Check out twelve issues worth of supply and return data for Farms & Farm Machinery for a newsagency. On average, one copy is sold in this store. The average supply from Network Services is three copies – recently bumped supply to four copies. Click on the image for detail.
Okay I am only complaining about one too many copies, maybe two. It is oversupply nevertheless. This from a magazine distributor known for engaging in bullying of newsagents over account payment yet accepting no responsibility for creating account challenges through oversupply such as for Farms & Farm Machinery for this newsagency.
If Network services was fair in its supply to this newsagency and newsagents more widely, it would not increase supply until there was evidence of sales being lost due to lack of stock in-store. This would require an analysis of sales data.
If a store sells out in, say, week three of the on-sale and there is no evidence of a sale over the last year in week four for weeks when stock was available then I’d say there is no justification for a supply increase. If, on the other hand, there is evidence of a sale in week four then it would be reasonable to increase supply.
It is unfair for network to demand that we are responsible for our indebtedness to them when they refuse to give us reasonable levers with which to control our level of indebtedness. Even transparency would help – like a discussion around allocation algorithms.
Newsagents who complain to Network about oversupply are met with – it was an allocations error or I can’t explain it or the business rules indicate you need more stock.
In this case of Farms & Farm Machinery, the company’s processes have failed the newsagent. They have resulted in more stock than is necessary being sent. Supply for this store should be at no more than two copies. Sending the extra stock lumbers the newsagent with unnecessary costs.
Magazine publishers using network should remember this scenario when wondering why newsagents early return their stock. It is this creeping oversupply that angers newsagents and gets them striking out.
“Magazine publishers using network should remember this scenario when wondering why newsagents early return their stock. It is this creeping oversupply that angers newsagents and gets them striking out.”
AMEN!
Broken record: The data is available to prevent this type of behaviour, so why is it that it’s only being used by newsagents to prove the inefficiency (and apparent stupidity) of the current system?
Mark,
This is one reason I find IPS the best of the distributors to deal with. I get what i want and if i want to make changes they are easy to deal with and i do not get mags dumped on me i will not sell. I know from this blog some agents have had problems with IPS but it is not my experience.
Just wish G&G and Network where as easy to deal with as IPS.
dont know about anyone else, but i dont pay me mag bills UNTIL ive had the threatening letter and phone call. Their trading terms might be EOM +20 days, but my accounts payable works on at least 30 days..
This is the same old oversupply issue, when they want to play fair, then so will I, until then its everyman for themselves.
Mag publishers (collectively) are as much to blame for their inaction over this problem. So publishers bleating about early returns losing sales need to look at the part they play in the supply chain and call the distributors to heal.
I dont have the time or the resources to take this issue thru the ACCC, not that i have any faith in their abilty or desire to do anything about it.
Oh yeah this issue S*#@ts me to tears in case you cant tell.
And on this side of the the world, we were sent half of our regular sales….
here we go again What are we collectively going to do about it other than whinge which is justified by the way We have to come up with a plan.
P,
Until we ALL hit them where it hurts,ie: paying/non paying of the monthly account. They will continue to abuse us as they know we can whinge all we want but at the end of the month they will get their money regardless.
Any of us experiencing this should complain to the ACCC.
I asked both Gotch and Network for a list of all my magazine so I can cull some of them and was assured by both the list would be emailed today. So far no emails. I can’t display them. All pockets are full and I can’t give them anymore space. So they come in we pay cost of arriving them ( staff wages etc) and then pay same staff to to them and then have to pay to dispose of them so like rick I don’t pay them until the last minute. I am finding at the moment with all the calendars etc it is placing a huge strain on my cash flow.
Carol I will publish a best practice approach to handling this in the next few days. That you have more magazines than you can fit on your shelves is an appalling situation.
This month we our supply of Cosmo was increased from 6 to 18 copies off an average sale of 3 copies. In our experience in terms of gross oversupply Gotch is manageable whilst Network is much much worse. We return about 65% of all stock received from Network. Vast majority are full copies.
It’s pretty blatant that the distributors don’t give a rats a$%e about us when you see delivery invoices with the data laid out on them such as: Forecast sales:10 Supply: 25.
I agree with Shayne in that for me Network is far worse than Gotch normally with oversupply. I’ve gone through and adjusted manually most of what I receive with them to quantities that I want and yet today a couple of titles that I didn’t adjust have magically increased in number for no valid reason that I could see.
For me, and I’d point out it a valid potential direction due to my business mix and location, I’m seriously thinking of planning for a top 50 or 100 magazines only stock holding a’la 7-11/Coles/Woolies and using the space for other products. One third of my mag space has already gone to other things and maybe for me the answer is to reduce the existing space by another three quarters to make the category workable. At the moment with the labour costs involved in running it and the general gross oversupply issue I shouldn’t be allowing it to continue as it has when I can and do do better in other catergories within the business.
this misuse of the newsagency channel by publishers is comming to a head i feel, as times get tougher more retailers are looking at the bottom line in therir business with a view to surviving the current slow retail environment. No longer can we afford to turn a blind eye to gross oversupply and just say its all too hard. We are being forced to do something. I advocate mass early returning of magazines, and late payment of distributor invoices. As a major partner in the magazine business i think we are treated appallingly by the publishers, and quite frankly i dont care if some publishers fall by the way side if we early return too much stock. They dont seem to mind family owned newsagencies going to the wall because of cash flow issues.
Talk of the ACCC is fruitless, they are not interested in maintaining a level playing field just look at how they pander to the coles and woolies duoply.
Some will think im being too radical (including mark) but i bet many more will feel the same way i do.
If we had a union instead of associations, we would have withdrawn our labour to mag publishers long ago until they came to their senses and trated us fairly
I’ve come to the opinion that to fix the problem we have to be proactive. I don’t mean complain here on Marks blog or ring NANA. If you have allocation issues ring the distributors call centre and make an employee manually change it. If they wont get them to explain why not. Do it ever time you have a problem. If enough newsagent do it the call centres will be under that much pressure management will have to react. Yes it takes up valuable time but it is effective. With Network under new ownership go hard so they understand what they’ve bought and how dissatisfied we are.
i cant/wont sit om hold waiting for the network call centre to answer the phone. Besides we have all tried to adjust our supply levels one way or another to no avail. I believe its up to the publishers to engage with the distributors regarding supply of their product to newsagents, after all the distributors work for and are paid by the publishers are they not???
Mark, the only way to stop oversupply is to target the cause. The publishers. Here is an idea: can we update each title in our systems with the publisher, so when we run the sell thru reports you can see who the real culprits are and target early returns based on fact and not blanket returns based on frustration. If the publishers who are abusing the system are acted upon and those doing the right thing are identified and over supported, ie they get the space, the eye level positioning and the best locations someting may change.
Mark, re Carols more mags than she can fit on the shelves, this would be common. How many pockets do you have for mags and how many titles would you get from each Distributor? I have 750 pockets, receive 500 titles from NDC alone and they represent 43% of mag sales. I’ve done a range review many times only to find titles reappearing after 3 to 6 months.
I have pockets for all titles and some to spare.
Bill, let Network and Gotch know what you have for them. Depending on your state you might have an avenue of complaint that is low cost.