Here is proof of how newsagents are disadvantaged by the broken magazine distribution system.
On October 11, 2006 we received 16 copies of PC World’s Small Business Technology magazine at my newsagency. Up to yesterday we sold two copies. If we do what NDD, the distributor, wants, we’ll hold the title for another month. The credit for returned copies will not reach us until a month after that, leaving us more than $100 out of pocket for several months. On top of this cash-flow ‘loss’ I’d add that the title, over its shelf life, will have cost us $14.00 in real estate and labour providing a trading loss to us, on the basis of two copies sold, $9.00.
I didn’t order this title and it’s cost me $9.00. How nuts is a magazine distribution system which can cause a loss for me and not offer me any control over the loss?
How unfair is a magazine distribution system which does not value, at all, my real estate and my labour?
Every day in newsagencies across Australia we’re seeing unconscionable conduct such as with Small Business Technology magazine by magazine publishers and distributors.
I did not order this magazine. I had no input into the quantity supplied. Sales data at NDD would suggest that a scale out of no more than six copies for my store would be appropriate. However, since NDD has a contract with the publisher which, I suspect, requires scale out of all copies supplied by the publisher, they shift their obligation to newsagents like me. This makes us the banker for several months. NDD uses our cash to fund a broken magazine distribution system. The publisher gets paid, NDD is financially protected and newsagents carry the risk.
This magazine should never have been published. The information is out of date. It’s mainly advertising designed for browsing and newsagents provide this service.
I doubt that newsagent competitors in the magazine category – supermarkets, petrol outlets, convenience stores – have this title. They control what they receive. Newsagents do not.
Titles like this and scale our decisions such as that made by NDD for this title are killing newsagencies. This is one outcome of the Government driven deregulation of our channel – that we have been left with a magazine distribution model which makes us financially uncompetitive.
The only action I can take is to return the title early but that’s time consuming of itself and often leads to arguments with the distributor.
The magazine supply problem will get worse for newsagents in 2007 as the gulf between the successful titles (around 250) and the unsuccessful titles (about 2,000) widens. Newsagents must organise and take collective action, they must boycott under performing titles. They must refuse to pay for under performing stock and force their suppliers to fix the problem.