Magazine departments in newsagencies are reducing in size based on what I hear from shop designers and newsagents building new stores. Whereas in the past, an average newsagency would have 1,300 or more magazine facings, today, they are more often at 1,000 and even less.
This structural change has been underway for the last two or three years yet suppliers appear to be unaware.
The reduction in space commitment to magazines is the newsagent response to the magazine supply model and a reflection of sales. It centres around low margin (25% for most titles), lack of control over supply and flat or falling (for most) sales.
The best way for publishers to address this shrinking space in newsagencies is to engage on the issues of margin and supply control. I say this from recent personal experience. I decided on 800 facings. I would have allocated more space if the money and control was available. At 800 I have reasonable range without the high floor-space cost of the usual side magazine department. This is an important factor when you are paying $1,000 per square metre a year plus outgoings.
The publishers who suffer the most from the space reduction are the small independents. While some are responding with better margin and are considering a direct (more control for the newsagent) supply model, others are missing the opportunity of embracing change.
There was a time when publishers, distributors and newsagents would say that the magazine supply model in Australia was the best in the world. Chipping away at the edges, putting magazines into other channels and lack of structural support for newsagents has meant that claim may no longer be accurate.
I would like to see more publishers engage commercially: better terms, more control over supply and more marketing driving shoppers to newsagents as the magazine specialists. Of the three, a united campaign promoting newsagents could help address the first two.
What is the best way to tell the magazine distributors that you have reduced the size of your magazine department, so that they will stop sending you the unwanted titles and then having to spend time doing returns on these titles that you don’t want
Deb if only , what you change today will be back in a month . Have you ever seen a cat chase its tail ??
we reduce our mag pocket by 30% and increase stationery by 50% and books replace my lost from mags. great!
Mark. You make newsagents sound like boat people on hunger strikes. Where is the logic behind stocking less magazines in order to raise margins and revenue? It just sounds childish and crazy. Why not admit the real reasons? That you just can’t sell the magazines anymore.
chris, you are spot on, mag sales are in terminal decline, its hard for anybody to sell them anymore, they are becoming less relavent in a modern retail outlet (formerly known as newsagencies) so if the publishers/distributors want prime real estate, they need to cough up the cash, or I use the space for something with a better margin, eg stationery or gifts. That just makes plain good sense to me.
Chris, read the rest of this blog. We are having success with plenty of magazines. The challenges are around return on the cost of floor space and the challenge over control over what I receive. Newsagents have sought to resolve these for many years. Failure to achieve this is leading to a reduction in space, but staying in the category.
Thanks Shaun, Yes I have seen that cat plenty of times
I am trying to understand how the whole magazine distributoin cycle works. Can anybody please try and explain it? (Just in short will do)
This will include which titles are sent to you, what happens if it doesnt sell, who pays for it, has XchangeIT Link made a difference, how aften are deliveries made, can you choose when they are made and other ifo like this.Thanks
Andre,
Magazines are distributed to newsagents and others through three magazine distributors: Gordon & Gotch, Network Services and NDD. Deliveries are made Mondays, Wednesdays and Fridays. The days of delivery and the titles delivered on these days are set by the distributors and their clients, the publishers.
Magazines are put on display for the period of time advised by the distributors on the date of supply. You take off unsold copies on the return date, or earlier if they are not performing and you have demands on your space.
You track what magazines come in and what magazines are returned through your computer system, the same system you use to track your sales. This system gives you the information necessary to approach the magazine companies – using the various channels they have established – to seek an adjustment in supply.
Sometimes, adjustment requests are actioned while other times they are ignored.
You are expected to pay for what you are sent around three weeks after the end of the month in which you received the titles. While some do have delayed billing, most do not. You are credited for what you return sometimes in the actual month you take the title off the shelf and other times in the next month.
I hope this helps.
We’re small publishers and are listening to you!
For any newsagents in the Gippsland (Victoria) or surrounding areas we are launching our new monthly magazine called milk.
It’s due to come out on May 19.
Cover price is competitive ($3.95) and we are offering you guys 40%.
We will personally deliver and pick up each month. We plan to do promotional work and supply A3 posters.
If anyone is interested please contact myself or david@themilkmag.com
We are down from 1500 to 1000 pockets and about to go to 800. Why , because sales are down ,the rest of the stock is selling well. Partwoks are no longer looking good because of the offers are made by others ,then they wonder why agents are not happy, the some with the stuff from express which people can buy from them for a next to nothing price, that is cutting the bottom out of your sales.Each month when the last return for the months account is due we do what they do we dump it all back to them works well.I can see the the day when agents just take the top 200 and that is it all their own work
I agree with you Jim, we have cut our range back to 800 pockets and stock the mags we know we can move within the first 2 weeks onsale. The rest is boxed up and returned before the end of month so we do not get billed. We have placed cash back into our business as we no longer have carry dead stock.
This all works until we get a delivery on the last 2 days of the month, then we are bombarded with huge oversupply that cannot be returned until the next month. We try and get reductions in supply but it always happens.
Luke Jim i also work it the same way i keep all stock untill the last week in hope of an extra sale then send it bucket loads back but times like last week when the last day of the month is a thursday it really stuffs me up with a huge bill NDC isn’t so bad because you can still get the returns in but GG is the problem .
Do g/g early returns in the 2 last week of the month
not the last 3 days i was told last week when i asked
Network yes g/g no
At the end of june you will need to do network 1 week before the end of the year as you could be 1 week ahead with the returns
If we all only took the top 200 titles (like the supermarkets) we would probably all be quite solvent.
The smaller publishers would then have to offer a higher percentage for us to agree to tke their product.
By the time we unpack, try to sell, do returns and wait for credits some (lots of mags) are totally unprofitable.
Why the A C P and Pacifics do not do something to look after their golden egg the newsagent i for one can not under stand, for 30 years ` i have seen the system go backwards when it could be their show piece and all it take is a little add or two .I find when we have partwork adds it drives a lot of numbers into the store and we get large sales of them + other mags . They forget the add on sale w/w cookbooks ,thats life puzzle ,fast fiction, dolly specials,cosmo brides,shop for kids + other one shots and spin offs, not looking at the bigger piture may be i an just dumb
, and it is all their own doing we are now down sizeing our range
Adjusting the size of your magazine department takes time and planning. The decisions need to be based on evidence and not emotion. Range is a point of difference for us. The key is to set the right range to match the return needs on your occupancy and other business costs.
I have seen magazine distributors co-operatively work with newsagents wanting to adjust range. Unfortunately I have also seen newsagents hurt their businesses cutting too hard.
I agree that under the current system, the time spent unpacking and sending back junk/filler titles very frustrating so say the least.
we are fairly new in the newsagency business, about 10 months now, and i notice that the number of new (weird/junk/whatever) titles we receive is growing each month. for a small shop run by 2 persons, the sheer number of titles we get and and the time we need to do all the magazines is sometimes too much.
how i really wish there is a way to at least limit the junk titles we get. can anyone offer advice? i have already tried going to the supplier websites and cutting back/cancelling non-selling titles. But sometimes its seems its totally ignored (GG i’m pointing at you)
and also, with network, their new system where you cannot cancel a title (even though you get 0 sales for a few months straight already just because you have 1 sale many many months back and therefore have an average sale of greater than 0)
ED, email me at mark@towersystems.com.au and I can help you sort this out.