Starvation

While this story is from my shop I am sure that every one of Australia’s 4,600 retail newsagents would have similar stories.

Take 5 is a successful magazine. Sales in my shop are up year on year by 40% – mainly due to our aggressive magazine promotion strategies. Our sell through rate bounces between 70% and 90% with the average at 80%.

Take 5 customers tend to miss the magazine unless there is a reasonable display. My guess is that they know they’ll find it elsewhere.

This week my supply has been cut by 30%, probably because of the bouncing return rate, possibly because of out of date sales data at the publisher end. The cut, however, is so deep that it is lower than my lowest sell through rate for the last three months except for one week. This cut will mean less sales. I’ll still return one or two copies because many customers don’t like to buy when there are only one or two copies left. These returns will be a further cut thus making the 30% cut this week a self fulfilling prophecy – the returns will prove to the scale our ‘system’ that the cut it made was appropriate. Such a conclusion would be wrong!

I understand the need for publishers to scale out to maximise profit and minimise wastage. However, cuts like those inflicted on my business this week with Take 5 starve me of sales and customers and diminish the value of small business magazine specialists.

A more intelligent review of my Take 5 sales data and a review based on the notion of partnership between my business and the publisher would have led to a cut of 5% with a further review in four weeks. My sales data goes back daily so there is current data available for such an analysis and quick reaction. The scale out algorithm needs to use current sales data and to take into account overall growth/decline to determine a weighting for any proposed supply change.

In fact, better reaction from the publisher would have been an automatically generated email saying, “hey, we plan to cut you by 5% for these reasons please let us know if you can justify any change and we’ll listen”. Asking for too much? Not if my business and businesses like mine is worth anything.

I’d like publishers to review their scale out algorithms so that they can cope with bumpy sell through rates and consider the overall growth a business achieves. This will respect the effort my team invests in growing the magazine category. The current big stick approach does not respect my efforts and will only lead to sales falls elsewhere.

Having said all that about Take 5 , I’d note that we called for more stock and it arrived this morning. (To do that took too long on the phone and still left us short for a day.)

Take 5 is not the only title I and others experience such cuts for, I use it here as an example.