What Is Profit and Is It Evil?

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Title:	What Is Profit and Is It Evil?
Creator:	Anonymous and Mary Lowe and Carolyn Cooper
Date(s):	January 1986
Medium:	print
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What Is Profit and Is It Evil? is a early 1986 essay in two parts. The first is by an anonymous zine editor. The second parts are by Carolyn Cooper, the editor of Blue Pencil #3 in which the article was printed, and Mary Lowe.

The first part of the essay, "a discourse on the secrets of zine finances," examines fan attitudes toward publishing fanzines at a profit.

The second part discusses (in great detail) "The Breakeven Method," "The Base Cost Method," "The Market Value Method," "The Martyr Method, "The Philanthropic Method." The essay discusses transparency in costs and why zine eds are so dodgy when asked the question of how much it cost to published a fanzine, prepayment for zines, and partnership pitfalls.

The reason why the first part had an anonymous author was explained by Carolyn Cooper:

Due to the unfortunate fact that many fans cannot accept the concept of IDIC and find it necessary to persecute those who voice an opinion differing from their own, opinion editorials on sensitive subjects will be printed anonymously at the discretion of the editor and request of the author. I can only hope and pray that someday this policy won't be necessary. Peace be with you. Live long and prosper.)

From the First Part of the Essay: by Anonymous

For years, there has been a lot of controversy about 'profits' made on zines, ranging from mild differences of opinion to out and out mudslinging. Generally these arguments have had the net result of lots of bad feeling and suspicion without clearing the matter up any. This article is an attempt to sort out some of the basic issues involved, and put the question of profit into a more neutral perspective.

The first and most important issue is the definition of profits as it relates to zines. Profit can be calculated in various ways. The simplest, and the one usually employed by fans, is selling price minus printing costs. By this definition, almost every zine available is making a profit. The amoxant varies from zine to zine, but the implication is obvious. Printing is not the only cost that editors consider when pricing their zines. Besides printing, there are art supplies for layout, conference calls and postage to contributors, advertising (minimal in fandom but still significant), going to conventions (almost essential to sell the zine, particularly for new editors), record keeping supplies, typewriter ribbons and elements, and other miscellaneous supplies, inexpensive of themselves, that add up. These items are difficult to assign on a per copy cost, but when the totals are added into the printing costs the out-of-pocket expenses of the editor are 50 to 100 percent greater. The difference between the selling price and the total costs results in what is called gross profit. A survey of current printing and supply prices suggests that most zines selling price is very close to the actual cost to the editor.

But even zines making a 'gross profit' are not 'profitable' ventures for their editors. Few businesses stop at gross profits in their figuring. And zines are a business because they involve the buying and selling of goods and services. Net profit is arrived at by subtracting from gross profit expenses like rent, equipment payments - overhead - and, more importantly, labor. It takes many, many hours of skilled labor, sometimes hundreds, to produce a zine. The layout and pasteup alone would cost four or five hundred dollars on a typical hundred page zine if done professionally. With most printruns at 500 copies that's a dollar a copy. That doesn't include the time spent typing, editing, writing, drawing, designing, ,collating, answering mail, and sending out orders. If these costs were included, then the vast majority of zines are operating a huge loss, and a very few are breaking even. It seems unlikely that anyone is making a net profit on zines.

NOW, many fans would say that the labor costs should not be counted. After all, this is a hobby; this zine is being produced as a labor of love, not money. Besides, isn't it illegal to make money on copyrighted material? And shouldn't the editor see the zine as their tribute to the fandom that inspired it? And what about all the contributors' time invested and all they get is a contributor's copy?

The question of legality isn't really relevant. If the parent company objects to its material being used, then that will be the problem of the individual editor, not the buyers. If the editor wants to take that chance, then that is her choice. There is a slim possibility that too many abuses might lead to a crackdown on all zines, but it is negligible.

Contributors' rights is a more difficult issue. It is true that the editor receives the money made on a zine. It is also true that the editor has usually spent a great deal more time on it than any one contributor. The copyright problem makes it impossible for editors to pay their contributors for the time they do spend, and if the editor is making a large profit that is unfair to the contributors. However, as explained earlier, editors aren't making huge profits. As it stands, poets are probably getting a fair compensation for their time with a free copy, and many artists are making their efforts worthwhile by selling their art in auction. In fact, some artists are making more money than the zine editor who published their work. This could be construed as unfair to the editor who gave that artist exposure. The other artists and the writers do not have any recourse. In fact, as most editors can testify, story submissions have slowed to a trickle. Writers tend to give their stories to editors they know, or start there own zines, since otherwise their efforts are almost essentially free.

This brings us back to the labor of love idea. For every fan I have ever met, zines are a labor of love. For writers, artists and editors alike, zines are a way to learn their craft in a public forum as well as share ideas with like-minded people. But many editors feel that after all the work and hassle involved, all the lonely nights doing the zine while everyone else is at the movies, they want a little something to show for it. Others consider a finished zine enough reward, but it is difficult to consider the zine editor who wants more 'evil'. Is it 'evil' for a bookseller to mark books up 40 percent over the publishers price? Is it evil for editors of academic magazines or small press publications to finance their projects with federal grants? There seems to be another issue involved.

Fans expect editors to keep their prices low so that they can buy more zines, believing that it is the editor's responsibility to fandom. And that is a very questionable premise. Fandom is a large group of people with a mutual interest, not a circle of close friends. Close friends don't engage in public, printed discussions (or wars), and they are usually quite lenient with each other about money matters. Fans have a lot more in common with each other than most people, but how does that create an obligation that we treat each other like best friends or close relatives? Granted, we give each other more leeway than just anyone, even when we haven't met, but this still does not obligate the editor to spend a lot of time and hard work with the only reward of someone she doesn't know reading her zine. Even that reward is pretty small these days when very few people send LOCs anymore. As far as the editor is concerned her zine has disappeared into a black hole the moment it gets bought. It's hard to keep motivated on nonexistent feedback. For many editors the small extra they make is their way of reassuring themselves that doing zines is worthwhile, and somebody does care enough to shell out their hard earned money for the project. A side note - often zines sell out their print runs very slowly, and in order to keep up a yearly publishing schedules the editor must make their cost back in time to finance the next zine.

Most editors wouldn't give up publishing because of these problems, but most editors also do not like to be constantly on the defensive about their prices. If 'making money on fandom' is wrong, then editors shouldn't be the only ones on trial. When artists can sell art in auctions at excellent prices, and when fans can resell their collections at 2 to 5 times the cover prices, it doesn't seem fair that editors should be attacked for the way they price their zines. I don't really believe anybody should be attacked.

Here is the key point. Does it really matter to the zine buyer what exactly was involved in pricing a zine? The buyer's primary concern should be whether she is getting her money's worth, not what the editor's motives are. If the price is too high, or seems unfair, or if you feel the editor is making excessive money, then don't buy the zine. If enough people agree with you and also don't buy the zine, then that editor will have to change her policies, or stop publishing. Many people don't like this alternative. They seem to believe they have a right to buy whatever zine they want at the price they want. This is obvious nonsense. If editors don't do things the way you think they should, allow them the right to their own opinion. Some editors will feel that they want to give fans the results of their labors freely, and others won't. If the issue is important enough to you then don't patronize the editors you disagree with. This is the basic principle of free enterprise, and fandom is nothing if not a free market of exchange of ideas as well as zines.

From the Second Part of the Essay: by Carolyn Cooper

"At Risk" Prepayment; Who's on First?

When I got ready to pub a zine, my husband had only one stipulation—I couldn't take pre-orders. He based his bias on the sob stories of my friends, the horror stories he heard at conventions, the outrage he read in UT and a thorough knowledge of my bookkeeping habits. Fortunately I agreed with him. When I hear editors mention pre-orders as a way of paying for the printing, I shake my head in dismay. Is it worth the costs in increased pressure, in unnecessary anger, in broken friendships, in lost buyers and in divided fandoms? I believe the emotional and social costs are unrecoverable and with few exceptions I've been proven right. Not all pre-payment is "at-risk", but all pre-payment carries additional risks—and obligations.

The earlier in a zine's production the orders are taken the riskier the venture. It's bullhockey to say pre-payment is necessary in order to gauge interest in the zine—SASEs are sufficient. It's bullhockey to say you can't cover the initial costs of announcement flyers, ads in UT and Datazine, and correspondence with potential contributors. At worst these should run $20.

With few exceptions (I can count them on one hand with fingers left over), I actively discourage fans from pre-paying. I resent zines that insist I must pay up front for a copy; that only those fans who pre-pay either part or all of the zine will get a copy. It's like including gratuities on your dinner check—if the service was good, I would have tipped more and if the service is bad, I object to paying for it. What about the poor fans who find out too late? How do I even know if the zine is worth the price? Where do these people get off telling me I have to be their venture capitalist? I don't like being a silent partner especially when there are no audits of accounts or annual reports.

[snipped]

Basically it is a question of honesty. I would feel much more inclined to let go of my cash if the editor were honest and said, Help! Can't cover the $1500 printing bill. Need pre-orders."

How much nicer that sounds compared to "Only those fans who have pre-paid will receive a zine; there will be no overrun." Not only is the latter statement a lie (there are ALWAYS overruns, unless it's an under-run and then who doesn't get their copy, mmm?) but is egotistical, implying that wanting more complete information such as actually viewing zine or a review is an offense. I'm sorry, but "caveat emptor" is merely a suggestion for buyers, not a blanket protection for sellers.

If a zine editor does take pre-payment, she is obligated to produce the zine or offer a refund—a FULL refund—in a reasonable time, say 2 years. And quite honestly, after that much time, I feel it's the editor's duty to contact the buyer; then it is a gesture of goodwill rather than a response to a threat. (However, if the fan doesn't take the refund offer, SHE has to shut-up and quit kvetching.) Again, honesty would go a long way towards getting my cash. If the editor has a writer's block, admit it and if possible why; I might be able to help. If the money went to pay the rent and the zine is on hold until the capital is replaced, say so—I might even cough up some extra cash in exchange for extra discount copies. If the bloody thing went monstrously over budget, then tell me why and offer to either take more money, pub it as two issues or refund my pre-order. There are always solutions, but being honest is the first step to finding them. I have editing friends with stacks of orders ready to go to press, but they don't have the pre-order money at hand; it went to bills. I've known editors who hated their typewriters, dreaded each day, because they were behind on a zine for which they'd taken pre-payment; they couldn't afford to pay back the money, it was spent and they couldn't finish the zine because of the pressure. A viscious circle. And before someone self-rightously says, "Well, they shouldn't have spent the money on anything but the zine" I defy them to sit with $300 of pre-orders in the bank and a $250 carburetor collapse and not dip into the coffers.

[snipped]

So hear me and be saved! Forsake the temptations of pre-paymentI Arise and go forth an indebted, but morally free editor

From the Second Part of the Essay: by Mary Lowe

Setting A Fair Price: Common Methods of Price Determination

The first major faux pas I ever made at a zine convention was bouncing into the dealer's room and asking the woman in charge of it who Katharine Scarritt was (she happened to be the woman I was speaking with at the time); my second major faux pas was asking how much it cost to print the gorgeous zine she was setting on her table. Zine editors are hesitent, for a lot good reasons, to discuss actual costs and pricing methods. Primarily because they want to avoid any potential trouble with officials from the production studios, the IRS and the fans. A great many fans believe strongly that editors should only charge the printing cost per zine, while others engage in competative games of one-up-manship using fiscal information to sow dischord and damage reputations. It is unfortunate, but true. Fortunately, enough editors have graciously shared their pricing techniques that a fairly comprehensive lists of methods is available.

Breakeven Method

I've chosen the most complex first so that I can be brief elsewhere. Breakeven is the point in any capital investment where you "break even"; i.e. get back all of the money you've invested. Once you've hit breakeven, the rest is theoretically profit.

[snipped]

The Breakeven Method is the most complicated and require the most work, but it also gives you the most accurate financial picture for making your plans.

The Market Value Method

The Market Value Method is the quintessential capitalist pricing technique—and the most controversial. It is based on what the market will bear. If you CAN get $16.00 for your 100-page zine, so be it. It is the pricing method used in zine and art auctions and often found among special interest zines such as K/S. There is no formula to calculate, however, you MUST know your market.

Name authors and artists, fancy covers and other frills all add to the market value. One editor confided, "If you rely heavily on con sales, you can add $1-2.00 for a color cover (4-process)". Indeed, I was berated by some editors and fans for pricing FROM A CERTAIN POINT OF VIEW 1 so cheaply compared to the going market value for 4-process covers and interior color. More than one buyer told me they would gladly have paid another $1 or 2 for the covers alone. Another editor admitted, "Any K/S, or any other slash zine, has a couple of dollars added. Kind of a hazardous duty charge. And besides people will pay to get what they want."

And that's the trick—people will pay extra to get what they want...if they can't get it somewhere else cheaper. If you plan to use the Market Value method, be sensitive to the mood of the marketplace; be aware of the growing disgruntlement with high prices and inferior writing, the move toward higher production values and graphics quality. Study the current prices of zines similar to yours and then formulate a marketing position. Most of all, be careful. Fans can be viscious when aroused.

Martyr Method

Okay, okay, my prejudice is showing, but basically this is any method used that creates a loss for the editor. Usually this is done with the noble intention of performing a service for fandom, whether this is the actual result is the subject for a SOAPBOX . If you're willing to lose money, you don't need to calculate anything. Pick a price. How about $2.00 for our theoretical 100-page zine? If you're not THAT altruistic, figure the zine's base cost and then decide how much you're willing to lose per zine. All I ask is that you don't drag around the conventions bemoaning your fiscal deprivations or awarding yourself the Nobel Peace prize. YOU chose to make the sacrifice.

Philanthropic Method

The Philanthropic method differs from the Martyr technique in that the editor is not interested in WHEN she gets her money back, just in minimizing the long-term loss. To determine the price first calculate the base cost, then add 10-25% for the pre-postage price. This method was popular back in the days of cheap printing, short print runs and lots of able body volunteers. However you choose to determine and set your prices, remember this—the price is NEVER rightl

Partnership Pitfalls

It's the most natural thing in the world to think Betty-Jo and I have been friends since high school, and we both like 'Dynasty' - we should be partners in this great zine idea of mine! But there are several potential hazards in that wonderful brainstorm. Anyone contemplating a partnership should consider them.

First, he obvious - Betty Jo is your best friend: do you really want to stress your relationship with a business deal. And a zine partnership must eventually come down to that, since money is necessary to produce the zine, and money will be received for the zine when it's sold. Many good friendships been ruined over money matters. Be sure you have discussed the handling of the money thoroughly beforehand. Both of you clearly understand any agreements you make. In fact, it's best to put those agreements in writing to avoid any possible confusion later, or the inevitable 'but you said' or 'but I thought' Things to keep in mind: how is the zine going to be paid for, where are zine funds going to be kept (a separate joint checking account usually works best)/ how are any overages or shortages going to be handled, who is going to keep the careful records required for a successful zine, who will store the zines, handle mail orders, deal with the post office, answer correspondence, etc, etc, etc. Many a close friendship has crashed on the rocks of mundane clerical work.

Second, 'We both like Dynasty' (or Star Trek, or Star Wars, or whatever) may not be enough to hold a partnership together. It is not wise to presume that the only necessary element of a good partnership is a mutual affinity. Street gangs have mutual affinities, but they kill each other all the time. Half the charm of fandom is that among any group of any kind of fans, there are an infinite number of points-of-view on the common interest, and people can be quite militant about their ideas. Again, make sure you have discussed the project, that you both agree on the kind of zine you're doing, the editorial policies on submissions, revisions, artwork, theme and so on. This doesn't mean you both have to believe the same things. Perhaps one zine that caters to one partner's preferences, and another that accommodates the other

partner's ideas. But your beliefs about your subject should be fairly close. In Star Trek fandom, for example, it would probably not do for a K/S fan and a Sahaj fan to combine efforts.