Newsagents are collectively investing a considerable sum on money in the launch of Australian Ink, a new tattoo magazine which features Pink on the front cover.

The table to the left shows the projected impact (if my assumptions are right) on the cash-flow in one of my newsagencies based on what I expect to sell of Australian Ink, the cost of retail real-estate, the cost of labour and the timing of paying for stock and receiving a credit for returns.

I’d appreciate feedback from others on whether they think my calculations areb right.

While I am using Australian Ink as an example (as I did Cosmos magazine in my March 16, 2006 post), I could easily present numbers for other new titles launched through the newsagency channel. Like other independent publishers before them, I would expect the publishers of Australian Ink to say that they cannot afford to offer delayed billing, payment based on scanned sales or bonus margin for the launch issue.

I appreciate that it takes considerable financial resources to launch a new title.

Newsagencies are slim margin businesses. Every launch has costs as detailed in the table. Collectively, we invest millions of dollars of our money each year in supporting publishers and their title launches. We do this usually without control over new titles sent nor the volume sent.

I’d note that the payment by newsagents for the title in August as shows in the table is not, as I understand it, paid to the publisher until after the issue goes off sale.  Certainly this is the case for some titles according to publishers I have spoken with.

I like magazine launches – if the launch is backed by an advertising campaign which drives traffic to my business. I am not so keen on launches which rely on newsagency foot traffic to find sales.

Popular Science was launched in more of a partnership approach last year – better margin, excellent out of store marketing support and excellent collateral for in-store promotion. The campaign has been on-going, beyond issue one.

Here is a list of what I would like to see offered by publishers for magazines launched through the newsagency channel:

• A minimum agreed level of external marketing.
• Better margin for initial issues.
• Opt in process for taking on a title and the quantity.
• Payment for any premium activity – our space costs money.
• Delayed billing until after the first issue is off sale.
• Promotion of newsagencies on the magazine website.

This is an topic which should have been on the table during the discussions around a magazine distribution code of conduct. I suspect those representing newsagents missed the opportunity.

As for Australian Ink, we are promoting it boldly with good location and excellent merchandising.

For more information, see my cashflow report from a few years ago.  This was presented to newsagents, magazine publishers and magazine distributors.