I really feel for newsagents who have contacted me over the last few days about magazine distributor billed they have to pay in a couple of weeks which are equal to more than the sales they achieved with the same titles in the last month.
Despite a decline in magazine sales, supply to newsagents is more often static or increasing.
With this in mind, magazine publishers concerned about newsagents early returning their titles ought to ask the following of their magazine distributor:
- What is your overall average sell through rate for all titles you distribute to newsagents?
- After you strip out the top twenty-five selling titles you distribute, what is the average sell through rate for the remaining titles you distribute to newsagents? This is an important question as the number will be considerably lower than for question one.
- What is the average sell through rate over the last six issues of the bottom selling 500 titles you distribute to newsagents and what is the total value of shipments to newsagents through this period?
- How many titles currently in your computer system as on order for newsagents have a zero sell through rate recorded?
- Please graph the dollar value of newsagency magazine sales monthly for the last twelve closed months and on the same chart graph your average newsagent invoice value. I suspect that this will show that newsagents are not being supplied in line with sales.
- How often do you undertake a range review to ensure that newsagency scale out is within reasonable performance parameters? I suspect that the answer to this is never. I don;t see much evidence of it being done at least.
Magazine publishers could be a good ally for newsagents in dealing with magazine distributors. Our needs and the needs of magazine publishers are closely aligned.
There is no fairness in a magazine distribution model where the costs are the same or increasing in the face of flat or declining sales. There is no fairness in a system where costs to the retailer are greater than the income derived. Both situations can be fixed by setting a minimum sell through of 50% and compensating newsagents for titles which do not meet this bare minimum. Such a move would make the distributors responsible. At the moment there is no pressure on them to achieve a minimum sell through.
5 WED in a month always is a killer of a month for us . this months bill should be a good one but look out for august another 5 weeker
Great article Mark!
Well said Mark !
Now we need the various representative groups to stop mucking around with the smaller picture and pick this up and run with it. Would be a great major issue for a newly united newsagency representative groups to get a result on and to prove their worth.
Something tells me unfortunately that this is unlikely to happen however. 🙁
Paul, to be fair this is a complex issue. For progress to be made we need the other side to be open to change. They are not in my view. This is why I think engaging with publishers is the right move.
i am just curious, what is stopping the ANF (for example) to go to negotiating table with the distributors and say “look things have tho change regarding this this this……..if not then all our members will stop selling your magazines”
similar to what cole’s and woolies do, “you do it on our terms or don’t do business with us”
i know i made it sound so simple but i know its more complex than that. But thats the general idea.
why can’t more heavy handed/drastic measure be taken up by ANF and the like?
its like they are scared of the distributors.
would be good to find out if the associations ever recieved any benefits from parties outside of newsagency members.
Hate, it’s complex because for a negotiation you need two sides. The magazine distributors would be, in my view, reluctant. What is in it for them? The current model is ideal for their needs.
Also, the ANF can’t threaten as there is no mechanism for compliance with newsagents.
I think getting publishers on board has to be a key goal as their needs and our needs are aligned.
Mark you have set the scene but how do we get to the action stage. Each delivery day I feel powerless as the supply is outside my control. My practices on returns are now becoming more driven by cashflow concerns than giving some titles a shelf life. The only way I see is for publishers to engage but if they cannot engage with a Newsagency Distribution Company then the status quo will continue. Call me a control freak but I want to have control over what comes into my newsagencies and I would happily consider firm sale to 50%+ commission but we don’t have that option because we don’t have control. I think this is everyone’s frustration and unless we control distribution we will not enjoy the freedom and profitability that magazines should offer.
I am not agree with you, Mark. I think dealing with 2-3 suppliers is easier than dealing with many publishers. what I do is return the magazines on time, adjust my supplies every 2 months on their websites and of course, early return of the over supply and non selling magazines.
If I have a problem with a publication not received or over-supplied I go to the publisher not the distributor and it is usually fixed. It also advises the publisher when we get insufficient supplies of their publication despite repeated requests for it and then it leaves the publisher to confer???with the distributor and not with us. I have used this mechanism often.
Glenn,
Where we are over supplied, tell the publisher involved.
Where we are under supplied, tell the publisher involved.
This will being them into the room to consider the problem.
They make money from sales. So do we. On this we have a shared objective.
While engaging per title may seem clunky, I am sure this is a good next step. Even if only a few do this it would be an excellent start.
@mark -post 10
any success talking to express? they one of the biggest thorns with their packs and full returns. not to mention non-selling.
going over network and gotch invoices for last month’s trading.
am just curious, what are your delivered vs returned rate. eg. $10,000 deliveries, and $5000 worth of returns.
what levels is deemed acceptable? your replies would be greatly appreciated guys.
Hate, this is an excellent question. Gotch and Network each spin wonderful answers when asked this very question. outside of their spin, given that we are the ones paying for rent and labour, I’d suggest that a reasonable starting point of a sell through target is 50%. It should be 60% but I would accept 50%.
When you look at your data, once you have the figure, take out the top 20 or so titles and look at the sell through rate.
PS. If you have Tower software run the magazine sell through rates report – it gives you this data for every title, category and segment for whatever date range you select.