41% of newsagents who early returned a particular smallish circulation Australian magazine recently lost certain sales as a result. A check of their own sales history would have shown that the level of early return would leave them with insufficient stock for sales they would achieve.
This suggests to me that a concerning number of newsagents are using early returns to manage cash flow without assessing the the impact of their early return action on magazine sales.
The evidence I have seen is compelling.
Why early return a title which you know from history in your store will sell? Probably because you have not taken the time to check whether your planned action is appropriate. And probably because you need to do something to bring your magazine account into order.
I can understand why newsagents do this. Too often we feel helpless at managing magazine over supply, particularly titles well outside the top 200. In chasing credits to get the Gotch and Network accounts down sometimes irrational decisions are made.
In the data I have recently seen, a title which would sell in 41% of the newsagencies could not because of early returns.
There are three solutions necessary:
- A magazine distribution model where scale out is based on current sales data and with a small buffer of supply above average net sales is needed.
- Demands by all Australian publishers that their distributor “partners” create a genuinely transparent distribution model which makes it easier to see how actions taken with some titles can affect on sales of another.
- More care taken by newsagents before early returning rather than random removing sock from the shelves.
I know that some Australian publishers are frustrated by newsagent early returns. Often with justification. Maybe they and newsagents should get together to challenge the sick supply model.
Which title???
It’s important publishers realise there are a number of reasons newsagents might early return a title despite perceived sales potential:
1. Offensive oversupply – A title which consistently sells one or two copies on a supply level of 3 or 4 has its supply increased to 6 or 8 copies for no justifiable reason. Rather than play these games, the newsagent removes the title altogether – examples – british soccer week, the Phantom.
2. Unreasonable presentation. A magazine which won’t sell unless people can browse arrives sealed in plastic – examples -Robb Report, Selector. Bent or torn cardboard sticking out the top.
3. Too big to fit into fixtures.
4. Too bulky – bridals – often cut back below sales potential due to a lack of space to store or display. Mags with toys, DVDs, other crap attached.
5. Too small – Disney DLLs, Mini cookbooks etc. Easy to lose, easy to steal.
6. Theft risk. Lads mags, porn, surfing, skateboarding.
7. Condition of mazazine on arrival – some titles are always bent – W – some titles always have their tractors smashed.
8. Unreasonable attempts by the publisher to entice newsagent customers away from newsagencies. ie subscription offers which undercut the newsagent by massive amounts – Time magazine.
9. Protection of local publishers – Crossword onslaught from USA and UK.
10. Price – $44.95 for a fashion mag?
$22.95 for this flimsy American housing mag spinoff?
Sometimes too cheap – why replace $14.95 bridal mag sales with $6.95 sales?
I’m sure there are other reasons. Newsagents can be temperamental!
Key is knowing your own market, I have sold 7 Vogue collections @ $44.95 and 1 UFC @ $6.95. Hand selling is required for big titles, but the rewards are large.
My local newsagent returned a magazine without even putting it on the shelf, it was Treadlie a new cycling culture mag which had Tim Rogers on the cover. I have asked them to get it back in, which they say they have done but I have been waiting 3 weeks
Cameron, sorry, can’t name the title. The data I have seen indicates that this title was not oversupplied, was not too big etc. The newsagents lost sales because of early returns.
Ben, excellent point. Our own data can guide which titles to early return.
I’m a big believer in trying to give every title I receive a go on the shelves and it does pay off with one recenct title that we were running out of patience with winning us a putaway from a customer who was going out of her way to other newsagents searching for this title not always with success.
Another regular customer created.
The trick is to clear mags that have been on the shelves too long rather than not let them hit the shelves. With a return rate in the mid 20% range this seems to work well for us while maximising sales.
Hi Mark, if any of your readers are interested in talking to me directly regarding any of Morrison Media’s Titles (frankie, surfing life, freerider, riptide), feel free to offer them my contact details. I am available and interested in implementing a minimum and maximum supply accross our titles. As well as monitoring the increase and decrease for covermounted issues, reducing early returns, the lifespan of the title, as well as promoting outlets and where to obtain the titles.
Alf Santomingo
Circulation Manager
alfs@morrisonmedia.com.au
@CAMERON
very well said.
@ ALF
just wondering, do you guys give the ditributors a target amount to distribute? or do the distributors pretty much decide how much/little they send a particular store.
Cameron,
Brilliantly said. Totally agree.
Im tired of playing their game and demanding payment – I am not treated so rudely by any other supplier. Wish they didnt have a monopoly and we could shop elsewhere for mags.
i would like to comend alf on making hinmself available to newsagents for comment. i think thats great.
peter
Alf, I got 37 copies of Frankie and know I can sell more but when I asked for more I was told “sorry we don’t have any”.
Mags which sell are
OFTEN short supplied and mags we can’t sell we get buckets of.
It is a broken system and needs fixing. We are totally compliant with EDI and surely the distributors can see when we don’t return any Frankie that we need more to assess our true sales potential.
Great to hear from you Alf – we only get to deal with the distributors and sometimes the publisher needs to hear this stuff as well.
Excellent article Mark and a good contribution Cameron.
I am guilty of early returning in anger and not using the data. I think this is a key point Mark makes. We should not get caught up in the negative stuff – leave that for another day.
Hi Ed and June
Feel free to contact me directly and I will do what I can to help.
As you can appreciate, I don’t wish to clog up Mark’s website with enquiries directed to myself.
alfs@morrisonmedia.com.au
We at Lovatts employ two people, Terry Thelwell and Peter Gilbey, whose sole job is to make sure each newsagent receives the right amount of magazines to ensure that we stay well ahead of the industry for special interest sell-through rates.
As I have said countless times in countless places around Australia, why would a publisher want to waste a fortune printing copies that will not sell. Each magazine costs me around a dollar to print and distribute, so every copy unsold is a dollar wasted.
That said, our industry still suffers from an enormous oversupply problem which needs to be addressed. The vast majority of overseas titles dumped in our Lucky Country do nothing to help this situation.
James, Lovatts is guilty, on occasion, of what I would consider to be oversupply. Just as newsagents are guilty, on occasion of wrongful early returning.
We need a better distribution model which rebuilds trust which will reduce overall oversupply and reduce the need for early returns.
Over the last 6 months GG have distributed to my store on average $18,600 woth of mags at cost. My avearage cost of goods over this time is $8,300, or 44.6% of that origanally distributed. I have tried varying my allocations with GG both via a spredsheet they sent me, and I adjusted and returned, and by using their website to adjust supply. As soon as I reduce this to $14,000 it is back to the higher level within 4 weeks. They have a target they need to hit per store. The only reason they want my sales data is so they can evenly distribute a target on a push down method. I have chosen not to be the victim in their game. Ever arrival is monitored with the actual supply that hits my shelves based on the sales history over the past 4 arrivals. New Lines get 4 arrivals before action is taken. Many titles sent to me do not hit the shelves. How many times do you have to request no more overseas puzzle books, reissues of recycled return in crafts and motoring etc. If publishers want titles to go the full shelf life then they should pay a fee per copy returned via normal returns. Then we may see allocations more realistic.
James Lovatt, maybe you should talk to NDC about sales based replenishment. To me they use this all wrong. Instead of using it on short shelf life products, ie weeklies and sending stock after its needed, they should use it on your titles. That way we could have sufficient stock on shelf and sales based replenishment 48 hours away when required. This would cut down your costs considerably. Problem is how much does NDC lose from not distributing and return processing your titles.
Thanks Bill. Naturally, the topic of sales based replenishment has cropped up between ourselves and our distributor. We are always looking for ways to avoid wastage, not just as environment-friendly guys but because however much oversupply costs you, it’s costing us a helluva lot more.
What we do want to avoid is throwing baby out with the bathwater. If you saw some of the sales data that we deal with and the frustrations of dealing with agents who average a sale of 30 copies a month but then early return their entire allocation, you might see that many publishers are suffering badly too.
Just as we have seen and tried to deal with the legitimate frustrations of agents over the past 30 years, it would be nice to see that some agents acknowledge that this is NOT a publisher versus agent situation.
James I think this blog post and many here acknowledges what you seek.
I would like to know exactly how many newsagents return the entire allocation. facts are important in this discussion.
Your titles have a 60 day on sale usually. The challenge for newsagents is the weight of the stock versus return. This is where SBR would work. It would mean that parties other than newsagents fund the warehousing of stock.
James, to reassure you, I have never early returned an entire allocation in anger and rarely early return any Lovatts titles. The only exception to this is the last return of the month I may and again rarely return a Lovatts title that has excess to my requirement but still enough to see me thru. I do how ever return in full many overseas puzzle titles that get allocated in 1’s and 2’s and just get in the way of a presentable section. All of my early returns are fact based using prior sales history on arrival. This ensures I meet my target, ie my Magazine monthly accounts in total are not to exceed my COGS unless there is a very good reason, ie diary allocations.
james;
i agree with you and i acknowledge that this is not a Publisher VS Agents problem.
publishers need to sell to make money and no point over printing (unless they want to artificially boost sales figures which in turn increase advertising rates)
agents need to recieve just right amount so as not to lose resources on returning excess magazines.
Now, there is this one other party…..how do they make money? If they send just right amount of money they actually earn less in processing fees. what is the incentive making less money right?
one thing i would really like to know…..Who is actually the customer? newsagents? publishers? distributors?
because i seem to remember customers are supposed to be treated right.
we are the slave of acp and GG. if you have a mortgage then owe your life to the bank too.