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Newsagents: have your say about a possible fresh approach to magazine distribution

Mark Fletcher
January 29th, 2015 · 58 Comments

I have been talking with a senior magazine distribution executive on behalf of newsagents on a possible change to their model and write today to open the topic for discussion by newsagents. But first, here is one question for you:

If you were given the control you want over magazines you receive, would you use it, would you be more engaged in the category?

Frustration with the current magazine distribution model has been intensifying as more and more newsagents are realising the control the can have and the additional gross profit they can make from other retail categories.

Publishers are frustrated with a model where they see early returns increasing, newsagents becoming less engaged and poor service from the old model.

Newsagents want to make more money from magazines. I’ve written about it here before, noting that 40% GP would be reasonable. This post today is not about GP, it is about control of range and volume.

While some will say we need to fight for everything we want, I think our interests are served by a step by step approach. hence the question I have for you today.

A magazine distributor, it does’t matter which one, is contemplating establishing new magazine supply rules. In a recent meeting we canvassed a range of options.

After reviewing the options, the package of ideas under consideration are:

  1. That following allocation of new titles on the distributor computer system, you would have the opportunity to log in to cut those titles or adjust proposed supply volumes. You’d have three or four days to do this.
  2. Once you take a new title you’d need to display it for the on-sale of the first issue. What happens after that would be up to you.
  3. That you could cancel the title at any time in the future – and a cancellation would be a cancellation.
  4. That you could adjust supply at any time in the future.
  5. You could order new titles to try for as little as one issue.
  6. Tops only returns for all titles. Note: it is possible the result will be no returns at all.
  7. You could opt out of point 1 (new titles being allocated) and only get what you ask for.

The concern is that not enough newsagents will engage with these changes, that the distributor will lose titles and and those titles would be taken over by others who would not give newsagents this level of control. I share this concern.

While newsagents say they want more control over magazines, I worry that not enough will exercise it. That is what I want to know about today. Would you like these proposed changes to be implemented? Yes or no.

I see it that simply: yes or no. For me it is a resounding yes. The control being contemplated is something I’d embrace.

If the response is yes and the channel engages, we prove a point to all publishers and distributors and through this improve our leverage on everyone adopting this approach and opening consideration of margin.

The MPA, Bauer, Pacific, Gotch and Network are working on a code of conduct as I have written about before. I do not think the draft code of conduct is a good solution.  It has been developed with little consultation.

Of the 2,600 newsagents on XchangeIT, around 900 currently consistently pass compliance tests. This is a factor that will play into whether the package of changes I outline proceeds – particularly the question of no returns at all.

Any time there is an audit of physical returns versus what is claimed, around 25% of returns claims are not matched by reality. This makes distributors and publishers nervous. In one case I heard about recently a newsagent repaid tens of thousands of dollars for over-claimed returns.

the other factor that will play into any change to processes is rules for changes. For example, should a newsagent be allowed to cut supply of a title to below the quantity they are selling? I’d suggest they should not be able to do this – for their own good … unless they are selling only one copy an they are doing an overall space adjustment.

Back to my question – modified with more detail given the seven points in the package of ideas:

If you were given control over magazine titles you receive and the volume of each issue, would you use this control, would you be more engaged in the magazine category, would you seek out new titles and adjust supply seeking more stock to increase sales?

The distributor will watch the answers here. Please get your colleagues to engage and share their opinion. This is an opportunity to be heard.

18 likes

Category: magazine distribution · Magazine oversupply · magazines

58 responses so far ↓

  • 1 TED // Jan 29, 2015 at 8:04 AM

    Yes I would Mark.

    We would be mad not to as this is what the industry has been crying out for. I would support a distributor that gives us control a lot more than one that doesn’t.

    The code of conduct being worked on is just waste of time as it will only be developed to suit the distributors and tell us how wonderful they are for doing this and nothing will change.

    3 likes

  • 2 Brett // Jan 29, 2015 at 8:39 AM

    Put me down as a yes.

    We need to talk about margins as well, but this is a great first step and long overdue.

    1 likes

  • 3 Brendan // Jan 29, 2015 at 8:48 AM

    I already exercise as much control as I currently, reasonably can over magazines. I use the early return facility in Tower and set it according to the time of the month being more stringent towards the end of a month but assessing each flagged magazine return on its merits. In both the G&G and IPS systems I every so often identity LOCAL publications that I do not receive and add them if I think they may sell. This is time consuming and as such does not happen as often as I’d like.
    A distributor streamlining these processes as described would be welcomed by me.
    As for compliance, although you have stated that this post is not about commission, perhaps compliance can be monitored as with or as a part of XchangeIT compliance and a significantly higher commission be paid to compliant outlets encouraging and rewarding those that engage but NOT withholding this system from non compliant outlets.

    0 likes

  • 4 Leon // Jan 29, 2015 at 9:02 AM

    Yes – but I would imagine that people would over compensate initially. This should be ironed out over time.
    Agree with Brendan Re: XchangeIT compliance.

    0 likes

  • 5 Gary // Jan 29, 2015 at 9:11 AM

    No.

    0 likes

  • 6 Bruce // Jan 29, 2015 at 9:20 AM

    YES from me. I would use the controls within the 3 or 4 days. However, keeping the new title on sale for the on sale period would normally be fine but the on sale periods seem to be stretching in some cases. Two recent cookbooks have an on sale till Jan 2016. No use early returning them as I could have been hit by a bus before I get my money back. The odds are better for me to try to sell them. However I can’t cope with too many of these.

    0 likes

  • 7 Dennis Robertson // Jan 29, 2015 at 9:25 AM

    Short answer YES.

    Strategically, to actually engage Newsagents positively in such a manner could be a brilliant move by a supplier and really benefit the Publishers that flight to them.

    I believe that leadership positions (by number of magazines handled) could be challenged, over time, if a supplier were to engage with Newsagents in the manner you have described.

    I am actually heavily involved in the magazine category at the moment in a twice weekly discipline of constantly amending supplies (up and down) in a useless and futile attempt to manage magazines when the rules are stacked against me having the slightest degree of control.

    So it would be no effort at all on my part to PLEDGE or formally AGREE to engage with such a supplier, and, therefore Publishers, WITH A VIEW TO SEEKING MORE STOCK TO INCREASE SALES.

    I could easily apply more time to focus on increasing sales to the high number of Sub-agents I supply with magazines if I could eliminate all the wasted time I spend in trying to control all the unwanted titles that I have to keep on cancelling (repeatedly).

    Dot point 3 above would eliminate so much negative energy.

    For any supplier who would do this for me, would be repaid in kind. By that I mean I WOULD GIVE PUBLISHERS OF NEW TITLES A FAIR GO FOR THE DURATION OF THE SALE PERIOD. See dot point 2 above. Shear relief and gratitude would probably see me put out any new Publisher title from such a supplier and give it a chance for several issues.

    Sorry about the capitals, but I don’t seem to be able to hi-light the important bits any other way.

    0 likes

  • 8 Dennis Robertson // Jan 29, 2015 at 9:33 AM

    In addition, I have little confidence in the

    “The MPA, Bauer, Pacific, Gotch and Network are working on a code of conduct as I have written about before. I do not think the draft code of conduct is a good solution. It has been developed with little consultation”

    If past performance is anything to go by.

    0 likes

  • 9 Adrian // Jan 29, 2015 at 9:47 AM

    Yes for us as but the on sale period for first issue would need to have a maximum limit set,ie no longer than 4-6 weeks as some are set now at ridiculous timeframe

    0 likes

  • 10 Mark // Jan 29, 2015 at 9:47 AM

    yes

    0 likes

  • 11 Jon // Jan 29, 2015 at 9:55 AM

    YES

    I am always looking for new titles for our shop that make the right fit for my customers and gives us a point of difference. However there is so much crap we receive that i know wont sell. To be able to have a list from a supplier for me to say yes or no to would save so much time rather than me culling so many titles as they come in.

    As a shopping centre retailer margin is a major issue. With the rent I pay at over $2000 psm, 25% on magazines doesn’t cover it.

    0 likes

  • 12 Carol // Jan 29, 2015 at 10:17 AM

    yes but the three to 4 day time period could be longer after all the distributors know well in advance that they are going to introduce a new title and we do very occasionally get a break out of our business for a few days.
    2. If I take a new title I would want the on sale period to be a month to 6 weeks not longer or I would not accept it.
    I cancelled my IPS account because of ridiculous requirements accept titles for so many issues even though we new it would never sell.

    1 likes

  • 13 David // Jan 29, 2015 at 10:35 AM

    Yes

    0 likes

  • 14 Tyrone // Jan 29, 2015 at 11:20 AM

    YES

    0 likes

  • 15 June // Jan 29, 2015 at 11:29 AM

    Yes

    0 likes

  • 16 Rick // Jan 29, 2015 at 12:09 PM

    Yes Sir, count me in.

    0 likes

  • 17 Narelle // Jan 29, 2015 at 12:13 PM

    Yes

    0 likes

  • 18 Graham // Jan 29, 2015 at 12:25 PM

    Yes, about time someone finally talking sense.

    1 likes

  • 19 ANDREW // Jan 29, 2015 at 12:26 PM

    YES
    Here is you big chance Newsagents and Publishers.Forget about any Associations. Last year I lost $11.5k on selling Publishers product. I reduced space by 35% and now make a small profit,
    although I sell less product. Replacement area then produced a further profit of no less than 50%.
    We also waste a lot of staff resources trying to cut down the rubbish.It Would be good to use that time to forensically examine each title in order to grow and promote sales.
    At 40% with no returns would make me re examine the way we do things based on a real commercial return.As it Stands, Magazines have become less relevant each year.
    As for Exchange it, Give the 900 compliant
    a go,Help the others to become compliant and if that fails penalise by a % if they don’t.

    0 likes

  • 20 David // Jan 29, 2015 at 12:32 PM

    Yes… but have to agree with initial onsale limits

    0 likes

  • 21 eric tjie // Jan 29, 2015 at 12:43 PM

    i have done that. YES

    0 likes

  • 22 Carol // Jan 29, 2015 at 12:59 PM

    Yes go for it, let the associations scratch their heads wondering why they are losing membership and respect in the industry.
    No wonder more Newsagents are joining groups.

    1 likes

  • 23 Ying // Jan 29, 2015 at 1:00 PM

    yes

    0 likes

  • 24 Bob // Jan 29, 2015 at 1:08 PM

    I’m in.

    0 likes

  • 25 Steve // Jan 29, 2015 at 1:11 PM

    Yes, the best suggestion yet. Mark were do you get 900 out of 2600 newsagents XchangeIT compliant, thats 35%. I talked to XchangeIT today and asked the question they claim 95% compliance.

    0 likes

  • 26 Mark Fletcher // Jan 29, 2015 at 1:12 PM

    FYI Mediaweek magazine has written about this today and linked to this post. Their daily email goes to thousands working in publishing and media generally in Australia.

    0 likes

  • 27 Mark Fletcher // Jan 29, 2015 at 1:17 PM

    I’m told by magazine distributors. Their is XIT compliance and then there is distributor compliance through to physical returns.

    0 likes

  • 28 shauns // Jan 29, 2015 at 1:35 PM

    I would say yes , not totally over the moon about keeping new tittles for the entire on sale but if that is the sacrifice I would I have to do I would .

    0 likes

  • 29 Steve // Jan 29, 2015 at 1:39 PM

    I consistently fall IPS’s NoF (number of files) on Xchange IT. Why? Because IPS dont have enough quality titles that sell so a lot of my files are empty and not counted, I do still pass XchangeIT compliance. I hope their not hiding behind bullshit like that.

    1 likes

  • 30 shane // Jan 29, 2015 at 1:39 PM

    YES But on sale period for first issue could default to a Max. period of so many weeks. I dont want a mag that has two issues a year taking up space if its not selling.

    1 likes

  • 31 Jack // Jan 29, 2015 at 1:47 PM

    Short answer – yes

    0 likes

  • 32 jenny // Jan 29, 2015 at 1:55 PM

    Yes

    0 likes

  • 33 allan wickham // Jan 29, 2015 at 2:43 PM

    Yes

    0 likes

  • 34 ROD // Jan 29, 2015 at 2:50 PM

    yes

    0 likes

  • 35 nh // Jan 29, 2015 at 2:50 PM

    YES

    0 likes

  • 36 rick // Jan 29, 2015 at 3:26 PM

    Yes with fine tuning

    0 likes

  • 37 eric tjie // Jan 29, 2015 at 5:12 PM

    not IPS though. i wish they stop distributing mags.

    2 likes

  • 38 Matt // Jan 29, 2015 at 5:36 PM

    Yes – a good progressive step

    0 likes

  • 39 Rod Maher // Jan 29, 2015 at 5:48 PM

    Yes,It would be great to get some change as the way we are going at the moment its not working .

    0 likes

  • 40 Peter B // Jan 29, 2015 at 9:07 PM

    Yes. Looking forward to progress in the Magazine channel.

    0 likes

  • 41 Glenn // Jan 29, 2015 at 9:52 PM

    Yes

    Any distributor initiating changes such as these deserve the support of our industry, though agree with a time limit on 1st issues.

    Also, with nil returns electronic audits should pick up any “discrepancies” in sales and returns claims so where these are found they should be able to ask for physical returns to resume. Anyone found to be deliberately cheating the system should face stiff penalties so that the majority that do the right thing do not get penalised by having to return to systems of old because of a few bad apples.

    1 likes

  • 42 Ross // Jan 29, 2015 at 10:24 PM

    Short answer – YES

    0 likes

  • 43 JOHN // Jan 30, 2015 at 6:15 AM

    YES

    0 likes

  • 44 Diane Watt // Jan 30, 2015 at 7:37 AM

    Yes.

    0 likes

  • 45 john s // Jan 30, 2015 at 8:02 AM

    yes. Sounds like goog idea and long overdue.

    0 likes

  • 46 Tc // Jan 30, 2015 at 8:27 AM

    Yes

    0 likes

  • 47 Jim // Jan 30, 2015 at 11:54 AM

    YES!

    0 likes

  • 48 ken // Jan 30, 2015 at 3:19 PM

    yes from me but I do not have xchangeit nor do I have tower or any other pos system. should I be penalised because I don’t ???

    0 likes

  • 49 Mark Fletcher // Jan 30, 2015 at 3:59 PM

    Ken it won’t make any difference with this question.

    0 likes

  • 50 BillW // Jan 30, 2015 at 8:36 PM

    Yes, however if this supplier is IPS they would also need to look at the way they deliver.
    A daily trickle now of magazines and newspapers, twice a day, some days is not something I would want to grow. IPS Magazine deliveries turn up too late to be relied upon.
    I have been looking at certain mag categories of late that look sick on range, ie music and entertainment and teenager, but dealing with NDC and GG is just too difficult.
    If this new arrangement caters for 2 deliveries per week, with no Thursday deliveries, I would be very keen to engage.

    0 likes

  • 51 DM // Jan 31, 2015 at 8:26 AM

    Yes, anything that assist with magazine management has to be a positive

    0 likes

  • 52 Budi // Jan 31, 2015 at 9:34 AM

    yes

    0 likes

  • 53 Paul // Jan 31, 2015 at 10:00 AM

    Yes. But it probably still won’t save me cutting my magazine pockets from the current 700 to 200-250.

    2 likes

  • 54 Publisher // Feb 1, 2015 at 9:45 AM

    Mark thank you for posing this question and providing the background information you have on this issue. I and some of my small magazine publishing colleagues have been discussing just this idea and what you and your colleague newsagents are saying is of interest it us.

    1 likes

  • 55 Sarah // Feb 4, 2015 at 5:11 PM

    Yes! Anything that will help with the frustrating cycle of “Wait… haven’t I cancelled this?”

    0 likes

  • 56 Mark Fletcher // Feb 5, 2015 at 10:38 AM

    Publisher – you’re welcome. I just wish those who called me to support this initiative would comment on here as well.

    0 likes

  • 57 June // Feb 6, 2015 at 1:00 PM

    Interesting email from xchangeit about sticky labels – whether or not we need them.
    I would love to NOT use them as they take so much time (which is money) to find, attach and put on the shelf and then the opposite when returns are due.
    I don’t use them for volume Oz titles both weekly and monthly but I do use them for
    all other mags and I would be against the
    demise of labels.
    1. they tell me how many items I am getting
    2 They are a fantastic guide when putting new product on the shelf as to how many of the new mags need to go on the shelf.
    3. when labels are over you know you have a shortage
    4. labels tell us tops and fulls
    5 labels tell us which company to return the product to.
    6 labels are tremendously useful for early returns (publishers/dist won’t like that one.)
    7 Labels tell us when to pull for returns
    8 labels allow us to pull returns on the day prior to mag deliveries which saves time on a not so busy Wednesday instead
    of a very busy Thursday.
    9 Labels ensure mags go into their correct category.
    10 Labels tell us when there is a re-issue
    or forward billing so that we don’t remove it before we can request a credit.

    I can’t actually see any way that I would be happy to get rid of labels.
    However, I don’t know what xchangeit are
    planning yet so I just thought I would air it here.

    2 likes

  • 58 Mark Fletcher // Feb 6, 2015 at 1:25 PM

    I’ll open a separate threat on this so as to not confuse this thread.

    0 likes

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