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Magazine supply failures cause newsagents to protect their business and fail XchangeIT compliance

Mark Fletcher
January 8th, 2014 · 50 Comments

We sold out of a top-selling monthly magazine in the week of on-sale just prior to Christmas. We ordered more online and a day later were advised by the distributor they were out of stock. I contacted the publisher and they helped the distributor discover that they did indeed have stock. We were told we’d have stock in two days, on the Thursday. The replacement stock actually arrived the following Monday but it was the old issue.

Frustrated that we had been out of stock already for several days I bought copies of the magazine at retail and put them on the shelves for sale. I’m in a shopping centre with five other magazine outlets and I refuse to encourage my customers to buy magazines elsewhere – hence my decision to purchase additional copies at full retail for re-sale in my business.

By doing this I have set my business up to fail the data compliance requirements of XchangeIT. I am sure I am not alone in this.

XchangeIT, magazine distributors, magazine publishers and newsagency software companies need to agree on a mechanism by which I can report that I have acquired additional stock elsewhere.  My newsagency software background tells me this is quite achievable. I envisage a simple transaction through which I add quantities of an item purchased outside the usual magazine supply grid with this transaction advising XchangeIT electronically and through them the distributor.

This approach can stop me and other newsagents who engage in this practice be being told off by XchangeIT for failing by being a good retailer. It can also give visibility to the distributor so that they know what I could have sold had they been able to supply the additional stock I sought.

While there have been discussions around the XchangeIT table about this on several occasions, no action has been achieved. This needs to change – especially in this current era of undersupply of some key titles.

Magazine distribution failures hurt our businesses not only in lost immediate sales but in educating shoppers to consider other retailers that compete with the newsagency channel. We need to do everything possible to serve our customers for the future of our businesses. If this causes us ti fail XchangeIT standards in the meantime so be it.

How prevalent is this move of purchasing magazines at full retail and selling them in the newsagency? I’d guess that it happens between 1,000 and 2,000 times a year.

On a side note: I wish magazine distributors better handled spare floor stock. Too often I am told there is no additional stock where there is stock.

13 likes

Category: magazine distribution · magazines · Newsagency challenges · Newsagency management · XchangeIT

50 responses so far ↓

  • 1 shauns // Jan 8, 2014 at 8:08 AM

    Yep i have had to restock Tv week and Womens day 2 weeks in a row from woolies

    1 likes

  • 2 Bruce // Jan 8, 2014 at 10:02 AM

    I have done this around 3 times over the last six months. I refuse to be out of stock of some titles and drive ppl away.

    0 likes

  • 3 P // Jan 8, 2014 at 10:23 AM

    why o why does it take so long for anything to be achieved in this industry If this is a good idea which it is i bet it will take forever if at all for something positive to happen

    1 likes

  • 4 murray // Jan 8, 2014 at 11:21 AM

    We get over supplied TVW and WD every week, the amount we send back is ridiculous. We are told they cant be cut because its a SBR product. I early return a minimum of 35 TVW and 45 WD every week

    0 likes

  • 5 Mark Fletcher // Jan 8, 2014 at 11:33 AM

    The only ones who will benefit from this proposed change is newsagents – by us not being whacked unreasonably by XIT. The publishers probably won’t like it because it legitimises a retailer buying at retail and reselling.

    1 likes

  • 6 Brett // Jan 8, 2014 at 3:00 PM

    We are being undersupplied WD lately, we sold out Wed Morning and Murray is sending back 45 early?

    1 likes

  • 7 shauns // Jan 8, 2014 at 3:57 PM

    Just checked and looks like BHG have cut back as well , so the question is does Xchangit even work or has it ever worked .

    0 likes

  • 8 Brett // Jan 8, 2014 at 4:05 PM

    We need to reclaim ownership of our data. The concept of XchangeIT was originally the agents and the distribution companies have hijacked it.

    The data would provide an efficient allocation of magazines, important for both the agents and the Publishers.

    Not a good deal however for GG or Net.

    1 likes

  • 9 shauns // Jan 8, 2014 at 4:10 PM

    Who owns Xchangit ? isn’t it the mag companys ?

    0 likes

  • 10 Mark Fletcher // Jan 8, 2014 at 4:12 PM

    Shaun there are seasonal reductions this time of year based on history. Check your sales history.

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  • 11 Gary // Jan 8, 2014 at 4:13 PM

    I would’ve asked what SBR had to do with initial allocations, they just don’t want the model to change as they get paid to distribute. Where is ends up and if it sells is irrelevant to them. They prob prefer it if it comes back then they get paid again for back/extra orders.

    In our experience, I swap alot of mags between 2 shops with separate accounts and get those early warning xchangeit compliance messages.

    Whats disturbing is supply some of the regular weekly titles will drop 40 suddenly (20%) with no basis and is actually lower than net sales while the other shop supply remains the same. This tells me its not a widespread shortage and further evidence the supply model is broken.

    At least with 2 stores I can move stuff around on a next day basis to alleviate some of their mistakes. Dreaming if you expect customers who missed out to come back in 3-4 days IF stock actually arrives.

    /end rant.

    1 likes

  • 12 Mark Fletcher // Jan 8, 2014 at 4:26 PM

    No SBR for BHG as it’s a Gotch title.

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  • 13 Jarryd Moore // Jan 8, 2014 at 4:48 PM

    Brett,

    I agree.

    The fact that we are charged such an exorbitant amount (or anything at all) for XchangeIT is absolutely crazy. It’s a relatively simple piece of software and newsagents pay $200+ per year for electronic data that is largely generated automatically.

    We’re paying money for someone to take our sales data. It should be the other way around.

    Ideally all newsagents would boycott sending any sales data until the fees were removed and changes to the software were made that reflected the needs of the industry.

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  • 14 Mark Fletcher // Jan 8, 2014 at 5:13 PM

    That horse over data etc bolted ten years ago. We have what we have.

    My understanding is there are two XIT businesses one has the ANF as a shareholder.

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  • 15 Brett // Jan 8, 2014 at 5:33 PM

    Our data is our data – further it has immense commercial value. They should pay us for it, not the other way around.

    1 likes

  • 16 Jarryd Moore // Jan 8, 2014 at 5:33 PM

    I disagree Mark. This is one area over which newsagents could easily hold their ground. We have the ability to control the flow of data and the right to demand proper remuneration for access to it.

    0 likes

  • 17 Buckat // Jan 8, 2014 at 5:39 PM

    Why is it that SBR arrive on or after the return week???

    1 likes

  • 18 Amanda // Jan 8, 2014 at 8:10 PM

    I agree with Jarryd here.

    Newsagents have been forced spend thousands of dollars on IT to become more technologically compliant and be more efficient to give distributors (who supposedly pass onto publishers) information to prevent individual stores from:
    (a) running out of stock
    (b) being oversupplied by distributors

    Let’s be honest. XchangIT does not work as well as it should. And it is not the fault of Newsagents.

    1 likes

  • 19 Mark Fletcher // Jan 8, 2014 at 8:16 PM

    Buckat it’s probably not SBR.

    Good luck with that Jarryd. We have lived with it this way for more than 10 years. There’d be challenges I suspect.

    We go on and on about stuff and never act. Call me when newsagents are serious and I might engage. Until then I think it’s all hot air. I’m going to focus on what I can change.

    I don’t mean my comment to come across a bratty yet I know it does. I seriously don’t want to get caught up in beating the drum in 2014 on issues we can’t change. On magazines, the more poorly we are dealth with the more newsagents will retreat. This is our ultimate position I suspect.

    1 likes

  • 20 John Fitzpatrick // Jan 8, 2014 at 10:07 PM

    Guys –

    Stop complaining about XIT – it is nothing more a Post Office …. for incoming files they check integrity etc then pass onto the Distributor.

    For out going files they ensure the file goes to the correct Newsagent, they offer support to Newsagents changing hardware etc.

    My understanding is XIT don’t look at content – only integrity.

    The complaint about ownership was settled years ago – move on.

    The real problem (as I see it – Mark agree or disagree) has been the amount of non compliant newsagent data due to Newsagents NOT updating their POS’s.

    I agree that if the data is accurate we should be receiving correct allocations. BUT while Publishers enforce print runs of titles that the market can’t handle this problem (over supply) will be here forever.

    Lets be very clear on this, IPS, Gotch & Network are DISTRIBUTORS, if any decline to handle a title due to large print runs, one of the other two will take up the contract.

    Even early returning won’t solve the problem – I suspect Distributors quote to Publishers includes (maybe hidden) a charge for them to handle the returned titles.

    So you see the Distributor wins! and the punter (newsagent) can’t.

    I realize, as a Distribution Newsagent our costs for storage and handling of Returns is probably much less than most Retailers.

    Well that’s my view – just back from a short holiday – enjoy business and always try to see the upside of life – as long as you see a sunrise – life is always good – bye

    John

    1 likes

  • 21 Jarryd Moore // Jan 9, 2014 at 12:20 AM

    John,

    Non compliant data is only a problem if that data is being used properly. It clearly isn’t.

    There is little to no incentive for newsagents to provide accurate data if they are not receiving any benefit from doing so.

    I agree that the distributors win in all current situations and that newsagents loose. The magazine distribution system is stacked against newsagents because it is profitable for distributors to both encourage and facilitate oversupply.

    0 likes

  • 22 Jarryd Moore // Jan 9, 2014 at 12:34 AM

    Mark,

    I agree that we go on and on and the industry never acts, but that doesn’t mean the we should stop talking about those things. If we do, some important issues, big and small, get relegated to footnotes in history.

    I agree, there would be challenges. There always are. Some are overcome easier than others. If a newsagent body (or multiple bodies) were to ask the industry to stop sending sales data I don’t think the problems that would arise would be insurmountable. In comparison to many of the issues the industry faces I would imagine that it could be one of the least divisive issues to be raised.

    Nevertheless – do i think that is going to happen? No. But I still think it is worth raising the issue … again.

    0 likes

  • 23 Mark Fletcher // Jan 9, 2014 at 7:09 AM

    John, non compliant newsagents historically have been newsagents using one or two software systems only. It’s been the elephant in the room for a while.

    I’d also note that too often the argument about non compliant newsagents is trotted out and those hearing this rarely ask for evidence.

    Jarryd – yes worth raising, always is. It’s like gun control in the US. Kids get killed … shock horror … must act … a year on they do nothing.

    0 likes

  • 24 June // Jan 10, 2014 at 10:32 AM

    The only time I would EVER purchase a mag from anyone else (never from Coles/Woolies) it would be from a newsagent to satisfy a Putaway that didn’t arrive.
    I WOULD NEVER ASSIST THE DUOPOLY IN THEIR SALES WHICH WOULD BE MAGNIFIED BY YOUR PURCHASES HOWEVER WELL MOTIVATED.
    I have a son who manages an O/Works here in SA and he constantly tells me how
    much I can buy stuff for and resell it in our shop but I have never done it for the above reason.
    We need to understand that mags are becoming of less importance in all of our shops and we need to be looking at product to replace them.
    I am not happy to call myself a newsagent any more – I am a retailer.
    I have gone from 1900 pockets of mags to 750 and have dropped only 18% over
    last years’ mag sales so one can only assume that we were getting a whole lot of unsaleable mags and the distributors know this.
    They take too much time and too much cashflow and we should be concentrating on other parts of our businesses.
    Papers used to be my main concern when I had a distribution round but now I am a subbie and I never get enough papers and I don’t even ring any more because at 12.5% it is simply not a good enough return.
    I want to hear from people who are doing different things (like plush) e.g.
    What are you selling that is working?
    I did an art sale from Monte Marte last year and it was great but I don’t have the room to do it now and my landlord will charge me to go outside my leaseline so I
    have to look at other stuff, that is not readily available in my centre.
    Let’s share what we are doing that is working – and leave some of the negative stuff out because it is not a problem we can solve – it is an evolutionery thing.

    5 likes

  • 25 Gary // Jan 10, 2014 at 11:05 AM

    Great post June, we are on the same path as you are. The whole newsagency channel needs to be turned on its head. My new year resolution is to put the final phase of a three year plan to rid my business of mags. This should be achieved by Christmas.
    We have wonderful success with gifts, not plush or novelty. They can get these from the department stores and discount stores in the centre so there’s no margin in these.
    Good quality photo frames are a very popular item. We have also established ourselves as a destination for milestone gifts.
    Its a hard gig but it is very rewarding. We have a 150% mark up on gift lines as we only stock good quality.

    2 likes

  • 26 Mark Fletcher // Jan 10, 2014 at 11:24 AM

    June I won’t miss a sale if I can help it. This puts my business first.

    3 likes

  • 27 Shaun's // Jan 10, 2014 at 11:59 AM

    Problem with buying from another newsagent when you run out of mags is that you potentially set them up for an over supply the next issue because of the increase in sales especially on one off put away mags

    0 likes

  • 28 Shaun's // Jan 10, 2014 at 12:01 PM

    I will be going into woollies to buy some BHG because I orderd extras the day they came out but surprise surprise no stock.

    0 likes

  • 29 Jenny // Jan 10, 2014 at 12:03 PM

    Gary, if you don’t sell magazines won’t you just become a gift/card shop?
    Magazines are hard work but they bring customers through the door and if you do a good job they keep coming back.
    I had the same reasoning as you regarding plush because we are near Big W. What a surprise I got last year when we put plush in, cannot believe what we sell now and it is so easy.

    1 likes

  • 30 Gary // Jan 10, 2014 at 12:54 PM

    Jenny, mags is a strange business. If I add all the costs associated with mags, floor area, staff costs to arrive, sell, early returns, end of month culls, scanning, checking invoices, claims for non arrivals, waiting on the phone to distributors, stress on cash flow, shrinkage due to theft, ( for 25% gm), all this to create traffic flow. I think there are better less stressful ways.
    I appreciate your concern that we might just become a gift/card shop and I am happy that you have had success with plush. Everyone has their own niche in retailing.

    0 likes

  • 31 rick // Jan 10, 2014 at 3:03 PM

    distributors do what they get paid to do, distribute magazines and handle returns. the more they move around, the more they earn,what would u do? do the publishers pay them to manage allocations based on sales data? serious question, id like to know whats in a contract between publishers and the distributors, are we asking for something thats not in the contract? if its in the contract, then the publishers need to act, if its not in the contract then we need to ask the publishers why not. poor allocation is a pain in the bum, but who is responsible? at the moment there is only one winner, we need to engage with publishers to get change.

    6 likes

  • 32 June // Feb 3, 2014 at 12:17 PM

    This morning I had $500 worth of missing stock from GG.
    This is the 4th week inarow that I have had huge shortages.
    I put the shortages online and then don’t get the stock I need for replacement and it is impacting on my business (putaways not done and angry customers).
    If the billing can be done correctly then why not the logistics.

    It is a huge problem in our state and it needs to be addressed at national levels.
    GG need to understand that at the coalface we meet their consumer and we need to be able to supply the product that they are expecting and paying us for.
    Our stock is all delivered under lock and key so it is not being stolen so WHO HAS GOT IT. If I have someone else’s parcel I ring and get it collected so that the other newsagent is getting his product so WHO HAS MY PRODUCT.
    If you keep it and it is not yours IT IS STEALING FROM YOUR FELLOW NEWSAGENT.

    2 likes

  • 33 Gary // Feb 3, 2014 at 1:58 PM

    I’m from Geelong and we lose magazine and foreign paper bundles all the time since a new courier company took over.

    Most of the time no stock to replace, and if’s its a weekly title, next delivery date is too late anyway.

    Don’t even get me started on damaged part works.

    0 likes

  • 34 June // Feb 3, 2014 at 2:19 PM

    Gary, while I’m in a whingeing mood (it has been 44-45 degrees in SA for over a week) I must agree with you.
    Missing parcels and damaged partworks are par for the course.
    Victorian dolls house arrives wrapped & strapped (and broken) week after week.
    A piece of cardboard each side and it would be perfect for strapping but it seems that it is too hard for the powers that be.
    I am embarrassed to put out some of the partworks because of the condition in which they are received.

    0 likes

  • 35 subaru // Feb 26, 2014 at 3:37 PM

    Off topic,
    But has anyone received the Xchangeit files for NETWORK for Thursday 27/2 yet?
    Us and a couple of other local newsagents are yet to receive these files so we can produce the labels ready for tomorrow morning.
    If we can’t can’t invoice the magazines, we can’t produce the labels, and therefore we can’t early return the excess stock that arrives…..

    0 likes

  • 36 jenny // Feb 26, 2014 at 3:46 PM

    Subaru, I phoned NDC this morning they are having major problems and we will not receive until 6pm tonight – fingers crossed.

    0 likes

  • 37 Mark Fletcher // Feb 26, 2014 at 3:48 PM

    Network now has available two types of invoice files. One that includes everything you receive in the one file in invoicing order and another, sent closer to delivery time, that is the old format of files by invoice – as close as possible to the pick order. You will get one or the other depending on what you select on Netonline.

    0 likes

  • 38 subaru // Feb 26, 2014 at 4:26 PM

    Jenny,

    We were told the same thing, and it was a BIG maybe – as you said “fingers crossed”

    Mark,

    I want the older type that I can get before closing time. I’m not coming in any earlier tomorrow (than i already have to) to print the labels. Don’t get me started on the fact that I have to wait until maybe 9pm (as per the email info) for the files to be put into proper order – when Gotch’s system has been doing this in the correct order for years without issue.

    0 likes

  • 39 Richard // Feb 26, 2014 at 4:33 PM

    Subaru
    Does your POS not let you put the labels in whatever order you want? It should.

    0 likes

  • 40 subaru // Feb 26, 2014 at 4:49 PM

    My POS does let me do this this, but because I print my labels tonight, I don’t know what order is going to be on the NDC invoice tomorrow morning…

    0 likes

  • 41 jenny // Feb 26, 2014 at 4:58 PM

    So what is this setting, I get GG in order but NDC is all over the place. MY mags should be here in an hour or two, why would I need to arrive labels in the morning if these were picked hours ago?

    0 likes

  • 42 subaru // Feb 26, 2014 at 5:02 PM

    Jenny,

    You have to log into NDC website and change a setting in there, BUT it could be up until 9pm before the files are sorted into the correct “packing order”.

    I’m not staying at work until then, and i’m not coming in earlier in the morning to print the labels either. Printing labels the next morning for me would also play havoc with the subagent magazines list as well.

    0 likes

  • 43 Brett // Feb 26, 2014 at 5:50 PM

    Network used to send many many small files – now they are sending one very large one, I spoke with them today. I arrived my mags and printed my stickers, all is well

    0 likes

  • 44 subaru // Feb 26, 2014 at 5:57 PM

    I still have a problem Brett.
    According the the notification on the Xchangeit Client, the problem is only affecting NSW…which includes me…

    0 likes

  • 45 jenny // Feb 26, 2014 at 6:23 PM

    All I have just now is delayed billing invoices.

    0 likes

  • 46 Mark Fletcher // Feb 26, 2014 at 6:36 PM

    I’ll open up a thread on this tomorrow with some of the info from network about the change.

    0 likes

  • 47 rick // Feb 26, 2014 at 6:52 PM

    thanks mark, did i miss something from network on this tho?????

    0 likes

  • 48 Brett // Feb 26, 2014 at 7:17 PM

    Subaru,

    Sorry about that but of course you brought this on yourself you know, I mean you are from NSW! :)

    Seriously, hate to hear another agent being stuffed about, I mean all we need is MORE hours at work right!?

    0 likes

  • 49 subaru // Feb 26, 2014 at 8:17 PM

    Jenny,

    I have around $120 worth of NDC invoices in the shop now. WAAAAAY short of what I am expecting….

    Brett,

    No more hours at work than normal.
    I’m sitting at home on the lounge with apple pie and ice cream.

    I DO have a secure VPN connection from home to the shop though.

    While enjoying my dessert, I have my laptop remoting the back office machine at the shop. The label printer at the shop is full of labels, the laser printer at the shop is full of paper. As soon as the issue is resolved, i can print the labels from home ready for tomorrow morning.

    3 likes

  • 50 Jack // Feb 27, 2014 at 7:28 AM

    Suburu does make a good point. Chuck some labels in your printer before you leave. Remote into your PC. Sit on the couch and watch some MKR while you arrive your mags and print your labels. No one likes having to do work after they leave their business but it beats having to leave work later.

    0 likes

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