A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Investment allowance not enough

While the Federal Government announcement of an investment allowance is welcome, the 10% is too low to change business behavior and increase spending.  As I blogged in October and November, stimulus for small business has to be bold – as much as a 40% investment allowance.  A 40% investment allowance would change business infrastructure spending and this is what the government says it wants. 

This support is needed more because the Government and others have told businesses that they should be in the doldrums, not because they are actually in the doldrums.

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Newsagency challenges

Print is Dead. Long Live Print.

Newsagents should read Pitnt is dead.  Long Live Print by Dan Costa and published at pcmag.com, the online home of the PC Magazine which killed off its print edition recently.  Dan makes a lot of sense, especially his environmental pitch about magazines.  This issue of wasted paper is going to get more and more coverage.  I expect this environmental pressure will have mroe impaact on magazine oversupply here in Australia than decades of complaints of newsagents.

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magazine distribution

Cross promotion with wrap

fhn_wrapcutter.JPGThe paper cutter we have placed next to roll wrap is selling well.  Supermarkets and other retailers place a product from one department in another department regularly.  It is smart retail.  The paper cutter is a perfect fit with wrap.  As is tape and wrist band tape dispensers – which we also have nearby.  Making the most of every opportunity is crucial in an economy like we have today.

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giftwrap

Cupcakes and lotteries

fhn_cupcake.JPGIn the three days since Wednesday this week we have sold five of the new ACP Cupcake cookbooks at our Forest Hill store.  I know from our refills that most have sold from the small stand we have placed next to one of our Tattersalls counters.  While Tattersalls will complain, the customer uptake shows that they like the service of this product being available within easy access.

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magazines

Purging Bill Express

It seems that some newsagents do not know that Bill Express is dead.  I have seen several newsagencies this week with stickers and posters displaying Bill Express brands.  Newsagents should check:

  1. Remove Bill Express light boxes or use them to promote current services.
  2. Remove BOPO stickers – usually placed near the entrance to the shop, on the door or window.
  3. Remove Bill Express and BOPO brochures, usually in a stand at the counter.
  4. Paint over Bill Express signs.

Out of date promotional material like this lets the whole newsagency channel down.  It makes us look second rate, out of touch.

In fact, while removing this, take a look at the door, window and counter and remove any other out of date promotional messages.  Less is more as they say.

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Bill Express

Melbourne Bride sucks newsagent cash

fhn_bride.JPGMelbourne Bride is another title being used to play with newsagent cash. 

The new issue came in today and the old issue is not to be returned until the first week of January – meaning that the return credit would not be reflected until the statement due for payment on February 20. 

If we return Melbourne Bride today, as should happen, the credit would be reflected in the statement to be paid on January 20. 

Maybe I am being cynical but this appears to be a grab by the distributor, Network Services, or the publisher for newsagent cash.  There is no reason for the return to be delayed to next month other than to delay refunding newsagents for unsold stock.

Newsagents cannot afford to have a thirty day delay to accessing credits due them for product which has failed to sell.  Network Services would know this from their own accounts people.  This practice must stop for the financial health of the channel.

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magazine distribution

Good counter offer

fhn_boards.JPGI did not think that emery boards, no matter how funky they look, would work at the counter of a newsagency.  I was wrong.  In a couple of weeks we have sold half the stock at our newsXpress Forest Hill store.  These have been bought by customers who came in to buy traditional newsagency product and walked out buying that plus an emery board.  Thankfully our team did not listen to me about carrying this item.

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retail

Exclusive digital music offer for newsagents

cardplaiad.jpgTower Systems has announced Cardplai, a greeting card with the gift of digital music offer to be available exclusively through newsagents on the Tower Systems point of sale and eziPass platforms.Cardplai allows customers to purchase a greeting card with a gift for $19.95. Each Cardplai greeting card comes with a unique code that is activated at the point of purchase using Tower Systems POS and eziPass software.

When someone receives a Cardplai card, they go online to the Cardplai redemption site and download 10 high quality digital music tracks from a catalogue of over 500 000.

Newsagents receive a kit of 100 cards pre-packed into a counter display unit (with a footprint of only 40cm by 25 cm) plus point of sale. Newsagents earn $5 per card plus bonus loyalty points (that are redeemable in cash or prizes) for every card sold. Every participating newsagent will also be listed on the Cardplai store locator on the Cardplai redemption site.

For more details please click here.

Cardplai telemarketers will begin contacting individual newsagents from the week of the 15th of December. Remember, this product is exclusive to newsagents.  The eziPass website will have a sign up link early next week.

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retail

Promoting magazines as Christmas gifts

fhn_promomagazines.JPGWe have placed A3 posters promoting magazines as Christmas gifts at intervals down one of our magazine units in our Forest Hill store.  The posters look attractive, not visually overwhelming.  We figured the best place to pitch magazines as a Christmas gift was in the magazine department.  The A3 art in PDF form for the posters is available for anyone to use free from this link on the Tower Systems website.  It is something else we have created to help newsagents professionally promote the magazine range available in their store.  An A4 version of the art is also available.

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magazines

2009 calendar sales strong

fhn_cal.JPGOur calendar sales in November were up 6% on November 2007 at our Forest Hill store.  December to last night is nicely ahead as well.  With no discounting I would note. This is a solid result given the excellent numbers for last year and that we had a Card and Diary outpost out the front of our shop last year pulling customers in.

Magazines generated 7.8 times the revenue of calendars and only 3.2 times the GP.  Once I account for space and labour, calendars are more profitable and the best weeks are ahead of us.

I’d note, however, that the comparison with magazines is somewhat unfair in that many calendars are sold to customers who shop with us because of our range of magazines.  This is the challenge with the department.  The key is to build better GP departments around the magazine traffic.  This is where calendars fit well.

It surprises me that many newsagents still only sell calendars from magazine distributors.  Why you would do this for less than half the margin is beyond me.

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Calendars

Flooded with Kitchen yearbook

fhn_kitchen_yearbook.JPGNewsagents may want to check how many copies of Kitchen Yearbook they have received from NDD.  This is another long shelf life Universal Magazines title oversupplied to newsagents.  The sales performance, its size and long shelf life combine to make this title loss-making for us and, I bet, most newsagents.  Our average sell-through is less than 50% yet NDD has increased supply with each of the last three issues.  NDD says I can early return.  The weight means that for each four copies I will have to pay $3.00 in returns costs – I am funding the failure of their supply model.

Almost a month after I asked NDD and Network to stop supplying Universal titles they are yet to act.  This is my business and my money, no supplier can force me to take product which will cause me to lose money.  To force that I will have to take the matter to the ACCC.  I should not have had to but it now seems likely.

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magazine distribution

Returning old magazines

fhn_golf.JPGHave I missed something?  I thought that the old issue of a title was returned when the new issue came in, in most cases at least.  We received the January issue of Australian Gold Digest yesterday.  The December issue is not due to be returned until next month.  Of course, we have sent it back early.  Many newsagents would not.  I have checked out the December issue of Australian Golf Digest.  There is no reason I can see inside the magazine for it to have an extra month on the sehlves.

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magazine distribution

Are you using Photo Express?

photo_express.JPGI was in a newsagency yesterday with a Photo Express kiosk and was surprised to find out the terms under which this has been provided.  The costs seem extraordinary for little or no return.  Knowing a bit about computer equipment, it seems to me that the kiosk was priced at the very high end. 

I’d be interested in hearing from other newsagents with a Photo Express kiosk and whether it is profitable.

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Newsagency challenges

Costco is coming soon

costco.JPGThe sign at Waterfront City in Melbourne heralds the imminent arrival of the giant US retailer Costco on Australian shores.  Costco is bringing a style of retailing new to Australia in this 14,000 sq metre warehouse and other stores it says it will open.  While not playing too much with newsagent core circulation products, their arrival will have other retailers respond, especially in the areas of stationery, ink, cards and gifts.  This is another reason we each need to continue to evolve our model to be fresh and relevant.

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Newsagency challenges

Magazine oversupply and long shelf lives

I visited a newsagency today to review their magazine situation.  We pulled off titles supplied between July and the first week of November for which most of the original supply remained on the shelves.  We filled two very large trolleys with early returns.  And magazine distributors complain that newsagents are not good business people and do not pay their bills on time! 

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magazine distribution

Not so Groovy Grandmas

fhn_groovy_not.JPGWe have had Groovy Grandmas, a new magazine, on the shelf for three weeks.  We allocated four pockets in a good location near high volume titles speaking to the same demographic.  We have not sold a single copy.  Given the lack of sales, the real-estate the stock is taking and the four month on-sale, we are returning half the supplied stock today.  I am all for supporting new titles but without a single copy sold in three weeks something had to give.  If the result next month is no better the remaining copies will be returned.

I would feel differently is there was a well funded campaign supporting the title or if we were only billed for sales.  The magazine distribution model is such that we need to look carefully at new titles like Groovy Grandmas and act to mitigate our losses.

I would also feel differently if I have been consulted about receiving this title in the first place.  This is what I do with another distributor and it allows me to buy-in to launches.

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magazines

The season for Cupcakes

frank_easycupcakes.JPGWe have sourced a good cupcake making kit to display with the new AWW Cupcake Cookbook at our newsagency in Frankston. Both are displayed next to high volume women’s weekly magazines.  Once we sell out of the cupcake making kits, which will be in the next few days, we have other Christmas gift products to display with magazines.  I am confident that this display will result in good business for the AWW cookbook too.  We are using space which usually displays smaller special interest magazine titles.  As we have to do at Christmas, we shuffle and find new display spaces.

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magazines

Expecting the discount

It is disappointing to see some businesses including newsagencies heavily discounting Christmas cards.  While retail is tough, I don’t see the sense in training consumers to expect up to 50% off Christmas cards – not given the sales being achieved in stores which are not discounting.

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Greeting Cards

Packaging issues affecting magazine distribution

Product packaging issues affecting print media (magazine) distribution in Victoria is a report written by Mark Thomas of Loadrunner transport.   Mark worked with 1st Fleet and then with Zip Couriers handling magazine distribution.  His report documents issues and challenges which demand attention, issues which were first raised a year ago.

I am grateful to Mark for his permission to publish his report here for people to read. The report eloquently covers challenges which frustrate newsagents and many others which I am sure are new to us, challenges which impact on the magazine product consumers are presented with in newsagencies.  Mark’s passion for customer service is evident in his words.

In general there is still much that can be done to improve quality of service, delivery standards and to reduce the number of human related errors. A large number of parcels are still packaged with inadequate, insufficient or inappropriate strapping that directly contribute to product loss, damage to stock and numerous other problems.

I feel it is necessary to identify a number of problems that require urgent attention and strongly believe if the below issues are examined in a responsible and professional manner, that many of the current problems associated with magazine deliveries could be avoided entirely.

If magazine distributors are serious about improving the quality of service then may I suggest that there is a great deal that requires attention in their own backyard. The contractors and drivers responsible for delivering stock into stores are not always at fault, and there are far more productive measures that can (and should) be introduced apart from wrongly directing blame for any problem encountered.

Unfortunately, Mark’s complaints last year fell on deaf ears.  Rather than listen to the message, those who should care shot the messenger.

The breakdown of issues by title ought to be of particular interest to the publishers of the titles listed.  Remember, this is from a transport operator trying to do the best for publishers, to deliver their product in a merchantable form.

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magazine distribution

Newspaper prophecy

9. The death of newspapers

Newspapers as we know them are in decline. Are you reading this in hard copy or online? Around the world, newspapers are shutting down or moving to the web. Blogs are replacing the mainstream media.

The profession of journalism, and the way we consume media and get our news, is being transformed. I’m not sure whether this is a good or bad thing, but there’s no doubt it’s happening.

From Ten prophecies from the digital millennium  in The Age today.

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Media disruption

Jamie Oliver launches food magazine

Jamie Oliver has launched Jamie Magazine, a bi-monthly, in the UK exclusively through the WH Smith chain of newsagencies. 

While I am sure Jamie Magazine will be successful, I do wonder whether the market needs another food title.  For newsagents, space is an issue as well as capital.  each new title requires shelf space which is not currently free.  It also requires our cash to fund its release through the newsagent network.

I am disappointed that Oliver has gone with a big business chain and ignored small business newsagents.

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magazine subscriptions

How much sudoku is too much?

sudoku_titles.JPGHow many sudoku titles is too many?  As the photo shows, we currently have eleven sudoku titles at our Forest Hill store.  We often have more than that.  Between 60% and 70% of our sales come from one title – Super Sudoku from Lovatts.  We do not need most of all of these other titles.  I am certain that if two thirds of the titles were cut, our total revenue from sudoku titles would not be affected.

The Australian magazine marketplace is flooded with UK and US imports.  They are sent to us because there is no risk.  We provide access to our space and our labour for free.  We even pay for shrinkage, theft.  We carry the risk.  This flooding of an already well satisfied, saturated even, market is something the ACCC could look at.  Especially given that small business enwsagents are the victims.  This plays out to a consumer cost because it impacts on the services we can offer and on our very viability.

As comments here over the last few weeks show, it is difficult for newsagents to cut titles from their product mix.  Many who have tried end up giving up and just accept the dumping as evidenced in the number of sudoku titles in my newsagency. 

I’d like to see a small working party established between Australian publishers and several newsagents to formulate a joint strategy on this issue.  Nothing fancy – meet online, gather data (which is easy to get) and develop a position paper which could form the basis of a submission on dumping to the ACCC.  I’d start in the crosswords area because it is an easy target and rife with dumping.

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crosswords