Give our vendors a raise
Beginning in April, Real Change will cost two bucks. Here’s why
Let’s talk about you, our readers, and the price of Real Change. On April 3, your $1 newspaper will go the way of the $4 movie ticket, the 95-cent gallon of gas and the
85-cent Metro bus fare. That’s what these things cost when Real Change started in 1994. It’s 2013 now. Things change.
Most of us understand that selling Real Change isn’t begging, and it isn’t asking for charity. It’s a job. Our vendors sell a quality newspaper that people want, and they are out in all kinds of weather, connecting to their customers.
As prices have risen, we need to ensure that our vendors earn a wage that’s worth their while. Vendors buy this paper for 35 cents and sell it for a dollar. On a straight, no-tip transaction, they’ll make 65 cents.
Some vendors, of course, make more. Tips vary widely. Female vendors, for example, seem to get tips more regularly. Vendors who are well established at a certain spot tend to do better as well.
About half of our vendors, however, sell the paper more casually at a rate of perhaps five or six papers an hour. Maybe one in three of these sales comes with a tip. The math here gets the vendor a little better than half way to minimum wage.
The new price of $2, with vendors paying 60 cents for each paper, means each paper sold nets the vendor a solid $1.40. It raises the floor for what our vendors earn to something closer to $9 to $10 an hour. It’s time for this to happen.
When the price of Real Change goes to $2, we’ll become the sixth North American street paper to make the shift. For European street papers, such as London’s Big Issue or Germany’s BISS, a $2 to $3 price equivalent has long been the norm. Vendors there typically pay 40-50 percent of the cover price for their papers.
Street newspapers in Montreal, Vancouver, B.C., Denver, Chicago and Washington, D.C. have preceded us in this, and we have learned from their experience. Each says that the $2 price has been a great thing for both the vendors and the organization, but if they could do one thing differently, they’d prepare the vendors and readers better.
One paper increased the price quickly and without much explanation. Between the upset vendors and readers, they lost more than 40 percent of their circulation. Half of these readers eventually came back. We’d like to avoid this scenario altogether.
So before we made any final decisions, we assembled a cross-section of vendors to ask their opinions. We had established vendors who get good tips, and we had more casual vendors who sell fewer than 100 papers a month. We had long-time vendors and new recruits. We had men and women.
About half of these vendors walked into the room undecided or fearful. Once we talked it over, every one of them favored the increase.
Many of these, and many others since, went on to talk with their customers about paying the $2. The feedback here has been extremely positive. “About time,” is a common response, along with “It’s worth it.”
Over the past few months, we’ve had three open vendor meetings to discuss the change. The majority of our vendors support the new price as something they know will help them succeed. Some, however, still fear that the change will mean lost sales.
Our 2011 reader survey told us that you would support a $2 price if it helped the vendors. We believe that reader response will put their fears to rest, and that you’ll let your vendor know you support their success.
Priced to thrive
It’s challenging to do the work we do on the resources available. We publish a quality weekly paper sold by more than 300 low-income and homeless people each month on a little over a million dollars a year.
More than half our budget comes from approximately 1,500 individual donors, with a median gift of $50. Another 10 percent or so comes from foundation support. The rest is earned income, mainly from circulation.
Unlike most street newspapers, who set the vendor price at 40-50 percent of the cover, we have taken this opportunity to actually lower our vendor rate to 30 percent. But the extra quarter per paper that comes to Real Change will make a very big difference.
We’ve grown a lot over the past three years. The capacity issues that once threatened our stability — inadequate administration, outdated technology, insufficient space and chronic overextension — have all been addressed, and we’re on solid footing. But we still struggle.
Plans for regional expansion were postponed last year due to lack of capacity. We just hired a staff organizer, but for years, this position went unfilled because adequate staffing for the newspaper, vendor services, administration and fundraising were a higher priority.
We still only have about six weeks of operating expenses in reserve, and we dip into a line of credit to manage cash flow several times a year.
By expanding one of the most reliable income sources we have, the price increase will give Real Change the income we need to thrive and not just survive.
Thank you for your wonderful support of our work. You make it all possible.
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