Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

The cost to small business newsagents of returning magazine covers from unsold product

Mark Fletcher
October 24th, 2016 · 5 Comments

DSC_0580This photo is from a colleague newsagent. It shows just some of the magazine covers they have to return as part of the arcane unsold magazine returns process that applies to newsagents and not their key competitors. I am writing about this today because of the discussion from my recent post: What happens to magazines newsagents don’t sell and why are newsagents treated differently to supermarkets?

The stack of magazine covers have been ripped off magazines that failed to sell in the newsagency. This newsagent is permitted to return covers for some titles. For other titles they have to return the full product.

Some publishers see the sending of covers as a benefit for newsagents. Hell no! It is a cost our big competitors do not have.

Besides taking the title off the shelf and removing the cover, we have to post the covers to the distributor. This can often involve more than one envelope. Distributor processes being what they are, many newsagents send them in expensive Express Post envelopes.

  • All of this for products that failed to sell.
  • All of this for products over which the newsagents funding the work have no control re the supply volume.

These points are some of the reasons newsagents remain angry about the out of date magazine supply model. They are also points about which some magazine publishers are ignorant.

While publishers have benefited from deregulation, newsagents have received no benefit whatsoever. Indeed, the model we are forced to endure disadvantages us when compared with our big competitors.

Small Australian magazine publishers take note – this is why more newsagents are significantly cutting magazine space.

Returns ought to be eliminated immediately, unless publishers, distributors and newsagents agree to a model where newsagents are the exclusive retailer of magazines.

As newsagency businesses change, new traffic is found from new products categories and overall business GP % increases from selling higher margin products, it is only natural we look more carefully at the operating costs of low margin products over which we have little or no control. This is a consequence of deregulation – but it has been slow in coming for the channel.

13 likes

Category: Uncategorized

5 responses so far ↓

  • 1 Colin // Oct 24, 2016 at 9:09 AM

    I think we all know the distribution system is bust. It’s a stitch to support fictitious circulation numbers and thereby inflated advertiser rates. The system suits distributor and publisher, neither dare admit to the true number of readers.

    2 likes

  • 2 John // Oct 24, 2016 at 8:23 PM

    As a Distribution only we allocate 1 copy above average of the last 5 sales.

    Everything else goes back immediately.

    2 likes

  • 3 Paul // Oct 25, 2016 at 3:19 PM

    And interesting that Australia Post will be offering magazine subscriptions again this Christmas via Isubscribe and what do Newsagents get to offer ? Nothing.

    0 likes

  • 4 Mark Fletcher // Oct 25, 2016 at 3:22 PM

    Paul newsagents have trialled multiple forms of subscriptions over the years. No trial has worked.

    0 likes

  • 5 Henry Henderson // Oct 26, 2016 at 11:45 AM

    John, I’d be very interested to know how much oversupply distribution agents get.

    0 likes

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