Month: August 2007

Jeff Webster is probably a nice bloke. His Fitting Out for Bay & Coastal Fishing magazine demonstrates his passion for fishing. So, this post is not a crack at Jeff of his magazine as such.

I am losing money from Fitting Out for Bay & Coastal Fishing and cannot justify carrying it. My sales data proves that yet NDD sent me 3 copies yesterday and expect me to keep it on the shelves for six months. I might sell 1 copy and if I do and adhere to NDD’s request, I will have lost $18.52 supporting Jeff Webster’s business. This loss takes into account the cost of real-estate and labour for the title. It does not factor in the cost of cash given that I will have paid for the copies sitting on my shelf for months.

I’d expect that more than half the newsagents receiving this title are losing money by carrying it. While small publishers want newsagents to carry their niche titles, newsagents cannot afford to provide free billboard space. It is uneconomic.

An alternative model would be a marketing payment to newsagents for their billboard space coupled with delayed payment for the stock.

My newsagency is well satisfied with fishing related titles. I can afford to cut this one and have returned the stock to NDD with a request to not supply again. I should not have to ask this since the sales data held by NDD shows that supply of the title would lose money for my business. They have an obligation to not put me in this position.

The problem for newsagents is that there are hundreds of titles like Fitting Out for Bay & Coastal Fishing. The continues supply on such uneconomic terms is unconscionable.

Issue #2 of Emporium magazine – the house magazine promoting Myer stores – arrived today and it appears that the sales data we have provided the distributor, NDD, has counted for naught. We sold 3 copies of Issue #1. NDD gets sales data from us daily and while they have cut us from 25, the 17 supplied is way too many.

I would accept 8 copies and this is what we will ask for next time – but my question is why should I have to ask when state-of-the-art technology as designed by NDD ensures that know that 17 is gross oversupply. I’d call it unconscionable conduct as it continues serial abuse of the newsagent channel.

I received a phone call Friday from Diane Frola, publisher of UFOlogist magazine. She was upset by what I had written here in June. Over the course of our long phone conversation, Diane accused me, among other things, of lying, being a John Howard voter, being a lover of big business, only wanting New Idea, Woman’s Day and other “trash” titles to survive and hating small independent publishers like her. Diane is wrong on all fronts.

When I suggested to Diane that she post her views here as a comment she said there was no point as I would delete her comment. When I asked why she said that someone at NDD had said I delete comments.

I do not delete comments unless they are spam such as selling mobile phone products or seeking money. Anyone trawling through the comments at this blog will see that comments complimentary and critical get through.

Blogging invites conversation. I hope Diane posts her views here. Her contribution would be most welcome by me and, I am sure, other newsagents.

If Diane’s claim that “someone from NDD” said I delete comments is true it would be disappointing. She also claimed that I have never asked NDD to reduce supply for her title or other titles. While I should not have to do this – the state of the art NDD distribution system should do this for me – I have had plenty of dialogue with NDD about title supply in my newsagency.

I understand Diane’s frustration. She is a small publisher struggling to keep her special interest title afloat. Business is tough. Newsagents are key to her reaching her customers. The problem is that she is tapping into a business model which was created in the days of newspaper and magazine distribution regulation. This is when the price model was set. Following deregulation in 1999, the price model was not revisited. Newsagents make less as a result – with more outlets selling magazines but only the top sellers. This challenges the financial model of newsagencies. It is why the pre deregulation compensation model is unfair today.

Diane Frola’s demand – that newsagents should support her title – gains no traction with me. Business is tough. If I support UFOlogist as Diane asks, I have to offer the same charity to other titles. The two copies I sell every eight weeks lose money. I would have thought that those copies, and the other nine I get from NDD, would do better in a newsagency where more than two copies sell.

The shelf space I provide UFOlogist is cheap advertising for their brand. I suspect this is why Diane demands I keep her magazine on the shelf – to advertise her brand. With an 18% sell through rate the title is dead in my newsagency and NDD ought to cut it immediately. Either that or Diane pays for the advertising space so that I achieve a fair return on my shelf space.

This is business. My landlord expects me to conduct my business on commercial terms. Likewise, it is reasonable for me, as landlord of UFOlogist, to expect it to conduct its relationship with newsagents on commercial terms.

FOOTNOTE RE NDD: I acknowledge that I have been fierce in my criticism of NDD here this year. I did so because regular business communication with NDD failed to achieve an equitable arrangement. My blogging has resulted in more equitable supply of many titles for my newsagency – hopefully others will be fixed. I am disappointed that I have had to use a public forum such as this to achieve, in part, what ought to be delivered to every newsagent – equitable supply of magazines based on sales data.

Playstation, Nintendo, Xbox and other computer game magazines are not selling like they used to. Sales in the segment have fallen by more than 50% in the last year in me newsagency. Over the same period benchmark categories of women’s weeklies, women’s interests, other men’s interest segments have grown.

While there has been a reduction in the titles supplied in the Computer game segment, we still have between 15 and 20 pockets allocated at any point in time. This is a considerable amount of retail real-estate.

The game titles remain popular with browsers – but fewer of them convert to paid sales.

We will create a feature display to promote the segment in a few weeks but I suspect that this will not generate a significant kick in sales. People interested in computer games can get access what they want online, free. Online sources are also more timely. Why pay for out of date information?

What got me looking at the category was a customer who picked up a Playstation magazine as the free magazine when she filled her Magazine Club Card. The fiftysomething pointed out that the magazine was for her son. She went on to say he used to buy plenty of magazines but “the Internet changed that”.

We have started rebuilding our stationery offering following major disruption over the last five months with construction in the centre and in our tenancy. The building project will take a few months as we are taking our time and focusing on brands. We have started with tape and are building a stolid story around the 3M Scotch brand. What is interesting to us is the challenge of accessing enough of the range to adequately represent the brand.

This is a huge problem for newsagents across the country. They rely on stationery warehouses for the range of a brand they carry and often a national brand is not as fully represented in the warehouse as it could be. This is what we found with Scotch when we started.

We like national brands because consumers are more likely to know and trust them and because they are advertised more often. Newsagent warehouses need to understand this and help newsagents pitch a more consistent brand story.

While on the issue of stationery, I am pleased to see the ANF preparing to survey newsagents about the newsagent owned GNS warehouses on the Eastern Seaboard.

Caravan World and Caravan Trader are two good titles with okay sales compared to other titles in the segment. We have both on the shelves at the same time and displayed in the same area. I am surprised, therefore, that we also have a double pack with the current issue of Caravan World and the previous issue of Caravan Trader. The cover price of this is $2.00 above the usual price of Caravan World. Why would I pay even $2.00 more for old caravan ads? Maybe I ma missing something – this seems very odd.