Earlier this month, Gordon and Gotch launched The Market Hub, a wholesale business offering toys, gifts and other items.
In my opinion, Gotch should get its magazine distribution business right first. There are too many mistakes, too much oversupply, poor newsagent customer service and a poor tech platform through which newsagents connect.
As I have noted previously, Gotch could grow magazine sales for publishers by providing better service to newsagents, through a better tech platform. Indeed, the poor Gotch tech interface is a big barrier to newsagents taking on new titles.
There are items offers by Gotch through The Market Hub with a suggested retail price that is higher than the original supplier suggested retail. This potentially sets the participating newsagents as expensive and creates a false margin perception in my opinion.
Some items in the Gotch offer need understanding and support to drive sales success. Simply purchasing product and stocking it is not enough for such items.
FAILURE TO ADHERE TO DATA STANDARDS.
It is in the data side where I have concerns with how Gotch has gone about the launch of The Market Hub. Gotch sent to newsagents an EDI file using a format designed for magazine data. XchangeIT passed through the file, without testing.
The file contained errors. Gotch and XchangeIT people were clueless and, in my opinion, disengaged. It fell to the COO of my newsagency software company to detail the errors in the Gotch file sent by XchangeIT.
A big challenge was that Gotch was the supplier. The way the standard plays out is that having one company provide data for two very different types of products through one file format is problematic. yet, for several days, Gotch and XchangeIT resisted establishing a second supplier for Gotch to send through their data for The Market Hub.
While I don’t know about other software companies, XchangeIT agitated my newsagency software company, Tower Systems, to change its software to serve the approach Gotch and XchangeIT wanted to take. What this meant is they wanted me to personally fund, to the tune of many thousands of dollars, changes so they could bend XchangeIT data to work with standards not designed to accomodate the data they wanted to send.
I made it clear to them that out of all of us at the table, Gotch, XchangeIT and Tower, only I was being asked to personally fund any work. I refused. Instead, Tower outlined an approach they could take with no cost – by sending the data from a separate supplier.
Thankfully, it appears that The Market Hub from Gotch will be established as a separate supplier through XchangeIT, negating the need for any software changes. Why is this relevant? In my opinion it reflects the poor preparation by Gotch and XchangeIT for this project and an arrogance that they expect others to invest capital on their behalf. But they are from the magazine distribution side of the business so I guess that is their usual approach.
What should Gotch and XchangeIT have done differently? They should have engaged the software companies before sending the file. They should have followed the standards. The should have established a separate supplier for this new Gotch business. They should have thoroughly tested the data they sent.
Instead, they worked in secret and rush to newsagents flawed data, compromising the integrity of the data standards that XchangeIT ferociously protects when it comes newsagent data. It is a pity they are not as tough with themselves and Gotch as they are with newsagents.