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NDD refuses to cancel Universal supply

Mark Fletcher
November 28th, 2008 · 18 Comments

NDD has advised that they refuse to cancel the supply of Universal Magazines titles to my businesses.  I know from my own sales that these titles are loss making my business once I account for the retail space and labour – even at a sell-though of greater than 60%.  For titles of greater than 30 days on-sale I, and other newsagents in shopping centres, need between 80% and 100% sell through to break even.  The only way to address this is with commercially fair terms which respect the long on sale and high cost of returns.

My original blog post on this can be found here.

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Category: magazine distribution

18 responses so far ↓

  • 1 ScottM // Nov 28, 2008 at 1:35 PM

    so what will be your next step?

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  • 2 Mark T // Nov 28, 2008 at 2:41 PM

    It’s difficult to defeat an incredibly effective, albeit unethical, business model.

    Best of luck Mark.

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  • 3 Brett // Nov 28, 2008 at 2:44 PM

    Effective for them, not for the Publisher nor for the agents.

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  • 4 Mark T // Nov 28, 2008 at 2:49 PM

    … exactly Brett!

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  • 5 Mark // Nov 28, 2008 at 2:55 PM

    Mark,

    I hear from many people that we have the best magazine distribution system in the world. From a newsagent perspective it is effective for top selling titles in our stores and ineffective for non-top selling titles. Our cash-flow study showed that 65% of all titles are cash-flow negative over the course of a year.

    Mark

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  • 6 David // Nov 28, 2008 at 5:09 PM

    Hank Spier was very helpful in the Bill Express matter. I would like to see him used further in matters such as this.

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  • 7 Michael // Nov 28, 2008 at 5:37 PM

    Mark, your shops are bigger than mine, but you still have another two distribution companies supplying you. As far as I know, it’s YOUR choice as to what sits on the shelves.

    If you decide to change your range and expand on titles from the other two distribution companies and cut out the ineffective titles you can. If you have changed your standing order and they still send them, that is oversupply in my book – there is simply no shelf space allocated to them.

    Send them back straight away and ask for an immediate credit. I do it that way for now.

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  • 8 Derek // Nov 28, 2008 at 6:14 PM

    Mark

    From their point of view they have drawn a line in the sand not just for you, for everybody! If the gate is unlocked for one person its unlocked for everyone. My personal thoughts are this is illegal as one has the right to stock what products it wants to.

    Michael’s and other comments are all relevant and have given you options to not react with haste.

    It would be in the best interest of NDD to acknowledge they have a big problem and react with the best interest of Newsagents.

    They will have a bigger problem in the future because I know you wont let this behaviour continue and with your strong support from individuals and business’s.

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  • 9 SHAUN s // Nov 28, 2008 at 6:15 PM

    Michael , how do you ask for the immediate credit ,with network they want it by the 15th so there are another 15 days + that will not make it on those returns do you have a way around it ?

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  • 10 Mark // Nov 28, 2008 at 6:22 PM

    Derek,

    You’re right. They could not afford to agree. I won’t publish their letter because they say it is confidential. I am not done with this as my advice is that they have an obligation to not force me to take product on which they know I will lose money. Mark

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  • 11 Derek // Nov 28, 2008 at 6:44 PM

    Mark- It just goes to show how hard it is to deal with Distributors on this subject of supply. I believe your advice would be correct because you have a number of years worth of data. Good luck and keep us updated if possible. Its a potential breakthrough the industry needs.

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  • 12 dan // Nov 28, 2008 at 11:31 PM

    MARK, after lots of complaining to ndd with no real response we just closed our account with them. if more agents did the same they would have to listen. to everyone best of luck with these clowns

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  • 13 Michael // Nov 29, 2008 at 8:02 AM

    Shaun, in Mark’s case where he has told them he does not want them and they still send them, he should ask for an immediate credit in my opinion.

    I don’t know the full facts but if they are as Mark states I see it as bullying.

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  • 14 Mark // Nov 29, 2008 at 8:05 AM

    I would expect to find the ACCC most interested in the refusal of NDD to stop- supplying titles on which I lose money.

    UI have gone back to NDD and invited them to reconsider before I take the next step.. Mark

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  • 15 Michael // Nov 29, 2008 at 8:17 AM

    I think it would be easy for the ACCC to come to a conclusion with your issue.

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  • 16 Derek // Dec 1, 2008 at 7:28 PM

    I do not have an NDD account as stated many times in blog posts however I was happy to read that in late January 2009 Lovatts Publications will be distributed by Network Services again.

    I find this interesting however I can only assume they were not happy with NDD. I am personally looking forward to really pushing them in my shop.

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  • 17 Mark // Dec 1, 2008 at 9:00 PM

    Derek, This is what surprises me about the NDD response. I would have thought that they would want to work with newsagents. Especially in the face of evidence about the financial return achieved from titles from a publisher. Instead, they are putting the publisher first and refusing to consider store level financial data. This limits how newsagents can respond. Mark

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  • 18 Derek // Dec 2, 2008 at 10:48 AM

    Mark

    Exactly, Evidence of data is irrelevant it seems, but I am sure that apart from NDD’s inflexibility towards Newsagents requests its software is also inflexible. I am no software person however when I spoke last time to NDD, their were limitations on whats its software can do for Newagents, we however know what it can do for publishers though!

    As you said it leaves Newagents with only a few options. 1) Carry on carrying the Publishers/Distributors 2) Just send them back straight away for immediate credits or 3) Take that anguish out of one’s business altogether and close an account.

    I think its terrible that one is forced into point three, I would love to have an NDD account however my business could not function properly with the money NDD sucked out of it because of the total inflexibility of its supply model.

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