Sales of TV Week in my newsagency were up 25% yesterday thanks to the 3D cross promotion for the Medium TV show. Because of a 22% supply cut three weeks ago I’ll sell out today and have no TV Week stock for five days. This will turn customers away, maybe some will not return – such is the fickle nature of magazine purchases. I could buy replacement stock from Coles or Safeway as they have plenty but that would screw with the sales data I provide to ACP. ACP agreed that the 22% cut was too severe and that it would be fixed. I’m waiting.
If you think I am complaining unreasonably, consider this. PBL owns ACP and Network Services. ACP is tight with magazine supply – supplying close to sales quantities to newsagents to minimise wastage and maximise return. I’d do the same if I were them. However, this model makes it challenging for good newsagents to chase significant growth. Network Services, on the other hand, supplies based on a model I cannot fathom. There are titles with a return rate of 50% or more, that is we sell less than half we receive, and Network has just increased our supply.
So, one part of the PBL group is choking us while the other is drowning us.
This is why the ACCC needs to review the magazine supply model in Australia. Newsagents have been left disadvantaged by the increased competition as our competitors get to choose the product they carry. It is in the supply model for titles outside the top 200 which needs the most urgent attention as this is where newsagents have been made less competitive.