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Junk Mail Publishing: Felix Erken

Taking On The Print Media Giants To Offer Free Classified Ads

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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

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25 Of The Most Successful Business Ideas In South Africa

Find out who’s making waves in numerous industries and how they managed to differentiate themselves in local and international industries.

Nicole Crampton

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“Disruption is all about risk-taking, trusting your intuition, and rejecting the way things are supposed to be. Disruption goes way beyond advertising, it forces you to think about where you want your brand to go and how to get there,” says Richard Branson.

South Africa has its fair share of innovative and disruptive businesses taking both local and international industries by storm. From cutting edge space technology to reimagined logistics, and innovative business models, here are 25 of the most successful business ideas in South Africa:

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Colin Timmis Says ‘Position Yourself For Success By Starting With The Numbers’

People pay first who they feel pressure from, so people will pay you when they feel pressure from you.

CEOwise

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Entrepreneur Colin Timmis founded South Africa’s first cloud accounting practice in 2011, Real Time Accounting. Then, a few years after being appointed as South Africa’s first Xero partner Colin became Xero Country Manager South Africa. Xero is the emerging global leader of online accounting software that connects small businesses to their advisors and other services.

Related: Pat Pillai On How He’s Helped Over 5000 Entrepreneurs Using 3 Key Steps

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Two 20 Year Olds Reshape Entrepreneur Landscape With New Social Investment Platform

The Merge vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

Merge Connect

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It’s no secret that finding the right investor for your venture is a challenge that most entrepreneurs face. The current process of finding investment is one that is outdated, and limits entrepreneurs due to a lack of time, and network that is needed to find the right investor. But, this doesn’t have to be the case in today’s digital society, says Zander Matthee and Brandon Bate, co-founders of Merge.

“By making the Internet the middleman, we are able to connect with each other much simpler and faster than before” was Zander’s response. “We have taken advantage of this, and have created a digital meeting place for entrepreneurs and investors” added Brandon.

Merge is a social platform that connects entrepreneurs and investors. It aims to simplify, refine and accelerate the process of finding investment for entrepreneurs, and the process of finding investment opportunities for investors. From idea to developed, the platform allows entrepreneurs to present a brief outline of their venture to a network of all investor types. While doing this, entrepreneurs are able to browse through, and connect with investor profiles that suit their requirements.

Related: 8 Codes Of Success That Helped Priven Reddy of Kagiso Interactive Media Achieve A Networth Of Over R4 Billion

From Private Investors to Venture Capital, and everything in between, Merge allows all investor types to join. Investors have the opportunity to personalise their feed to suit their investment preferences, and will be able to connect with innovative businesses – that are looking for investment – at their fingertips. Only once there is a mutual interest in each other, are users able to enter a secure private chat where they can discuss further and share documents under the protection of a digital NDA.

The two boys became good friends during their time in high school at St Stithians Boys College. However, it was only in their last year, 2016, that they decided to pursue their dreams and create the platform. They didn’t know how to code, so rather ironically, they needed some form of investment to get the platform off the ground.

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“We knew we had a mountain to climb, but we believed in our vision and that we were really trying to make a difference, and if we could get others to see that, they would be onboard.” said Zander.

Related: Lessons From The Rich And Famous: Manage Your Money Like Oprah To Avoid Going Into Debt Like Nicholas Cage

Chris Peters is one of these individuals that bought into their vision, and became Merge’s first investor. As a successful entrepreneur and part time investor , Chris saw how much value the platform could bring to all entrepreneurs and investors alike. His marketing and strategic background gave him insight into how Merge could play a vital role in a lucrative space, Brand involvement.

“Entrepreneurship and SME development are two key factors that drive economic growth in developing countries like South Africa. That is why brands are currently getting involved, and looking to support entrepreneurs through various means. We have built a platform that allows these brands to successfully market, and execute on the programmes they have created to assist entrepreneurs.” said Chris

Merge was created to assist all entrepreneurs and investors in finding exactly what they are looking for, regardless of age, race, sex, financial position or social status. That is why anybody can sign-up as an entrepreneur. As long as you are determined and willing to work for your dreams. For too long has the investor space been seen as an “elite club for the select few”, and Merge is here to change that. Whether you’ve gotten your bonus at the end of the year and looking for new investment opportunities, or are an active investor, you can sign-up. Whether you’re currently working, or a retired industry leader, you can join as a mentor.

Their vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

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