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Magazines count on sales door to door

Many publishers ignore dangerous, ugly side of subscription industry,
critics say
By Dave Umhoefer and Meg Kissinger
of the Journal Sentinel staff
Last Updated: Aug. 1, 1999

New York - America's multibillion-dollar magazine publishing industry has a decades-old habit it can't break.

It is hooked on door-to-door sales as a cheap, easy source of millions of new subscribers - and critics say publishers are in denial over the abusive and dangerous culture on many traveling sales crews.

Some publishers who contracted directly with Kay Hillery's troubled Subscriptions Plus Inc. have moved to reject orders she generates. But there appears to be no interest in investigating the field-selling industry as a whole.

Publishers express horror over allegations involving the magazine subscription industry, but they said they cannot be blamed, in part because they are unaware of specific trouble spots or they lack resources to root out bad actors.

But the trade's biggest critic isn't buying it.

"The publishers shouldn't be able to sleep at night given the dozens of deaths," said Earlene Williams, a longtime watchdog over magazine crews, which then-New York Attorney General Robert Abrams described to Congress in 1987 as "sophisticated criminal enterprises masquerading as legitimate sources of employment."

"They (the publishers) are taking the money," Williams told the Journal Sentinel. "They are ultimately responsible."

Williams can't accept naivete as an excuse. Congress, partly at the urging of her Manhattan-based Parent Watch group, held hearings twice in the mid-1980s revealing a host of child labor and consumer abuses on traveling crews.

Many publishers contract directly with companies that run crews, so they can't argue that layers of subcontractors separate them from the street sellers, she pointed out. Close relationships between publishers and major figures at clearinghouses that process field orders date back 60 years.

Michael Pashby, an official with the Magazine Publishers of America, said the industry instituted guidelines last year aimed at curbing deceptive and abusive practices in field selling. The voluntary agreement encourages publishers to approve all companies that send them orders.

He acknowledged that publicity had made some abuses on crews obvious, but he defended door-to-door in general as viable.

"There is nothing inherently wrong with doing business door-to-door," Pashby said in an interview at the MPA headquarters in New York.

Some publishers do no business through door-to-door, while some magazines can rely on it for 15% or more of sales, industry experts say. It's a vital, if relatively small, part of the revenue mix for many.

Subscription prices typically are higher at the door. The reason: Postage and handling charges of $7 or more are tacked on. Street agents typically get $4 or more on a $20 subscription, although many complain they are shorted. Crew drivers usually get $1 per sale by agents. The crew chief makes about $9 of the $20, another $4 goes to the clearinghouse, and $2 is left for the publisher. Postage and handling charges add to the take of the clearinghouses and perhaps to those below.

The magazine trade group has estimated that field sales account for 1% of all subscriptions. That would mean 3 million subscriptions or some $60 million, Pashby said. Williams' educated guess is $200 million.

Hearst, Hachette Filipacchi Magazines and Petersen Publishing Co. have severed ties to Hillery's company. It's unclear so far how much that will hurt Hillery's business.

Chip Block, an industry veteran and Petersen board member, said he could offer no defense of agents like Hillery, who generate millions of dollars in orders for publishers.

But to suggest that publishers simply not take money from these agents is unrealistic, he said. Publishers pay careful attention to subscription totals because they are linked to how much they can charge advertisers, Block said. Recently, publishers have become more dependent on agents for new subscribers.

He recommends that publishers combine to hire their own subscription agents. He pleaded ignorance of any details of companies that have hired underage children.

"We are sitting here in New York," Block said. "Frankly, it is a revelation to find out that this stuff is still going on."

Also stunned was John Gill, agency manager at the non-profit Children's Better Health Institute, a non-profit whose wholesome children's titles like Jack and Jill were being sold by Hillery's crews. The institute has since persuaded its clearinghouse to stop taking Hillery's orders for its magazines.

Despite his concerns, Gill said, the non-profit will probably rely more heavily on door-to-door sales as it fights to stay competitive, unless evidence of widespread abuses forces a change in strategy.

Parent Watch's Williams, interviewed in her Manhattan home office stacked with complaint files against traveling crews, believes the case has been made over and over. She is clearly frustrated because efforts to regulate field sales have largely failed over the years, and self-policing has had mixed results.

"It kills me that when we started Parent Watch in 1982, some of these children who are dying were not even born yet," said Williams, whose son was briefly on a magazine crew.

"It is time for the public officials and the magazine publishers to do the right and brave thing."

Appeared in the Milwaukee Journal Sentinel on Aug. 2, 1999.

Chart; Journal Sentinel; Caption: Following the trail \ Here's the sales chain of how subscriptions flowed into Oklahoma-based clearinghouse Subscriptions Plus and into the hands of magazine publishers:

Door-to-door sales agents. Recruited through newspaper ads and off the street.

Car handlers. They pick up and drop off agents and shepherd them back to their motel in large vans or station wagons. Some recruit agents for extra money.

Crew chief. Travels with crew from city to city but not out on sales calls. Hires junior managers, agents, car handlers. Magazine clearinghouse. Processes subscriptions under contracts with publishers for specific titles.

Subscriptions Plus had direct authorization from some publishers and also sent its orders through two large clearinghouses who have their own contracts with publishers. The two are: Publishers Consulting Corp., Michigan City, Ind., and National Publishers Exchange, Clearwater, Fla. NPE severed ties to the company after the Wisconsin van crash.

Magazine publishers. Some publishers use no door-to-door sales, while others rely quite heavily on it for some titles. Here is a list of magazines Subscriptions Plus sales people sold door-to-door.

American Heritage: American Legacy. Argus Publishers Corp.: Popular Hot Rodding, Super Street. Atlantic Monthly Co.: The Atlantic. Avcom Publishing Inc.: Audio/Video Interiors, Car & Audio Electronics. CMP Media Inc.: Windows Magazine. Coastal Associates Publishing L.P.: Computer Shopper. Collins Chase Publications, Inc.: Cross Country Skier. Communications Co.: New Man. Conde Nast: Allure, Details, Mademoiselle, Wire. Continental Communications of Indiana Inc.: Sport Truck. Dialogue Diaspora, Inc.: American Visions. Earl G. Graves Publishing Co., Inc.: Black Enterprise. Emerge Communications Inc.: Emerge Magazine. Entrepreneur Inc.: Business Start Ups. Fairchild Publications: "W" Magazine. Fast Company, Inc.: Fast Company. General Media Automotive Group: Drag Racing Monthly. General Media: Stock Car Racing. Golf Digest/Tennis Inc.: Golf Digest, Tennis. Good Family Magazines: Christian Parenting Today. Gruner & Jahr U.S.A. Publishing: Child, Parents. Hachette Filipacchi Magazines Inc.: American Photo; Audio; Boating; Car & Driver; Car Stereo Review; Cycle World; Elle; Elle Decor; Family Life; Flying; George; Home; Metropolitan Home; Mirabella; Popular Photography; Premier; Road & Traffic. Hearst Corp.: Esquire; Harpers Bazaar; Motor Boating & Sailing; Redbook; Sports Afield. International Data Group: PC World. K-111 Communications Corp: Automobile. Lang Communications, Inc.: Working Mother. Mariah Media, Inc.: Outside Magazine. McDonald Communications Corp.: Working Woman. McMullen Argus Publishing Inc.: Surfing; Volleyball. Meigher Communications: Garden Design; Saveur. Morningstar Inc.: Mutual Funds Magazine. News America Publishing, Inc.: TV Guide. New York Times Co.: American Home/Gardening. Penthouse International Ltd.: Penthouse. Petersen Publishing Co.: Car Craft; Guns & Ammo; Motorcyclist; Motor Trend; Skin Diver Teen; Sport Magazine; Hot Rod. Reader's Digest Association, Inc.: Readers Digest; Travel Holiday. Retirement Living Publishing Co.: New Choices. Rodale Press: Bicycling. Sendai Publishing Group: Electronic Gaming Monthly. Strang Communications Co.: Charisma. Surfer Publications, Inc.: Bike Magazine. Times Mirror Magazines Inc.: Field & Stream; Golf Magazine; Outdoor Life; Popular Science; Salt Water Sportsman; Skiing; Ski Magazine; Yachting. Times Ventures: Vibe. Trans World Publishing Inc.: Art & Antiques, Boating World. U.S. News & World Report Inc.: U.S. News & World Report. Walt Disney Magazine Publishing Group: Discover. Weider Publications: Mens Fitness, Shape. Wenner Media: Mens Journal; Rolling Stone; US Magazine. Werner Publishing Corp.: Golf Tips; Outdoor Photographer; Plane & Pilot. World Publications, Inc.: Wakeboarding. Ziff-David Publishing Co.: Family PC; PC Computing; PC Magazine; Yahoo Internet Life.

Credit: Journal Sentinel staff

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