Newsagents in Australia have been brought up on sale or return supply arrangements for stock. They have served us well.
Sale or Return is the supply basis for magazines, newspapers, greeting cards and a range of stationery and gift items to newsagencies in Australia. Newsagents like SOR because they (we) see less of a risk if the products do not sell. Suppliers, especially those in the stationery and gift categories, know this and pitch SOR when introducing new lines.
I wonder if SOR lowers our expectation for products – because of the parachute of SOR which ‘protects’ us from failure.
We ought to assess new products as if SOR ‘protection’ does not exist. I suspect that some products we take on today would not make it. I also suspect we would work harder to move products and be more demanding when new products are presented.
The greater the risk we take the more focused we are on driving our success. SOR dilutes that risk and takes our focus away from being profit focused.
I cannot see how firm sale on mags would work, it would mean massive work for newsagents to get the supply right for weekly titles as these go up and down depending on the content, also monthly titles or also fickle.
Cards and gifts I understand but again it would mean massive work viewing stock and making decisions. I understand the POS systems would help but owners would still have to eyeball all stock and make a decision before getting new stock in, where as the SOR model allows us to test the water first.
We would also need to get massively more commisions to hold stock on firm sale in my mind I would need 60% minimum if I am to take the risk.
Just my opinion
I would like to see the model change from push to pull. Rather than the distributor deciding who gets what, I would like to decide that myself.
My software tells me what sells and what quantity is predicted. MY software then should be the order quantity, sent via EDI that the distributor responds to.
If there is a new title we should be asked and a quantity agreed on, they have proven that they can do this.
If there is a special, like we used to do with newspapers, we should have the facility to order more.
We should be able to demand better margins for the savings provided all around.
The biggest problem may be educating our customers to get used to a more frequent sell out scenario.
When I wrote this post I was thinking more about non circulation product and I should have made that clear.
We have never stocked SOR gifts. I want the maximum margin and am prepared to take the risk. It means that I have to be very involved in my business to make the decisions – but I don’t see how this hurts at all. We have had failures, but with the mark up we have a 50% discount still delivers some profit and customers perceive it as a bargin.
Cards are an interesting thought though – I would want much more control than what I currently get. I think if this occured we would see a lot of newsagents shrinking the range particularly on cards that are ultra-specific (eg. pet sympathy and naming day).
I don’t know of much product except circulation product that is
SOR in my shop apart from cards. Gifts are certainly not and I am very particular about what goes into the shop for that very reason.
I have just stocktaked (????) my
cards and the holding was quite
large but John Sands are very good about changing over stock
that isn’t moving and the computer tells them also (Retailer I mean)
Even though circulation wasn’t what Mark was talking about I
have always advocated that we
newsagents should get a larger
% (say 45) with no returns and
the right to choose ANY PRODUCT that we want and to
be able to access extras on demand. I’D LIKE TO SEE THAT!
if magazine company started charging firm sale on mags , i will quit this newsagency business after over 15 years. Newsagency core business is magazines, I believe we need the variety of titles to attract customers, whether you think they are good sale or not. otherwise you become street vendors like i have seen in usa or most part of the world. this newsagency system in australia is very unique , nowhere else in the world like this.
We stock heaps of magazines on a firm sale basis. Its our “not so secret” weapon.
and they are ??
porn mag i guess