161 newsagents have participated in my survey on magazine supply. The results are an insight to publisher and distributor behaviour and how newsagents respond.
Click here to see the survey results in full.
While newsagents, magazine publishers and magazine distributors should read the results, I urge publishers especially to read the results. Here are the headlines:
- 93.8% of newsagents said they received more magazines than they had space to display. 29.8% said they received more than 50 magazine titles a month they had no space to display.
- 79.5% of newsagents early return magazines regularly. What a waste of time and freight costs.
- 86.3% of newsagents say they think they could increase magazine sales if they could control their magazine supply.
- Dealing with magazine supply (29.8%) and the magazine distributors on accounts matters (13%) causes the most stress for newsagents.
This is an important survey as it gets to the heart of magazine distribution challenges for all three stakeholders.
For newsagents it reinforces the labour and financial wastage in a distribution model that disadvantages newsagents compared to other magazine retailers.
For publishers it underscores why titles they send may be treated in a way they are unhappy with. It also demonstrates that the business rules around supply are missing some key factors.
For distributors it provides evidence that they are running a broken system. You cannot keep loading a conveyor belt when it it already at capacity. The conveyor belt will break.
What do I wish would happen? I wish distributors would trial a new magazine supply model with a group of, say, 200 newsagents. I wish this group would be selected based on a robust application process and that the participating newsagents have complete and absolute control over the magazine titles and quantities of titles they receive.
139 newsagents out of 161 have said they think they could increase magazine sales if the above processes were put in place. It sounds too good to be true. But certainly worth a trial. What if it works? What if these newsagents in such a trial do increase magazine sales? The question would then be what’s next?
The magazine distribution model is paternalistic. Newsagents do not have control over commercial levers. Newsagents are not given reasonable opportunity to be business-like. This results in a lower standard of responses from newsagents – such as ill-informed early returns of which I write here regularly.
The purpose of the survey, publishing the full results and writing this blog post is to encourage genuine change for the good of newsagents, magazine publishers and, yes, magazine distributors.
We need to move on from the denial by distributors about over supply. We also need to move beyond the finger pointing where publishers blame distributors and distributors blame publishers and where both blame newsagents.
We need to engage in serious dialogue about fixing this. If fear that if we do not, more newsagents will cut magazine display space (27.3% have already according to the survey) and more will undertake ill-informed early returns and publishers will seek other routes to market.
Getting a group of newsagents together who do want to actively work with publishers and distributors on a more equitable model is the easy part. My question for publishers and distributors is – will you join with us on this, will you work with newsagents to create a magazine distribution model which respects newsagents and pursues everything necessary to help all stakeholders make more from magazines?
This is our moment of truth. If we all believe in magazines (publishers believe in their product, distributors believing in their business model and newsagents believing in the importance of the category as a traffic generator) then we must act. The current situation is not working by any measure. Do we have the guts and faith in our respective businesses to engage in genuine partnership on this? I hope so.
My proposal is risk free and loaded with valuable upside. I would jump at the opportunity to engage through my own newsagencies.
just did a report on “supplier arrival by day of week” i was interested to see what fridays total would be like becasue of the end of month landing on a friday . The average for a friday jumped 100% for GG and for NDC went went well over 100% . .So me being me i will be doing early returns tomorrow on any new tittles or anything that i have stopped in the past .
Shauns,
That is alright for Gotch, where their cut off is tomorrow. No good for Network where cut off is today.
I am getting new titles tomorrow from network that I have never had before and cannot do anything to get credits. Also supply of other titles have been increased for no reason.
DM, we always find both Network and Gotch returns are credited immediately. As long as you get the returns in by lunch time Friday you should get credits on this months statement.
shayne,
Gotch is fine, but if we do network on the last day, our early returns are not credited for that month.
touch wood i have never had a problem with either one with last day of the month returns ,but this month i did not want to risk it with NDC so i completed them earlier today BUT i will do what is remaining in tomorrows delivery in the hope they make it through .
I thought you could only do one lot of returns a week. We did ours today. Can I do more than one return in a week? I did a big clean out today to try to keep my next months bill down but I won’t get my delivery until Saturday so I can’t do more returns anyway.
There was an email a couple of weeks ago from network stating that if you want to be sure of having you returns credited this month you should complete them by the end of the second last day of the month. That would be today.
But for the likes no comments on the actual blog post?
Mark
That”s because its the end of the month and we’re all busy culling the dead wood.
I was surprised that 86.3% of respondents thought they could increase mag sales with more control of supply. I’ve never had a problem getting supply of a title if I want it, so I’m happy I can have the titles I want and can sell. It’s the ones I don’t want but can’t get rid of that cause the problem.
carol i often do more than one a week .
Mark , this says a lot about what a shambles the whole distribution model is
93.8% of newsagents said they received more magazines than they had space to display. 29.8% said they received more than 50 magazine titles a month they had no space to display.
If 200 newsagents where able to set there own supplies and have 100% control this would mean one thing , the other 4000 newsagents would recieve even more garbage magazines because that how the distributors make the cash .
Don’t want to be negative because it is a great idea just not sure if it would work for all involved . Small steps i suppose
Shaun, yes … small steps. In decades we’ve achieved nothing. Either we do now or magazines and newsagents will part ways.
Mark with your contact with publishers and distibutors have you had any feedback on these numbers ?
I thought we were talking about the problem – over supply and returns. Sadly this is the only forum for us to vent. We all battle away at our problems wich are the same but we are isolted in our little shops working our guts out and use this site to get things off our chest. What is your proposed model for magazine distributions. If its like IPS then forget it. Stuck with mags until they say we can return the useless things and not asked if we want them. No differant to G&G and Net. I just want them to use thier computer systems to reduce supply in the same way as they quickly increase supply. They have our figures and can mange supply if they choose to . They cannot justify sending 10 copies of something we only sell 3 of. I place a special order for a customer no one esle buys. I start of with one only and pretty soon they are sending 5 but I’m still only selling one. Handling cost are higher than the profit made by the time I return other 5. With this senerio repeated over and over with every title. Any new model would have to be first approved by all newsagents.
What I’d love is a discussion about the suggestion. Publishers read this place including the comments.
Carol I am planning on outlining steps you can take to fix this in your store. Practical steps.
Scanned based sale is the only way to secure a future with magazines , it would eliminate all the dead magazines . They do it now when you claim stock missing and buy your stock else where they then charge you for it when they get their sales data . They can do it and to keep everyone honest all they have to do is a whole heap of audits with suprise shoppers , it may cost a heap in labour for them but we having been acrrying the current system for way to long at our cost
I would have thought that “sudden” jump in supplies on the last day of month, particularly of titles that sales history show are are being oversupplied, would be indeal block of information to present to the ACCC ? Perhaps if all of us here did this with tomorrows deliveries the ACCC may take notice and something may start to get done.
Has anything ever been achieved with the ACCC , personally i have not done my part when it comes to the ACCC but i read a lot on here about go to the ACCC and overall i cannot see any thing that has changed as a whole .
It’s easy to see the reason that this blog has not been able to become a voice for change. Despite excellent blog posts from Mark the average comment seems to be a distraction into the trivia of daily clerical tasks. It’s so stark in keeping the newsagents off the real issue I begin to wonder if people like Shauns /S etc aren’t stooges put in by the magazines’ distributors to sabotage and disrupt the conversation.
We don’t necessarily want to have total control of magazine supply ourselves. The task load would be phenomonal and not worth the time and the cost. We’re not uncomfortable about being sent new titles without ordering them. We need it this way in order to give new titles a go. In any casse the early return process is effectively an opt-out tool. Our main concerns are in regard to packaging and staff practices. We have spent a lot on an industry standard shop fit with a certain size and lay out of pockets. Magazines with bulky giveaways on them simply don’t fit on our shelves. These promo items simply aren’t worth the effort and inconvenience in terms of increase sales. We have far more abilty to influence sales ourselves with relays, displays and loyalty cards. In our view in between Tower, XchangeIT and the distributors there is a system that enables you to control your supply. If you take good care in the arrival process you can influence what goes onto your shelf. If you regularly do relays and shelf checks you can influence what stays on your shelfs (or comes off).
The other challenge is training employees to follow these porcesses in the way you want them done. We are appalled at the lack of training opportunities offered by the distribution companies. If they spent more time interacting with newsagents the situation would vastly improve.
Ricky if I was to reply to your post in my own words I think I would offend way to many people out there so I shall leave your stupid comment alone .if you need verification on who I am please just ask Mark ….I must add it took my original comment post 1 to get the ball rolling and 18 comment down the track you decided to put your 2 cents in
Cheers
Well I would participate in a new mag model trial, better to do something than talk about it.
Was surprised that answers to question 4 were equal stress caused by retail in general and magazine supply. Maybe a lot of complaining about magazine supply but it’s just one of many problems facing newsagents.
Paul I think we need to take a more structured approach than a letter to the ACCC. We have to show that we have taken reasonable steps to address the situation.
I can understand why Ricky has written what he has. My post was one of the lengthier ones I have written here. It contains a practical suggestion yet much of the discussion is off topic.
Ricky while there are some here using fake names to further their agendas, those commenting on this thread are real people, I can vouch for them.
Check out this link for an example of the new video training I am having done at Tower for newsagents:
http://www.youtube.com/watch?v=QZTXFv0Ms6Y&hd=1
Mark if this is the video I watched earlier ,it is worth watching just simple things like ALT M work a treat just makes the task that little bit quicker .
I am guilty 100% for going off topic ,I do it all the time but that’s how it is .while Ricky and probably other think I strayed off topic this is not so because one of the biggest issues today is over supply and hence my post in # 1 .then on top of that there are other post and some on how to manage returns which some is old news and some is new where you learn that yes you can do more than one return a week.
Not one publisher comment yet, that should show how much they think of newsagents. most read this blog as they throw their two cents worth in when the feel like it but silence now?
Newsagents are frustrated and I thought this blog gave them a voice to talk to other agents so they knew they were not the only ones, I for one can understand why people post what they do, because it is one of the only ways to talk to other agents on a regular basis.
Maybe we should acknowledge little steps that have appeared lately. G & G daily email with updates to supply. Networks email this week about a new publication giving background and an option to alter the initial distribution. These are welcome steps and must be encouraged if we want start running. It is a positive step forward.
My thoughts on the actual blog post.
We display as many magazines in as we reasonably can and this means that fringe magazines may only get exposure for a week or so until the next low priority mag arrives so the publishers should expect early returns of these magazines.
Early returns are labour intensive and we are being more ruthless in culling magazines that are only a waste of our time. Proper supply will give magazines adequate shelf time .Early returns are a necessity especially when we receive for example 9 Nexus on the last day of the month with sales of no more than 6 and often only 3-4. The distributors/publishers create unnecessary work with this practise and engender bad will.
For two main reasons direct control of supply would increase sales, a) the other side of over supply is undersupply which especially with part works, cost many sales opportunities. We know and manage our business and space better than any outsider and should be shown the respect and given the opportunity to manage or stock. We above all want to and will do this in such a way to grow sales. Advise us of new releases with appropriate lead time and we will determine what and how much space can be given to them. New magazines should arrive at the start of the month to encourage us to give them shelf time, this is only a proper and respectful way to deal with us.
Many more points can be made but for me these are probably the main ways to drive magazine sales. It would be great to see publishers and distributors get involved in this post.
As Richard says there have been some little steps taken lately but we need an asseted effort to get things working properly.
There have been many small steps over the years, and each of those small steps has made a small difference. We need to take big steps to fix a big problem. These small steps are no more than a distraction to the big issues that no one seems to be willing or able to address.
Whilst newsagents and many publishers are haemorrhaging due to a broken supply model there is little point putting a bandaid on a scratch.
Glenn what I am suggesting is no bandaid. I propose a structured trial of a move that many newsagents have said would alter their behaviour.
Sorry Mark I did not mean to imply that your proposal was a bandaid; it was aimed at the likes of GG and Net who seem happy to dart around with small, almost irrelevant steps whilst dodging the big issue of oversupply, and in response to the post by Richard @ 25. Initiatives such as the one you suggest can work but the seemingly impossible task appears to be getting the distributors interested in making these changes.
I am no fan of SBR, or the promise of increased commissions should we sell over a preset target. The single biggest factor that would again make me interested in magazines is fair and equitable supply, and allowing me full control over what I get. I am more than happy to get any new title and try it, but I want to have the ability to say no more if it does not work, and I want to be able to set my supply levels if it does. After all, it is of no benefit to me to run out and miss potential sales.
Whilst I am waiting for the above to happen, I have reduced my magazine space by 35% and doing really well with other high margin product that now occupies that same space. If I can start to make money with magazines again I will happily revisit my decision.
Much of what has been written above I would agree with. For me there are some crucial points in magazines sales and distribution and I was one of those that doubts if I would increase sales should the distribution model change.
I am a single man business with some help from my wife 12 hrs a day and 6 days a week. I have a TOWER system which I think is brilliant and enables me to have a pretty good idea of what is going on and along with Xchangeit allows the computer to do much of the work. There is not a lot of time to check websites and order stuff between customers let alone answer a phone or wait for Network or G&G to answer theirs. My priority is the customer in my shop with cash and not the person on the phone who may be trying to sell me something I don’t want.
Consequently when a mag arrives it is checked against previous sales and early returns of all but 1 or 2 extras based on the highest sales in last 5 receipts. I do not adjust with Network or GG site simply cos I don’t have the time. It is quicker to early return. I NEVER phone for the above reason.
If mags arrive in the last week of month they are likely to be culled to a greater extent because of cashflo. Early in the month they will get a full 3.5 weeks run before they get culled. If they are fat they will be culled because I don’t have space. If they have FREE something and don’t stack or fit in shelving they may have the FREE removed or they may be early returned cos I don’t have the space. I cant give a mag extra facings simply cos it is to fat cos otherwise the ones that I sell lots of will have less facing and I will sell less of them. My experience is FREE doesn’t sell any more units and as somebody said if its FREE it probably is worth less than that. The over delivery of mags has gradually diminished to the point that last month I received Network approx $9000 and returned $4800 and G&G was $5800 and credits about $3000. Onec upon a time I used to return two thirds of the total. Every now and then I get a strange delivery such as Nexus 8 when the most I have ever sold is 3. Then I get revenge by sending back 6 or if it is just before the end of the month the whole damn lot even. And what about all those caravan travel magazines and the Puzzler mags where you get a years supply in a month. Thankyou Lovatts because now I tend to keep yours and less of the others and guess what I am selling more of yours.
If something new arrives something old must go. It is a judgement call whether it will sell. I tend to give stuff a month and then it has to go as there is no space for the new ones regardless of their return date. When a new edition arrives the old one must be returned. If I have a month before I have to pay for it I will give it a better chance on the racks if it has sold previously. If it hasn’t sold I would early return even if they give me 6 months free. Those fat books posing as magazines are getting less of a look in because they are to big and fat and don’t fit on the shelves. If they want me to have it for 3 months and then want a full return there is even less chance for it to get a ride. Certainly I don’t want 6 for 6months but if they sent me one and replaced it after I had sold it from the data I have sent every night they would have a better chance. Talking of SBR(Ithink) when I receive 6 WHEELS and sell 3 in the first couple of days don’t SBR me for another 3 because they will be early returned. Had I sold 5 I think it would be justified. Please bear in mind that I have only EVER sold 4 so it is unlikely that I am gong to sell the other 3 anyway let alone 9. However when I sell 20 out of 21 New Idea 2 weeks out of 4 please feel free to increase my allocation to 25 and try to resist REDUCING it to 16. You have the data because it gets sent every night and I have it on my computer too.
So to all you publishers I suggest you
Send out your mags early in the month,
In reasonable quantities not for a year but for the month and top up later from the data we have sent you.
If you want it to sit out there for a couple of months offer extended terms and it may get extra time.
Forget the FREE mags or lipstick with mags because there is no room in the INN.
I think the tools are already there. They are just not been used correctly. I think XchangeIT and my Tower system has all the necessary information it just isnt been translated correctly or the distributor doesn’t want it to be used better. The reason may be because its revenue will be affected. If it is been paid for delivery and again for returns it is not in its interests to use the data that it has. If it is been paid extra for delivery of FREE stuff why would it want to end it. And if FULL returns are required and paid for why would it want to get tops only back. After all it is a business based on what it does. The more it does the more it gets paid whether it goes out AND back and is highly inefficient doesn’t really matter as it gets paid for been inefficient.
And perhaps some of the publishers find it advantageous to send out extra copies at the end of the month so that they get be paid within 20 days or so. This would help their cashflow considerably whilst using the 4000 odd newsagent cash to bankroll their stock and printing.
Forgive me for this ramble. I am sure I have missed many points and I do not want to go into margins and incentives which may or may not work. Nor have I discussed reissues of reissues of certain publishers.
Mark I would like to see the current system used correctly and as it was designed first. But if that doesn’t happen we will all continue to reduce the allocation of space for magazines and put something else in there which makes a better profit for less time an effort. Roll on the newsagency of the future whatever that will bring us but unless the distributors and publishers change they will have less magazine space allocated to them. Perhaps Coles will increase their allocation of space??
I know i am just a wally.
Wally this is not a ramble. It is very likely the most sensible comment in the whole post. We are all under the pressure of time and immediate service to a customer must always have priority. If only there would be distributors and publishers who take more notice of your comments – especially in regard to early in the month deliveries.
Spot on Wally!
As Rick says – if only the distributors would take notice but when their business is driven by a set of rules which are totally at odds with those of their customers then what hope have we got?
Brilliant Wally ! You are SO right !
A simplistic answer to all of the above is to
change the terms of trade.
30 days to pay not 20 for wkly/mthly
60 days to pay for bi/tri mthly or longer
Ability to change an order FOREVER
Ability to order quantities ourselves and
alter them up or down as the case may be.
Emails of new product coming out and the
ability to say yay or nay to same.
In other words we should be the masters of our own destiny. Some agents will do
the above well and some will fail – so be it.
ANF – if you can arrange the above your reward would be membership renewals from all over Australia. Go for it!!!
Wally, thank you for your wise words. As a publisher, I value knowing how newsagents are treated by the magazine distributors.
I want sensible, equitable allocation of our magazine to newsagents. Anything less is:
a) a gross imposition on newsagent cash flow
b) an avoidable waste of our print cost, and
c) a host of disappointed customers whose newsagents were not allocated copies.
Our magazine has been distributed to newsagents for more than 15 years (by Network, G&G, NDD, Network (again) and IPS).
Our experience with distributors ranges from Excellent to Atrocious. One paid close attention to our sales and allocated accordingly (Excellent). One did not pay us a cent for over 5 months (Atrocious). Another advised the total number of copies required and then did not allocate all of them (only revealed the following month). That distributor also tried to disguise its proposed allocations to newsagents by providing company name instead of retailer name. Re-arranging their draft allocations spreadsheet into postcode order also revealed gross over-supply to many areas, and non-supply to many other areas. Attempts to make them improve – a complete waste of time!
Wally, you did mention one thing that needs clarification:
“And perhaps some of the publishers find it advantageous to send out extra copies at the end of the month so that they get [to] be paid within 20 days or so. This would help their cashflow considerably whilst using the 4000 odd newsagent cash to bankroll their stock and printing.”
That comment cannot apply to monthly titles, as they go offsale at the end of the month.
The traditional method for publishers of monthly titles to be paid for sales by newsagents is in 3 stages:
1) 70% of estimated sales at end of onsale month
2) 30% of estimated sales at end of next month
3) 10% +/- of actual sales at end of month, 3 months after onsale
This method is not just seriously outdated, it raises the important question of what the distributors do with all the cash paid to them by newsagents so far in advance of when they make the final payment to publishers.
In our experience IPS respects both newsagents and publishers. It allocates based on actual sales and newsagents receive a higher commission. It respects the goods it handles by packaging them thoroughly for delivery to newsagents. Its method for publishers of monthly titles to be paid for sales by newsagents is 100% of estimated sales soon after end of onsale month, with adjustments made the following month. 100% KISS.
Lastly, our magazine has always been distributed to newsagents in the last week of the month however, due to your comments, I am going to change that to the first week of the month in 2013.
Thank you again Wally for all your wise words.
Connections – do you get sales data from the distributors on a regular and timely basis and is it/can it be on a detailed basis?
If so, is it of use in setting print runs and allocations for magazines such as yours?
If not – why not?
Jim – Connections is a marketing arm and does not do allocations. ACP does these for ACP titles.
Wally, the current system is being used as it was designed. It is a push system with the distributors primarily paid on what they ship and the returns they process.
I am proposing a different system, a pull system where those who take on responsibility for paying distributors can actually made business decisions as to the liability they take on.
Sorry – Connections should have read Australian Family Tree Connections
Jim – publishers get detailed sales data from the current ‘push system’ distributors each month, however it is neither timely nor useful for a monthly title, because those distributors take 4 months to process final sales, therefore the data is always at least 3 months behind.
Regarding setting print runs, I am probably not the right publisher to ask about that because our title attracts regular readers (genealogy is addictive and there’s no known cure, and there’s at least one person in every family tracing their family tree). Our main focus has always been on attaining the widest possible equitable supply throughout Australia.
Mark – am I correct in thinking IPS uses the ‘pull system’?
AFTC, yes in most cases. I have heard of some instances where they do not but that has not been my experience.
Thanks for participating in this discussion.
AFTC – isn’t this yet another example of distributors having no regard for their customers?
To have a 4 month lag in data availability when sales data goes daily to the distributors suggests to me that they might not want you to see the real picture of over and under supply.
For those agents who supply daily data there is no real reason why publishers couldn’t see that almost immediately. Distributors might argue that they need to cleanse the data but why? and why can’t they supply you with distribution numbers the day the product goes out?
Sure, there will be returns processing which would affect settlement with the publisher and late returns which would affect the final figure (but this would be minimal) but if this is all about allocations then the distributors are having a lend of all concerned (as if we didn’t know that already) in both monetary and logistic terms!
A first step of good faith by both the big Dist. would be to allow us to make changes online without restrictions (NDC) and actually have those changes stick, i.e. lines deleted don’t reappear after six months and changes to allocations are set and fixed. Should a dist want to change an allocation we should be emailed with their proposed change and have the final say yes or no. I will continue to early return at time of arrival until they give me full control of my allocations online.
This could be implemented immediately and resolve the majority of the issues, but I won’t be holding my breath because the dist will not be willing to take the hit in lost volume, despite the savings for publishers and retailers in productivity.
I think a first step needs to include all stakeholders: distributors give us the opportunity to choose titles and quantities for a publisher, the publisher locks this in and supports us and newsagents agree to not early return for the publisher.
It is only a negotiated settlement like this that has any chance of getting up.
AFTC Thank you for the interest and I hope you get the results you need. I will defnitely keep the extra 2 mags on the shelf for you at least until the end of the month. I was not aware of the system that you get paid on. I am sure it is in the interests of the distributor to get as much product out at the end of the month as they get paid 100% in 20 days time. Perhaps i have laid blame on the publishers incorrectly.
Mark, I understand what you are saying about the push system(I think) but if they were FAIR to all they could do a better job of allocation which would solve a large proportion of the problem. They do have the information thru XchangeIT of sales although I have no idea how many agents actually return information. I think that the ones that do the accuracy is claimed to be about 90% of agents.
I personally would not like to have each magazine detail sent to me and for me to make a decision if I wanted it or not and how many. I have no idea of the popularity of magazines nor the time or resources to investigate each title. I started to get pig shooting magazines and thought who the hell would buy this and then found I sold a couple. Unfortunately now I get 5 different pig magazines and still only sell 2.
With your system I probably would be loathe to take on some of the more obscure titles and so as a specialist magazine outlet would probably end up no better than Coles. I am thinking on my feet at the moment so gain you have a ramble. As you suggest perhaps 200 of the largest outlets could run your trial and see what happens. Certainly if we continue on the current path I think more of us will get out of magazines. Between margins and labour of returns it becomes less and less inviting as a category.
Wally, bringing about the change I seek would be hard work but the outcome could be commercially valuable. I am hopeful of getting publisher support for a trial along the lines of what I have outlined here. Maybe such a trial could result in a more automated process for making this work for others.
The only answer is pay for what you sell and no early returns ,even 60 days credit then you can do a return .At this point paying your bill on time is sadly what it is about , does gg network put the cash on the short term money market and with cash flow like they have a lot could be locked on at better rates as the cash rolls in i could be wrong, it was 30 years ago alway going around about the short term money market Why would they care about over supply or over printing more the better but could i be wrong