In February 2005 I spoke at a breakfast meeting of publishers in Sydney and presented a suggested list of magazine key performance indicators. In cleaning up last night I found the list and thought I’d publish it here for comment.
- 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.
- 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.
- 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.
- Newsagent 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.
- Newsagent changed supply figures not to be altered without reference to newsagent unless such change absolutely supported by sales data.
- No cut of supply below current recorded net sales.
- No reissue within six months of last issue of a title.
- Delayed billing of at least 30 days for any new title.
- Returns to be credited within 48 hours of provision of electronic returns data or 7 days of provision of physical returns form.
- Returns to be called no later than the date of the next issue of the same title going on sale.
Magazine KPIs are mainly needed for titles outside the top 200. Inside the top 200 the supply model is, overall, good – although somtimes I would like to be abl 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 provided this to the ANF for their work on magazine performance KPIs at the time.
It sounds fair for both sides. Will it happen though?
Well that was in 2005 not a great deal has happened since then as far as i can see .
The rates might need some tweaking for allowance to agents with a high number of sub-agents and trialing new sub-agents but other than that they all seem reasonable.
I would forego the penalty payments and carrying fees for a negotiated blanket increase in commission though.
Getting supply cuts under recent sales figures is absolute murder though and never ever should happen, especially when they run out of top-ups. That shouldn’t be a ‘concession’ we have to negotiate for.
As a publisher who attended that meeting we would welcome a number of those changes. We at Lovatts have self interest at heart when we strive to ensure our titles perform much better than the suggested minimum of 50 % efficiency.
Those benchmarks would also eliminate the vast majority of imported Crossword titles which perform well below that level. Overcrowing the valuable real estate and tying up cash flow.
I was thinking Mark about how you said somewhere that you are planning a shop re-fit without a backroom.
What will you do with the NDD magazine returns that take up a fair amount of space?
Michael we are planning a small back room. NDD efficiency has been improving and the space needed is not as bad as it was. Mark
you are lucky that your ndd supply is going well ,mine is still shocking .I recently found out that when you put a permanent stop on a magazine it only last for 13 weeks and then it all starts back up again .How rediculous is this system that they are useing they have all the power in the world
Guys, with some of these low selling titles have you tried spreading some of your stock out across your sub-agents. I cant speak on behalf of all subagents but i’m one of those you is willing to give any magazine a go in my store for at least a month. At the end of the day a sale is better than nothing
yes scott that is a good idea i do that for my subagents .on the newsagents side you just have to be a bit more alert when it is return time as some of these titles last for months at a time .