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The high cost of two extra magazines

aust_bus_sol_sep09.JPGOur supply quantity of Australian Business Solutions magazine has been increased by 2 copies with the latest issue. I cannot see any justification in our sales data for this title for the increase. If they are planning a promotion and wanted us to have capacity to grow sales as a result then the usual supply has enough room for that.

These two extra copies of this magazine, or any other, come at a high cost to newsagents when you play such an increase out across the channel.  If they don’t sell, as will probably happen, the channel has provided extra cash (from the extra copies) to the publisher and or the distributor for their purposes.

Magazine distributions should not permit any increase unless sales demand it or unless I agree to it. Where such a rule is reached I ought to be given the additional stock for free. Otherwise we have the system we have today – these two extra copies sit on my shelves until recalled. I am out of pocket as a result.

While my experience of oversupply is much better today than a year or two ago, it still happens.  Those responsible don’t understand the cash-flow impact.

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  1. db

    This is one thing that drives me to distraction. We too received extra ABS without one sale of the previous issues. Last week we received from network the aussie guide to about everything you can think of – ie cycling, photgraphy,etc.etc. at a retail cost of $14.95. The thing that annoys the most is that we received some of these magazines last month and early returned them. They had already done the rounds to various newsagencies prior. You are right Mark they do not understand cash flow impact at all.

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  2. Y&G

    “…they do not understand cash flow impact at all.”

    Oh, they do, they’ve been told enough times by enough agencies.
    They just don’t give a toss.

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  3. Richard

    Comments from Yvonne Smallman QLD State Manage ANF in the QLD news letter dated 15/9/09 #8.
    Supplier Trading Terms
    I have had meetings with suppliers and
    publishers in the past couple of weeks and
    inevitably the discussion has turned to the effect
    the current economic climate has had on
    business.
    The message that has been very clear from
    each meeting is that the suppliers and
    publishers are monitoring their cash flows even
    more closely at the moment and as a result they
    are tightening their credit policies.
    This means that if accounts are not paid within
    their trading terms where they may have given
    you some leeway in the past THEY WILL NOW
    cut supply immediately so if you are
    experiencing cash flow problems please talk to
    them.

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  4. Luke

    Y&G, the distributors understand cashflow extremely well.
    They send out gross oversupplies of mags that nesagents have to pay for within 20 days or they stop supply. Then they hold onto that cash from publishers until returns are done. It’s great for their cashflow, just bad for everyone else.

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  5. Y&G

    Luke, My point exactly. The opening sentence in my post was a direct quote from the last sentence of db’s.

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  6. B

    From recents posts I believe that the current model is lose-lose for everyone. The newsagent loses from over supply of useless magazines and publishers are losing out from un-sellable returns.

    Perhaps if the publishers worked a little more closely with the end-distributors (meaning newsagents) the could work out a suitable solution which would suit everyone’s cash flow?

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