Newsagents are billed for magazines supplied right up to the end of the month but the cut off for returns credits is usually between four and six days before the end of the month.
I heard from a newsagent yesterday about their frustration with Gordon & Gotch. They have a floating end of month cut off for returns and they do not let newsagents know the date. This denies newsagents the opportunity to better manage cash flow.
With the magazine supply to newsagents not declining in line with overall magazine sales decline, attention to cash flow management opportunities is mission critical to newsagents.
Magazine distributors must know about the situation – they see how many newsagent accounts are closing each month. Yet when they have a conversation with newsagents about the cash flow challenges of the magazine supply model they usually talk about it as if it is only a problem for the newsagent talking with them.
In one store, magazines from one distributor were cash flow negative for nine months out of the last twelve. This situation is unsustainable. The distributors can take action to resolve it but don’t.
I am concerned that the newsagency channel will reach a point where it collapses because of the expensive and challenged magazine supply model.
The inequity in the timing of accepting returns for credits in a month is just one example of many disadvantages newsagents face with the current model.
I was always told by GG staff that you have untill the last 3 days of the month but they forgot to mention that if it is the last wed of the month (the day we get massive oversupply )the do not accept it because i know they didn’t accept mine on the 28july
i do a heavy cull of mags a week before the end of the month, knowing that i will need room when they load me up at the end of the month, plus also gets my returns in for the month. might miss the odd mag sale because of early returning, but more than made up for in better cash flow. i am being a lot tougher on mags as a general rule now anyway, if its been on the shelf for a month and i need room, it goes back as an early. more newsagents should be more pro active with mags and early return anything that is not selling, i wont tolerate doubling up in a mag pocket, if i have a new mag and no room, either it goes back or something else does
I HAVE CUT MY MAGAZINE POCKETS BY OVER 400 AND HAVE PUT SLATWALL IN.
TO HELL WITH THE DISTRIBUTORS AND THERE ARROGANT APPROACH TOWARDS THEIR CUSTOMER BASE.
WHEN WE LOSE, THEY LOSE TOO.
THEY HAVE TO AGREE TO BETTER TERMS AND CONDITIONS FOR THE SAKE OF THEIR OWN SURVIVAL. SOMEHOW I FEEL THIS POINT DOES NOT GET THROUGH THEIR THICK SCULLS!!
i share same concerns. and i also believe the only way for us to be heard is to act as a group.
but as always there is the question, how do we act as a group? what can we do as a group?
just to kick things off for ideas, how about we all withhold/delay payments all at the same month in protest. that’s gotta hurt their pocket a bit as they believe we are obedient sheep.
they hurt our cash flow month in month out, why can’t we play same game?
any comments about this idea? any other suggestions? would really love to get back at these greedy bastards.
Anyone else unable to cancel a non selling title with Netonline? Despite months of 100% returns, a title cannot be cancelled because it cannot accept an amount[0],that is lower than the average sale! So if you sold one copy many moons ago you are stuffed.Inside Football a good example.dreadful title for us,no sales in the past several weeks, but Network increased supply from 2 to 4. Changed allocation online back to 2, but continued to receive and be charged for 4, tried to cancel completely but cannot, what a waste of time,resources ,just more frustration dealing with Network Also starting to receive titles ex NDD, that I had cancelled with them. Cannot cancel with Network due to “no sales history” !
Meanwhile my cash flow suffers along with my blood pressure.
ed, newsagents should not comment here in response to what you have written as it could be evidence of collusion.
There is a lack of fairness in a system which will bill to the last day of the month but only accept credits to some days before.
max document your complaint to Network. Give them reasonable time to respond. If no response, complain to the ACCC. Or, if you are in NSW, consider the CTTT.
maz i had the sam3e problem with inside football , i sold 1 copy a few months ago and a zero quanity is less than the average
Maz, I rang network and asked this same question after trying to cancel a title and the girl said she could do it over phone. Strange given they want us to use online.
i have cut down my magazines pockets by at least 30% ,but my supplies still very STRONG, sales very weak day by day. thanks to easy early returns software now there is no idle stock in the store room. whatever don’t fit in the shelves return.
We cull on a daily basis. And return as much as possible each week without leaving our shelves empty. We are also about to cull our magazine area down due to the costs involved. Even with a title we return immediately it has still cost us money in wages the minute we lay a finger on it.
First time commenter but a regular reader.
Mark you put yourself on the line so much writing about the magazine supply model. I don’t see anyone else bringing these issues to the fore like you.
A couple of years ago Ithought you were a maverick. That’s what I was told by some older newsagents when I bought my newsagency.
You are not a maverick at all. You are writing what we are all thinking.
What I really want to know is what I can do. I am drowning in magazines. I am being threatned by Network but they will not let me easily control my supply.
Some days I want to give up.
Thanks for listening and keep writing.
We return with every delivery. We walk the shelves twice a month to check for old(4wks or more) mags. Our view is if they havent sold in the first 4 weeks then they wont sell after that…Our Network bill for example was $9000 approx and this month $2500! Big difference….Our opinion is take control and dont let the big boys boss you around.
no mags should stay more than 3 weeks if they have no historical sales in the first 2 weeks at all.
Gaye,
This a sound approch to your business. The adage “if you can’t control your stock you can’t control you profits” is very true. As for sending back stock when one thinks it is past its “use buy” date is a subjective decission that only the store owner can make. You know your stock and your customer and one rule does not fit all.
I often deal with other small businesses on a performance analysis basis and in a Book Shop for instance the stock holding is far greater (especially in value) than a newsagency and the stock turnaround ever so much slower and no sale or return – howevr margins of 45-47.5% I am doing a comparison of units per sq metre with say magazines = return for space on a net profit basis. The overheads include the temporary “holding” of stock at 25% versus the “sell on special” dead stock in a book shop aa an expense at 45% gross profit to establish the net G.P. in comparison.
At this stage I believe we are better off because we can do what you are doing controlling the out come of net profit by contolling the shelf life of the stock.
Steve, thanks for your first time comment. Contribute again.
The problem with the model is that we do have to return to control stock. Distributors have the data to provide more control but legacy issues in their relationships and systems make this a challenge.
They have the ability to control what they send you – granted however in fairness they do not have the ability to forecast sales at the coal face. This is why we have sale or return I believe Gaye has a really good handle on it and one that needs embracing and improving. If we give up and leave it to the distributor to provide MORE CONTROL we are abdicating our own destiny. Lie back and enjoy or resist on your own terms
Graeme, The do have sales history and excellent forecasting software. Plus they have the opportunity for sales based replenishment.
As I said in the post:
I am concerned that the newsagency channel will reach a point where it collapses because of the expensive and challenged magazine supply model.
Mark,
It has been illustrated here by Gaye that one can get control of their own destiny re stock (at a price) it is I believe a beginning certainly not or no where near the doomsday end on the newsagency World that the “newsagency channel will reach a point where it will collapse etc” after all it has been doing this for over 60 years.
If good business practice can’t over come this problem then we need to put forward a new model to our suppliers and this is what should be debated but to say the end in “nigh” seems like a desparate plea of an out of control retailer. As for their forecasting ability this blog has given many instances, more often than not, where they got it wrong too many , not enough etc. anyway why would anyone in there own business expect a supplier to cater for their needs especially when they have a pecuniary interest.
I believe that your remark is contrary to you objective in “giving you Less not more?
Graeme, it is not control. Many newsagents do this already.
While there is considerable work being done on an alternative model, this work is not happening fast enough.
We should not have to early return to control stock, especially when we have to pay freight to return this stock.
Mark, This is a very different statement to being “the end is nigh” dramatic statement that you have posted here.
I am pleased that you are working on a different model and mentioning that would maybe lift the spirits of those looking for some up lift. Others have taken the matter into their own hands for want of running their business more efficiently and more profitably, meanwhile that is.
Graeme I didn’t say the end is nigh nor did I say I am working on a different model.
Just about every newsagent I knows early returns. That is not a good long term plan but I understand that it is a necessity.
Newsagents can lift their spirits by reading plenty of what I write at the blog, the energy and commitment to pursuing impusle purchases, creating good retail theatre and pursuing change.
The channel is evolving. It has a lot to offer for those who encourage this evolution.
That’s good Mark I just think sharing the posititives are greater than highlighting in bold the negatives of which some bloggists are offering an immediate solution which may be temporary however fits the problem for today.
Keep up the good work the promotions etc are extraordinary.
Mark totally agree.
I have been in the industry for nearing 7 years and what frustrates me more is the sick and cop it mentality of the federations/ assoc. and they will moan with you about it but never do anything. In my opinion, that is why the newsagency channel is devalued by brokers and banks as a whole. What ever happened to setting up a 3rd alternative association that will actually challenge these problems?
i think the era of associations is nearly over, too many members with too many business objectives and agendas. the way it will evolve is that there will be more consolidation in the industry, ie in country towns where there are more than 1 newsagency, there will only be one in the future, not sure how it will pan out in the cities. the newsagency business model will continue to blur so that we become more or less specialist retailers or convenience stores, some will move towards specialist stationers, others into phone or printer/ink retail outlets, and others into gifts/cards, each has to find their on niche market for where they are, and above all else stay nimble. Mags and papers will continue to be of less and less importance to our business. There is no way an association can deal with the industry that will become so diverse, more likely each business will be attracted to a marketing group that meets there needs and ideals. these marketing groups will then be kind of like an assoc but very specific in what it seeks to achieve. It will be more about brokering supplier deals, running promos and seeking out new opportunities, rathe than trying to deal with publishers/distributors that clearly are not interested in the channel, and will only be in it until they can migrate accross to electronic media completely.
Herewegoagain, the alternative association did not get off the ground for the same reason associations have been challeneged over the years – newsagent apathy.