Following my post this morning about the Mother’s Day magazine subscription deals at ACP’s magshop, tonight in the mail at home I find the twelve page mother’s day offer from isubscribe. I hope people don’t subscribe with this mob. If people want to get their magazine on time and in good order they ought to ask their local newsagent for a putaway. isubscribe has a sweetheart deal with publishers which gives them a wholesale price per title considerably less than small business newsagents. It sucks.
It is deals like this between publishers and isubscribe which lead to consumers thinking newsagents are expensive. Look at Good health. I get 25% off the cover price, I promote it actively in store with at least two major aisle end displays a year plus a multi pocket display every month. Isubscribe has this title for 33% off and they make money on top of that. reader’s Digest is worse – they have it for 50% off. Lovatts crosswords 30% off. National Geographic 45% off. Life Etc. from our ABC 44% off.
Magazine publishers will tell us they need a balanced supply chain – subscriptions, newsagents, majors and other retailers. Yet it is newsagents who invest the most in promoting these titles in terms of display and shelf space. It is newsagents who are compensated the least.
I wish publishers would compensate me as handsomely as they seem to compensate isubscribe. I wish they supported small business. Once day they will wish they did.
I don’t think you can make isubscribe out to be the bad guy stealing our business. I blame Network,Gotch and NDD for not passing on the higher commissions. Isubscribe goes direct to the publishers and gets the full discount, newsagents have to go through middlemen and we get burnt accordingly. We pay freight5 on delivery plus freight on returns plus recieve what we are told not what we want, until this model is changed on a national level newsagents cannot complain about the 25% commmission. It is what we get for playing by other peoples rules.
Mark
Isubscribe does not have “sweetheart deals” with publishers, it charges a commission for selling annual and half year Subscriptions to magazines. I’m sure I don’t need to explain what a commission is.
The facts are: Publishers publish (and sell subscriptions), Distributors distribute, Newsagents sell individual copies of titles and Subscription Agents sell annual or half year subscriptions.
It can be enlightening to know exactly what business you are in.
Luke
Isubscribe does NOT go “direct to the publishers and gets the full discount”. How can it? There is no such thing as “the full discount”.
What Isubscribe does is charge publishers a commission to sell subscriptions to their titles.
You must remember that over the counter sales and subscriptions are two entirely different animals.
iSubscribe provide an extremely valuable service to small publishers like us. As a small independent magazine, we don’t get the visibility in newsagents that we need to make enough sales to cover the costs of paying a distributor AND newsagency commission. We can pay iSubscribe a commission and cut out the middle man (distributor).
Thanks for the info about the model. Any deal which enables isubscribe to sell a magazine for 40% off cover and make a profit is a sweetheart deal. If I was given such capacity I could sell more subscriptions / putaways in my shop. The deal with isubscribe educates customers that newsagents are expensive. Thanks.
Subscriptions and putaways are two different things.
A subscription is paying in advance for 12 issues of a title.
A putaway is putting away ONE issue of a title.
Interesting, too, that when you get it you call it a commission but when someone else gets it you call it a “sweetheart deal”.
You’re wrong. Putaways are a commitment for as long as the terms set by the newsagent. I have seen them contract and get prepaid for a year.
25% is commission. A commission which allows a retailer, online or otherwise, to offer 40% off it is a sweetheart deal.
Michelle – re Lip magazine. I understand the challenges for small single title publishers. With 1,300+ titles in an average newsagency there is a lot of visual noise. The majors get our attention because they provide the sales.
I’d encourage you to contact newsagents and ask what they want from you. Through this blog I have had contact with a chap who publishes a Chinese language BRW type magazine. He is now supplying me direct and we are actively promoting to our Chinese community. There are newsagents who support niche titles, the first thing to do is to connect. Let me know if I can help connect you for a more direct relationship.
In your situation I have no quarrel about isubscribe. It makes sense. It’s when their price is dramatically lower than ours that it bothers me.
Mark
Re: You’re wrong. Putaways are a commitment for as long as the terms set by the newsagent. I have seen them contract and get prepaid for a year.
25% is commission. A commission which allows a retailer, online or otherwise, to offer 40% off it is a sweetheart deal.
My newsagent’s understanding of a putaway is that a customer asks the newsagent to put away a copy of a particular magazine each time it comes out and the customer is at liberty to cancel the arrangement at any time. My understanding of a newsagent appointing themselves as a subscription agent is that it contravenes the Trade Practices Act.
With regard to commission and “sweetheart deals”, you are confusing the savings made when people subscribe direct compared with purchasing single issues of a title at a newsagency. As an example, buying 12 issues of a monthly title at $5 per issue totals $60 per year, whereas subscribing direct for 12 months costs $35.00. The saving is therefore $25 or 15%. If Isubscribe chooses to boost the savings by foregoing some of the commission it receives for handling a particular title, that is their prerogative.
All I want is equal terms. If this requires upfront commitment then I am prepared for that. By not offering this I am not competitive. That a newsagent wants to be entrepreneurial is an opportunity not something to reject.
No-one is rejecting your desire to be entrepreneurial. You regularly demonstrate how creative you are in your own field – your newsagency – but beyond that is simply not your domain.
Saying you want equal terms with Isubscribe is a bit like a dressmaker saying they want equal terms with a petrol station – very difficult to achieve [grin].
Newsagents only sell the current issue of the titles they stock, on a commission basis. Whether sales are across the counter or putaway, they are current issues of titles. By contrast, Isubscribe having been legally authorised by a publisher sells a more expensive package called subscriptions to title/s, also on a commission basis. Another aspect of the process is that individual back issues of a title are only available from the publisher.
It is a complex environment, therefore much simpler – and kinder on the blood pressure – to be realistic about the business you are actually in.
The reality is: Publishers publish products (and sell subscriptions to them), Subscription (i.e. commission) Agents legally authorised by publishers sell subscriptions to products, Distributors and Manufacturers distribute products to newsagents and Newsagents sell a wide variety of products.
25% commission on a copy of a magazine is generous. The sensible comparison is how it compares with the commission on other products you stock in your newsagency.
Why not concentrate on being competitive about things that you can relatively easily improve? Such as limiting the number of titles you choose to stock – especially if it involves rejecting the fatuous, gossip rags many magazines are or have become? A good range of worthwhile magazines is available, so why not work on stocking only those with quality content?
While doing that, you might find you are not only matching the standards many Australians hold dear but gaining a whole swag of new customers to boot[grin].
Just a quick note about the second last paragragh of the last post by M Stevens, 2 weeks ago we sent a fax to a magazine distributor to stop them sending about 20-30 Titles that we have no market for and even less space to display them in. The distributor had the nerve to send a reply back telling us that we had to keep getting them about half of them, even with no demographic for the title, no customer interest in the titles and no space to give to these titles.
25% commission on a copy of a magazine is generous.
Get real – have you ever tried running a retail business where just to open the doors, turn on the lights and have the staff sign on costs you a significant part of that 25%! You can’t do it!
Without huge volumes of sales that most of us can only dream about, trying to run a business on those margins is a recipe for disaster.
Why not concentrate on being competitive about things that you can relatively easily improve? Such as limiting the number of titles you choose to stock – excuse me, what planet did you say you hailed from? An average suburban newsagent trying to stop titles with the major distributors might as well try to stop the XPT in full flight with a hand full of horse manure! Ambitious, however the end result is invariably messy, usually the same and inevitably the train rolls on!
What we are seeing here with isubscribe is someone making a quid at the expense of those who put in the hard yards, time after time, carrying overheads year in, year out supporting a model that, without newsagents, would be dead – all for a commission that on its own is hardly enough to sustain us at poverty level.
Hi, Mark & Stephens:
Thanks for pointing out the 2 different systems of subscription agents & retail agents.
Here are 2 questions (and my thought):
1. Can a newsagent or a retailer be a subscription agent?
Newsagents/retailers may sell subscription in some trails orgainzed by publishers/distributors, or sell subscription using some electronic POS/EFPOS devices.
2. Should newsagents actively promote and sell subscription?
Although the net commission of selling subscription are much less than selling magazines at full cover price, for smaller local newsagents, I value the saving in time, energy and money from selling subscription. It will be the happiest day in the future, when I only retail the top 100 magazines and sell the subscription of other magazines.
The retail of top magazines will provide convience to customers.
For rest of the magazines, if local newsagents can provide customers a nice experience of sampling these magazines (online/pdf edition)without presenting the hard copies, and then sell them a subscription. That will be win/win for customers, newsagents and publishers.
The current problem is that it cost newsagents too many resources (labor, space, money) to presenting all hard copies to create a experience to our customers. The customers samples the magazines and found the suitable ones then go subscription.
So publishers & newsagents (and distributors in electronic means) should work together to promote subscrptions, and share the profit.
Cheers,
Sunny
M. Stephens. I’d appreciate you outing yourself so people reading can get a perspective of your comments.
Your analogy is flawed. Newsagents sell magazines. isubscribe sells magazines. Newsagents are on 25% commission. isubscribe is on between 35% and 75% commissions.
You are wrong about what newsagents sell. Newsagents do not only sell current issues. For decades they have sold back issues.
You are wrong to tell me how to run my business by cutting titles. Go visit a newsagent and ask how easy it is to do this. Newsagents have insufficient control over what they stock.
I know form the putaway business in my newsagency that I can sell subscriptions. All I need is an equal footing to isubscribe and I can deliver a win win.
Sunny:
The answer to your question “Can a newsagent or a retailer be a subscription agent?” is Yes, but only if the title’s publisher legally appoints you as such.
Therefore, the answer to your second question “Should newsagents actively promote and sell subscription?” is No.
Reason? By definition, a subscription is where a customer pays the publisher (or authorised subscription agent) for, usually, an annual subscription and the publisher (or their mailing agent) posts each issue direct to the customer every month for 12 months.
Just another example of the ways in which subscriptions differ from putaways
.
One more rebuttal: there are 2 reasons why you are wrong in believing that newsagents do all the work of displaying the magazine only to have customers “then go subscription”. Firstly, the publisher does all the hard work of compiling and publishing the magazine, that is, creates the product. Secondly, the majority of people who buy a magazine in a newsagent do NOT take out subscriptions. It’s a disposable income thing.
Do newsagents give the manufacturer of the pens they sell in their newsagencies such a hard time? I repeat, 25% commission is generous and must be compared with the commission on other products sold by newsagents.
Okay, what are newsagent commissions for other products?
That would be the difference between Invoice Cost and Selling Price.
Yep, smart response. Your previous post declares that 25% is generous. You indicate knowledge of what newsagents make from other products. What do you think newsagents make? Come on, show how smart your are. It’s a valid question since you have been proven wrong about what magazines newsagents sell and you;re wrong about us selling subscriptions.
Mark Fletcher
PS. Let us know which publisher you work for.
There are a few flaws in Michelle’s argument. The 2 not previously discussed:-
1. I quote: “As an example, buying 12 issues of a monthly title at $5 per issue totals $60 per year, whereas subscribing direct for 12 months costs $35.00. The saving is therefore $25 or 15%.”
I don’t know when a saving of $25 (from $60) results in a savings of 15%!!!
2. No, newsagents don’t give pen suppliers a hard time. Why??? Because we order what we want. They don’t give us awful product that won’t sell and they don’t oversupply us either. AND we also make a LOT more money on PENS than we do magazines. Don’t misunderstand me, I don’t want us to get rid of magazines, however we need to manage them well to ensure we aren’t oversupplied. It is very time consuming to handle magazines, and since newsagents are supposed to be the magazine specialists (holding thousands of titles – rather than 50 at supermarkets) we should be treated with more respect. We sell more magazines for publishers than any other avenue, however you wouldn’t think so by the way we are treated.
Stephens
how else would people learn about the magazines and the subscription offers if they didnt get it at a newsagency.
marks figures available to show how publishers USE newsagencies to push their subscriptions drive when launching a new magazine make very interesting reading
mick..rochester n/a
I was in favour of Isusbscribe until this stephens joker carried on. If you are saying that we would get a greater profit by only offering subscription and not having to actually sell individual copies then sign me up. I wouldn’t have to do waste space displaying unwanted magazine, don’t bother with returns and have the publisher pay me more, thats great.
My comment was that the distribution companies take a line ball of the profits and newsagents do all the selling but if m stephens think this is not the case then let the publishers get out of bed at 4am and sell their own stock.
25% may be generous in some industries, but certainly not in the newsagency industry. Magazines (generally) are a low quantity turnover product per magazine and as such the 25% does not provide sufficiant ROI for the space it takes up, the time it takes to manage and the capital investment in stock it demands.
It would make sense for publishers to offer newsagents the option of also selling subscriptions (with equal terms to isubscribe or similar). More subscriptions for publishers, more commision for newsagents and face to face customer service for customers. Sounds like a winning combo for everyone.
Yes; I think we would all like to know which publisher M Stephens works for??
Hey, now lets not forget the charge of returning what we did not order in the first place.
Please do all the sums, when drawing comparisons.
Yes I would not mind selling subscriptions either.
Sue
I couldn’t agree more, Sue, it’s totally unfair. When we finish debating all the issues surrounding isubscribe, I’d love to discuss this more fully, if anyone’s interested, of course.