All it takes is a couple of extra copies of a magazine to each newsagent and a publisher significantly increases the size of their scale out and, depending on the return cycle and their distributor agreement, significantly improves cash-flow. Magazine distributors are happy since they get paid per item then shift.
I saw several example of small supply increases on Wednesday this week which are not supported by net sales.
Hot Rod is the first title – we sell a couple of copies. Our sales and return data does not support any increase yet the magazine distributor’s system thinks we can carry extra stock. I am sure there will be some reason. A reasonable response will be that it’s only one or two extra copies. Well, if they are not going to sell, why send them?
Mindfood is another example of an unjustified supply increase. In this case, I suspect that the increase is publisher driven – that’s just a hunch though. Beyond getting a couple of extra copies we will not sell, we have more stock than a single pocket can hold. This takes extra space and increases our costs.
Foreign Affairs is the third title for which we have received what we consider to be an unjustified increase in supply. I have gone back through our supply and return data and cannot see any reason for this move by the distributor. More cash being drained.
These are just three examples. Indeed, there were plenty on Wednesday this week – sucking cash out of newsagencies. Every extra copy sent must be justified. This is not done, leaving us poorer in cash-flow terms.
Magazine distributors need to understand the damage these small creeps in supply is doing to the newsagency channel. I am seeing magazine bills increase while sales are flat or falling. This is unsustainable.
One way newsagents respond is early returning – and not necessarily of the new title. This is all about managing cash. Smart newsagents look for other titles from distributors causing the problem which can be returned to balance cash flow and space. The problem is that since we have to pay to return stock we still have a cost which hits us.
To distributors reading this:
Look at your systems and consider carefully the impact on newsagencies of every extra stock item you send. Look at this as if it was your money and your business. Would you put up with this?
Would you accept a supplier sending you something which all sales data indicates you will not sell and then expect you to pay for this on time and under the threat of not receiving other stock, very popular stock, if you do not pay the account on time? What is the size of your magazine bills to newsagents today as a ratio of overall magazine sales? Are your bills declining in line with sales?
Newsagents are keen for dialogue on this. Not the one way statements of the past. Genuine dialogue. Every copy of a magazine which you send and which is not supported by sales data as likely to sell has a considerable cost to the retail network on which you rely to stay in business.
Today we received 5 copies of winestate value pack.We have only ever averaged sales of 2copies.What is worse the pack contains 2 magazines both dated early 2009 and have the stickers of another newsagent clearly visible. I would have to open the bag to remove the old stickers.
mind food sell 1 normally get 2 wed received 6 good bye mind food . i have 1 on putaway the rest are now getting sent back i will no longer carry it on my shelf
My biggest worry at present is the migration of News titles from NDD to GG (DELICIOUS, VOGUE ETC). We traditionally sell a lot of these titles and it will be a huge loss to NDD (contract with News finished) who will then be trying to shore up their cashflow by sending us more junk. If I see this happening I will be early returning as fast as they send it to me.
Our 25% is really more like 12% when you take into a/c the wages to attend to the stock both incoming and outgoing and then paying to send back the credits as well.
It is imperative that a new model be
launched whereby agents have some concrete say in the purchase of their supplies (demographics etc).
Skiing magazines at
the beach in summer for instance??????
what future does NDD really have , is this the take over by GG ?
i agree 100% with June’s worries. i kinda expect to get junk titles now from NDD because all the good sellers are now with Gotch. Of particular concern is, NDD returns are once a month only meaning we need to find space to hold on stock that we will be early returning.
also the time needed to unpack,put sticker on…store for early return etc. plus if we early return they want it in FULLS which makes its worse by being so damn heavy.
has anyone ever started a petition to the distributors asking for more fair means of distributing magazines? (just curious) I’m sure a lot of newsagents who share our pains will sign.
ED,
NDD has announced weekly returns starting from April 19.
Ask NDD for a range review. They are the best distributor at offering and fulfilling this service.
mark,
i asked all 3 distributors for a range review, they ALL said i should just change my standing orders online.
they did say they would be able to produce a standing order report, but that is yet to be seen 8 weeks later.
peter
i asked all 3 awhile back to do it and all 3 did i cannot remember how long it took but it did happen (not that it helps much because as soon as you cut something back there is a new one to replace it )
Whilst distributors are paid on each copy they distribute nothing will change. Changing your allocations online is also a waste of time, as they soon change back or they supply you with another tiltle. I recommend you use the latest feature when arriving your mags that allows you to view you last 4 issue sales and early return the oversupply. It’s amazing how much time and space is saved from these unwanted titles, ie all of the crap overseas puzzles books that dribble in in 1’s and 2’s or all the porn magazine reissues. I now put 15-20% of my arrivals straight into early returns, the only issue is the cost of Full returns of reissues and multipacks.