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If magazine publishers and distributors do not offer viable terms, what then for newsagents?

On the issue of newsagents achieving better margin on magazines, I appreciate there are some newsagents who think there is no hope, that things will never change. I’m an optimist and think that there are enough magazine publishers who value the role we play in putting their titles in front of new eyeballs for them to want / need to engage with us in a discussion about viability.

With the majority of newsagents losing money on magazines something has to change.

There is no doubt that the current model, as I wrote earlier this week, is not financially viable for newsagents, especially those paying shopping mall rent of $1,250 per square meter a year and more. Even allowing the traffic magazines generate there is a live question about viability. That question goes to the future of the channel as it is seen today.

One alternative is that magazine publishers pursue alternative channels. No single channel can be as valuable as the newsagency channel. We’re known and, for the most part, engaged. We are also well located and locally connected.

The other alternative is they sell more through other channels they have already such as supermarkets, convenience and petrol. But these channels have space challenges and engagement costs.

I think the newsagency channel continues to be the most economically viable for magazine publishers, even at a higher margin for newsagents of, say, 40%.

I am confident that with as higher margin we as a channel would see magazines differently and engage with them as something as more valuable than agency business.

Newsagents are challenged by disorganisation and lack of national leadership. While the ANF directors and staff will say they provide good leadership, the proof they do not is lack of engagement by newsagents. Leaders have followers. The ANF has failed newsagents on matters like magazines and spent too much time on questionable commercial offers.

But back to my topic – what if publishers do not engage and provide newsagents with better margin, what then? The obvious option is to get out of magazines. Do you have the guts to do that, to quit magazines? Think about it, look at your data, what would your business look like.

Another option is to quit one of the major distributors in return for the other major distributor offering better terms.  This could work if the better terms are seriously good and if they included control over stock received. Imaging the seismic shift in distributor use if this happened and newsagents started carrying titles from only one distributor.

Another option is to keep cutting range. The problem with that is that you no longer satisfy browser interest and you lose that traffic and that plays out into declines in other categories.

The fourth option is that you say bugger it yes we are treated poorly but I will prey on other newsagents cutting their magazines ranges and increase mine and become the go to newsagent for magazines. This is an interesting option, making your shop mor of a destination. But you are stuck, probably with the current terms.

There are other options too. Newsagents need to think about this, they need to explore what they could do and would do if they do not achieve more equitable terms for magazines.

To the magazine publishers reading this – take the concern seriously. The current arrangements cannot continue.

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  1. eric tjie

    i bet no one will opt for option 4.

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  2. eric tjie

    no matter how much range you have , no body even bother to read them for free

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  3. Mark Fletcher

    Stacey – yes. Early returns can only be looked on as helping you out with cash flow and not ignorant oversupply.

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  4. Terry Legg

    Our store is culling none preforming magazines at the moment and GORDON & GOTCH are being so helpful with my decisions. Tattoo candy first delivery of 2 03/11/14 second delivery of 2 15/01/15 same issue, none have sold, so they will also be culled . TOO GORDON & GOTCH we are not a WAREHOUSE for your titles

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  5. DM

    I contacted Gotch about oversupply as I was having difficulty meeting payment on the 20th. They agreed to do a range review and sent me a list of all the titles I receive for me to set my supply. I spent a huge amount of time setting my supply based on my sales and returns. This was locked in by Gotch. It has been working very well, my supply has been mostly good and my return rate a lot lower. With a few adjustments my supply of magazines is what it should be and my account manageable.
    Gotch has now informed me that my supply will no longer be locked and that my supplies will now be increased. After spending all that time getting things right it is now open slather.
    I have been flooded with magazines I have never had before and my allocations have increased without any justification based on sales and returns.
    The lovely people at Gotch have decided I was not returning enough magazines, they should be happy now.

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  6. Peter B

    DM, we went through the same process 3 times now with Gotch, every time there is a lull for a month or so, then you get swamped by crap that you have never had or was culled the first time.
    Same with Network, and if you change the quantity online it only lasts a few issues then back to above what you had before.
    They deliberately PUNISH you if you cull mags.
    We now just keep reducing pockets at every opportunity and put in full margin stock to replace mags.
    Whilst Mags CAN be an important part of our store, our strategy is not Magazine, Newspaper or Agency driven because of the disrespect they have for small businesses.

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  7. Mark Fletcher

    Gotch and network operate on 13 week cycles (or thereabouts) and will only hold an allocation change for that long before their algorithms kick in.

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  8. Peter B

    Well then they need to adjust their algorithms, if it’s not too painful!

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  9. Mark Fletcher

    They won’t though as it has always been thus as it suits them. Disadvantages us.

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  10. ADRIAN

    Does anyone know how their system with their algirithims is supposed to work because it seems they know as much about algorithims as I do ?

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  11. rick

    You have to remember that network and gotch are paid to distrbute mags and process returns, of course they over supply, that’s how that make their money. Why do we complain about the oversupply from them, if I was running either I would be sending out everything I had to make as much as I could. Just maybe the publishers need to wake up and help bring about change, there is no incentive for the distributor to change, in fact there is a disincentive in place. $$$$$$$$

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  12. Australian Family Tree Connections

    Rick, all distributors (Bauer, Gotch and IPS) charge a fee per copy distributed, which would be OK if they did their job properly.

    Having had my magazine distributed by all three distributors during the past 20 years I can state that Bauer and Gotch leave a lot to be desired.

    Why are newsagents over-supplied?
    Bauer and Gotch both over-supply newsagents in some geographical areas which leaves many other areas un-supplied. Their over-supply bias favours capital cities and some regional areas which suggests their goal is to keep the cost of transportating magazines to an absolute minimum.

    In my opinion, there is no excuse for magazine distribution to be inefficient and create problems for newsagents and publishers. It is a clearly defined, logical process:

    * Newsagent requests distributor to be supplied with x title and x number of copies.

    * Distributor advises newsagent there have been requests for x title in their area and newsagent decides whether to stock it and number of copies.

    * Newsagent has a history of selling x number of copies, so is supplied with that number.

    * Newsagent can increase and/or decrease supply at any time (to operate on an “until further notice” basis).

    * Full copy return of unsolds is discontinued.

    * Distributor automatically provides publisher with supply and sales figures in a timely manner.

    *Publisher is able to set realistic print runs with minimum wastage.

    Just my two bob’s worth. Hope it is of interest.

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  13. Amanda

    It is good to get factual information from the “other-side of the fence”, with comments coming from Australian Family Tree Connections.

    I wonder if Australian Family Tree Connections would be so kind as to offer your thoughts on Newsagents wanting 40% commission? What would have to change to achieve this? Could publishers change and reduce costs? Could a new distribution model be created through GNS?

    Personally, we have stocked Australian Family Tree Connections for the entire period it has been printed….until last year when we cut magazine space for more profitable items.

    In the end, we pay rent, we pay wages and we pay a bunch of other things that keep going up.

    And 25% commission does not cut it anymore.

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  14. Mark Fletcher

    Small independent publishers and newsagents are the two parties screwed over by the current distribution system and this has always been the case. It is more noticeable now with competitor retail channels receiving far more favourable treatment that disadvantages newsagents and small indecent publishers.

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  15. Australian Family Tree Connections

    Amanda, thanks for your response, however I’m disappointed that after reading all the information I provided, your first reaction was to ask for my thoughts about newsagents wanting 40% commission and whether publishers could change and reduce costs.

    Fact is, publishers also pay rent, wages and many other overheads that regularly increase in cost. What would you have publishers change so they could reduce costs?

    Let me pose a couple of questions. Wouldn’t newsagents be better served if the 7 points I raised were observed? What value would you place on having ethical, efficient and effective magazine distribution? That translates to complete cash-flow predictability and almost zero frustration which must be worth something?

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  16. Australian Family Tree Connections

    Mark, just how many “small indecent publishers” do you know? Please do tell.

    Jokes aside, of course small independent publishers and newsagents bear the brunt if a distributor is not 100% ethical. Large publishers too if they don’t closely monitor what the distributor is doing.

    You haven’t addressed the 7 points I raised, and I’d really appreciate knowing your thoughts about them. If they were in operation, would that make it easier for newsagents and, if so, how much difference would it make?

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  17. Chris

    Amanda, have you been selling your copies of AFTC? If so, why cut an aust publisher? How did you decide on what magazines were culled in your store? Do not get GNS in on the act, they need to improve their level of service in stationery right now before they start anything else (plus they might start supplying mags to your local competitor like they do stationery!)
    We do not provide any agents around us with magazines as they are all supplied directly but we have always maintained a reputation as the go to magazine specialist in the area. And as other newsagents drop magazines we will use that to reinforce our level of service. I don’t care so much for weeklies and titles like AWW, BHG as the customers who buy that do not show the loyalty that customers who buy for example AFTC show.
    We need to work with Independant Publishers to create change with the distributors as we are both in this together.
    Magazines are a traffic provider and you have to be careful to make sure you do not go pass the point where the extra commission you make from other products does not cover the lost profit and traffic from magazines. I use magazines to upsell other goods with higher commission now. The amount of Jasnor products I have sold by putting them on display next to childrens and womens magazines has been awesome and this is just one supplier.

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  18. June

    I think it is both dangerous and shortsighted to cull mags to an unviable
    position. I culled from 1900 to 750 pockets when I was “asked” to move to a smaller store a couple of years ago.
    My GG and Bauer accounts are still as high as they were in the larger store and like some of the above comments I changed all my supplies with GG and Bauer and it worked for maybe 4 months or so before it reverted back to their “algorithm” (don’t really know what that means Mark).
    However, I have noticed a distinct drop in the gift sales in my store and I think they are really great gifts with lots of good displays and people regularly tell me how
    lovely my shop is but the truth of the matter is that people are buying a lot of gifts online.
    The people with whom we deal also have retail arms and sell online to the public.
    I have people taking photographs daily (I don’t allow it if I see it happening but I am not on the floor 24/7).
    I now don’t get brochures out for people to see other product when they are really looking to see who is the product provider.
    People are not loyal and they use us up.
    We need to embrace our mags and ramp up our niche supplies because our competitors only really touch the top 20 titles.
    My mags and papers (???) are up on last year but my giftlines are a little bit down on the year before so I guess we all have to do what works for our businesses and that is the root of all our problems.
    We are such a diverse bunch with diverse needs and that is why our representation is so unsatisfactory.
    My stationery is doing well but I don’t compete with Officeworks and BigW etc – I just put the product out with BTS signs and buy lots of stuff that OW and BW don’t have so that my customers know that I am a “go to” store.

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  19. Mark Fletcher

    AFCT: I’d talk regularly with 10 to 15 small independent magazine publishers and infrequently another 10.

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  20. Australian Family Tree Connections

    In reply to Stacey
    Does the distributor-newsagent contract state that distributors are able to supply newsagents with any titles they feel like supplying?

    If the contract does state that, could newsagents band together and demand the re-negotiation of such an obviously out of date contract?

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  21. Australian Family Tree Connections

    In reply to DM
    Wow, that’s unconscionable behaviour loaded on top of unconscionable behaviour. Newsagents MUST have a say in which titles they receive. They know their customer interests, distributors do not.

    This seems another reason newsagents should consider banding together to demand their out-of-date contracts be re-negotiated.

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  22. Australian Family Tree Connections

    Peter B wrote: Well then they need to adjust their algorithms, if it’s not too painful!

    Mark replied: They won’t though as it has always been thus as it suits them. Disadvantages us.

    FYI, when we used Gotch and Network they promoted themselves as magazine sales experts.

    They are most definitely not. Each individual newsagent is the only magazine sales expert because only they know their customers’ interests.

    In any case, true sales experts would practice SBR, not algorithms.

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  23. Australian Family Tree Connections

    Mark
    In your post you wrote “With the majority of newsagents losing money on magazines something has to change.”

    What effect would there be on the bottom line if newsagents did not have to return unsold magazines?

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  24. rick

    AFTC any chance the publishers could band together and bring the distributors into line?
    it’s you guys that pay for distribution.

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  25. Mark Fletcher

    AFTC: the main saving of not having to return magazines could be labour if we did not have to count returns. In cap. city locations there would be a freight cost saving too.

    Rick: there are two publisher groups in Australia. Neither actively engages with newsagents. While the ANF goes to some functions, if what I am told is true their representations are wildly out of touch.

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  26. Mark Fletcher

    One publisher I was in monthly contact with dropped off the radar when I criticised their model – long on sale, 40% sell through cash flow negative for newsagents. They say they would not survive with a higher margin for newsagents. I said newsagents are not surviving being their bank.

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  27. Australian Family Tree Connections

    Rick, the two publisher groups in Australia are:

    The Association of Magazine Publishers of Australia (MPA)
    http://magazines.org.au/about

    Publishers Australia
    http://www.publishersaustralia.com.au/about/about-us

    Neither appear to focus on the practicalities of how the majority of magazines are sold in Australia.

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  28. Peter B

    It is quite clear the whole system is stuffed from top to bottom.
    The Newsagents generally blame distributors, as I do mostly, and here the publishers seem to as well.
    It is very difficult for Newsagents to band together because we are all time poor. The ANF should be the go to but they seem to be useless, and don’t represent the whole of the Newsagency chain. Those that ANF do go out of their way for is agency rubbish, Newspower and the old style Newsagencies that have no future on planet earth, and hence no future for ANF in its current form.
    There needs to be a whole new body representing RETAIL ONLY newsagents, separate from distribution, as our challenges are very different from distribution.
    The traffic generated by mags…is it really that profitable. There is obviously some upselling, but is it as much as we think. Take out 10, 15, or 20 linear metres of magazines, that’s a LOT of space for high GP items, then you become a destination for other things.
    40% on Mags and we may not be thinking of this scenario.

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  29. Mark Fletcher

    AFTC both groups do not engage with real working newsagents – the people who sell close to 50% of all magazines sold in Australia.

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  30. Australian Family Tree Connections

    Mark
    Is there a need for a new group comprising retail newsagents and magazine publishers?

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  31. James

    And around the vicious circle we go again with no solution in sight.

    By my calculation, the distributors currently carry out 3 times more work than they need to i.e. they deliver out twice as many mags as is required, and then take half of them back. No matter how many times I do the distributor spreadsheet update, cull pockets, or early return, I routinely return half the magazines Im sent. And my magazine sales have actually increased over the last three years!!!. If they just delivered what agents sold or required, they would reduce their income by two thirds. And as I have noted on another thread, they cant make a profit under the current model. The last thing GG and Network are going to do is slash their income.

    For seven years Ive heard this go nowhere circular blame game and progress is nil. So here is my take:

    Agency product lines only work when their is some level of exclusivity associated with the agency. Its true for almost any agency product or service you can think of. The minute exclusivity was removed from print publication agencies, that business model was broken. So in my opinion to reinstate stock and merchandising control, agent viability, and agent enthusiasm requires both newspaper and magazine publishers to pull back from the supermarket open slather model. I cant actually think of a good reason why publishers want to be a part of it anyway. Its not like there isnt a Newsagent in close proximity to most supermarkets anyway – so access to the product is not the issue.

    Now I dont think for a minute that this will happen.

    But it is the only solution that I can think of that would put enough volume back into the channel to make GG, Network, and magazine retailers viable.

    Because if some level of exclusivity is not introduced back into the channel, the whole thing risks falling apart starting with the distributors. And then mags and papers will only be available from supermarkets. Maybe that the real plan.

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  32. Dennis Robertson

    James@post32.

    That opinion is closer to hitting the nail on the head than anything else I have heard, from anyone, in listening to 12 years of circular waffle.

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  33. jenny

    We are slowly changing our focus to magazine titles that aren’t available in supermarkets and their petrol stations.

    I am disappointed that some great Aussie magazines have dwindling sales (in my shop) but can’t fight it so putting more energy into looking after smaller publications (australian and overseas) and hopefully that will work.

    It really annoys me when a customer pushes their trolley into my shop just to check lotto and sitting on top of their groceries is a couple of weekly mags!

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  34. Peter B

    Jenny we have spoken to customers who actually think magazines are cheaper at the supermarkets.
    That is how well the supermarket campaigns have gotten into the gullible population in general.

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  35. Mark Fletcher

    Unfortunately, we are already witnessing it falling apart James. That our terms are different to our competitors is evidence as is continued supply above a reasonable buffer ahead of net sale and as is the refusal of distributors to provide us with reasonable business levers with which to manage of level of indebtedness.

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  36. Australian Family Tree Connections

    37 James @ post 32
    “If they just delivered what agents sold or required, they would reduce their income by two thirds.”

    Sadly, that’s not true. Distributors charge a fee per copy supplied to newsagents. Publishers have no guarantee that their titles will be distributed equitably throughout Australia.

    You are OVER-supplied but how many newsagents are NOT supplied with titles when demand exists in their area? My comment @13 has more detail.

    “Agency product lines only work when their is some level of exclusivity associated with the agency.”

    That raises the question, are today’s newsagents agencies or retailers?

    Mark promotes newsagents as Magazine Specialists yet some newsagents grumble here because they don’t have exclusivity over less than 50 of the thousands of titles available. Yes, a few of those titles are among the top sellers – women’s “gossip”, lifestyle, auto and sports magazines – however the wide range of titles that are only available at the newsagent means they are, indeed, the magazine specialists.

    The problems of over-supply (and non-supply) negatively affect both newsagents and publishers:

    a) gross over-supply gives a distributor the ability to trespass on a newsagent’s management of their cashflow.
    b) gross over-supply unnecessarily wastes a large percentage of a publisher’s print cost.
    c) non-supply causes a significant level of frustration for the newsagent’s and publisher’s mutual customers.

    For the record: why am I being so vocal? Because thousands of people religiously buy our magazine from their local newsagent. I’m starting to think I’m the only one who recognises that publishers and newsagents are in this together.

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  37. James

    @AFTC post 37

    I am with you 100%, publishers (particularly small publishers) and newsagents are in this together and Id suggest we are both getting the rough end of the pineapple. But the system is outdated and has been set up for a different time and a different market structure. Sadly as I understand it, Pacific Magazines signed a new 10 yr distribution agreement with GG as little as 2 years ago. And so we are stuck with what we have for the foreseeable future.

    Whilst I understand the inefficiencies in location distribution, I seriously doubt that a country newsagent would be under-supplied the range and volume I am oversupplied. The differential would be incremental, not monumental and in reading this blog for some time now, the number of instances of under-supply complaints is infinitesimal compared to the tidal wave of oversupply issues.

    The issue of agency vs retailer is the great conundrum of our time for newsagents. But again here is my take. If you offer me an exclusive agency deal, Ill stock a heap of your product for as long as you want it on the shelf and accept a lower margin. But if Im now a retailer competing with the national chain supermarket next door, then I need a minimum of 50%gp, (preferably 60% plus to compete with the big boys), some marketing funds, volume discounts etc etc and Im going to pick and choose which stock items and how much of what I stock. If it doesnt sell, Im quitting the product line asap at big mark downs.

    Unfortunately what I have is an agency deal in a retail market.

    I also understand the specialty retailer concept and the customer drawing power of specialty titles. The reality is however is they are small turnover niche products and particularly in shopping centres, sales of these titles at 25% gp isnt going to pay the bills.

    The fix, in my opinion, requires everyone in the chain starting with publishers to sit down and develop a distribution model better suited to the times and market situation. This has been suggested many times before and gone no where. And it simply isn’t in the interests of GG and Network to restructure. Until publishers start jumping up and down about the distribution system then I dont think anything will change. History says newsagents have no ability to change the way things work.

    Now having said all of that, I am committed to stocking magazines as a product line. But as a retailer I deal with it in the same way as I do all other product lines and I have an expectation that its gp contribution per sqm will meet the commercial hurdles I have for the store overall.

    So thats how I have arrived at my win win solution of publishers withdrawing from supermarkets as an implementable, simple to understand action. Again…. I also understand it wont happen. But it would be interesting if a number of publishers got together and said we only want our product stocked in newsagents and marketed their titles accordingly.

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  38. Mark Fletcher

    There is no future in being an agent in any circumstance.

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  39. Australian Family Tree Connections

    James post 38
    Thank you for taking the time to reply so comprehensively, much appreciated. To return to the discussion:

    I seriously doubt that a country newsagent would be under-supplied the range and volume I am oversupplied
    The range and volume you are over-supplied represents multiple UNsupplied newsagents in multiple country and regional locations all across Australia. I know this is the case with my magazine because the first thing I do with the distibutor’s spreadsheet is re-sort it in postcode order.

    the number of instances of under-supply complaints is infinitesimal compared to the tidal wave of oversupply issues
    That are many reasons why that may be so, varying from not being on the internet or not reading this blog, all the way down to a newsagent not being “switched on” to providing the best possible customer service. It’s a sad fact that some newsagents can’t be bothered arranging to be supplied with even one copy of a title they don’t stock for a new putaway customer. I know this because we get phone calls nearly every week from potential newsagency customers wanting to know where they can buy our magazine.

    The fix, in my opinion, requires everyone in the chain starting with publishers to sit down and develop a distribution model better suited to the times and market situation
    I think the fix requires both newsagents and publishers (either as 2 separate groups or one mixed group) to demand contracts with distributors that contain and clearly define each aspect governing supply, returns and payments.

    When I was with Gotch and Bauer it took 5 months from the issue month to be fully paid for sales of that issue. The breakdown was: 70% of estimated sales the month after issue, 20% of estimated sales the month after that and actual sales +/- two months later. That payment method was implemented BC, ie before computerisation to allow sufficient time for newsagents to receive and return paperwork by post and allowed 2 full months after offsale for returns. That is just one example of how out of date the distributors contracts are with publishers. From what I gather, newsagents contracts could be just as out of date.

    Until publishers start jumping up and down about the distribution system then I dont think anything will change.
    I assure you I have been jumping up and down about the distribution system for over 11 years and have made very little headway. I know of other small independent publishers who have had the same experience.

    History says newsagents have no ability to change the way things work
    Yesterday is history, Tomorrow is a mystery, Today is a gift, which is why we call it the present.
    In politics, it is said that the people have the power. Individually they don’t, but collectively is a completely different kettle of fish.

    In post 31 I asked Mark Is there a need for a new group comprising retail newsagents and magazine publishers? I kept it short and sweet, but now might be the time to suggest such a group could be conducted on the internet via a Live Blog or a Hangout or similar.

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  40. Mark Fletcher

    AFTC I’d be all for a new group if it could achieve control over supply. I have a couple of meetings this week that could lead to an opportunity. I’ll write once I know more.

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  41. Brett

    Grateful for the ASFTC comment stream.

    I have said for years now that the agents and the publishers are getting the rough end of the pineapple and its time we both said enough.

    Time the agents and the publishers sat together and drew up an agreement on the way ahead.

    My only concern is that one of the distributors would not survive that change. Its not a huge concern.

    A new model would see the agents and the publishers save money, more margin would be available for both.

    Its time.

    Lets set a date and a venue and get this done.

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  42. Amanda

    AFTC – re comment “16”.

    In regards to the 7 points you have raised in comment ’13’, i’m sure most newsagents find your points valid and would implement them if possible. Newsagents have long raised these points with distributors and associations but it has fallen on deaf ears. Mark has often mentioned many of your points in this blog. Unfortunately Newsagents have not had the power to change the contracts they have signed many many years ago.

    I think what AFTC and most publishers have failed to realise is that Newsagents have invested heavy in technological changes and becoming EDI compliant. We have all the data on what sells and what does NOT sell, and this is provided to the distributor at OUR cost! Yet it is the publishing and distribution arms of the industry who are not utilising this information.

    Publishers think newsagents rely on them and their title. Think again!

    In regards to having ethical, efficient and effective magazine distribution, there are NO distributors who provide this. Personally, I found IPS the worst so we cut them completely and EVERY title they distribute. It was as easy as that.

    I would happily support AFTC and your 7 points mentioned in comment 13, but what this has done is decrease your overheads and you need to come to the party with a better commission. The retailer is still wasting time “topping” your title for return.

    Remembering, you the Publisher are the only person who can raise the RRP of your title. The retailer is restricted in its income by the RRP you place on your title. It has no way of changing this price, thus the only variable for the retailer is commission.

    In todays retail environment, 35-40% commission sale or return is what is needed. I would take 50% firm sale and take the risk of selling the product, encouraging me to sell more.

    AFTC..time to answer the question no publisher wants to answer… if newsagents were to implement your 7point plan, what commission could your magazine offer newsagents?

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  43. Australian Family Tree Connections

    Amanda @ post 43
    Thank you for taking the time to address the 7 points in my post @ 13.

    i’m sure most newsagents find your points valid and would implement them if possible.
    Amanda, the 7 points I raised relate to all 3 groups involved in selling magazines in Australia i.e. publishers, distributors and newsagents. As newsagents are not the only group involved they could not possibly be expected to implement them on their own.

    I think what AFTC and most publishers have failed to realise is that Newsagents have invested heavy in technological changes and becoming EDI compliant.
    You are wrong to think that Amanda. Every publisher is well aware, if only because they are the only one of the 3 groups that is excluded from XchangeIT.

    Publishers think newsagents rely on them and their title. Think again!
    I am quite sure publishers do not think that, Amanda.

    In regards to having ethical, efficient and effective magazine distribution, there are NO distributors who provide this.
    That is the current situation. Newsagents and publishers both need distributors to lift their game by becoming ethical, efficient and effective. I believe the 7 points I raised have the ability to achieve that.

    but what this has done is decrease your overheads and you need to come to the party with a better commission.
    I’m not sure why you think only publishers would benefit if the 7 points I raised were implemented because:
    a) Newsagents would benefit from having full control over which titles and the number of copies they stocked
    b) Newsagents who provide their customers with a putaway service would benefit by being able to increase or decrease supply of titles at any time on an “until further notice” basis
    c) Newsagents would benefit from Sales Based Supply by not having to bear the cost of returning unsold and unrequested magazines

    In fact, the first five of my 7 points would directly benefit newsagents. Six of the 7 points involve distributors and only the last point would benefit publishers.

    The retailer is still wasting time “topping” your title for return.
    “Tops” provide proof of sales and proof will always be required. I am sure that newsagents would have far less tops to return if Sales Based Supply was implemented, and if distributors were prevented from dumping extra copies and unwanted titles on newsagents.

    I urge every newsagent who reads this to spend a few moments assessing how much time and money they would save if Sales Based Supply and No Dumping were implemented.

    time to answer the question no publisher wants to answer… if newsagents were to implement your 7point plan, what commission could your magazine offer newsagents?
    A reminder that the second last paragraph of Mark Fletcher’s post on this topic states:
    Newsagents need to think about this, they need to explore what they could do and would do if they do not achieve more equitable terms for magazines.

    The words “more equitable terms for magazines” – note “terms” (plural) – suggests there is more than one inequitable element of magazine supply. As a publisher, I am well aware of the inequitable elements that affect distribution of my magazine.

    For all the reasons mentioned in my posts, I believe that newsagents and publishers urgently need to explore all the current unethical, inefficient and ineffective elements of magazine distribution in Australia.

    This is a complex discussion because it involves 3 separate but inter-connected groups, 2 of which are experiencing multiple difficulties. For those reasons, I hope newsagents and publishers will respect each other’s positions by thinking about the issues thoroughly. Anything less would not be a real contribution.

    1 likes

  44. david@anglevalenews

    AFTC – Three thumbs up! Excellent.

    0 likes

  45. Mark Fletcher

    The comments here reflect the reason the situation has not changed. Lots of noise and not enough listening.

    At the core of my posts on magazines is the uncompetitiveness of the current situation. Our main competitors get better terms than us. This is a key reason our magazine sales are declining faster than theirs. However, it is only a major issue for the top 200 to 300 or so titles.

    When it comes to smaller print run (sub 20,000) indie titles, the model is as broken for those publishers as it is for newsagents. Some of the discussion here reveals they are as powerless as us to resolve the matter.

    I still think IPS is our best hope. They are more open to discussion. A co-operative approach around the IPS relationship is the best opportunity as it see it.

    1 likes

  46. Glenn

    AFTC @ 44

    Why should we still need to provide tops as proof of sales? This requirements still harks back to the old days where that was the only verification process available, and also sends the message that there is no trust in the relationship.

    As has been discussed, all our sales data and information going back to the distributors via EDI has ample information for their systems to check on return claim accuracy. They know what they send us, they know what we sell and they know what we return all from EDI data.

    Nil physical copy returns should be a “reward” for those newsagents who have invested many thousands of dollars in technology to provide this information back to distributors.

    Those without it can continue to work inefficiently – and there is an incentive to get them up to invest and upgrade their systems.

    2 likes

  47. Australian Family Tree Connections

    Mark Fletcher @ 46
    I agree that IPS offers the best potential for improving the way distributors currently supply magazines to newsagents. I have also experienced their openness to discussion, a courtesy not afforded me by Network or Gotch (it was, however, a strong feature of the “old” Network Services back in Kerry Packer’s day).

    Re “the uncompetitiveness of the current situation” I believe that is a separate matter which would be best dealt with after the multiple problems affecting newsagents and publishers have been eliminated.

    Why do I believe that? Because this discussion has evolved into focusing closely on the causes of and possible solutions to the problems faced today by newsagents and publishers, and that is vitally important. Mentioning something related to a separate group of retailers only serves to “muddy the waters”. It has the potential to send the current discussion off on a tangent or worse, shut it down entirely. I would not like to see either of those happen.

    There may be a case for publishers to increase the newsagent’s commission to newsagents, however that cannot be accurately demonstrated until the causes of today’s problems with magazine supply to newsagents have been eliminated and newsagents have had some time to experience operating under the greatly improved conditions.

    Meantime, my “forensic detective’s hat” will remain firmly in place and I look forward to the continuation of this discussion.

    0 likes

  48. rick

    Sorry to much blah blah blah for me, how about some actual action, the clock is ticking and I’m not going to wait

    1 likes

  49. Australian Family Tree Connections

    Amanda @ 43
    Unfortunately Newsagents have not had the power to change the contracts they have signed many many years ago.
    This is the era of frequent changes, so annual contract renewals for both newsagents and publisher should be mandatory.

    0 likes

  50. Australian Family Tree Connections

    rick @ 49
    It’s a shame you view the comments as “blah blah blah”. As a regular reader for several years, I feel this is the closest this blog has come to solving the problems experienced by newsagents and publishers.

    Yes, the clock is ticking – for all of us – so lets all keep working together to solve the problems, bearing in mind that a problem cannot be truly solved until it’s fully understood.

    And yes, that may take a little more time.

    0 likes

  51. Mark Fletcher

    AFTC when I write about uncompetitiveness I am not talking about GP. I am talking about having absolute control over what newsagents receive.

    I’d also note that there is nothing new in any of the comments posted here except that much time has passed in the 11 years this blog has been running.

    2 likes

  52. rick

    How are we closer to solving anything, this is the same discussion we’d have been having for eternity, my business will survive the loss of mags as it evolves, not sure many publishers will make a viable business online, I hope you do AFTC as at least you are part of the conversation. We need to move outside the square totally if we seek a real solution, the discussion may need to bypass the current distribitors as they have zero incentive to change.

    1 likes

  53. Mark Fletcher

    Rick this brings it back to the original post which I wrote because I do not think things will change. I think it will be newsagents who bring on the change. Some are already as has been discussed here in the past.

    I feel for AFTC as that is the type of title we need to nurture. However, the distribution machine works against it.

    0 likes

  54. Australian Family Tree Connections

    Mark Fletcher @ 52
    You wrote I am talking about having absolute control over what newsagents receive.
    With the utmost respect, I suggest that:

    a) newsagents receiving magazines on a Sales Based Supply basis

    b) distributors no longer being able to dump unwanted extra copies of a title or unwanted titles on newsagents (and thus not trespassing on newsagents’ cash flow)

    c) distributors having to ask newsagents whether they want to stock a particular title and, if so, how many copies they wish to receive

    d) only newsagents having the ability to increase or decrease the number of copies per title

    adds up to having absolute control over what newsagents receive. What other aspects are there?

    Also with respect, I have been reading this blog for many of its 11 years and have never seen the depth of discussion about resolving the problems of newsagents and publishers as there has been now.

    0 likes

  55. Australian Family Tree Connections

    rick @ 53
    As an avid reader of this blog, I cannot agree that “this is the same discussion we’d have been having for eternity”.

    If you had stated that many newsagents have been making the same comments for many years and almost no publishers or distributors had responded to those remarks, I would agree with you 100%.

    I also cannot agree that “We need to move outside the square totally if we seek a real solution”. On the contrary, I believe we need to zero in on the square and put every aspect of it under the microscope.

    Also (I’m sure you’ve already guessed!) I cannot agree that “the discussion may need to bypass the current distribitors as they have zero incentive to change.”

    As Mark Fletcher stated @ 46 “I still think IPS is our best hope. They are more open to discussion. A co-operative approach around the IPS relationship is the best opportunity as I see it.”

    I agree with Mark’s remarks and believe IPS has the desire to change. My magazine is distributed by IPS and while I’m aware there have been problems I have always found them extremely willing to discuss the cause and find the appropriate solution to prevent it recurring.

    Finally, why are other publishers so reticient about commenting here? The issues raised affect you too and your two bob’s worth is long overdue.

    0 likes

  56. Mark Fletcher

    AFTC, what has been proposed in this thread is not new. Indeed it has been canvassed several times over the 11 years, most recently with some regularity following the failed ANF magazine summit of three years ago at which I presented for a cute of hours.

    But it doesn’t matter if it’s been canvassed here or not. Nor does it matter who came up with the ideas.

    The point is Gotch and Network impose on us a trading regime which makes us less competitive that our competitors.

    Then the real point in 2015 is – what will newsagents do about it. There will be more discussion this week when the benchmark results come out.

    2 likes

  57. rick

    AFTC @ 55
    Those are conditions publishers need to negotiate with the distributors, you pay them not the newsagents. At the moment, for me anyway, the only difference between ips and the other 2 is that I can’t early return. If publishers think that gets more shelf time, they are kidding themselves. I receive many more titles than I can physically fit into my fixtures, if it hasn’t sold in a month it’s either early returned or in a box out the back. If I don’t think it will sell at all it won’t even see the light of day. We are all in this to make a dollar and with mags it’s getting harder and more time consuming. Let’s move into 2015 and use the tools we have available to use, our POS systems, somebody has my sales data that I pay to supply, charge me only for what I sell, no returns at all. If I’m not compliant or caught rorting them system, stop supply. The only losers with this system is the distributors, ahhhh back to square one if I’m not mistaken.

    7 likes

  58. Australian Family Tree Connections

    Rick @ 58
    Those are conditions publishers need to negotiate with the distributors, you pay them not the newsagents
    If you think about it Rick, distributors service 2 separate clients, publishers and newsagents, and both pay distributors. Publishers directly by distribution fee, newsagents indirectly by unnecessary labour costs and distributor trespass on their cash flow. Why should publishers have to make all the effort to improve conditions? United we stand, divided we fall. Strength in numbers. Stiff upper lip. That kind of thing.

    the only difference between ips and the other 2 is that I can’t early return
    * 27% commission not a difference?
    * Ability to request a change in supply and it’s done plus the same change is flagged for next year and it happens automatically? (June @13 in http://www.newsagencyblog.com.au/2013/11/01/here-is-one-way-newsagents-can-approach-magazine-oversupply/ ) – such fantastic service is a huge difference!

    I receive many more titles than I can physically fit into my fixtures
    That’s not only abuse of the newsagent channel, it’s as close as dammit to encouraging those publishers who print more copies than will sell to continue doing it. Greed, stupidity or collusion?

    Important point: Many publishers watch their sales like a hawk and constantly adjust their print runs to match. In my opinion, if a distributor is over-supplied they should strictly Sales Based Supply newsagents and charge publishers for disposing their over-supply.

    Let’s move into 2015 and use the tools we have available to use, our POS systems, somebody has my sales data that I pay to supply, charge me only for what I sell, no returns at all. If I’m not compliant or caught rorting them system, stop supply. The only losers with this system is the distributors, ahhhh back to square one if I’m not mistaken.
    When you think it through Rick, you’ll understand that distributors won’t lose. They do not earn less by supplying less because their freight cost is proportionately less.

    0 likes

  59. Australian Family Tree Connections

    I have been remiss in acknowledging a bunch of earlier comments:

    Chris @ 18 replying to Amanda @ 14
    why cut an aust publisher?
    Thanks Chris, your pro-Aussie mag stance is much appreciated.

    James @ 38
    I am with you 100%, publishers (particularly small publishers) and newsagents are in this together and Id suggest we are both getting the rough end of the pineapple. But the system is outdated and has been set up for a different time and a different market structure.
    Couldn’t agree with you more, James.

    Brett @ 42
    Grateful for the AFTC comment stream. I have said for years now that the agents and the publishers are getting the rough end of the pineapple and its time we both said enough.
    Very happy to share what I know. Only hope it encourages a few other publishers to participate. I hesitate to even hope that a distributor may join in.

    Time the agents and the publishers sat together and drew up an agreement on the way ahead.
    I couldn’t agree more.

    david@anglevalenews @45 in response to @ 44
    AFTC – Three thumbs up! Excellent.
    Thank you. Good to know someone thinks I’m on track.

    0 likes

  60. rick

    Don’t wont to engage in a slanging match, the ips online system for adjusting supply simply does not work, hence the reason I lump them with the other two, as for the 27%, it does not compensate for the insbility to early return. If you ever get a break from your mag, come for a holiday at mission beach, far nth qld and come spend some time with me managing my mags, I dare say we would both learn something valuable from each other. You win my support simply because you are prepared to be part of the conversation, we will most likely always have a different poin of view. That’s the great thing to celebrate on Aussie day, we can both have a say. Happy aust day 🙂

    3 likes

  61. Australian Family Tree Connections

    Thanks Rick, no slanging matches from me either. Respectful communication is so much more productive, and pleasant. It sounds like IPS needs to stop over-supplying so it can justify its policy of no early returns, no supply adjustments needed then. Holidays, what are they? Haven’t had one for over 23 years. Publishing and editing a monthly mag and running a small business with all that entails is like painting the Harbour Bridge without the views, but I absolutely love it and most of the time it doesn’t feel like work. At last count I wear 14 hats which is funny because I’ve never been a hat person! Hope you enjoy the rest of All Aussies Day too.

    0 likes

  62. June

    James I like your idea about supermarkets reneging on mags but it aint
    gonna happen anytime soon.
    What will happen (IMHO) will be that the distribution agents will stop their mag supply which will impact on small outlets and service stations etc (the larger ones already have direct supply) and the retail newsagent will possibly pick up that slack.
    However, it will be at the expense of our fellow newsagents and that will be a shame.
    I would like nothing more than to hurt the duopoly but it is a vain hope.
    We just have to accept that the publishers and distributors got greedy and sent their product everywhere and some newsagents have become unviable because of those decisions.
    So for some newsagents to survive, some will have to fail and that is what it is folks.
    We don’t have to like it but it is happening as we speak/blog.

    2 likes

  63. June

    Here we are again – last returns for the month and the Network site has only processed my current returns (no supplementary yet).
    Seeing as I sent it via xchangeit at 10.30 am today and it usually comes through in 20 minutes for me to finalize returns ready for pickup tomorrow morning I can only suspect (as it happens every last week of the month) that Network need my cashflow for their own cashflow so if they don’t accept the supplementary items in THEIR timely fashion they won’t have to put my credits on until next month. WRONG- I will take the credits off the account.
    Why is it only one week of the month that this cannot be achieved in a timely manner?

    2 likes

  64. john s

    The commissions payable to newsagents is long overdue for a relook. I personally believe if any magazine is put on sale instore and promotes subsriptions for said magazine why shouldn’t we be intitled to higher margins. ie partworks is a good example as with many other titles.

    2 likes

  65. Dave Brazier

    This was a big issue and why I left ‘Notwork’. Despite a reduction of sales I was asked not to reduce supply but to look at the possibility of supplying more. Then it was explained to me that agents have to buy the magazines up front – that was never explained to me and I was of the opinion that a pro-forma invoice was issued and agents only paid for what they sold. Reading some comments here it appears some agents have also been charged for early returns as they didn’t hang onto them for the allocated sales period. Did I read that right? If that’s the case, and you have been charged, as a publisher I haven’t been paid for that – early returns are simply thrown away and are marked a loss for me. Nothing urks me more knowing a few copies never had the opportunity to be sold as they were never presented on the shelves for sale, due to over supply as managed by the distributor. From where I sit, IPS seem to be listening to the concerns of agents and arte acting. I have acted by changing back to IPS and reducing the distribution supply to reflect sales data and help not to clog up your shelves so everyone gets a go. Im on your side – Dave Brazier, Publisher ‘Boar it up Ya’ & ‘Shoot Ferals Australia’ magazines.

    5 likes

  66. Dave Brazier

    In response to John S ” I personally believe if any magazine is put on sale instore and promotes subsriptions for said magazine why shouldn’t we be intitled to higher margins. ie partworks is a good example as with many other titles”.

    My subscription base makes up just 1% of what is offered for sale in Newsagencies. Subscriptions used to be ‘a must have’ but due to rising postage costs it is bloody near impossible to say it’s a profitable exercise so it’s not something I overly encourage to my reader base.

    0 likes

  67. rick

    Dave, if it’s not profitable then don’t do it, put a form in the mag that customers can get a subscription thru their local newsagent, win win for everybody.
    Find it hard to understand how a publisher has a contract with a distributor, yet does not know how the system works?
    The other thing to remember is that even if we can’t early return (eg IPS) that does not automatically mean any over supply mag gets to sit on a shelf in customers faces, in most cases they will be in a box out the back waiting for the return date. Newsagents simply do not have the shelf space for non performing mags, if I wanted to display all titles supplied to me I would have to increase my shelving by at least 50% and we all know that’s never going to happen.

    0 likes

  68. June

    Re my previous comments (64) I would like to say that Network rang me about my supp. returns and the explanation for the tardy response (from the netonline website) was that a lot of newsagents (I am not one of them) only do supp. returns on the last week of the month and that is what clogs up the system.
    If ALL newsagents sent current and sup returns weekly they (Network) would not have this issue.
    I have never heard this explanation and the young man explaining it went to great pains to tell me that I could take the supp. amount off my account if the returns were sent by me on time but not
    accepted from Network on time.
    Seeing as I had sent both of mine at 10.30 am I was mollified but I would ask you, my fellow newsagents, to do the job
    weekly which is far better as the job is not so hard at the end of the month.
    Surely it also gets the product removed from the shop and space is always a premium.
    I, personally, thought it made sense and I wanted to pass this on as Network have obviously got a huge problem at the end of the month when they are trying to handle huge supp. returns in a timely manner.
    p.s. I don’t usually have great dealings with this company but I thought this worth
    passing on.

    2 likes

  69. rick

    i do supps and current every week, however my supps are usually larger for that last week

    0 likes

  70. Steve

    With a magazine delivery on the morning of the 29th of January-and the oversupply that comes with that-plus the cut off for network returns being midnight on the 29th I doubt many newsagents didn’t slip a supp return in on that day. If Networks oversupply and returns cut off times are causing them problems,well they are networks policies maybe they need to change them.

    1 likes

  71. Hamish

    its interesting reading everyone’s comments but while the main players stay out of the conversation its achieving little – as has long been the case.

    I seem to remember a discussion some time ago around newsagents effectively becoming an alternate distributor of magazines, either through a shareholder arrangement like GNS or through an amalgamation of distribution agents or even outright purchase of a current key distributor.

    I feel that a complete alternative needs to be developed and put forward as an option. The current system is a train wreck. Its not in the current distributors interest to change this system and they wont change until they loose a substantial number of titles to a breakaway or alternate distributor that doesn’t play by the current lopsided rules……Its time for a new player with a compelling offer.

    To answer the original question Mark posed in the post…….newsagents need to look at taking control of distribution if the current distributors don’t change.

    5 likes

  72. Amanda

    Well said Hamish.

    0 likes

  73. Jewel

    I’m talking for the little guys who G&G won’t give the time of day – This is all interesting but I don’t see practical solutions for independently published “niche” magazines. We spend a huge amount getting supply into newsagents and it is really disheartening to read that there is an apparent desire for niche titles yet no solution regarding an effective sales channel to you. No, increasing your margin isn’t viable for us either we pay to have every magazine distributed and yet we only get paid for what is sold – when we’re starting out 20% sales is very good – I’m sure you can do the maths. Without distributors we’re selling mags out of the boot of our car – we did that for 7 years….you can only get so far doing that but it means our local newsagents sell 15 copies no sweat with weeks to spare and customer requests for more – elsewhere we are yet to find out.

    0 likes

  74. Paul

    Unfortunately Jewell you will strike a problem then. I just had a look at your stockist tracker and I don’t think there was a newsagent within 9km of me in suburban Brisbane yet at only 25% margin I won’t chase your magazine to stock it and indeed I now early return all new magazine titles that arrive that aren’t asked for. Maybe some newsagents are willing to but I for one won’t any more until margins are brought in line with costs. Makes it tough for you but unfortunately I’m in business for myself and suppliers need to realise this is the case with newsagents not as it has been previously where they seem to think we are just here for their benefit. The ones that don’t take this attitude will be the ones gone in another year or two.

    Not trying to be abrasive but unless something changes magazines as a whole will continue to decline and eventually disappear. It’s why I for one no longer plan my business with magazines as a major part of the picture. Good luck and I really do hope you find a way to be successful with your publication.

    0 likes

  75. Colin

    Jewel,

    Both newsagents and niche magazines need a world without G&G and their dishonest model.

    G&G ain’t interested. They will milk the model until the end.

    If it were not Australia, somewhere with major conurbations and short distances, I could see specialist newsagents forming distribution cooperatives. But it is Australia. Too many remote outlets and distances too great.

    It is what it is.

    2 likes

  76. Chris

    That is another issue for Publishers, there are newsagents who want new titles and there are newsagents who are reducing their magazine range.
    As a newsagent who loves new titles, eg Breathe, Collective hub etc I want publishers to know that I will support them as long as they support me and not the supermarket next door. I will give titles a go because the Top 100 titles are declining and I want the titles that are growing sales. Not only that but new titles bring in new demographics that are not traditional newsagent customers and who I can target with other products.
    Each to their own hey

    3 likes

  77. Mark Fletcher

    I think the issue here is that dealing with us ia what is effectively a trucking company. No one is actively thoughtfully managing the magazine supply to newsagents in a way that is over the counter sale focussed.

    0 likes

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