Back to the Basics
Paper represents more than 30 percent of production costs for magazine publishers. Therefore, production directors should have a well-defined strategy for purchasing this essential component of print magazines. With the continuing firm paper market and the high level of supplier consolidation being announced, your paper purchasing should not be left to chance.
Let's assume you have already selected the grades and basis weights of paper desired. The following will outline a broad framework of issues to be addressed during the formation of a custom paper strategy. This strategy can assure long-term quality supply and lead you to competitive prices, even throughout the ups and downs inherent to the paper market. The three basic paper purchasing models are:
Printer purchased: Your printer handles all aspects of paper buying and includes the cost in the print invoice, which is billed after production.
Publisher purchased: The magazine publisher handles all decisions and administration of paper ordering and inventory. The printer defines roll width and pounds required. Publisher specified/ printer purchased: A hybrid approach that gives the publisher an element of control over supply and price, but allows the printer to handle purchasing administration.
The decision of which model is best for your magazine depends on tonnage volume, whether you have in-house expertise and a variety of financial and administrative issues. Once your requirements grow beyond 3,000 tons, consider the publisher-purchased or publisher-specified route. Then you'll need to decide on a sales channel:
Mill direct: The magazine publisher deals directly with the mill in negotiating supply and price arrangements. Merchant or broker: A mediary sells you paper after negotiating with various mill alternatives. The mill pays the mediary's commission.
Many large publishers prefer to deal direct, while more modest-sized houses appreciate a merchant or broker. Some mills prefer to distribute their products through merchant channels, while other mills prefer the direct selling approach. In some cases, a production director can do well by blending both approaches.