Many other publications had similar original backing. Perhaps more importantly, newsstand (and later supermarket) distribution of periodicals and papers around the country has long been controlled by mob-backed unions. It is a well-known fact that new publications wanting premium placement need only pay the right-connected someone, and presto, the magazine is suddenly on newsstands. Cross the wrong people, and even an established magazine suddenly has circulation problems. Finally, the porn industry is a Mafia-connected business, and the biggest money market for newsstands are the “skin” magazines.

These skin magazines are not exactly the place where Procter & Gamble wants to advertise Pampers. In fact, no legitimate advertiser wants to risk being associated with the skin rags. They are, therefore, dependent for ad revenue on mail-order ads. Guess who sells these ads? You got it. You want to advertise in the magazine at a good rate? You go to them.

Once the mechanism was set up to sell mail-order advertising, they didn’t want to stop with skin magazines, though. How about all those other magazines the union drivers were distributing? Surely the publishers would allow a special, discounted mail-order rate if you came through the “right agency.” You wouldn’t, after all, want to risk the “efficiency” of your newsstand distribution, plus its good business. Mail-order firms can’t afford to pay fifty grand a page like Budweiser, Nike, or General Foods. They need a discounted rate. It’s sort of hard, though, for the magazine’s advertising sales staff to be selling ads for full price to one guy and at more than half off to another. Why not just farm out the job to someone else and let them keep part of the revenue for themselves? Mail order’s not that big a deal anyway. And why get the wrong people upset? Guess who you have to buy the ads through? You got it again! Incredible!

It’s my experience that you deal with these guys with caution and you always pay your bills.

But usually you don’t even have to pay your bill when you work with these guys. They pay them for you and become your partner.

Isn’t that a great deal? Well, maybe not, but given the fortune it costs to advertise nationally, it’s a deal few small-time mail-order promoters can resist. Here’s how it goes.

You run a mail-order ad once or twice in a publication, and you pay for it. If the ad is highly successful, meaning that it pulls in more than double what it costs, leaving ample margin to pay for the merchandise and still turn a profit, then they run the ad once or twice at their own expense with the response going to them to make sure it really works. You ship out the merchandise at your own expense for the privilege of being considered for this partnership relationship. If the ad is successful, a deal is struck. The deal typically goes like this. They’ll spend half a million on advertising, the first half million of which comes back to them. After that, you get the money you need to ship the merchandise. After you both cover (this assumes at least $750,000 in sales) the money is split as follows: One-third of each dollar goes to you to pay for the actual cost (and you better not cheat) of the merchandise. The balance is divided 75 percent for them, 25 percent for you. You put up no money. You have no risk (unless your ad does less than $750,000 in sales, in which case you could be out $100,000 or so to pay for the merchandise) and you get 25 percent of the profit. If the ad really does well, they’ll even put up another million or more.


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