The latest issue of Martha Stewart Living is a good example of certain issues of overseas titles which face challenges. Only a die-hard Martha Stewart fan will buy this Christmas themed issue which arrived yesterday. We will be unlikely to sell the one copy we received. I am not sure what the answer is: airfreight seasonal issues, cut supply or live with it as we do today? Having Christmas titles now makes us look lazy or out of date.
Gowns, published by Wildfire Publications, has a price of $9.90. However, it is free if you buy Sydney Weddings. This is extraordinary. In a newsagency I visited today (in Melbourne) there is Sydney Weddings on the shelf with Gowns for free and next to it is Gowns by itself priced at $9.90. Both are distributed by NDD. Surely someone at NDD noticed this? I hope not because it would shock me that they noticed this and let it through. This behaviour makes newsagents look stupid to customers.
We have not sold a single copy of Groovy Grandmas since it launched six weeks ago. As I blogged at the time, we received 19 copies. We early returned the stock today. Besides being out of pocket for a time for the cost of the initial stock, we have to pay freight to send this now dead stock back. This is a considerable impost on small business newsagents.
While I understand that the publisher has risked tens of thousands of dollars, maybe more, in the launch of Groovy Grandmas, that is their choice. Newsagents have not been given a choice as to whether they want to invest in a new title. The distributor is not out of pocket in such a launch. Only the publisher, who had a choice, and newsagents, who had no say in whether to invest.
Reduction in supply quantities of some weekly magazines over the Christmas / New Year period is seeing sell-outs. In some cases, the impacted customers are shifted to a competing title while in other cases they leave to find the title at another retailer. While I understand that the size of the print run of many titles is determined by the ad revenue of the issue, as a retailer I hate losing sales.
Besides a six-month period and supply way beyond what we will sell, Complete Wedding Melbourne from Universal Magazines stings newsagents because of its sheer weight. We have to pay to freight unsold product back to the distributor and cannot fit more than four copies per bundle. This is another argument for sending the cover only and trashing the rest of the magazine. Paying to freight returns of Complete Wedding Melbourne is like a fine on newsagents for doing nothing wrong.
Further to our Bulletin dated 13 November 2008 re Home Delivery Fees. VANA has been discussing a Home Delivery fee increase with HWT for quite some time and we are extremely disappointed to advise that Peter Blunden, Managing Director of HWT has informed us that we have not been granted an increase. He has stated the following:
“After giving the matter careful consideration, we have decided to seek alternative ways of addressing the issues raised”.
With that, VANA has announced that it has failed, again, to deliver for its members.
No wonder newsagents are quitting newspaper distribution.
In what other business is a service provider expected to carry cost increases every year in labour, fuel and other areas, cope with a reduction in margin and survive with no increase in service to compensate?
Newspaper publishers will wonder, at some point in the future, why newsagents abandoned what was the best newspaper distribution system in Australia. The answer can be found in this decision and many similar decisions which preceded it – to not pay a fair day’s pay for a fair day’s work by newsagents.
I know newspaper executives are concerned about the number of newsagents quitting home delivery. They invite such action with decisions such as this. Sadly, the VANA announcement contains no passion on behalf of newsagents.
I wonder who VANA used to prepare and represent its case? If this was done in-house or by VANA Board members then it has let its members down. On a case such as this, professional representation is essential so that the newsagent position and negotiation is as strong as the other side. Such a case would have included information on advertising rates as a comparison among other things.
Home delivery is a service by newsagents. It is only reasonable that they set the fee they cahrge for the service they provide.
The Federal Government yesterday announced that small retailers, those with stores under 1,000 square metres, will be exempt from mandatory unit pricing. This will be of interest to newsagents selling grocery products, those covered by the regulations.
While this looks like a victory for small business, it, in my view, widens the gulf between them and big retailers.
Unit pricing is not that difficult since the work is done by the software and the data included on shelf talkers and other labels produced. I certainly plan on using unit pricing and eliminating an opportunity for a customer to prefer a bigger competitor over one of my businesses.
The Australian has more on the Government’s announcement.
Check out how Peter Williams at Banksia Beach News in Queensland has embraced the newsagency marketing campaign we developed a couple of months ago. On several window panels of Peter’s shop he has included artwork which connects with the TV and print campaign. Peter has done this at his own cost to connect his business with the wider newsagent network and to support other newsagents.
Thanks Peter!
A newsagent called me last week to ask for help. They received a bill for $4,000 for software support. No, I didn’t tell them to switch to my software company, Tower Systems. I advised them that I know of newsagents paying just $1,500 a year to their current software company for support (mediocre as it is).
Software companies ought to treat all newsagents. There is no justification to charge someone $4,000 and the newsagent in the next suburb $1,500 for the same services – such an approach preys on the weak.
Trust is key to the relationship between newsagents and their software provider. Trust is demonstrated in common pricing for all. In the case of this other software company, $1,500 a year software support is the benchmark they have established.
We have been talking across our newsagencies about our price policy for diaries and when to contemplate discounting the 2009 range. With excellent sales still being achieved – $500 to $900 a day Friday last week and again today across our stores – we feel no need to contemplate discounting at this point.
I was in a newsagency yesterday where their diaries are at 50% off. They told me they did this because another store was discounting. The newsagent has a bigger and better range. This is why we don’t need to discount. It demonstrates the value of a point of difference.
The free 12-page CSIRO health heart program diet book which comes with New Idea this week earns prime position at our counter.
Thankfully, Pacific Magazines has not cut supply over summer as some other publishers have – we have plenty of stock to support the hoped-for sales kick as a result of the front counter promotion.
New idea is an easy impluse offer with the right cover or some other value-add. Girlfriend, in this same position last week, did well for us.
Magazine publishers and distributors hate early returns, the mechanism through which newsagents send titles back prior to their requested return date. Newsagents hate them too. For us, they are work based on an expectation of failure of the title. For the publisher, they could be a denial of opportunity (and sales). For the distributor, I am not so sure since they are paid a fee for logistics services regardless.
The label in the photo is produced by our software when we are supplied product which the software is certain we will not sell. This is one of several mechanisms available to us for flagging early return opportunities based on what is to be supplied. The label is good because it is a push activity. That is, it is produced by the software along with pricing labels used in labeling magazines before they are put on the shelves in the morning. This means that newsagency staff do not need to print out reports or undertake other work find out early returns opportunities.
Early return opportunities are only flagged when a title does not sell as well as a distributor expects. That is remembered so that action can be taken next time it is supplied.
Given that it is my money at risk with this dead stock, it is appropriate I take every step possible to mitigate any potential loss. The frustration, of course, is that this problem is created by magazine distributors given that they have the data to stop supplying something which will not sell.
Newsagents are stung because they have to fund sending early return product back – I found out recently that this is not the case in some overseas countries.
One way we could address this, in instances of gross over supply, would be to top the covers and only send these back. Publishers would soon get the message that gross oversupply is a serious problem.
These small pads from For Arts Sake are an ideal addition to the happy space in newsagencies about which I blogged yesterday. They work at the counter as an impulse item and also work in an area dedicated items which reflect a positive outlook on life. Our customers love items like this. They make for an ideal small gift to accompany a Thank You or Congratulations card.
The more I think about the more I like the idea of a section of our newsagencies, a happy space, dedicated to positive and inspiring gifts and thoughts.
Check out TV.COM. This online TV viewer resource has been localised. Access is free. Sites like this represent a considerable challenge to print TV listings such a TV Week and the inserts in daily newspapers. They are another reason we need flexible magazine fixtures.
Magazine distributor NDD sent us 18 copies of 4 Ingredients 2 cookbook on Christmas Eve. There is no justification for this – especially since 4 Ingredients 2 is available from book retailers for between $15.00 and $17.95. The newsagent price is set at $19.99. Our margin is a magazine margin and not a book margin so we have no room to move on price. NDD has abused us by sending this stock. It has arrived too late to be a Christmas offer, the price makes us look expensive and too much stock has been sent.
The behaviour by NDD in my own situation with 4 Ingredients 2 represents, in my view, unconscionable conduct as defined by the Trade Practices Act.
We will send all copies of 4 Ingredients 2 back. We may even rip off the covers and return just those since this is a gross oversupply. We may even rip off the covers and return just those since this is a gross oversupply. By topping the book and returning just the cover we make a statement. Newsagents have to stop NDD abusing us as has been done in this instance.
We received eight copies of Box magazine from NDD on New Year’s Eve at our Frankston newsagency. Based on our assessment of what sells in this location, Box magazine is not for us. We are early returning the stock. It is a failure of the magazine supply model which allows this. I am suspicious that it was supplied to us on the last day of the month given that the title had been out for some time. That we are given no choice by NDD to carry an obscure title like Box is a problem for our channel and another reason, I suspect, why newsagents choose to not deal with NDD altogether.
Many newsagents reported receiving between 20 and 100 emails from magazine distributor Network Services yeatersday about credits and supply going back several months. I am not aware of any newsagent successfully making contact with someone at Network about this. I tried several numbers, including people who can bypass the usual call centre queue, and got nowhere.
Magazine distributors need to understand tht newsagents work when other businesses take a summer break. To not provide customer service this time of year when your software goes haywire is poor form from Network Services. The cost in lost time is frustrating.
The Tower Systems help desk took calls about this because Network was not responding.
These postcards make customers happy – when they browse and when they purchase. Their positive message is infectious to people open to feeling happy. They are part of a range we have from Compendium. In several of our stores are have a happy space where everything is about nurturing happiness. We have not signed the space or made it obvious in any way other than through the placement of products. The products are popular. They are purchased on their own and as a small gift to go with a greeting card. Besides the postcards, there are booklets, books, cards and trinkets. Besides being happy with the sales, this part of the shop is good to visit as the products inspire as well as the customer who browse them.
I am thrilled with the strong sales for boxed Christmas cards eight days after Christmas in our post Christmas sale. The best sale yesterday was one hundred and twenty five packs of a specific design of boxed cards to a single customer. We pulled these in from three of our shops.
In each of our centres we are the only outlets with a good range of boxed Christmas cards left. Word of mouth is driving good traffic to us – we know because customers tell us. In one case, where regular traffic is not so hot, the cards are finding new customers for us. Our average daily sale of boxed Christmas cards in each location is in excess of $700.00.
We sourced this boxed card product specifically for the sale. Our margin is 60%.
The boxed cards are the hero product. Customers drawn into buy boxed cards also purchase calendars, magazines, lottery tickets and newspapers. Not every time but enough to make us happy. We know because we have watched these customers – not those in buying a magazine or a newspaper but those walking past who see the display, come in and browse, pick up several boxes and then browse the shop.
This is a great seasonal opportunity for newsagents – the planning for which starts in February.
Despite receiving no marketing collateral, we are promoting the latest issue of Girlfriend magazine at the counter given the number of gifts which come with the latest issue. The display has been up since Wednesday. It is good to move away from Christmas at the counter.
We are committed to continuing to use this counter space to promote titles with we consider to be an easy impulse purchase.
If you know this person please let us know so we can pass his details on to the police to assist with their enquiries.
Newsagents and pharmacists are two forever-protected species as far as the coalition is concerned.
This is a quote attributed to Joe Hockey, the former Minister for Small Business in the Howard Government. It’s on Page 12 of the Perspective insert in the Australian Financial Review (Dec 30 – Jan 4).
Joe Hockey and his colleagues demonstrated their commitment to newsagents through their years in office by:
Joe Hockey is wrong about newsagents. The Coalition has not demonstrated any concern for newsagents other than hollow words.
That said, we owe our poor handling of deregulation to the two or three newsagents who ran this project on behalf of newsagents. They were not up to the task. The cost of their failure will be felt for years to come.
Footnote: This blog post is not a call for regulation. We needed to move away from the protection of what we had until 1999. However, what we do need is complete deregulation – fair commercial terms around the distribution of newspapers and magazines.
The Kansas City Kansan, the only newspaper exclusively devoted to covering Kansas City and Wyandotte County in the US will cease publishing a print edition from January 10, moving to a pure online model. Read their announcement here.
While this is a small town story from the US, the drivers of the decision by the publisher exist worldwide. Smart newsagents are prepared. They are doing this by balancing their business, not relying on one category as much as before and modifying their shop fit to facilitate change.
Jason, the Manager of our newsXpress Forest Hill store was bitten by a customer yesterday. The customer was trying to retrieve two credit cards he handed over for a transaction. Jason suspected, based on a call from our bank’s fraud department on Monday, that one of the cards was stolen. The customer became agitated and got behind the counter while Jason was on the phone to be bank. In the ensuing altercation, the customer bit Jason and escaped. The Police came can and gathered evidence of the assault.
This all started with a transaction on December 26 for which a customer used a stolen credit card to transfer money to a prepaid card. Since it went through the bank we did not know of a problem at the time. One the same day a similar transaction using the same card was done at our Frankston newsagency. The bank called us Monday and from then we were on alert.
Yesterday, when an identical transaction was presented at Forest Hill, Jason stepped in. His role as Manager of the business does not require him to be physically attacked by customers like this. The Doctor treated the wound and gave Jason a tetanus shot, it will be three months before he knows if the bite introduced any infection.
We have tightened prepaid Visa card loading transactions and now will only take money from another card if the customer has the PIN number. While the bank does not require this we feel it is an appropriate precaution.
What do scooters and food have in common? Lots accouding to News Magazines, the publisher of Two Wheels Scooter magazine. The latest issue which came in today is bagged with Super Food Ideas – although, you have to turn the bag on the side to see what the free title is.
Scooter is one of those titles which needs to be browsed to sell – the bag stops that.