Here is a graph indicating the cash flow impact of magazines supplied by Network Services (excluding ACP Magazines titles) and Gordon and Gotch (exclusive Pacific Magazines titles)to a newsagency between May 2009 and April 2010. The data was collected and analysed using Tower Systems newsagency software. To determine the cash flow impact of a title, the software considers the cost of goods, cost of retail real estate by title, cost of labour plus revenue from sales achieved.
How can small business newsagents manage cash flow with such peaks and troughs? With difficulty. The cash flow challenge is far more pronounced in shopping centre based newsagencies where rent per square metre is much higher than elsewhere.
Newsagents manage by subsidising magazines some months with cash from other parts of their business.
I first wrote about this in my Magazine Cash Flow Report of 2006. I have spent time this year updating the data and things have not changed.
Magazine distributors control the model. They will say that the don’t but they do. They are paid regardless of sales. Newsagents only make money from sales. We are the weakest link in the chain yet pay the highest price.
The cash flow peaks and troughs of the current magazine distribution model cannot continue.
Before the magazine distributors complain to each other that I am unfairly blaming them again, I challenge them to look at the cash flow data. This will show that I am right. It will show that the current magazine model is cash flow negative for 65% of all magazines distributed.
Some simple changes could turn this situation around.
What is grossly unfair to newsagents is that no other retail channel competing with us in selling magazines has the limitation imposed by the magazine distributors on us.
One day, people will look back and wonder why they acted as they did commercially against newsagents.
Mark I have done this graph for my business and it is just as bad. I was surprised at the difference it made taking the acp and pacific titles out of network and gotch respectively.
I urge every newsagent to do this.
Did a graph on mine and only 3 months of the year on Positive – Something has to be done about this Over-Supply
Please be advised that the final time and date for submission of returns to achieve a credit on this month’s statement is
3 PM – Sydney time on Thursday 28 Oct 2010.
Please adjust for your own time zone.
Returns submitted to us after this date and time will be processed in the next Calendar month.
At least GG have told us. Thanks Guys and Ladies
why can’t they be like network same time every month “last day of the month “