Australian Newsagency Blog

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Newsagent magazine supply standards

Mark Fletcher
August 30th, 2014 · 7 Comments

In February 2005 I spoke at a breakfast meeting of magazine publishers in Sydney and presented a suggested list of magazine key performance indicators. In cleaning up yesterday I found the list and thought I’d publish it here for comment.

  1. Scale out to reflect title performance in that outlet with proposed supply to be no more than 25% above recent sell through rates except in exceptional circumstances where the additional product is expected to sell due to cover feature or special promotion. With higher scale out to be accepted for an additional fee paid to the newsagent.
  2. Offering of a carrying fee for titles which do not meet minimum performance criteria so that the newsagent is paid to carry the title. The carrying fee to cover labour, real-estate and any other fixed costs.
  3. Introduction of a penalty payment to newsagents for any issue with a sell through of less than 50% on an escalating scale based on a falling sell through.
  4. Newsagents to be able to easily and electronically alter order quantities (i.e. without having to call a call centre and wait on line for too long) and with no maximum number of titles to be adjusted each week or month.
  5. Newsagent changed supply figures not to be altered without reference to newsagent unless such change absolutely supported by sales data.
  6. No cut of supply below current recorded net sales.
  7. No reissue within six months of last issue of a title.
  8. Delayed billing of at least 30 days for any new title.
  9. Returns to be credited within 48 hours of provision of electronic returns data or 7 days of provision of physical returns form.
  10. Returns to be called no later than the date of the next issue of the same title going on sale.

Magazine KPIs are needed for titles outside the top 200. Inside the top 200 the supply model is, overall, good – although somtimes I would like to be able to get extra stock more easily. Th real problem is the titles which generate around 20% of our revenue. These titles are cash flow negative. The KPIs I suggest above, if adopted, would make them at least cashflow neutral. The cash saved would help us have more resources to reinvest in our businesses.

I’d update my delayed billing point (8) to say that delayed billing titles are to be be supplied with an additional fee to cover labour and the space if they do not meet minimum sales performance.

In a shopping centre, a magazine pocket $2.00 and more a week. Add to this the labour cost of magazines in that pocket and you could argue that such a newsagent needs to be paid $2.50 to $3.00 a week just for the space and time.

18 likes

Category: magazine distribution · magazines

7 responses so far ↓

  • 1 Brendan // Aug 30, 2014 at 11:08 AM

    Still relevant and sensible 9 1/2 years later.
    Covers most bases and is technically possible if they had the will to follow these recommendations (requirements from our point of view)

    0 likes

  • 2 Mark Fletcher // Aug 31, 2014 at 7:07 AM

    So much time wasted Brendan.

    0 likes

  • 3 Bill W // Aug 31, 2014 at 2:11 PM

    To earn $3 per pocket, per week, requires sales of $13.20 per week, $52.80 for a monthly title or $171.60 for a quarterly title.
    How many titles out side of the top 100 would achieve this? And many of these titles require more than 1 pocket.
    Overlay a magazines sales decay with the length of time on shelf and the only way to make these titles pay is to sell to history and sell out and move on.

    1 likes

  • 4 Mark Fletcher // Aug 31, 2014 at 2:39 PM

    Bill my last study on this indicated that 85% of magazine we receive re not cash flow positive for us.

    0 likes

  • 5 rick // Aug 31, 2014 at 3:06 PM

    From what I understand, the distributors are screwing the publishers as much as they are doing newsagents over, no body is winning with the current system, have my doubts about the distributors are making money as well

    0 likes

  • 6 Glenn // Aug 31, 2014 at 4:09 PM

    This is exactly why newsagents are losing interest in the magazine category! 9 ½ years ago these issues were raised – and many, many times since then, and how much progress has been made? Squat!

    16 years I have been listening and contributing to these arguments, and for 16 years they have been falling on deaf ears. Unless the publishers, distributors and newsagents can agree on a sustainable model the decline will only continue. How could anyone blame newsagents for losing interest and looking to stock items with healthy margins where we can control supply – and the choices here are only getting greater.

    Wake up publishers and distributors before you go from endangered to extinct.

    3 likes

  • 7 shauns // Sep 1, 2014 at 8:53 AM

    30% increase in womens day today ,yeah na there is no supply issues

    2 likes

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