Newsagents are collectively investing a considerable sum on money in the launch of Australian Ink, a new tattoo magazine which features Pink on the front cover.
The table to the left shows the projected impact (if my assumptions are right) on the cash-flow in one of my newsagencies based on what I expect to sell of Australian Ink, the cost of retail real-estate, the cost of labour and the timing of paying for stock and receiving a credit for returns.
I’d appreciate feedback from others on whether they think my calculations areb right.
While I am using Australian Ink as an example (as I did Cosmos magazine in my March 16, 2006 post), I could easily present numbers for other new titles launched through the newsagency channel. Like other independent publishers before them, I would expect the publishers of Australian Ink to say that they cannot afford to offer delayed billing, payment based on scanned sales or bonus margin for the launch issue.
I appreciate that it takes considerable financial resources to launch a new title.
Newsagencies are slim margin businesses. Every launch has costs as detailed in the table. Collectively, we invest millions of dollars of our money each year in supporting publishers and their title launches. We do this usually without control over new titles sent nor the volume sent.
I’d note that the payment by newsagents for the title in August as shows in the table is not, as I understand it, paid to the publisher until after the issue goes off sale. Certainly this is the case for some titles according to publishers I have spoken with.
I like magazine launches – if the launch is backed by an advertising campaign which drives traffic to my business. I am not so keen on launches which rely on newsagency foot traffic to find sales.
Popular Science was launched in more of a partnership approach last year – better margin, excellent out of store marketing support and excellent collateral for in-store promotion. The campaign has been on-going, beyond issue one.
Here is a list of what I would like to see offered by publishers for magazines launched through the newsagency channel:
- A minimum agreed level of external marketing.
- Better margin for initial issues.
- Opt in process for taking on a title and the quantity.
- Payment for any premium activity – our space costs money.
- Delayed billing until after the first issue is off sale.
- Promotion of newsagencies on the magazine website.
This is an topic which should have been on the table during the discussions around a magazine distribution code of conduct. I suspect those representing newsagents missed the opportunity.
As for Australian Ink, we are promoting it boldly with good location and excellent merchandising.
For more information, see my cashflow report from a few years ago. This was presented to newsagents, magazine publishers and magazine distributors.
Some fair points. I will however state that Network did approach me via email to ask if I wanted to receive the title, a suggested qty and the full details of commission etc. I gather I was not the only one!
I applaud them for that.
I’m happy to support a new launch and if interest waines early return what I donot think I will sell.
+1
Given other tat mags we stocked came from the other N-word distributor, we also responded affirmatively to the offer.
We appreciate that kind of proposal, where we have a choice (a perceived one, at least) as to whether or not to accept new titles. We’ve always been happy to try out new titles, but it’s less galling to be asked first. Quite a nice surprise, actually. We could get used to that kind of courtesy..
As for the figures and the forecast, real estate and margins are things we’re also happy to play with at least for a while. If we apply for new titles, and they’re slow, we hope that the distributor gives us a couple of months to try them out, before they stop it or reduce supply. Despite my rants on here, I am appreciative of a two-way street 🙂
We also received the email which was appreciated. We chose to try the title even though this now makes 11 tattoo titles on the shelf. It appears our newsagency is in the tattoo capital of Australia!!!!! It is extraordinary how many tattoo magazines we have started to receive.
I agree with Wade, good stuff by Network in the comminication part.
Mark your comments regarding start up mags are good also, I wrote to my State Association although not a member recently regarding start ups, after my own dissapointment on the Zoo & ALPHA because after “they” made it big the Goal Post changed. I asked them that a document of understanding should be generated via the Association & publisher/distributor for all New Launches to avoid future occurences, therefore I think your suggestions are on the right track in my view.
If you want honest feedback Mark, I will share it with you, If you came to that conclusion, mosts magazines outside the top 100 would be in the red. Does Real Estate & Labor charges differ from great weekly sellers to specialty Magazines? Personally I feel if you go down that track you should charge higher Labour & Real Estate for the magazines that you are giving prime space to.
On a completey different view is, I would support a local Tattoo Mag any day over an imported one.
I read all 37 pages of that report. Very good, not an eye opener for Newsagents but maybe for Publishers.
There are many opportunities staring us in the face. I still like the idea of the carrot in front of the Newsagents face in terms of experimenting with commision.
Would increasing commission to 35% be worth it to a Publisher if it created an increase in sales, say 15% up on normal?
Like many others, we were emailed details of new launch and we were asked about preferred qty. We have quite a large range of tattoo mags (popular in our area) in store and a number of subs who sell these titles well also. We advised Network of this and requested reasonable qty. So far we have sold 12 of 20 (incl to subs, but we expect those to sell out also) and we are also supporting the launch with 2 eye-catching displays instore. Only issue we had was the POS did not arrive until Monday after launch, so we had to create our own. Otherwise, we are happy with how this particular launch is working for us, though we accept it will be different in every newsagency.
Cashflow. What about the publishers? Don’t forget that as an idependent publisher of a bi-Monthly magazine we receive our final payment on an issue 90 days AFTER THE MAG HAS GONE OFF SALE.
That’s 150 days after the mag is distributed. Bear in mind that the mag is also printed the month prior to that and the printer needs to be paid in 30 days. We are looking at a gap between printing and final payment on a bi-monthly magazine of 180 days.
There are some interim payments, but the cashflow drains on independent publishers is also fairly significant I would suggest.
We feel your pain too!
We too received that email. Requested 30 and received that exact amount.
Because of the large number we expect to sell the title did receive an off-location position. However if we did not expect it to sell so well, higher margin would provide us with reason to push the title harder (as was the case with Popular Science).
we only sell an odd copy of tattoo mag so I only request 2 to start with.
and I only receive 2 but I haven’t sold any so far.
The magazine definitely been browsed from me having to tidy up.
carroboblin;
Why do you continue to deal with them then (distributors)????
What is wrong with approaching newsagents directly and increasing the commission rate from 25% to 35%???
The upside for you would be reduced costs, increased cash flow, most importantly prime retail space within the newsagency.
Pay me 35% and i will put the thing on display on the front counter.