Month: August 2010

Newsagents may want to the quantity of Scooby Doo stock received yesterday.  In our case supply was increased without justification.  Yes, yes, we can early return.  We should not have to do this.

I was discussing this with a newsagent late yesterday and they are at their wits end about magazine supply with the cheques they regularly write for the magazine companies equal to or more than the value of sales in the month.  And that is without even factoring in the cost of real estate and labour.

Newsagents have complained about the supply model for many years both formally and informally.  Millions of dollars have been invested by newsagents to provide magazine distributors with more timely and accurate data with a fairer supply model as one of the promises.

While newsagents can and do early return to manage stock levels and cash flow, there is a limit as to what can be achieved.  Plus there is a labour and freight cost with this.

Negative cash flow for magazines is worse today in 2010 than I have seen it in years.  It is the extra one and two copies of a title, like Scooby Doo, which is causing real damage as it is under the radar.

I can see a time when newsagents en masse refuse to pay magazine distributors on time and through this exert cash flow pressure of their own.

The better alternative would be for distributors to agree to a fair supply model with penalties for failures on their part – like sending extra copies of Scooby Doo without justification in the sales data. They need to hold themselves as accountable to us as they hold us accountable to them when it comes time to pay the bills and put up displays.

Network Services has been talking with the various software companies about how to best handle the transition of titles from NDD to Network where the recall date is beyond the last day of trade for NDD.

To their credit, Network has sought input from the software companies on transition options.

Earlier today is a surprising move, POS Solutions published the correspondence from Network.  They have published a request sent from Network to them for input.  It is not a statement from Network as to how they will handle the situation.

My personal view is that POS should not have published this communication as the approach canvassed is far from certain.

Newsagents in Tasmania yesterday received an email from Jonathan Mathys, the editor of Tasmanian Life, setting out the new trading terms relating to the title which used to be distributed by NDD.  The email announces that the next issue of the magazine will be delivered, starting today, by a courier company.  There is no invitation to open an account, just a decision by the publisher.

Judging by communication I have received, the email has not gone down well. The issues raised with me are:

1. Lack of agreed terms.  There is no contract, no request to accept supply.  An assumption has been made that newsagents will take the stock.
2. Supply volume.  The last supplied NDD volume will be shipped.  This will not reflect adjustments since made by newsagents.  While there is a credit / returns process in place, it’s more work for those involved.
3. Margin.  33% if you pay within 3 days if invoice.  25% if you pay within 14 days of invoice.  Invoices are sent electronically within 24 hours of delivery.  There is no comment about the margin if you do not pay on time.
4. Returns.   You hold the unsold stock until the next delivery, eight weeks later, when it is collected. You are given a credit against supply for the returns.  No early return.

To their credit, the email outlined some good marketing initiatives.  It also forecast a rewards program offering cases of beer and weekends away.  I suspect that newsagents would prefer margin since you can’t bank beer or a weekend away.

I like Tasmanian Life.  It’s a good publication for Tasmanian newsagents. I think that the transition from NDD to an in-house managed operation has not been handled as well as it might has been for newsagents.

I understand that the closure of NDD leaves magazine publishers to come up with distribution solutions which work for them.  It is important that they consult widely with their newsagent customers otherwise they risk alienating their retail network and losing sales.