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Do You Send Supplemental Invoices / Publisher Price Increases / Bill Backs?

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The question came to me today from a former customer from another magazine subscription agency.  She wanted to know if Rivistas Subscription Services sends out supplemental invoices if a publisher increases their price after the library has paid the original invoice.  After I told her we do not send supplemental invoices, she asked a follow-up/clarifying question; “Once the publisher has accepted the order and the invoice is paid, I will not receive another invoice for that item until it is time to renew it again, correct? Even if the price increases after the invoice has been paid?”

I get this question very frequently, so I want to explain part of the reason supplemental invoices exists in this industry, and explain why we do not run back to our customers with additional invoices after they have already paid for their magazines.  I’ll explain the process the other subscription vendors have and then share our process.

Most of the other agencies will send the library a formal invoice just as quickly as they can.  Let’s say your magazines run January-December and you typically submit your magazine orders to your subscription agency in late July or August.  Most library subscription vendors will go ahead and submit the invoice in July or August with a term of Net 30, indicating you need to pay SOON.  So the library pays the invoice in July or August.

The thing is, most publishers do not set their following year rates until September.  And subscription agencies will not submit your order with the publisher for January starts until mid-to-late October.  So the subscription agency has been sitting on your money for 2 1/2 months as they receive price updates from publishers for the next years’ prices.  The problem is that the agency has already billed you.  So the agency has to turn around and send you supplemental invoices for the correct amount.  They find it more important to collect your money early and inconvenience you by sending supplemental bills to collect for the difference.  To me, this is highly inefficient.

Subscription agencies have to submit payments to the publishers when we place your magazine orders.  So part of the reason for collecting a libraries money on the front end is so the agency does not have to carry the cost of the subscriptions.  Most businesses carry some sort of cost because an inventory is required.  For a subscription agency serving libraries, the cost is having to pre-pay your subscriptions.  It’s just part of doing business.

To me, the supplemental invoicing process used by agencies is flawed, inefficient and lazy.  Why would any company want to inconvenience their customers like this?  Wouldn’t it be much better to put a process in place that works for libraries, rather than against them?  I’ve always wondered if any other business could get away with doing this.  If I purchase a new TV from Best Buy, would they be allowed to chase me down in the parking lot and tell me “Hey, the price of your TV just went up, here is an invoice for the difference.”  In that situation, the idea is absurd.  Well, I feel it’s about as absurd to be billed for someone’s inefficiencies.

Here is our process for that same scenario using Rivistas Subscription Services:

For January starts, a library would place their order with us in the same time-frame they are accustomed.  However, instead of instantly sending an invoice to the library, we wait until we have submitted all of the orders to the publishers before we send an invoice back to the library.  Since we have your order, we know what titles you are going to order, so we verify pricing with the publishers prior to placing your order and make sure when we send you an invoice that we have the correct price on file.  That way, you can receive one invoice for your magazines and not have to worry about supplemental bills coming to you.  When you think about it, it’s also much more efficient for us, too.  We do not have to send multiple orders or checks to the publishers and by verifying prices on the front-end, we help all of our customers who order that particular title.  It also helps maintain consistency by publishers renewing the subscriptions properly, keeping the flow of subscriptions in tact.

I always get asked the question of whether or not we just “eat” the publisher prices.  No, we don’t.  We simply bill you correctly to begin with.  The final cost is the same, it’s just accurate on the front-end with us.  As a general rule, magazine publishers do not alter the cost of subscriptions mid-stream.  Newspapers, do, but they are a different beast altogether.

We have a process like this in place because we focus on public libraries and school libraries.  Most schools do not have this to worry about, but public libraries are often faced with the practice of supplemental invoices.  Since the question comes up so often, I thought it would be good to explain the reason behind the invoices from other agencies and the reason we are able to avoid sending them.

If you are interested in getting a quote from Rivistas Subscription Services for your magazine and periodicals, please go to our quote page for more information.

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About the Author:

Bonnie is a guy who is crazy about magazines. He sold his first subscription to Field & Stream at age 12 and has been practically selling magazines ever since. Working in the magazine industry since college, Bonnie has worked in school library sales, public library sales, publisher relations, customer service – all surrounding the magazine world. Bonnie is one of the partners of Rivistas and handles the PR & Marketing side of things.

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