduct the amount you will owe.

So where exactly does MY profit come into the equation? Do the publishers offer you some kind of 'wholesale' price on subscriptions?

[antoine]

I dont understand what you're asking. Your're profit is what your charge for the magazine subscription minus what you pay for the remit and your other fees....

[jleane]

You've been really helpful and sorry, please correct me again if I get it wrong, but you're saying I could sell a 12 month subscription to Vogue for say $99.95 and I would only have to pay the Publisher a one time fee of a few dollars? How do they break even, is it simply that the more subscribers they have the more they can charge for advertising?

[gopi]

>> is it simply that the more subscribers they have the more they can charge for advertising?

You got it!

[antoine]

Yes you got it. Some magazines are more reliant on advertising than others. Science and nature based magazines like National geographic and Discover will charge a higher remit fee than magazines like Vogue, Maxim, etc. Those magazines want the most subscriptions they can get so they sometimes pay you a small fee for each subscription you sell. Or else the remit fee is very small. But you cannot sell the subscriptions for less than they specify, otherwise there would be a price war and eventually someone would sell subscriptions for $0.99.

[jleane]

Thanks very much for the insight guys. It would seem to me that the most difficult part of the process would be forging and mantaining relationships with all those different publishers?