I have been talking to some magazine publishers recently about different sales models, in pursuit of more economic terms for newsagents than the current sale or return system controlled by Australia’s three magazine distributors.
The contact usually comes in the form of a question: which magazine distributor is recommended by newsagents?
This question is more complex than it sounds and is not one I am comfortable answering without knowing more about what the publisher wants to achieve by getting their magazine in to newsagencies. Some publishers want to be in front of browsers in newsagencies. Others want sales to drive subscription uptake. Others want real sales and to develop a long-term mutually beneficial relationship with newsagents.
It is this third category of publisher I am most interested in as they are more likely to invest in the newsagency channel and reward our investment in their titles.
It is clear that there are some independent publishers looking for an alternative which provides them with more direct to newsagent contact. They are usually open to a direct supply relationship on a sale or return basis for a better than usual margin a firm sale arrangement for an even better margin.
That some independent publishers are looking for alternatives which better suit their business model is good for newsagents. Our goals and the goals of publishers ought to be more closely aligned than the goals of the magazine distributors. This is not a criticism, just an acknowledgement of the services they are paid to provide.
Reducing the supply chain will cut costs and leave more money on the table for newsagents and publishers.
The question is whether an independent publisher is willing to break the system and try a evolve a direct to newsagent model. I am certain there are newsagents who would be willing to try this.
I know with the Gold Coast magazine, in which the magazine distributes the title to Newsagents personally, works well for us. We pay cash for what has sold the previous month and then they take the last issue away – reducing our return costs, making the magazine “more” profitable for us.
I could see this type of system working for niche titles that can be posted to us, seeing the day it’s released isn’t such a big deal.
I know an agent who is geting ready to take up subs with Express and he will give the gifts to their best customers,up to 50% margin He said why should people who shop in his store be worst off
I work for an arts publication here in Canada. Currently a lot of the magazines I’m in contact with are pushing for a distribution model closer to that of comic books since sale or return is just killing costs in production. At $4 an issue to print its not possible anymore to eat the returns.
I see the current system as unfair since there is no risk on the retailer for the issues they carry. Don’t sell, oh well.
I’d sell the magazine on at cost if it meant not losing money on printing and mailing. That is our cash flow killer right now.
James, if publishers worked a little more closely with the end-distributors (the newsagents ect) you may find that the return rate was less and have less impact on your cash flow.
Unfortuately being over-stocked magazines which have no hope of selling also impacts on a newsagents cash flow as you have staff costs associated with displaying, removing when expired and returning the magazine. There is actually a big risk to the retailer as the magazine is running at a loss from the day it arrives.
Whether there is a suitable solution that will suit all concerned is yet to be seen.