The announcement yesterday that NDD is to close will see two main magazine distributors. While there are other players, it would take extraordinary expansion for them to compete with Gordon and Gotch and Network Services.
The magazine distribution model newsagents currently have often fails us. We are supplied at a level which makes the magazine department loss making or break even for more newsagents than those who make a profit. This is not healthy for us for publishers.
Despite what magazine distributors say, newsagents do not have fair control over the stock they receive. They are denied the opportunity of making business decisions on what titles they carry and the volume of each they receive. Yet we are held accountable for paying magazine supplier bills on time. This is grossly unfair since we are not given control over magazine cash flow.
In the next week or so I will publish a post here on magazine cash flow in newsagencies, based on fresh evidence. In one store, supply from Gotch and Network has been cash flow positive only three months out of the last twelve. Yet this newsagency has had to find the cash to pay the magazine bills or not receive stock.
Gotch and Network are doing what they need to do to serve their respective business models. Just as IPMG has made a decision about NDD which serves its business model.
It is a pity that newsagents have so little control over this vitally important part of their business.
The closure of NDD reduces choice and has the potential to see newsagents face tougher magazine supply terms.
I will NDD’s innovation, they we always at the forefront of range analysis and, in recent years, more flexibility for newsagents in controlling supply.
Our Sunday team found that 50% of the time they offered a ticket in the OzLotto jackpot they were successful. The offer was only put to customers at the counter who had not purchased an OzLotto ticket. Knowing the hit rate is encouraging to others on the team since they know that 50% of times the offer is put they should expect to get the extra business.
