How many fulfillment houses are needed?

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Laura Wieringa, circulation manager at Allured Publishing Corp., which produces such titles as Cosmetics & Toiletries and Skin Inc., is facing a difficult decision that every circ director must confront. Allured currently uses two fulfillment houses, and two of its titles are coming up for bid in the spring. Would it be easier to consolidate and use just one fulfillment house? Arguments run both ways. Christine Oldenbrook, director of marketing and e-media at Bobit Business Media, said she prefers using one fulfillment house because of the leverage on prices and services it can give a company. However, she added, one fulfillment house doesn’t always fulfill the needs of your various titles. Oldenbrook has worked at other organizations that used more than one fulfillment house. At Primedia Inc., paid books didn’t fit in at the company’s chief fulfillment house, so Primedia had them handled elsewhere. That much smaller house didn’t have as much room to negotiate, she said. The books she handled while at Hallmark Data Systems were all taken care of by the company’s main fulfillment house, where they got much better treatment because there were so many of them. A second fulfillment house is normally used when the first cannot meet the needs of all a publisher’s titles. Hearst Business Media, for example, uses a separate house for its medical books because the American Medical Association and American Osteopathic Association only allow their files to be handled through specific fulfillment houses, said Barry Green, VP-director of circulation at HBM. CMP Media also relies on more than one fulfillment house. “A majority of CMP’s publications use Hallmark Data Systems because [it is] circulation-based,” said CMP spokeswoman Meryl Franzman. “The second fulfillment house is for the limited number of subscription-based publications CMP has.” At Reed Business Information, all its controlled-circulation books are handled inside the organization, while paid circ is done by Communications Data Service. “In our case, the reason for the difference is simply that our in-house system is not set up to manage paid subscriptions,” said Eric Rutter, VP-controlled circulation at Reed Business. Wieringa said, “If you have both paid and controlled circ, it is important to make sure you have a fulfillment company that really can do both well.” Using one fulfillment house is generally better from a logistics perspective, Oldenbrook said. “The impact to your staff—your fulfillment teams and your circ managers—and all the different ways fulfillment houses process things and require instructions can be crazy,” she said. Wieringa said, saying that while having one fulfillment house streamlines the process, it can have its own set of problems. “If anything goes wrong with the system—or if the fulfillment company gets bought or sold, etc.—we have all our eggs in one basket,” she said. “Having fulfillment spread across more than one fulfillment house gives us experience with multiple systems so, in theory, any need to change fulfillment should be easier.” One challenge to the entire industry, however, is the relative lack of quality fulfillment choices, Oldenbrook said. “There isn’t as much incentive for the larger fulfillment houses to do a lot for you other than the initial contract agreement because there aren’t too many places for a magazine publisher to run to,” she said. “If you’re a small publisher, this is a real problem, since it’s seemingly impossible to get attention from a large fulfillment house.”
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