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Is sale or return holding newsagents back?

Newsagents in Australia have been brought up on sale or return supply arrangements for stock.  They have served us well.

Sale or Return is the supply basis for magazines, newspapers, greeting cards and a range of stationery and gift items to newsagencies in Australia.  Newsagents like SOR because they (we) see less of a risk if the products do not sell.  Suppliers, especially those in the stationery and gift categories, know this and pitch SOR when introducing new lines.

I wonder if SOR lowers our expectation for products – because of the parachute of SOR which ‘protects’ us from failure.

We ought to assess new products as if SOR ‘protection’ does not exist.  I suspect that some products we take on today would not make it.  I also suspect we would  work harder to move products and be more demanding when new products are presented.

The greater the risk we take the more focused we are on driving our success.  SOR dilutes that risk and takes our focus away from being profit focused.

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Newsagency challenges

Finding space for new magazines

good_garden_design_a.JPGWe received Good Garden Design on Wednesday for the first time and was surprised to see it heralded, above the masthead, as Australia’s Best Selling Garden Design Magazine.  I thought if it’s the best then why are we only getting this title now.  But I digress, the problem was that our space allocation for the category was fully used.  So, we had to remove a title in order to accomodate this new (to us) title.  To be fair to other publishers, we looked at space allocated to Universal magazines – the publisher of Good Garden Design.

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magazines

Monkey digital magazine expands

Monkey, the free weekly digital men’s magazine launched in the UK in February 2007, is launching in Sweden, Denmark and Norway with a local partner.  The Guardian has the details. It is only a matter of time before we see a local edition of Monkey for Australia as well as a local edition of their other successful free digital titles iGizmo and iMotor.

Monkey, iGizmo and iMotor are all good well targeted titles.  To see how magazines are changing, check out their websites.  From a newsagent perspective, we need to understand that the Dennis Publishing model is built around a direct publisher / consumer relationship.  The traditional distribution channel does not exist.  Newsagents are not needed to collect subscriptions – these titles are free.  There are no returns, no sales data to be collected by a network of outlets operating at different levels of compliance.  Best of all for advertisers – there is accurate data on advertisement engagement.

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magazines

Art Australia is like art in a gallery – look don’t buy

art_australia.JPGArt Australia does not sell in our newsagency.  We return what we receive.  NDD knows this yet they continue to send the title – as a demonstration of their distribution skills (not!).  The best way for NDD to respond to this blog post and other complaints about oversupply is for them to fix the problem and deliver supply on equitable terms.  Titles with less than 60% sell through are loss making for shopping centre newsagents yet NDD continues to send titles like Art Australia which deliver a 0% sell through.

NDD would be better off investing the money they are spending on legal pursuit of me because posts at this blog on fixing the supply model which is sucking my cash and the cash of other newsagents through oversupply as described above.

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magazine distribution

Handyman magazine sales collapse

handyman_magazine.JPGSales of Handyman magazine have collapsed in our newsagency.  Yesterday we returned all but one copy of the last issue.  This is at a huge cost to our business.  The segment is over satisfied with local and overseas titles and the differences between the titles is not great.  We will try and cut titles but not all magazine distributors attend to newsagent requests.  This is where the distribution model is flawed – if a supplier does not allow newsagents to manage this part of their business then they should not expect newsagents to shoulder the financial risk.

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magazine distribution

The impact of the Internet on US newspapers

At the ABC’s 7.30 Report website is an excellent extended interview with former journalist and Crime novelist Laura Lippman about the demise of newspapers in the US. The interview provides an excellent back story to the impact the Internet and corporate takeovers on newspapers. I especially found Lippman’s comments about newspaper publisher interest in pursuing ‘young poeple’ interesting.

Publishers here will tell us that Lippman speaks from a US perspective and they will be right.  The changes she discusses are happening here – our model is such that it will take some time for the changes to be noticied.

Newsagents and those claiming to represent newsagents need to watch this interview as it provides a perspective of opportunities (or challenges depending on your perspective of change) which remain undiscussed in newsagent circles. We need to create our own leadership through these opportunities.

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Media disruption

EDI compliance guidance for newsagents

Given the interest here in my EDI post from two days ago, click here for a copy of the ten-page EDI compliance document being provided by Tower Systems at the national EDI / XchangeIT compliance training workshops currently being delivered to 1,600 Tower Newsagents nationally.

While parts of the document are Tower Systems specific,there is sufficient general content to be of help to non-Tower newsagents.


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magazine distribution

Playing with puzzles

fhn_puzzles.JPGWe are playing in the jigsaw puzzle space at Forest Hill and early sales are very good. Our team has selected puzzles based on successes from our calendar range.  The Planet Zoo range looks great!  Each features an appealing image.  There is a social responsibility connection – a portion of each sale is donated to a wildlife organisation by the folks at Planet Zoo.

We find calendar sales are an excellent resource when looking at other parts of the business for opportunities. They demonstrate popular interests – as do magazines.

While we’re not about retire on the sales of puzzles, they are extending the focus of our business and helping achieve gift purchases from our customers which would otherwise have been satisfied elsewhere.

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Calendars

Combat Tank Collection part 2 out now

tanks_issue_2.JPGIssue 2 of the Combat Tank Collection partwork went on sale yesterday.  Newsagents I have spoken with are chasing back copies of part 1 to satisfy special orders.  This series is surpassing expectations from what I can see – a welcome outcome in an otherwise lean year for partworks.  The supply model for partworks, while better than years ago, still has a way to go if publishers, distributors and newsagents want to achieve the maximum sell-through.

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partworks

Managing Swine Flu risk in retail

With swine flu significantly impacting at us at our Epping Plaza location in Victoria – McDonalds around the corner from us was closed for most of the day – I thought I’d share the simple steps we are taking for peace of mind of our team and of our customers:

  • Regular use of an alcohol based and cleaner by staff.
  • Hourly wiping of the counter from the customer side.
  • Regular cleaning of other surfaces touched by customers.
  • Keeping tissues within easy reach at the counter.

We are not alarmed, just cautious and keen to show our customers this.  The Victorian Government Health website has more information.

This is the same centre which pulls some customers from communities impacted by the bushfires earlier this year.

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retail

Newsagent interest in NSW lotteries under the spotlight

Crikey today published a story by Alex Mitchell about newsagent interest in purchasing a stake in NSW Lotteries.  I mentioned this on May 1 when NANA, the NSW Newsagent’s Association wrote to members announcing its intention. The Crikey story has some interesting points:

Newsagencies in NSW have been complaining loudly about the forthcoming privatization of NSW Lotteries because of the impact on their revenue streams and the value of their businesses.

So they’ve decided to put in a bid themselves.

On Friday the Newsagents’ Association of NSW and ACT Ltd has a meeting with Treasurer Eric Roozendaal, former general secretary of the NSW Labor Party, who is leading the privatization push.

Under the bank-backed newsagents’ proposal, the government would retain a majority 51 per cent shareholding and the association the other 49 per cent.

Whether this gets up or not, it is goot to see newsagents taking a yes we can approach to such a challenge.

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Lotteries

That’s Life set for a bumper week

fhn_tl_maggi.JPGWe bumped the Family Circle promotion from our premiun front counter location to make way for That’s Life and the free MasterFoods pack which comes with each issue.  This was an opportunity too good to pass up.  The free gift is excellent value.  We expect it to work very well with our demographic.  We will re-position Family Circle next week or when, hopefully, That’s Life sells out.  Given the shape of the MasterFoods gift it was a challenge to display the product in our usual way so we have adopted the simple stack approach.

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magazines

Promoting Annette Sym cover on Lovatts BIG

fhn_big_annette_sym1.JPGAnnette Sym graces the cover of the latest issue of Christine’s BIG Crossword from Lovatts.  Annette’s Symply Too Good Cookbooks have been sold in newsagencies for years.  We are promoting BIG and Annette’s books at the end of our busiest magazine aisle.  We also have BIG in the crossword section and in a pocket on the display near our main lottery counter.  Click on the image to see a larger version of the photo.  We were fortunate to have Annette at our store for a demonstration a few years back – she was very popular with our customers.

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crosswords

Magazine readers aging

The median age of magazine readers in the US has risen greater than the population accoring to research just published in the US.

Since 2001, 64 out of 90 leading consumer magazines have seen the median age of their readers increase faster than the population at large, according to a MediaPost analysis of the latest figures from Mediamark Research and Intelligence. The analysis, based on MRI’s spring 2009 measurements, confirms the continuation of a long-term trend previously observed in 2006-2008.

This generational shift is seen in our newsagencies every day.  It is why some newsagents are experimenting reconfiguring their businesses to appeal to a younger demographic.

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newsagency of the future

Magazine app for the iPhone

It seems that every day there is another online business offering direct to consumer magazine subscriptions of digital versions of print product.  Exact Editions is a free iPhone application which lets you read the print content exactly as designed.  There are some who prefer this to the designed for digital approach.  While they don’t offer a feast of titles yet, the range will grow as more iPhone users experience their interface.

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Media disruption

Beware free software

Newsagents are being offered free software by a couple of software companies.  In one case, the system being offered for ‘free’ today cost the same a couple of months ago.  They have reconfigured how this is invoiced to improve the tax situation.  They are also charging for the software annually – if you don’t pay, access to the software stops and you lose access to your data.

Another company is giving away their software but charging hefty fees for training, support and plenty of essential add-ons.  They also have a mandatory annual fee which, if not paid, blocks access to your business data.

Take care, research the costs, get the total cost of ownership for three to five years in writing.  Beware of free claims as you want to deal with a company which has a business model beyond the next sale.

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newsagent software

Playboy story is a story for and about newsagents

There are reports that Playboy, the magazine, the company, the lot, is up for sale and that Virgin in the UK is considering a bid.  The story here for newsagents is the shift in how consumers access entertainment.  There was a time when publishers said consumers liked the flexibility of being able to access content anywhere and at any time and that print ‘owned’ this flexibility.  Now, a few years on, devices like the iPhone provide access to content where people want.  The disruption by these devices is, in part, what is challenging Playboy.

We face similar disruption in our model.

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Media disruption

The value of a warehouse

warehouse.JPGWe have had our own small warehouse a few doors down from our head office since late last year. With three newsagencies and four card and gift shops to serve, the warehouse is making it easier for us to buy as a group and better manage stock. Instead of holding stock at the stores, most of it is held at the warehouse. This means we are spending less on our overall stock holding. It also means we are spending less time in each retail location managing stock.

While we have some kinks to iron out of our model, it is developing well.

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About us

7.30 Report on newspapers misses opportunity

I watched the 7.30 Report story on ABC1 tonight on the future of newspapers and was left wanting more.  It presented the situation and provided background but did not canvas in any detail the future.  It gave too much time to print connected people. That said, I guess for many viewers the report was news.  It will be interesting to see ff it generates questions tomorrow.

I would have preferred to see a more detailed piece: history – the collapse of classified revenue which is shaking the print model overseas and here to its core; the ripple impact of that collapse – newsagents, advertisers etc; and, the future – the opportunities to embrace change and redefine how we as a society create our own checks and balances independent of government funding to monitor those who lead us.  The future is where I’d like to see most time spent.

I’d like to see greater exploration of these issues.  I am concerned that we will call for this when it is too late and change well advanced. Now is the time for us to embrace change and escalate this.

It was interesting to watch the story on Foreign Correspondent about Detroit and General Motors which followed the 7.30 Report.  It complimented the newspaper story.  While they focus in the US on rebuilding the auto industry, some say they should focus on the opportunity of change.  We need to do the same in our newsagencies.

UPDATE: You can access the 7.30 report story here.

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Media disruption

Australian Traveller delivers for newsagents

aust_trav.jpgQuentin Long, Managing Director of Australia Traveller magazine, has been true to his word in comments at this blog.  He has provided newsagents who opted-in with marketing collateral and information to help drive sales of the next issue of Australian Traveller which goes on sale tomorrow.  We were advised Monday that the collateral had been posted.  This came in an email with a copy of the cover and additional helpful information about features in the issue: Time To Go Outback; The Amazing Expriences of the Outback;Bob Brown What’s He Fighting For? A portfolio of the Senator’s own photos of Tasmania; The 20 Best Tours in Australia; and,Melbourne Laneways.  Knowing this is useful if an opportunity presents when talking with a customer – it helps us act like magazine specialists.

Quentin is to be commended for his engagement with  newsagents through this place and elsewhere/.

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magazines

Free newspaper offer to drive sales of paid daily

News Limited is using its free daily newspaper, mX, to promote sales of the Herald Sun here in Melbourne.  All this week, mX is publishing a coupon which entitles the bearer to redeem the Saturday Herald Sun for $1.00 this Satruday, May 30.  I like this offer and the use of the free newspaper to drive sales of the paid product.  Newsagents are being reimbursed at full value by the publisher.

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Newspapers

Negotiating Your Payrise – a product opportunity for newsagents

I have been contacted by HK Consultants and asked to comment about Negotiating Your Payrise, a 2 CD Audio Course they have on offer.  They would like to place it in newsagencies for sale. It’s RRP is $19.95. Of the $18.14 (ex GST), HK will bill the newsagency $9.06 ex GST, leaving with $9.08 (ex GST) for each unit sold. Click here for a flyer.

I advised that I was not sure how the Negotiating Your Payrise would go in newsagencies in that it would need to be at the counter given the price and given that it would not easily fit into any department in a newsagency.  I can see it working well in some newsagencies and not so well in others.  This is why distribution through a magazine distributor would not be ideal.

I suggested I blog about it here so that newsagents could provide direct feedback.  The folks at HK agreed.  I am pleased for the blog to be used in this way – for suppliers to ask about whether newsagents are interested in a product.

Supply enquiries should be directed to Drew Okawa email: drew@hkconsultants.com.au.

Disclosure:  I have no commercial arrangement with this company.

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Newsagency opportunities

Living in the EDI dark ages

dark_ages.jpgA colleague was shocked to see the hand-written returns coding on magazines on the shelves of a newsagency he visited last week. The image is from the cover of Computer Music.  It shows it as a Week 25 return and having a price of $19.95.  Imagine the time this business must be wasting on hand writing details on magazines and hand processing returns.  They have no stock control as sales are rung up on a cash register.  Talk about living in the dark ages.  I am disappointed that the magazine distributors let them get away with this.

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magazine distribution

Taking Family Circle up-market

img_0648.JPGAt our newsXpress Watergardens store the team takes a different, more corporate, approach to magazine displays.  There isn’t the usual space in-store for the traditional magazine displays.   The photo shows their treatment of Family Circle which went on-sale yesterday.  This is a warmer, more professional, display than what I published here yesterday.  Given its location, at the front of the shop and on view to all who pass by the business, it is appropriate for drawing people not inside the shop to consider purchasing the title.  Magazine sales are growing at Watergardens thanks, in part, to these creative displays and their appeal to shoppers.

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magazines
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