Camera loving Dick Smith launched Australian Geographic magazine in 1985. After a struggling subscription launch, Australiaâ€™s 4,600 newsagents promoted the heck out of the product and grew over the counter sales considerably. Then, surfing the waves of success, Dick Smith and his crew turned their back on small business newsagents and jumped into bed with Australia Post.
â€œBy the time we pulled out of the newsagents we had about 135,000 subscribers,â€
â€œItâ€™s a very expensive journal to produce and we tried to negotiate to get the copies sent back to us, but it didnâ€™t work that way,â€ Whelan says. â€œAt the time they were just simply cutting the masthead off for the credit and theyâ€™d pulp the restâ€
Two quotes from Howard Whelan, Editor of Australian Geographic as reported on the Australia Post website talking about the history of their move from a retail distribution model to a mail only distribution model.
In the same article on the website Australia Post says: Australian Geographic was also troubled by the amount of magazines wasted in the newsagentsâ€™ system. While the journal achieved better than average sales figures, selling 70 to 80 per cent of copies sent to the newsagents, those copies not sold – which at times numbered as many as 30,000 – were pulped.
A 70% – 80% sell through rate is fantastic. Especially in that product category.
I do not believe the claim on full copy return. Full copy was available at the time this happened. I suspect that someone other than newsagents was being too greedy and priced full copy returns out of contention. So, the all green Dick Smith at the time decided it was better to save the 30,000 paper copies which would have been pulped and instead use 200,000 plastic bags every month to get the product to consumers. Paper or plastic Dick? I guess you chose plastic. And you chose big business over small business.
Here is the link to the article on the Australia Post website.
Australia Post holds Australian Geographic up as a successful subscription only story in their pitch to publishers. They kick newsagents for wastage and for not being prepared to negotiate on this matter and provide full copy returns. In a very clever spin they promote their service and educate people about what they consider to be flaws in our business model.
Folks, this is our own Federal Government doing this to us. Our Government is happy to sit by while their wholly owned corporation takes an unreasonable swipe at our independent small business channel.
All of this took place in the late 1980s. It is relevant today because Australia Post use this story today in their pitch for more subscription business.
Shame on Australia Post and shame on their owners, the Federal Government of Australia.
Thanks for your support of small business.
For the record I note that Dick Smith is no longer involved in the magazine.