I’ve been in Sydney today for several meetings and to help a newsagent in need. I am shocked at the gross oversupply being experienced by this newsagent – magazine distributors have the data to stop such criminal behaviour – it goes to shop that while noisy folk, like me, may be (overall) satisfied with supply, less vocal newsagents are at risk of poor treatment.
For all the talk of standards, today’s visit reminded me of how one sided the standards issue is. How can any magazine distributor justify increasing supply on a title achieving 50% sell through or less? They cannot. No wonder this operator, new to the industry, wants to get out.
I wonder what it will take for magazine distributors, publishers and other stakeholders to understand the gravity of what they are doing? Blood on their hands? The anguish I see and hear about make that a possibility – alarmist as that sounds. Magazine distributor management ought to visit newsagents, regular newsagents, and ask if there is a supply problem. If they have the guts to do this they should wear protective clothing.
Nelson, I was meaning that newsagents experiencing 50% sell through or less ought to beat up magazine distributors. But the probably wouldn’t as too many are full of hot air.
To watch a husband and wife in tears because of cash-flow problems caused by magazine oversupply breaks my heart. They do not deserve this but then they are too weak to fight.
Your analogy on unions is right and timely. Why do we fear strength in numbers?
Mark
Hi,
This is the sole reason we have decided to sell up after 4.5 yrs. We simply cannot control the stock and this has killed our cashflow for more sellable and profitable items. If this continues I can’t really see the viability of newsagents in the future as a whole.
Phil Esterman
Mark
Your statement “magazine distributors have the data to stop such criminal behaviour” is misleading.
It is not accurate.
With monthly titles, magazine distributors don’t have the data to accurately allocate the next issue.
In fact, magazine distributors don’t have all the data for at least 2 months.
Why?
Because newsagents have 2 months to notify sales of monthly titles to magazine distributors.
Fact – up to 50% of newsagents take the full 2 months.
Fact – less than 50% of newsagencies are computerised.
Fact – approx. 25% of late-notifying newsagents are computerised.
Are you beginning to see the big picture?
I’m not saying magazine distributors are perfect. They’re not.
I am saying it’s unwise to point the finger at magazine distributors when the newsagent channel – as a whole – is letting their side down.
Every newsagent who is computerised should be encouraging those who aren’t to do so.
When every newsagent is computerised and is notifying sales to magazine distributors on a daily basis (as the software allows), only then if over-supply occurs will the newsagent channel be justified in accusing magazine distributors of “criminal behaviour” – until then, to do so is verging on defamation.
Charles
Charles,
I disgaree with you. My visit yesterday was which a newsagent 100% compliant with industry IT standards and sending sales data daily. Each distributor has everything they need to supply on equitable terms yet they choose to grossly oversupply. This is unconscionable behaviour. The newsagent I visited yesterday is not the only one.
Magazine distributors deserve the finger I have pointed at them.
Mark
Mark
Please take the time to read and digest my words.
I am sure that a great many newsagents are 100% compliant, but that is not the point.
Until the ENTIRE newsagency channel (i.e. ALL newsagents) is 100% compliant, magazine distributors will be working in the dark.
That means some (how many?) newsagents will be paying for the actions of their non-compliant fellow newsagents.
Charles
Charles,
I disagree with you and so do senior folk at magazine distributors.
With close to 2,000 newsagents using current software the distributors have access to sufficient on time sales data on which to make better scale out decisions.
Your argument is an unacceptable excuse. Do not blame me for the inaction of others. If they are such a problem, stop supplying them or supply them on terms which reflect how they do business with you. But do not feed this nonsense line that you want all compliant.
Magazine distributors have used this excuse of non compliance for too long.
Mark
Nelson,
Unfortunately, newsagents find it easier to complain publicly than to own a problem. Your suggestions are right.
The folks I visited yesterday had done that but not at the right level. What is frustrating is that the suppliers had what they needed to fix this injustice. It is an impost on small business newsagents that they (we) have to go this extra step.
Mark
Mark
There may well be “close to 2,000 newsagents using current software” but you and I both know there are close to 5,000 newsagents, so my figure of “less than 50% of newsagents are computerised” is spot on.
Fact is “senior folk at distributors” quote the same figures I have here.
If “Magazine distributors have used this excuse of non compliance for too long” – why isn’t the newsagent channel listening to them?
Charles
Phil, I want to ask you a question please. Is there a contract that newsagents have to sign that says the distributor chooses how much stock is delivered? Surely there must be a loophole somewhere that you can use to sue them for damage to your business. Have you tried speaking to the company the stock originates from? I understand there must be hundreds of individual companies to contact but surely this would be better than walking away from a business you love to be in. I would hate to see Newsagencies go out of business. Perhaps there’s a way around the distributor completely. How else can you get the stock? Can you get it directly from the companies? Just a thought!
Why is it that when I cancel a title with a distributor they send me two new ones?
Why can’t I, as as example, direct debit the distributor for my returns?
Why is it that a distributor would send me 14 copies of a new title, not a new magazine, just a new title to me, especially when they also supply similar titles that sell maybe one or two copies?
Why is it when I cancel a title the distributor replies with, we will examine your request and let you know?
I am out to sell lots and lots of magazines, really I am, but with the best intentions there are some titles that I will never move, I would love the distributors to allow that my judgement of this is valid and that they would not second guess me.
I supply data daily to distributors, I see no evidence yet that they are reading/analysing it.
I would love to fix this issue. I make myself available to the industry and any distributor that wants to seriously work up a plan for the way ahead.
Charles,
Buy a newsagency and experience the relationship for yourself. I own the newsagencies and can only maintain an equitable relationship by publicly outing poor behaviour and being a prick. I hate that I have to do this.
The only way I know about the problem is because I experience it. You should too before you comment.
Mark
Charles
Stop banting on the fact you want all newsagencies to be computerised. It just can’t happen with all the out of the way places they will be found in. I don’t have a newsagency but I am a regular shopper at one and can see they have a major problem with their supplier. The supplier is over supplying! It just doesn’t happen in other industries that I am aware of. There, the shop owner decides what stock to have and how much of it. Surely these suppliers – the distributors – are the ones who need to change – not the newsagencies. I can see why these people are hurting. They are small businesses being stood over and dictacted to by a larger one. That is not Australian and something needs to be done about it.
Mark
In areas that need addressing, the public sign letters and present them to their local politicians. Is it possible for you or someone else to organise something that newsagents can sign to request a change and give that petition to the supplier and also a copy to a member of parliament, go to the local newspapers or get a story going on those current affair shows. They love to air the battling Aussies. Obviously speaking to the supplier isnt working because they are too arrogant to listen. It may be time to open the playing field right up and attack in numbers.
Phil, your comment of 12 November 2006 “newsagents need to seriously cull unwanted and uncompetitive titles immediately” (topic: Publishers plan for life after newspapers, so should newsagents) is spot on.
John, your comments here “Perhaps there’s a way around the distributor completely. How else can you get the stock? Can you get it directly from the companies? Just a thought!” are most thought-provoking. Why not indeed?
Brett, your comment here “with the best intentions there are some titles that I will never move” is a red flag.
Only the newsagent knows how many customers walk in their door wanting to buy a specific title. Therefore, the newsagent is the demographic specialist.
Mark, with respect, if you followed your own advice, you would buy a distribution company and experience it before you comment.
I realise I am preaching to the converted here, but will leave you with some facts:
On 17 November 2007 we will be allocating newsagent numbers for our December 2007 issue.
We will be doing so based on final sales figures for our September 2007 issue.
That’s correct, sales figures 2 months out of date.
Why?
Because newsagents have 2 months to notify sales of monthly titles to magazine distributors and up to 50% of newsagents take the full 2 months to do it.
Why is this so?
Newsagents have to remove unsold copies soon after the next month’s copies are delivered.
Many newsagents employ part-time staff to re-stock magazine shelves.
Why do 50% of newsagents then let unsolds sit for 3-4 weeks before removing the covers and notifying the distributors?
It’s not good for their business and it’s also detrimental to publishers and distributors.
Every publisher has the facility to over-ride the allocation numbers their distributor “suggests”.
Publishers who utilise that facility risk under-supplying newsagents with their next issue because allocatations are based on sales figures 2 months out of date.
When newsagents operated manually, they needed 2 months to notify sales of monthly titles.
In 2007 every distributor and every publisher is computerised.
Why are newsagents allowed to lag behind? (a question, not an accusation).
Should it be a requirement in 2007 that all newsagents are computerised?
That would resolve one part of this 3-part problem.
Next question: how do you get the majority of publishers to take control of their title allocations?
Part answer: Very difficult because there is no functioning publishers association other than for the ‘big boys’.
To get action, newsagents may have to complain directly to publishers about supply problems. That would also educate some publishers.
This topic began with an accusation against distributors. There is no doubt that both over-supply and under-supply is occurring. As Nelson said “Get all the facts. As hard as it may be, take the emotion out and present a business argument and show that over supply or indeed under supply is losing everyone money / sales. It is simplistic but effective.”
I have shared information and asked questions in the same spirit as Nelson.
Charles
Charles,
Maybe if you stopped bitching and engaged in a professional level you could find out how you can get up to date sales data for your title(s) so that you can make a more accurate scale out. Other publishers do. Try asking.
As for the rest of your post, you’re ignorant.
Mark
Charles,
If I dutifully send back sales data each and every night to the distributer, why does it take 2 months for you to get those sales figures. My sales data like many others is accurate and compliant,and before you think of some conspiracy, no I don’t have Mark’s Tower POS System, surely if you were getting that sales data earlier, you would have sufficient data on which to base allocations and your own production run. As for the returns sitting on our back shelves for 3 or 4 weeks that is how the distributer wants it, we certaintly don’t. I would love to see that money sitting in my bank account.
Charles,
Wow, you certainly should feel better now after blowing your trumpet at everyone! I think you have made the problem much clearer for me to understand now. The distributor CAN oversupply because the publisher is NOT checking their allocations and reducing the numbers. Your comment “Every publisher has the facility to over-ride the allocation numbers their distributor suggests” says it all. Why aren’t they doing so? If they were, there wouldn’t be this problem of over supply. Their poor management of their business is impacting big time on the news agents.
I seem to recall a publisher on this very blog site crying poor because the distributors were oversupplying!
So the publishers dont like the supply model and nor do we poor agents.
MMmmm is the answer becoming clearer?
Charles’ those facts do not support your arguement. A good distributor with good analysis and allocations systems and a good publisher relationship, can allocate pretty closely to actual sales regardless of the picture you paint with your so-called facts. The push distribution model you are defending is outdated, shows market power abuse, and generates significant waste – it is unsustainable!
As the circulation manager of Lovatts Publications I’ve been following this debate with some interest. As a publisher we hate oversupply as much as the Newsagent, while this is a drain upon your cash flow and valuable space and time, you eventually get your money back after you do the returns.
If we oversupply our lost money through print and distribution costs are lost forever.
4 years ago I began to take more control of our distribution, we cut the print run by 20% with no adverse affect on sales, this is of course a great benefit to us and the newsagency channel.
We keep detailed sales/efficiency data for every Lovatts title for every agency in Australia.
I constantly revue supply and sales, and alter allocations accordingly, trying to get the balance right.
I concur with Charles and Mark, with the need for agents to become computerised, but more importantly to use the data correctly, it’s frustrating as a publisher to see agents early returning 50% of some of our titles, when the previous month they sold 90% of the same title, when asked why, the answer is always, “I didn’t realise I sold so many”. I sympathise with the busy life of a newsagent and agree with early returning non selling tiles, in particular the myriad of overseas titles which blight our category. I invite any Newsagent who feels they are being oversupplied with any Lovatts titles to contact me at terryt@lovatts.com.au, i’ll be more than happy to discuss it with you.