I’ve had a small publisher contact me complaining that if newsagents stop stocking product because it does not perform then companies like his will close as they will lose a very cost effective retail channel. In his case, I receive 2 copies of his $6.95 monthly magazine and usually sell one. I earn $1.74 commission. The retail space costs me $3.00 per month. The title and pocket cost me $1.50 per month to service. So, I have to generate $4.50 per month from a title to break even before I start to recoup non real-estate and labour operational costs. The $1.74 from this title represents a loss for me so I should stop stocking the title. (Achieving that with some magazine distributors is challenging because they believe that I do not have the right to stop supply of a title not performing in my shop.)
Back to my dialogue with the publisher. he says if newsagents stop carrying his title his magazine will fold. Maybe it should fold because right now he is only surviving because newsagents like me are prepared to carry his title for a loss. In effect we’re investing our capital in his business every month. That doesn’t make sense to me.
This small magazine needs to find a publishing model which works for it rather than leech off the ignorance and good will of small business newsagents.
Mark, You could probably say that about 30% of the magazines in my, and probably most newsagencies. It also applies to a lot of other stock items in the store, bread for example.However, the person who buys that magazine from you comes into your shop to buy it and hopefully something else with a higher profit mark up.It is getting the customers into the store that counts most this day and age. If you take every item out of your store that is not singularly profitable, you won’t have much left. We have a Com.Bank agency. We make .4% on turnover, but the business we get from that agency is large.They will purchase something 90% of the time. So I think we have to look at the overall picture.