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Magazine oversupply an environmental issue

magjunkThis photo showing unsold magazines from a regional newsagency yesterday is evidence of what I suspect will (or should) ultimately drive change in the magazine supply model.

What is on show in the photo is waste – magazines that have been topped. This newsagency is not required to return full copies so they remove the cover, leaving  this pile of what is now waste to get rid of for themselves and at their own cost.

This is an environmental and economic problem yet the environmental issue is the one that could get action. No matter how newsagents dispose of topped magazines, even recycling them reflects a wastage that could be avoided through a better management of magazine production and distribution.

Multiply this photo by thousands of newsagencies and you can feel the scale of the problem, the trees and ink wasted – and the time wasted in small business newsagencies.

That the magazine distributors have allowed this to continue for decades is shameful.

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Environment

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  1. Peter

    Mark it costs less to recycle it locally than pay freight on fulls to send it to Sydney where it can then recycled it in the system in bags or as redistribution, When this happens they do not even remove labels.

    Top the Lot is the only sensible strtaegy.

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  2. shauns

    2 woolies trolleys full of returns yesterday

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  3. CraigL

    Mark, we have a similar qty to return. This week 34 bundles of Network and 10 bundles of Gotch. About $13,000 (our cost) in total. Whilst there may be a bit of end of moth panic, we have not stripped the shelves and were reasonably in control of returns from previous weeks. The labour (retail) involved is huge and we were only having the discussion yesterday on how the retail sales of mags are suffering due to the focus on returns. We supply over 20 subs with mags and I can sadly report that all their mag sales are reducing. Some number crunching coming up in our business.

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  4. h

    I return 50% of the mags sent to me. So very very lucky here to have a recycling centre that pays us by weight for our topped mags.

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  5. carol

    Just imagen this multiplied Australia wide. I wish the environmental groups would pick up on this. We have to pay to dump ours every week plus handling cost by staff, waste of shelf space that could be productive.

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  6. Steve

    2 wheelie bins full of topped mags and boxes full of them stacked all round the office because I’ve run out of bins,all headed to the local landfill.The cost to the publishers in wasted paper and ink you would expect to be immense,but the fact they keep doing it makes me wonder just how cheaply they can print a magazine.No matter the cost the pure waste is what gets me annoyed.

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  7. James

    Sadly it doesnt matter what you do by way of return volumes or titles or online order changes, somehow there is always twice as many mags as is required. Its like the Da Vinci code – its unsolvable using any logical methodology. Its part of newsagent folklore.

    Thou shalt receive twice as many magazines as thoust actually require.

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  8. Paul

    There’s no mystery there James.

    So long as Network and G&G get paid for distributing and recalling then they are going to send out as much as possible.

    It won’t stop until the ANF grows some balls and actually takes legal action against one or both and attempts to recover lost monies paid by its members due to oversupply. They have the capacity to draw data from a wide ranging number of sources across states yet they still refuse to do anything. They need to make real enforceable action that will cost the two distributors money and not just ignore the problem. From memory Marks recent survey noted this as the most important issue that newsagents wanted resolved yet nothing is done.

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  9. Steven

    The amount of packaging waste that passes through our relatively small newsagency is unbelievable. Not just the magazine companies, but Tatts, GNS and others too. The card companies especially could package their products much more efficiently.

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  10. P

    2 full shopping trollies every week

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  11. Mark Fletcher

    Paul, it will continue until newsagents individually grow the balls to challenge the contracts they have signed.

    The associations have given up.

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  12. rick

    mark, from that statement I am to assume your contract is different to mine ?

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  13. Mark Fletcher

    All the contracts are the same Rick.

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  14. Jarryd Moore

    I disagree Mark. Individual newsagents are unlikely to have the knowledge or resources to effectively challenge the contract from a magazine distributor. Any individual action would need to be backed by a group; be it a buying group, an association or simply a cohort of like minded newsagents.

    Such a group would need to be well resourced and prepared to continue any action as long as is necessary in taking on the behemoth that is a magazine distributor.

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  15. Jenny

    Great Bakes!!!!! partworks? Today I have received 4 copies of issue 4!!!!! 100% increase on previous issue which I adjusted down to 2 copies, duly received last supply, only 1 being put away leaving 1 one the shelf. How can this be justified. Of course not able to get in contact with Network, as always at the end of month. After 15 minutes call disconnects. Still there is always tomorrow, just more time wasted on the Distribution. Feel better now I have got this of my chest, looking forward to tomorrow(:-)

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  16. Brett

    We appear to be rapidly approaching a tipping point on magazine oversupply.

    The publisher and the newsagent both lose.

    We need to sit down with the publishers and ourselves and agree on a new model. I would be keen to see a firm sale model with a marked increase in margin.

    Our data will tell us what we need, new titles are sent on a trial basis sale or return for three months then move to firm sale.

    Partworks supply is agreed after edition three is sold.

    Advertising revenue data to be reworked as sold magazines only.

    If not, we have a case for a collective boycott. We have, in the past been given approval for collective negotiation and they have failed to negotiate. ACCC would give us approval to collectively boycott. 2 weeks of no Womans Weeklies would make all notice. All we have to do is get the agencies to our left and right to agree with us and all will play.

    Come on ANF, the silence is deafening.

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  17. BrettS

    @Brett
    Firm sale is not an option. I can’t seeing anyone able to have the REAL time to Micro manage an ever increasing magazine supply.
    As for Part Works can we really dump this problem as to a distributor problem?
    Margin increase I feel has to start happening OR Newsagents will keep cutting pockets back.
    No Pockets no sales and I can’t see where the big boys can pick up what we drop off.

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  18. BrettS

    Oops forgot to say I will put my 2 bob in with Jarryd. Knowledge and DEEP pocket needed to have a crack at a Magazine distributor. Not going to happen!

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  19. Mark Fletcher

    Knowledge and resources for first steps are simple. That no newsagent has taken the step is a big problem for us.

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  20. BrettS

    Mohammed is that a mountain I see?

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  21. Paul

    It is possible Brett.

    I’m actually part of a Group Class Action that’s just starting in another channel. All it takes is group commitment both financially which isn’t too bad when spread over a large enough group and to see it through.

    Better to fight and go down with a reasonable possibility of winning than to sit back and be bulldozed doing nothing.

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  22. Jonathan Wilson

    What is needed is for the advertisers to start telling publishers that they want changes in the way the ad model works so that what the advertisers pay is calculated based on the number of magazines SOLD, not the number that get printed or distributed.

    Doing that means the publishers have an incentive not to print more magazines than will actually be sold and to tell distributors that they wont get their money for magazines that get returned/destroyed. Distributors then have an incentive to stop oversupply as they wont be getting money for unsold product anymore.

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  23. Mark Fletcher

    Tomorrow morning I will lay out my advice for newsagents in detail.

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  24. Richard Jackson

    Almost 6 years into my newsagency life and still the same problem.
    Nobody will help us unless we help ourselves.
    I am happy to put $1000 of my hard earned into a fund to get a class action going .
    Mark can you post the BSB and account # tomorrow, and I will also go to 10 other newsagents in my town and ask for their support .
    Come on enough is enough from these suppliers.

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  25. Dennis Robertson

    Mark @ post11,

    All jokes aside, do we really know why the Associations have given up?

    Do you think it would be a reasonably successful marketing campaign if the ANF were to communicate to the wider Newsagent community a substantial plan for fixing gross oversupply. Think of the huge influx of new member funds that could be generated towards forcing change if the plan was sellable.

    A plan that hopefully included discussions with the major Distributors and then some transparent and open communication with members as to what the real story behind this mess is.

    Is it simply Corporate avarice or is it even more basic (survival) in that without charging for the truckload, the model is not sustainable. Meaning that consumers may be faced with not as many sale points for magazines if the Distributors are forced (legally or otherwise) to abandon this model?

    One things for sure, if the duopoly don’t have to abide by the same rules, then it is probably the Newsagents sector that is keeping this size game afloat.

    One of the reasons I ceased to be a member quite a few years ago is because I could never get to the real story behind issues and I refused to pay for the pleasure of being treated as a mushroom.

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  26. Brett

    BrettS,

    Firm sale is the ONLY option. Your POS will lead your decisions on what you need.

    Without firm sale you go back into the sale or return model, that’s a low margin wasteful supply model that we know is broken.

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  27. rick

    maybe we need some middle ground that does not actively encourage oversupply, perhaps only paying for mags we sell from our daily sales data collected by the 2 distributors each day, and getting rid of the returns process altogether. these sales would then set our supply, so those dishonest agents that didn’t scan out all sales would find their supply getting cut to match their sales data. but without some kind of push from the publishers as well then is will be an uphill battle.

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  28. BrettS

    @Brett
    I can not see any possibility for a Newsagent to manually manage there supply of magazines on a firm sale basis, we have enough trouble finding a lunch break as it is.
    Should we have more input into our supply Yes, I feel that would be win for all involved.
    POS data would give you a HUD of what you are selling but I would say you would order on the side of caution costing you sales but have a bad month or Two and you could be down thousands.
    I would not want to see firm sale ever.
    I would like to see a model that we only pay for what we sell I am sure the POS could do this already.
    I am not sure though if this would be open to abuse but to me it is the only viable way forward.

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  29. Lisa

    Totally agree with Brett and Mark re: the advertising funded revenue model that most magazines use! They charge outrageous advertising fees in comparison to actual printing costs and make so much money from pages and pages of ads based on whatever their print run is rather than actual sales that they don’t even need to sell one copy to have made a profit. I know of one new magazine that has started directly in competition to mine that has avoided the distribution model altogether and is supplying their magazine directly to caravan parks to give away for free and by offering a free online version to bump up their “readership” numbers! Their cost of advertising is over the top yet they seem to be raking in the big boys when it comes to ads. Am I cranky about that? Hell yes! Here I am doing the right thing, supporting newsagencies, paying for distribution and fulfilling my publisher legal requirements with regards to lodgement with the national and state libraries and putting an ISSN barcode on the front of every issue and yet these back door bandits are fleecing the advertisers!
    Vintage Caravan Magazine is one of the only magazines I know that literally relies on sales of the magazine to fund our print run as advertising is minimal. I’m lucky we have such loyal readers and that back issue sales keep the press rolling. Although having a sales-based rather than ad revenue based business means we make less money, I am honest with advertisers about actual readership numbers and so wish that the other magazines wouldn’t fool them with dodgy “distribution” figures when I know for a fact that many of those printed never even sell and end up as landfill. It’s a crime!
    Anyone who has seen my previous comments made here over the past couple of years will know what a hard time we have had with our former distributor Gotch who at a $1 per copy to distribute and $1.20 per copy for return of unsolds seemed to be deliberately oversupplying agents that sold minimal copies and undersupplying those that sold more. At the same time they were telling me that sales were increasing on every issue and that I needed to send them more (and with close to 3 months after each issue had come off sale before actual figures were passed on to me, I had no choice but to accept their recommendations)
    But I soon smelled a rat when my remittances never increased but my fees did! As soon as I had evidence of this dodgy distribution and revised their draft allocations according to average recorded sales and demanded that they only distributed as per my allocations from then on, they suddenly ended our contract. Hmmm..
    I have just got my last remittance from them today and it is almost half of what it was 2 issues ago yet I am being sent less than half the amount of returns I used to get from them…
    I have shown the paperwork to my accountant and he agreed that what they were doing was completely unethical but try going up against them! So I switched to IPS 2 issues ago and am desperately hoping for a better result from them…
    So I guess what I’m saying is don’t tar all publishers with the same brush – some of us are trying out best to run our businesses ethically in what is an incredibly corrupt system!
    Maybe a total boycott is the only solution!

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  30. Peter

    I seem to remember there was a crisis in confidence in newspaper advertising and there was a subsequent drop in quantity of adds and revenue per sq cm (we are now grappling with the loss to the newspaper publishers of their rivers of gold today). What will be the result of this if it flows into magazine advertising. It appears there is a major disconnect between reality and the distributors world.

    I would like to think that content will become the driving factor.

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  31. Mark Fletcher

    Advertising in mass market magazines is down.

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  32. CraigL

    Lisa. WOW!!!!! If this is not an example of a broken model what is

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  33. Mark

    I know of one newsagent in Sydney that no longer Top magazines since July. I always see one large commercial Blue Recycling Bin Full mixed with Flatten boxes from other neighbouring Businesses. The good thing though is that this Newsagent (Newslink/Relay) has recently stopped ordering too much Magazines so the amount of waste has dropped since September.

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  34. Peter

    Lisa’s comment about Magazines going direct and not even using the Distribution Systems. Yes I have heard of other people doing the same thing producing a Magazine then going direct in this case to Model shops etc and avoiding the Magazine Distributors. I guess this will always happen but if it becomes a major trend then where do we stand.

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  35. June

    Lisa you won’t be sorry going with IPS.
    I have always found them to be ethical and reliable (we have a fantastic SA manager) and here in SA at least, we can
    actually talk to a person who can handle our problem (we don’t have too many of them).
    The product comes impeccably packed and GG and Network could learn a lesson from IPS.
    It is a perfect case of bigger not being better.
    Lisa put a list of your mags on this blog and we will order them in if we are not getting them already.
    I wish other publishers would tell us the truth like you have.

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  36. Mark Fletcher

    Sadly Lisa’s story is repeated by other magazine smaller / independent publishers. They are not served well.

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  37. Garry

    Off Subject

    Does anyone know who supplies Novosti Hoboctn Use to be IPS
    and its not Wrapaway

    Thanks

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  38. Dean

    I don’t think its published anymore sales were too low

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  39. Garry

    Thanks Dean.

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