2012–2013 analytics analysis

Arthur was away for a bit, and so I took his place in a Smart Monkey Interview with Russel Southwood:

Part of our focus on university prescriptions meant ensuring that prescribed English and Classics setworks that were already available on Paperight were reformatted. I drew up a list and progress chart for the reformatting of these texts, and Philippa began the process of scrubbing the HTML for those titles. In the meantime, I continued to hack away at the CSS for the automated HTML-to-PDF conversion, to fix compatibility issues that had arisen when we switched over from Prince XML to DocRaptor. And, I continued testing the PDF-to-Paperight-PDF document conversion software on dev. Oscar continued to work on the university prescriptions list, completing the data and making sure that it was updated for 2014.

On our other content-generation fronts: Andi began an internship with us, working on the grade 11 and 12 question bank. Our conversations with Susanne Collins’ agent were going well, and our next step was to secure funding for the project.

I tried to set up a meeting with OUP to discuss reading tree books and expanding their catalogue, met with Hyreath from Juta, and sent her our contract and additional information. We also had further contact with Elsevier, WHO and Jacana about contracts and content, and set up a CoreSource channel to deal with RHS doc transfers.

Near the end of December, I did a comparison of analytics from 2012 to 2013. This included an analysis of traffic to paperight.com, taking into account both the total visits (including recurring users) and unique visits. As the current version of the Paperight site only went live in May 2012 (marked in the data by a *), all data for August 2011–April 2012 is for the earlier version of the site.

1

Fig 1.1 Overview of total visits from 2011–2013.

In comparing data from 2012 and 2013 it is clear that:

  • There is an overall increase in volume of traffic from 2012 to 2013
  • There are two definite dips, and two peaks in site traffic each year
  • Dips occur in June/July, and December each year
  • In 2012, the peaks for visits occurred in February and March, and again in October and November.
  • In 2013, the peaks for visits occurred in May and October, with two smaller peaks also occurring in February and August.
2011 2012 2013
Jan NA 369 1979
Feb NA 1282 2499
Mar NA 1613 2141
Apr NA 1078 2812
May NA 1211* 3999
Jun NA 950 3041
Jul NA 1349 2467
Aug 12 1398 3054
Sep 185 1264 2494
Oct 334 2319 4363
Nov 215 2460 2779
Dec 203 727 672

Fig 1.2 Figures for total visits to www.paperight.com from 2011–2013.

2011 2012 2013
Jan NA 302 1454
Feb NA 1120 2071
Mar NA 1420 1663
Apr NA 871 2076
May NA 871* 3110
Jun NA 567 2289
Jul NA 875 1793
Aug 10 810 2455
Sep 166 964 1993
Oct 239 1765 3622
Nov 157 1857 2207
Dec 125 309 469

Fig 1.3 Overview of unique visits to www.paperight.com from 2011–2013.

In analysing the license sales for the period from May 2012 to December 2013, it was necessary to show the number of copies sold per completed transaction each month. Transactions marked in red are the result of inhouse testing, those in green are actual sales.

2

Fig 2.1 Overview of actual vs. test license sales from 2011–2013.

In comparing data from 2012 and 2013 it is clear that:

  • There are peaks in May, July (Pelikan Park and Silverstream) and September (Kwamatua High and Tambalethu) of 2013, both as a result of sponsorship deals.
  • While in 2012 we had fairly high organic sales in August and October, we did not see these happening in 2013. The majority of these sales came from Silulo branches.
  • Graph also shows that actual sales in June and July 2012 were roughly the same. Spike was as a result of inhouse testing.

A comparison of license sales data to site traffic:

3

Fig 2.2 Overview of site traffic vs. license sales from 2011–2013.

  • The most interesting thing to note here is that high traffic volumes do not result in high sales. In fact, both years, almost every peak in sales is in a month where traffic is lower.
2011 2012 2013
Jan NA NA 16
Feb NA NA 25
Mar NA NA 170
Apr NA NA 44
May NA 22 398
Jun NA 76 72
Jul NA 121 861
Aug NA 228 84
Sep NA 82 1410
Oct NA 186 44
Nov NA 173 25
Dec NA 20 10

Fig 2.3 Overview of license sales on www.paperight.com from 2012–2013.

For interest sake: here is a breakdown of sales per province.

4

Fig 2.4 Overview of license sales per province from 2012–2013.

Publisher registrations

  • Niz Publications (2/12/2013)
  • Vij Books India Pvt Ltd (14/12/2012)

Strategy and requirements to be VAT compliant in 2013

One of my first assignments at Paperight was to meet with our accountants, Wolfsohn and Associates, to establish whether we needed to register for VAT and whether our grant income received from the Shuttleworth Foundation would be zero-rated or not.

After many discussions and meetings we confirmed that Paperight should in fact be registered for VAT as the grant income from the Shuttleworth Foundation should be recorded as income, but that the income would be VATable at zero percent. We also established that we could claim 14% of input on VAT charged. We needed to be registered for VAT for 1 January 2013, and we agreed that the best method for Paperight was to act as an agency and not a principal.

The grant from the Shuttleworth Foundation comes from an overseas base and is received for specific projects which are monitored.  All grant income received from within South Africa would attract VAT at 14%.

This meant that our website needed to be updated to take VAT into consideration on all documentation, sales calculations and reporting.

Our Paperight VAT strategy for updating our website was  as follows:

Paperight as an agency: the financial accounts perspective

  • Acting as an agency, only our 20% commission received is recorded as income in our books.  The top-up and publisher earnings will be monitored with control accounts.
  • The turnover will then be 20% of the sales made inclusive of VAT as per our agreements with publishers/rightsholders.
  • The suspense accounts will be reconciled on an ongoing basis.
  • The suspense accounts must agree with rightsholder statements.
  • Output VAT will only be applicable on Paperight’s 20% commission.
  • All commission is VAT inclusive and 14/114ths must be paid to SARS.
  • All invoices will be automatically generated on paperight.com based on the information received from rightsholders and outlets.
  • Statements will be drawn which reflect the all invoices and commission earned in one month.  The commission income earned from each rightsholder, and the licence fees earned by each rightsholder is captured in the accounting system at the end of the month.

Paperight’s relationship with publishers

  • As the agent we prepare all invoices on behalf of the publisher.
  • The invoices are created from the publisher (the principal) to the outlet (the customer) for 100% of the value of the licence payment in rands.
  • The currency will reflect in Rands and USD.
Scenario 1.: Local publisher invoices local outlet
  • Paperight issues an Agent Sales/Tax Invoice on the rightsholder’s behalf.
  • If the publisher is VAT registered then the invoice includes 14% VAT on the total licence fee. If no then it doesn’t include VAT.
  • Our rightsholders need to give us their details in order to reflect this correctly.
  • Paperight attracts 14% VAT on commission earned from the licence sales.
Scenario 2:  Local publisher invoices overseas outlet
  • Paperight issues an Agent Sales/Tax Invoice on the rightsholder’s behalf.
  • If the publisher is VAT registered then the invoice includes 14% VAT on the total licence fee. If no then it doesn’t include VAT.
  • Note: the same situation applies to this case as it does when Paperight invoices overseas Publishers.
  • Paperight attracts 14% VAT on commission earned from the licence sales.
Option 3:  Overseas publisher invoices local outlet
  • Paperight issues a Agent Sales/Tax Invoice on the rightsholders  behalf
  • No VAT is charged unless the rightsholder requests it. This information must be according to their tax and advised within their agreement
  • Paperight attracts 14% VAT on commission earned from the licence sales.
Option 4:  Overseas Publisher invoices Overseas Outlet
  • No VAT is charged. This information must be according to their tax and advised within their agreement.
  • Paperight attracts 14% VAT on commission earned from the licence sales.

Overall

  • All Invoices made to outlets are done in the name of the Rightsholder/Principal.
  • Invoices include or exclude VAT dependent on publishers’ VAT registration details being supplied.
  • Paperight will provide the rightsholder with an Agency Sales Statement/Tax Invoice for sales made during the month and the corresponding commission earned by Paperight at 20% inclusive of VAT.
  • The invoices clearly state Tax Invoice as well as Agent Sales Statement.
  • We act as an agent on behalf of all publishers/rightsholders.
  • Our contract includes a clause that says that the publisher gives Paperight a non-exclusive license to deliver the PDF to the copy shop and to collect the rights fee in return. Separately it says that Paperight will pay 80% of that rights fee to the publisher. It also notes that we are VAT registered and that the commission invoice is inclusive of VAT.
  • Rightsholder earnings are held until the publisher requests that they be paid out. This is done through the paperight.com website.
  • The length of time that that money is held does not change the value in Rands.
  • The exchange rate is calculated and recorded at the time of purchase and not at the time of withdrawal of credits. Important where the outlet and the publisher’s working currencies differ.
  • Existing publishers are updated on the changes and information received.
  • The commission invoice to the publishers includes Rand values, inclusive of VAT.

Notes

The most relevant regulations that govern this:

the legislation has been clarified further to the effect that services supplied to a non-resident may only be zero-rated if the services are supplied directly to that non-resident, or any other person, AND both the non-resident and the other person are not in South Africa at the time the services are supplied.

Only when your Publisher and your Outlet are both overseas at the time of the transaction can your commission invoice be zero-rated

54(3) The agent must maintain records of sales and purchases he makes on behalf of his principal

Because an agent may not want to disclose to his  principal who he sold to, or who he bought from, (or how much profit he made) he may keep copies of the tax invoices he made out for the sales or the tax invoices he received for purchases on behalf of his principal.

In such case, the agent must send a monthly  statement to his principal giving details of the goods or services sold or bought, the quantity of the goods or services bought or sold, the selling or purchase price and the amount of VAT charged or paid. This statement can also constitute a tax invoice for the agents commission.  In such case, it must state “statement for agency sales/purchases” and “tax invoice”. It must also show the VAT registration numbers of the agent and the principal

Things to keep in mind

  • The exchange rate is not shown but is based on the Yahoo! exchange rate which has been built into the paperight.com website.
  • Our 20% is currently inclusive of VAT for all rightsholders local and international.
  • We are not paying for VAT on the full amount but on 14% of the 20% commission earned. For each R20 rand out of R100, that would equal R2.46.
  • We are making 17.5% on every book purchase that is not Paperight owned.

Paperight’s relationship with outlets

  • The outlet registers, VAT number and address required.
  • The topup is received and voucher value is recorded on their accounts page.
  • No tax invoice or invoice is issued when receiving credits.
  • Only actual downloads are invoiced for the outlets will receive an invoice upon downloading a printable document.
  • The invoice will be downloadable directly from the website.
  • The invoices contain 100% of the sale, include the Publisher’s details.
  • The invoices include VAT based on the VAT status of the Publisher and not Paperight.
  • The credit value and the exchange rate value in rands will be stipulated on the invoice.

Publisher registration page

  • When a publisher registers they must provide their VAT registration number and liability start date if applicable.
  • This information will be pulled through on the the valid tax certificates created for each sale.

The outlet dashboard

  • When the outlet downloads a book, a copy of the invoice is  available on the outlet’s dashboard to download.
  • When an outlet downloads a book they receive an invoice from the Publisher.
  • Outlet invoices are saved on the outlet dashboard and available to download at any stage with applicable VAT, depending on the Publisher’s details, for the full value of the transactions.
  • Paperight has access to all the invoices that have been made.

Administrative access to website data

  • The invoices and statements sent to outlets are accessible to the Paperight accounts team.
  • The accounts team have access to the  server and are able to search by outlet or publisher for the total invoices issued over a month.
  • The data can be exported in csv format.
  • The most significant cells for importing data into accounting programs are the date and currency format.
  • Admins are able to log in and download copies of invoices where necessary.

The publisher dashboard

  • The rightsholders each have access to their own dashboard so that a copy of their monthly statement is available to download. They can also view the  balance of the money due to them.
  • The rightsholders are also able to request a payment for earnings from their dashboard on the website and forwarded through to accounts.
  • Paperight’s accounts administrators are then able to mark a publisher’s request for withdrawal as paid and the balance is updated on the website.

Currency issues and solutions

  • Payment in a foreign currency will always need to be converted into rands for the accounting system. The Yahoo! exchange rate used is recorded for each transaction.
  • The exchange rate is captured on the date of the first time the document is downloaded (the effective date of the final licence payment), to show the ZAR value at the time of sale. This information is reflected on the statement between Paperight and the Publishers to show them how the rate has been calculated. The rate  used in capturing the Publishers commission received and balance off the entries in the accounting program are also reflected.

Matric Exam Marketing Campaign 2013

For the end of the year, we focused on pushing sales of matric exam material as a priority and other supplementary school material too.  This was to be our most profitable season based on the success of the previous season. Our marketing efforts consisted of the following:

  • post_20131010press releases to media contacts on our work with Pelikan Park (PP) High School and Silverstream Secondary (SS) School (see ‘Turning school sponsorships into great PR’ article for more details)
  • newsletter pieces and blog posts encouraging outlets to commit to in store promotion
  • Gumtree and OLX adverts offering a door-to-door delivery service for past matric exam papers
  • an smsweb email to school principals introducing what Paperight can do to help their schools access study material
  • a Facebook conversation plan and paid Facebook advertising
  • three adverts in The Good Times school newspaper (Hout Bay/Llandudno, Atlantic Seaboard and Constantia).

We intended to also place an advert in Free4All (the free school newspaper that is distributed nationally) with the help of a copy shop partner, but this did not come together in time.

Our Facebook strategy was to fill our page with advice to matric students for their exams and links to relevant products, while targeting parents of matric students through paid advertising. This helped us to increase our page likes, yet did not lead directly to many sales, as far as we could track.

Our door-to-door delivery campaign completely failed with not even a single request for the service.

Our door-to-door delivery campaign completely failed with not even a single request for the service. We offered to print and bind matric past papers and drive them to customers’ homes and offices, and we advertised the papers at very affordable rates. Despite posting adverts on Gumtree and OLX, as well as posting our offer on Facebook and scheduling a paid Facebook advert targeting parents, it did not have the desired effect. The only conclusion we can come to is that the offer may have been arranged too late for most parents to take advantage of. Similarly, the offer only applied to the Western Cape (within driving distance of Claremont) and perhaps the need for the service may have been more pressing in other provinces that we couldn’t get to simply due to a lack of resources.

The press release I sent out about our work with PP and SS was picked up in numerous regional newspapers and again showed our extraordinary ability to generate free press.

we were faced with feedback from unsatisfied customers, explaining that they were turned away by front of house employees who did not know about Paperight or did not know enough about the service

Many outlets committed to instore advertising to drive sales of study material. However, as with most work with copy shops, we were faced with feedback from unsatisfied customers, explaining that they were turned away by front of house employees who did not know about Paperight or did not know enough about the service to a) recognise the query as a request for a Paperight book or b) assist the customer immediately. Yet more evidence that trusting Paperight sales to another business that has control over point-of-sale is a major hurdle that needs to be addressed. Regardless, we made many successful sales too.

The Good Times newspaper is a great publication to advertise with to reach parents directly. Made up entirely of news items about schools in different areas across the Western Cape, parents dip into the newsaper to find photos of, stories of and work produced by their offspring. However, the publication went to print far too late in the year (2nd December 2013) and therefore had no impact on sales. However, our paid advert was featured alongside a full page article about the work that Paperight does and I am sure that it will stick in parents’ minds during future buying cycles.

Based on the results of our Adopt-a-copy-shop/Adopt-a-school project, we did not send any marketing materials (posters or flyers) directly into schools.

post_20131018Overall, this buying cycle was more lucrative than 2012, even though the number of study aids (past papers and study guides) was significantly less. This is perhaps because in 2012 past exam papers had no license fee. From 2013, Paperight began charging $1 (or 1 credit) per document to help inch our way towards sustainability.

These titles are our most valuable content and have been essential to defining ourselves to the public. Any and all future marketing strategies that Paperight implements must build on the strong base already in place.