Connect with us

Snapshots

Junk Mail Publishing: Felix Erken

Taking On The Print Media Giants To Offer Free Classified Ads

Published

on

Felix Erken of Junkmail Publishing

There was a time when newspapers were thick with classified advertisements. A major money-spinner for publishers, it would be fair to say you would have to be mad to take on an entire industry. But that’s just what Junk Mail Publishing did when it introduced free classifieds to South Africa, and in so doing it has completely dominated the market. “Junk Mail turns the classic classifieds business model on its head,” says Felix Erken, managing director of Junk Mail Publishing. “In the old days, you would pay R50 to advertise something; but what if the item you wanted to sell was only worth R50? Junk Mail turns that around by giving the advertiser the opportunity to list his goods for free. Revenue comes from the potential buyer, who pays to view all the ads, effectively creating a marketplace and giving the buyer choice,” he says.

It’s a ballsy business model, particularly given the sheer dominance of the newspapers in the medium. Junk Mail is not unique to South Africa: “The business model has its origins in the 1970s in Canada. It was proven worldwide, but had never been tried in South Africa until we got going,” Erken says. With his experience and involvement in the Auto Trader publication, Erken got to know the owners in the early days of the publication. “I liked the concept of taking on the establishment.” Introducing a classifieds paper turned out to present some thorny and unique challenges. For one thing, people were simply not used to advertising for free. “We had to ask people for permission to carry their adverts. For two years, we had to canvass for every advert.” Then there was the issue of distribution, crucial to the success of the nascent publication. “Junk Mail is a relatively expensive paper and very time sensitive. It is there to meet the needs of the bargain hunter; if you haven’t snapped up the bargains by Friday [the paper appears on a Thursday], someone else has.” Trouble was, newspaper distribution was controlled by the newspapers, which were not happy with an upstart eroding their classified revenues. “We did something that no other independent publication does: we started our own

distribution network.”

This turned out to be more challenging than initially anticipated. “Had we known how difficult and complex it would be, we may never have tried. Back then, though, we naively thought, ‘Why not?’” Erken says if Junk Mail Publishing thought it had cojones starting a free classifieds paper, it needed much bigger ones to take on distribution. “Distribution needs people, warehousing, vehicles, routes – it is a logistics nightmare.” But, undaunted, the company made its start, initially in less formal outlets because proprietors have to agree to let you put your publication in their store. Today it is the country’s fourth biggest distributor, taking over 100 titles into some 10 500 outlets nationwide. “Distribution has become a revenue generator for us,” Erken confirms. Junk Mail has consistently innovated for success. When the Internet appeared as a potential new marketing channel, Junk Mail was there. “It was easy to see the potential, but people were going crazy, forgetting their original value propositions.“ Others thought it was a fad that would simply pass and swept it under the carpet. Within the turmoil, Erken kept a steady hand on the Junk Mail ship: “We decided to embrace the Net to protect our market. If it didn’t work, the loss would be minimal.” The decision to go online turned out to be prescient, and consistent with Junk Mail’s business model. “We remained true to our value proposition of letting the buyer pay to view the ads and successfully combined print publishing with the Web.” Today, Junk Mail Publishing employs about 800 people. But complacency, says Erken, is probably its biggest threat. “Ongoing success depends on continuous innovation and awareness of market currents. Anyone with a PC is a potential competitor, from the one page sheet ads, to the knock-and-drop newspapers and the mainstream newspapers. Staying the King of Classifieds depends on being aware of all these threats and managing our business model to be better than them.” Contact: +27 12 342 3840, www.junkmail.co.za

Snapshots

How Nic Haralambous Launched His 6 Year In The Making, Overnight Success

Nic Haralambous launched 8 failing businesses. He used the lessons learnt from that failure to ensure the success of his new business Nic Harry.

CEOwise

Published

on

By

ceowise-entrepreneur-magazine-thumbnail-designs-nic-haralambous

Nic Haralambous, the founder and CEO of Nic Harry who started off selling bamboo socks online and now has brick and mortar stores with a larger product range around the country. Nic has also written a book titled Do. Fail. Learn. Repeat. which is a brutally honest look at entrepreneurship and follows Nic’s entrepreneurial journey. Learn from his failures and how he used them as the foundation of his success.

Related: (Podcast) Speak More Honestly

Continue Reading

Snapshots

Vuyo Tofile Of EntBanc Group Talks About Finding Solutions And Partnering To Offer The Most Value

Vuyo Tofile offers his advice on how to know if you’re ready to scale and how to get it right the first time.

CEOwise

Published

on

By

ceowise-entrepreneur-magazine-thumbnail-designs-vuyo-tofile

Vuyo Tofile, CEO of EntBanc Group (Pty) Ltd, which is a privately held enterprise and financial technology group. They empower small businesses with the right tools including products such as mySMEtools, which is used by over 46 000 small businesses. Learn about partnering for success, develop tools and resources that your customer base needs, and how can you scale?

Related: Do You Have That 1 In 100 Business That Can Scale And Land An Investor?

Continue Reading

Snapshots

Eben Uys Shares His Concept Behind Mad Giant Brewery And How You Can Make Your Business Stand Out In A Crowd

“You just need to start” says Eben Uys, don’t make up excuses why you aren’t ready. Just start.

CEOwise

Published

on

By

ceowise-entrepreneur-magazine-thumbnail-designs-eben-uys

Eben Uys, Co-founder and CEO of Mad Giant, a Brewery in the heart of Johannesburg, South Africa. Eben brings new life to craft beer and has made his brewery and restaurant Urbanologi, a destination hub. His advice: “You can do things that give you short-term gains, but it might not benefit you in the long term. Try a lot of things over a long period of time and build a reputation and a network.”

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending