July 7, 2014 Last Updated 2:22 pm

Consumers love cheap goods, but so do far too many publishers

A Monday afternoon rant – brought on, no doubt, by a long weekend away from the computer keyboard

The American consumer loves a bargain (and I’m sure the trend extends across borders, as well). The idea that one should pay the least for anything, whether it is food, books, clothing, hardware, has consequences that works its way through society. Want milk for ten cents less than you’re used to paying? Shop at the big box store, but don’t lament the fact that the local, convenient grocer may eventually go out of business.

This topic is top of mind for me because a new grocery store opened near me, in the same location as recently closed store. The old store was awful, an out-of-town owned chain run by a private equity company.

The opening of the new store was widely anticipated because its location is so central to the town it is in. But the grocer, a mid-sized chain, is trying to do something a bit different – higher quality, more selection, different brands, but still offering reasonable prices for many staples. At its core, however, is service.

To achieve a high level of service it has employed far more checkers and baggers than your typical store – more deli workers, and meat and fish counter people, too. Dozens of young people, who would otherwise be unemployed, are now working for the new store, and damn glad to be working and getting a paycheck.

The first week of the store’s opening saw it packed with shoppers. But something seemed a bit off: crowds were milling about the excellent produce area, the deli featuring lots of meat and cheese varieties, the fresh meat and fish areas, but the lines at check-out were short or nonexistent.

I spoke to the store manager this weekend and he is worried. Sales are disappointing and he wonders if the new store will make it. I’m worried, too. I’m worried for those new workers who suddenly are getting a paycheck, but soon may be back searching for a job.

Yet, as someone who cooks and does much of the shopping, I can tell you that if I went across the street and shopped at Walmart I’d only save money because there would be so little of value to buy. Prices are not always cheaper there, though shoppers seem to think so. I know, I compare, I know the price of milk and eggs and good rib-eye steak. The steak may be a few dollars cheaper at Walmart, but its a few ounces lighter, too (not to mention half the thickness).

But this subject would not be fodder for a column on TNM had I not recently had several conversations with readers who asked me for a recommendation for a digital publishing platform. It happens every week and I never come out and recommend any particular company right away as that would be like a doctor diagnosing a patient the minute they walk in the door (and besides, I try and be somewhat neutral on these things knowing that everyone’s situation is different).

But the one theme that is constant is price, many simply are only swayed by price. Vendors know this and many have gone to revenue share models. Others have had to cut their prices, while still others have given up on the market.

One platform owner told me recently that he was surprised just how price sensitive publishers were when it came to digital publishing solutions. This vendor said that he had a conversation with a publisher who no longer knew what he was paying for paper and postage, but a couple hundred bucks a month for a Newsstand app seemed far too rich for his budget.

He knew the sales call would not go well when he looked around the office and noticed it was nearly empty.

“Where are your production people, another office?” he asked.

“Oh, we only use freelancers now. It cuts down on benefits and other overhead costs,” he was told.

Who the heck is going to be producing the future digital products, the vendor wondered, before realizing that the only thing this publisher would be interested in was a platform offering automatic conversions of print files, not a native digital publishing platform.

“This is the age of shoddy,” the New York Herald wrote in 1863 to describe the poor quality of goods being produced to make a quick buck during the Civil War. People complained about that back then. Today we sigh and say “well, at least I saved a few dollars.”

But cheap, shoddy goods – whether food stuffs, clothing or even publishing services – are costing us jobs. We really need to rethink the value of a dollar saved when that dollar might go into the pockets of our fellow citizens, or our fellow journalists and publishing professionals. It has to start someplace, why not with our own attitudes towards what we produce and the price we are willing to play to produce it?

  • Nick Martin 3 years ago

    Great article and food for thought (no pun intended) 🙂

    I may be slightly biased, as my reason for starting MagLoft was to give those super high priced solutions a run for their money, but I do agree that cheap won’t get you far today. We have come to realize this after offering crazy cheap prices for creating digital magazines. We still have extremely competitive prices, but we can also see ourselves increasing prices again in the not so distant future.

    We are starting to see that it’s much more valuable for clients to have the 1:1 support and help with getting setup, instead of just offering a “fire and forget” (aka PDF upload) solution. But that does come with a price of course, our valuable time.

    Anyways, it will be very interesting to see what pricing mid level solutions will eventually stabilize around. For many people, the idea of paying upwards $500-$1000 a month is just too much and I agree on that. On the other hand, anything less then $50 a month just won’t be enough to support the platforms long term growth I believe. Which ultimately leads to another shutdown and clients with magazines that will no longer function.

    We ran a poll some months ago with the first MagLoft BETA testers asking how much they would be happy to pay for 1 magazine with unlimited downloads, and the average was $66 monthly.