This is not a new story. What I describe here happens in newsagencies across Australia every week, many times over. It’s been happening for years. This is a crime. There appears little or no interest in key spiller businesses in fixing the issue.
Shame on those involved as you are the people hurting small business newsagents and making us less competitive than others selling magazines. Shame on you.
Newsagents are pressured and penalised to provide sales data to magazine publishers so that those publishers can respond to demand and supply more appropriately. That’s the spin. Sadly, there is little evidence from some publishers that it is more than spin.
Bauer Media has been caught out again this week ignoring newsagent data and oversupplying a title with no justification for the supply.
While Bauer allocations people will have excuses, they are worthless as we have heard them before. Many newsagents feel that the company deliberately oversupplies to serve its won purposes.
Take a look at the image. You can see the initial supply of 8 copies of AWW Slow Cooker 4 on June 6, 2014. 1 copy was returned and 3 copies were sold on June 6, June 14 and July 20. yesterday, Bauer supplied an additional copy. The newsagent early returned it – incurring freight and labour costs. The newsagent was effectively fined by Bauer for Bauer’s own oversupply.
Warehouse, trucking and newsagent resources were wasted in this. It’s shameful.
Take a careful look at the image. This is data from the newsagency software being run in this newsagency treated so poorly by Bauer. Take a careful look at the detailed data in this small business. If this small business has access to such well-organised data and can access it in seconds then why not Bauer? Are newsagent IT systems better than Bauer’s IT systems? It would seem so. Either that or Bauer has the data and deliberately ignores it.
The example from this newsagency is one of many I receive regularly from our channel.
Okay it is only one extra copy of one title. Multiply that across our channel and not that it happens many times a year and you soon see the financial cost on newsagents for labour and freight plus the cash flow impact which I’d say is in the millions of dollars.
The newsagent held data is great for business management but it is bad in that it proves consistently poor allocation actions by Bauer against newsagents.
My experience is that no amount of complaining about institutional oversupply by Bauer will drive change within the business. Plenty of newsagents think this too and it’s a reason they strike out at the company with aggressive early returns of Bauer distributed titles.
Early returning is the only way we can effectively deal with this oversupply.
Publishers using Network and who are concerned about early returns could consider this when wondering why newsagents early return their titles.
Smart newsagents like the one who provided me their data have the evidence and they are getting angrier. I can understand them wanting to strike back.
Footnote: I have masked identifying details to protect the newsagent.
I also had 4 copies of slow cooker 4 on hand but I still received another copy yesterday.
With cash flow issues such a prevelant issue in newsagencies, the mag companies are killing us.
If they don’t, Tatts will. See articles in todays Sydney Daily Telegraph.
Newsagents need to stop relying on Tatts as there is no long-term upside for you. The story in the Telegraph today is old news.
With no sales activity on this title in almost 4 months what triggered the additional supply? How many others received copies yesterday? Clearly NDC clearing stock from the DC.
Tatts pays the rent and is our biggest traffic driver, however I do not want to and believe it’s wrong to have to invest more money (shop fit) with them.
Slow cooker is a winter magazine, if they were smart they would send extras in Autumn and more newsagents would probably keep them not early return.
Mark, magazine oversupply is old news too, but it still gets blogged about every week! The Tatts issue just happens to be topical in NSW at the moment. Some Newsagents may have already chosen to drop Lotto etc, but it is still a valid issue for the vast majority of Newsagents in NSW.
Bruce, Tatts and this Bauer story are two very different stories. Tatts is about government policy whereas Bauer is about a commercial decision by a supplier to make the impacted newsagency businesses less competitive than their competitors.
The Tatts issue will not end well for newsagents if you are relying on a government to intervene.
Hi Mark
How many newsagencies would in your opinion last without tatts lotto?
Andy it’s hard to say. The answer should be 100%. Unfortunately, however, not enough have managed their businesses for this eventuality.
Nothing lasts forever and we should run our businesses expecting this to be the case.
The tatts issue is just as relevant as the mag issue, and we are likely to have the same impact on both issues, big fat zero. Mark I think you underestimate the importance of Lotto products to most newsagents, I’m in qld and I think we are protected til 2025 or something, not to say laws can’t be changed at anytime. While we may not be able to stop change, we should at least be fighting for some transperancy so that future investment decisions can be made, ie shop fits., with all the facts and implications clearly set out. The move into supermarket will have a big impact on business valuations and could result in banks taking another look at debt ratios in some businesses. This is a real game changer for the majority of newsagents, and potentially the end for many.
Rick I don’t under-estimate their importance at all. My goal with my comments – which I will open on a separate thread tomorrow – is to get everyone thinking what if as no one else is doing that, no one else is saying what does that business look like.
Do not lose sight that more than 10% of lottery products are bought online today and that number is growing at a rate that should worry you.
On the Bauer oversupply issue, add to that how they treat supermarkets and you have, in that category, something quite different and probably worse than the tatts issue.
Just sold our shop and bundled up our last Mag Box. It was the most rewarding feeling knowing that one of our major headaches is GONE….
Best of Luck to all of you for the future.
J
News Ltd has a great Taste $2 cookbook promotion with Telegraph. Today’s issue is Slow Cook, and we sold 39 copies today. That proves the demand is there.
I guess the AWW slow-cooker with $12.95 price tag is a little bit expensive, or we need to come with a creative way to market it. We sold 3 copies in this winter then zero sales in recent months.
I hear from publishers about stories of other newsagents who has a great success with cookbooks. For example, some newsagents buy expensive cookbooks from publisher directly, visit each restaurants and cafes, and show the owners about the books, and provide a free chef knife as bonus. they also pack cookbook+kitchenware and retail in store.
Its strange how they can top up by one little mag because of Sales data provided and tell me my XchangeIt data is failing too many times, but they refuse to reduce over supply from this same data. We were selling 1 of 5 of a title every week so they increased supply to 6 and that’s just one title in the big stupid supply picture.
John I am so jealous.
Carol there is the rub – double standards and you are the victim.
Can anyone explain why I need to have exchangit? It doesnt seem to work properly. It would be more accurate to just email a uestionairre to the suppliers every week.Seems like I am paying for a service that is not working.
Bruce G
No one forces you to have Xchangeit,I went with the old till I inherited when I bought my newsagency for 2.5 years before I upgraded and none of the distributors seamed to care. IPS even payed me the extra 2% margin your only suppose to get if your Xchangeit compliant and I’m convinced G&G and Network couldn’t care less if you have it or not. You sure dont get treated any differently. That said after 4 months with it I’d never go back, its more than worth it just for the convienience of instantly downloading invoices and tracking magazine sales not to mention a lot quicker to proccess deliveries than the manual way I was doing it.
As to what the distributors do with the data we send them,my observations over an admittedly limited time span is G&G completely ignore it and Network use it purely to send out unneeded extra orders via SBR. I haven’t experienced it myself but I believe they also like to ping and fine business’ for not be Xchangeit compliant, which considering what little they seam to do with the data themselves is a disgrace.
The benefit of data flow through XchangeIT is that it provides newsagents with evidence if they ever have the guts to take action against magazine distributors for oversupply. I am hopeful that one day newsagents will realise the value they can leverage from this evidence.
Today Network gave me the opportunity to upload my Christmas supply numbers for 12 titles. I looked at my sales data for previous years & made informed decisions how many of these magazines I will need. Wouldn’t it be great if we were given this opportunity with all magazines. Network & indeed Gotch have the technology to allow us to allocate our own supply numbers & yet do not. I wonder why?