Arizona Highways magazine is eliminating eight jobs by outsourcing the handling of catalog merchandise and subscription orders by phone.
Win Holden, Arizona Highways publisher, said the cost savings could be “north of $300,000.”
Arizona Highways is part of the Arizona Department of Transportation, but Holden said the magazine doesn’t receive state funding. It’s supported by subscriptions, books and other catalog sales.
Currently catalog items held for shipping are stored in a state-owned warehouse on 22nd Avenue south of Grand Avenue, beneath the Interstate 10 and 17freeway stack. The catalog offers items ranging from Arizona Highways books to salsa.
With outsourcing, Kable Fulfillment Services would handle catalog sales, as well as customer-service calls. The calls — including subscription orders — would be fielded in Kable’s Mount Morris, Ill., headquarters. Catalog orders would be shipped out of a warehouse in Oregon, Ill.
In addition, Kable would manage some finances — like processing subscription checks — out of an office in Louisville, Colo.
The three-year contract with Kable will run a little under $1.28 million, Holden said.
Similar state magazines, including Texas Highways and New Mexico magazine, already outsource their customer-service and warehouse operations, Holden said.
“There are not other magazines even close to our size that continue to operate these functions in-house,” he said.
Another difficulty with the current set-up, Holden adds, is hiring even more workers to handle gift orders that swamp the magazine during the holiday season, which begins Oct. 1 and runs through Christmas.
“Almost 70 percent of our revenue is in a three-and-a-half-month period,” Holden says.
“We actually start hiring people for that in July,” he added.
This year, however, outsourcing will make seasonal hiring unnecessary. And the eight full-time workers could be laid off by Labor Day, about when Kable is expected to take over their jobs.
Holden said the employees would be offered help in finding work in other state positions — or the private sector.
“We’re working with them on things like interviewing skills, resume enhancement,” Holden said.
Two employees in the warehouse section will be kept on, he added.
“We’re going to have to continue at least a limited warehousing operation here,” Holden said.
Some items will still be stored on site, including those for the Arizona Highways gift shop, 2039 W. Lewis Ave., Phoenix, Holden said.
More warehouse space for archives
The newly created warehouse space, he added, won’t go to waste. Arizona Highways will continue using some of its space for archives, while other state agencies are always looking for more storage, he said.
“I’d be very surprised if there wasn’t a line of people looking to take advantage of that space,” he said.
He added the cost-cutting comes at a time when the magazine, like other publications, faces competition from the Internet.
“We’ve had some erosion of subscribers,” he said.
But Arizona Highways has its own Web site, which draws a lot of hits from overseas visitors, Holden added. The magazine and Web site, he said, have the same mission: “to promote travel to and through Arizona.”
On top of that, Holden said, the Web site generates revenue through on-line sales. And in to two to three months, a new feature will be added — the Arizona Highways travel planner. Online visitors will be able to reserve flights and book hotels and events.