Magazine distributors control what newsagents are supplied, the terms under which the titles are supplied and often control when we are able to return the product. Their absolute control over the magazine supply model comes with an obligation to treat us fairly and in a way which enables us to make a living from what they supply.
Fewer newsagent make a living out of magazines than ever before.
When I took off 4 copies the old issue of Golf Magazine and replaced it with 8 copies of the new issue I wondered why Gotch increased us from 5 copies to the 8. There is no reason in our sales data. Sure I could call but I should not have to. The answer should be obvious since they have decided to risk more of my money on this extra stock – and on the last day of the month.
As I have blogged before, even one extra copy of a title which is not justified in the sales data is one copy too much- especially when you project the impact of this behaviour across the channel as a whole.
Newsagents need to match up their sales by distributor against the payments they make to each distributor over the last year and see in glorious colour the impact on cash flow of the magazine supply model. I will write more about this soon.
We should pay the distributors 75% of what we sell and what we don’t return.
they are well known for being flooder,
networks is worsen with it full cover return and cant alter because of their so called “Title cannot be changed due to its frequency”
Question,Do the disributors get paid more if the newsagent sells the magazine or does it not matter if they sell or return it?
When questioning a customer service person within a distributor about unjustified oversupply, I was told that the easy fix is to just sell more…
Well is it that easy ?
And if that’s not the reddest rag to the crankiest bull, I don’t know what is…
for obvious reasons i had to leave out the Expletives that i was thinking as he said it.
Dean, I think you have your answer from Johns comment, they couldn’t give two figs about sales it’s all about allocations and distribution.
Recieved 2 copies of EXPLORE THE PILBARA IN YOUR 4WD from G&G today printed in 2006 one is mouldy an looks like its been in a glove box for 4 years. At $19.95 a pop, and a shelf life of near on 6 months its a mag that will be returned.Someone must be cleaning out a store room somewhere.With all the overseas crap mags we are recieving lately its like we are a dumping ground.Being a country newsagent its hard to understand why we recieve so much stock thats of no use to us except to keep our bank account empty.
Oversupply doesn’t even make it onto our shelves, all instant early returns and sent back as tops regardless.
In a bundle worth $283.77 i returned over half without them even touching the wood ???? how is that fair ??
Also i had the same problem with Explore the Pilbara.
just had a look at the accounts from GG and Ndc for june and did a sales report to match and the usual outcome i owe more than i sold .
Had a customer in today. Was overjoyed to find EXPLORE THE PILBARA. Has been looking for it since 2006. One happy customer. One down one to go. Bring it on. Cheers….
Dean in answer to your question as a rule disrtibutors only make money when a magazine is sold. The current distribution model is solid. The only issue is when people on all sides abuse the distribution channel
Maybe this forum could be a good vehicle to explain the how the system actualy works, how it can be abused and why. Publishers are as frustrated about abuse of the system as newsagents as are the distubution companies.
dirk, your kidding right?
While for some titles distributors make money based on sales, they are also paid fees for their services. This is a key difference.
From a newsagents perspective, it is our lack of control which is a real problem for us. No control yet full responsibility for the decisions of others.
dirk-“The current distribution model is solid”
can i suggest to you dirk that you spend next wednesday with me or your local newsagent.
at my store you can watch the magazine bundles be thrown like footballs from the truck onto the pavement, then i will show you the sales data and explain each early return. then we can reconcile the end of month statements from all 3 distributors, and show you where the returns $ are double the delivered $.
good luck and go to bed early on tuesday night dirk, you will need your thinking cap on bright and early.
peter
“how the system actualy works, how it can be abused and why”
—
fixed:
“why the system doesn’t work, how it is abused and why?”
Dirk , i might be wrong but it is July 3rd and not April 1
what I find most frustrating is doing battle with the GG website (have they made it that slow and cumbersome so people will give up??) cancelling unwanted dud titles, only to be supplied with more unrequested unwanted dud titles.
At least you can actually cancel titles Craig. We’ve tried several times but to no avail due to either A, as you mention it being ridiculously slow or B, you put in the tiltle code/name and it just doesn’t respond. not to mention we can only access our account using Internet explorer which we never do, we us Mozilla Firefox as our main browser and for some reason it just won’t accept our acc details for some reason their IT people can’t explain. I first raised this issue with them over 6 months ago and they still haven’t been able to fix it. It’s the ONLY site on the entire web we visit that it happens to.
While we’ve had our fair share of issues with Network at the very least we find their site to be very user friendly in regards to ordering extras, reporting shortages, changing standing orders etc and G&G could learn a hell of a lot from them. Just in regards to Network, has anyone else been issued with infringement notices on returns either not having a returns label attached and/or not having a returns form enclosed? I only ask because we’ve just been picked up for both things for the second time and for the second time they’re both plain wrong.
I’ve been doing returns for a long long time and could do them in my sleep and the first thing you do after you submit the form is to print it out and put it with the returns, box them up and tape the appropriate label to the box. It’s such a routine it’s IMPOSSIBLE to miss a step. The strange thing is that they claim they didn’t have a returns label on the box yet if that was the case then how on earth did they know the boxes came from my shop? Especially if there also wasn’t a returns form in there either? We don’t write the name of our shop any more because the returns label on the outside clearly states the name, hence our courier knows exactly which distributor to drop them off to!
After the first time we were picked up on it after knowing full well we did everything by the book i now make a point of taking photo’s of every returns form and every returns label just to prove that all procedures are adhered to just in case they questioned it again.
Anyway it happened again this week, i rang up to complain and told them i’ve got photo’s to prove it and was told it will be investigated and they will get back to me with the “findings” We aren’t holding our breath and fully expect to lose the 2 weeks worth of credits which add up to just over $500 and there’s nothing we can do about it. It’s there word against ours and i’m sure they’ll be much more likely to blame us than to admit there’s an obvious problem with their return methods.
Sorry for the rant but to be blunt i’m just really pissed of at their incompetence. Is there anyone else that’s had the same issues? I’d be very surprised if there isn’t.
Steph you are not alone. Good idea on the pjhotos. It’s on a list I will be publishing tomorrow to help newsagents being ripped off by a flawed dispute resolution system.
Steph
I’ve received these notices recently as well. However, I’m convinced that we’ve done everything correctly.
I wasn’t aware that we would be penalised financially. Can someone expand on this please?
No credits.
Peter where are you. I’m in kew Melbourne
“…flawed dispute resolution system.”
No dispute resolution system, more like it.
Unless you get on the phone and have another circular argument about how head office have no control over warehousing’s decision.
And Dirk, the model is solid only because newsagents are not customers to the distributors. The publishers are. We’re the bunnies. Any imperative to look after us is secondary. It is only solid for the distributors, so you are partly correct.
dirk, i am in Bundanoon, half way between sydney and canberra.
The model is being abused there is no doubt. But the model where newsagents recieve stock on credit and recieve a credit for stock not sold is a model 99% of retailers would kill for. The problem is abuse of the system. Newsagents need accurate figures from publishers and distributors for a start.
I can’t see a better model. I can see the current model working better.
Dirk,
It’s difficult to compare the magazine supply model to that experienced by other retailers. Magazines are a time sensitive product. Their “used-by” date is incredibly short, the product is different every issue and the category demands a significant (some would say disproportionate) amount of labour. Newsagents sacrifice significant margin for this SOR model. What other small retailer operates with core product attracting only 25% margin?
Jarryd Agree whith what you say. I want everyone in this industry to do well.I’m a regular visitor to this blog and I’m yet to see a solution put forward. I speak to a lot of publishers who are concerned about keeping the distribution chanel through newsagents healthy. I feel a start is getting truthful figures from publishers. These figure would be used to justify an increase or decrease in supply. Also feel a code of conduct should be introduced in regards to sell through rates. Publishers who for example agree to maintain an agreed sell through rate could then be supported by newsagents. Newsagents will benifit by knowing they are given stock by that publisher that will sell and meet agreeed sell though rates. I’m a publisher and I’m putting it back on the publishers to take a step forward.
Dirk,
I think a voluntary code of conduct is too ad-hoc to work effectively. Given the vast number of publishers it would be impossible (and even more time consuming) for newsagents to manage which publishers comply with the code. Most newsagents, in all honesty, don’t know or care which publisher each title comes from.
What I want to see is a black and white agreement between newsagents and distributors that clearly sets out:
1. And agreed formula for supply of existing titles based on sales of previous issues.
2. An agreed formula for supply of ‘special’ issues based on sales of previous special issues.
3. An agreed process by which new titles can access the channel through automatic allocation by the distributor but are then subject to alteration or cancellation by individual newsagents and banner groups.
4. The recourse to early return only the cover of titles supplied outside the agreed formulas and alterations.
5. The ability to cancel supply of any magazine, or group of magazines, on genuine business grounds.
6. The ability to decrease supply of any magazine, or group of magazines, but not below an agreed formula based on sales.
7. The ability to flag certain issues as sales anomalies so they are not inculuded in any calculations.
I’m sure there are plenty more aspects that could be covered but the above would be a good start. If a distributor refused to at least come to the table for discussions, or could not present a reasonable case against such an agreement, then newsagents would likely have a strong case to take to the ACCC.
The challenge is that our commercial contact point is the distributors. They have shown little appetite for negotiation on terms.
i suppose why would they negotiate when we have no choice other than buy from them .the only thing that would make them listen is some sort of strike action ,wether it is non payment untill a certain date of send back stock
shaun all good points. Where are you based
Dirk you seem to know the distribution side pretty well, if credits are withheld for a missing form or label, I then still own the mags and should get the returns sent back to me to either resubmit or resell correct? I asking this because I have been told that we cannot have our returns sent back to us even at our own cost. Is this not theft?
Dirk i would love to tell you where i am based but i am sure i would get a phone call instantly from our favourite suppliers with some cautions to go with it .
The fact that the distributors either refuse, or don’t have reasonable intention, to negotiate would work very much for the case of newsagents. The ACCC prefer that resolutions of contractual matters first be attempted on a good faith basis without their intervention. If newsagents first go down this path they can then show that they have genuninely attempted to negotiate reasonable terms.
The duopoly-to-be issue would also assist a case in raising concerns of potential unconscionable conduct or misuse of market power.
Apologies Shaun I meant to say Jarryd all good points. You’ve got me wrong. I want to keep the distribution system health not make trouble. I’ve met with Mark and several newsagents as a group. I thought I may had met with Jarryd a couple of years ago.
Luke I’m not an expert on distribution. I can’t answer your question.