Combating Rising Costs: United Business Media’s SVP Manufacturing on Her Company’s Cost-Reduction Strategies

(Book Business, August 22, 2008)

With magazine publishers increasingly feeling the crunch of rising paper, postage and gas prices, Publishing Executive Inbox checked in with Marie Myers, United Business Media’s SVP of manufacturing, about the effects these costs are having on the global media company, and some of the cost-reduction strategies it’s employing going forward.

Inbox: How much of a difference have co-mailing and co-binding made to your postal costs?
Myers: Co-mailing saves 13 percent on our monthly titles. That is after the freight is deducted from the postal savings. Co-binding weeklies [saves] much more. One of the books saves about $500,000 a year; the other is about $300,000.

Inbox: How difficult was it to get together with other publishers? Is having the right printer/distributor to work with the most important element? Is flexibility key when it comes to working with manufacturers to save money?
Myers: The printer brought us together. One of our co-bind partners is a competitive magazine and that took much more to get off the ground.

Inbox: What about drop-shipping? Is this part of your co-mail strategy, and how important an element is it in terms of savings?
Myers: Drop-shipping is part of our co-mail strategy, and it is hard to tell how much the co-bind vs. drop shipping saves us. That is why I gave you an overall savings. Drop-shipping is a very good portion of the savings. On some of our books we do drop-ship only. The savings for that is about $14 per thousand copies. Of course, the larger the print order, the larger the savings will be.

Inbox: The continuing rise in gas prices has changed the game a bit as private carriers are tacking on fuel surcharges, making them in some cases less competitive compared to the USPS (at least for now). How have recent fuel prices forced you to change your cost-saving strategies, if at all?
Myers: At this point in time, we have not changed our freight carriers. We are in the process of seeing if the USPS could be less for the monthlies. Weeklies using the USPS require many trucks and air freight to get the required delivery times.

Inbox: The ABM and MPA have been busy educating members on the need to utilize co-mailing to reduce overall costs incurred by the USPS for the periodicals class. What’s your take on the need for all publishers to work toward new mail strategies, and how do you think this can be done? What do you think will happen if they don’t?
Myers: We have tried this before by using a few different alternate delivery services. That did not do well, and we were paying more than the post office. I am 100 percent [in favor of] publishers getting together and coming up with an innovative way to reduce postage and freight costs. If the ABM or MPA wanted to start something, we would be happy to join the group.

Inbox: Is United Business Media reducing circulations as part of its cost-cutting strategy?
Myers: Yes.