Newsagent magazine cash flow study announced

A week ago today I wrote to all 1,700 Tower Newsagents to invite their participation in a vitally important study into the cash flow implications of the magazine supply model.

Here is what I wrote to newsagents:

I am conducting new research into the cash flow implications of the magazine supply model on newsagencies and write to invite you to participate. I last did this in 2006 – a copy of the resulting report is attached.

This time I am not planning on writing a report. Rather, I am looking for data which can be used to get attention of regulators like the ACCC on issues with the magazine distribution model.

In one store for which I have data, they have experienced nine months out of the last twelve where magazine cash flow has been negative. In another store, their magazine bills have been more than magazine revenue for six months out of the last twelve. This is a not a sustainable business model.

There is a bit of work involved for us to get to an accurate understanding of your situation. However, once done, you can see the cash flow by distributor for your business. Plus you can easily run the report in the future without the one-off work.

To participate I need you to run the Magazine Cash Flow Report. I have attached an advice sheet which guide you on how to do this.

Here are my tips for creating an accurate report:

1. Enter your total rent cost including marketing and other levies.
2. Enter an accurate count of total floor space allocated to magazines in your store.
3. Take your time to get your pocket settings right.
4. Once you have completed the settings, take time to check them all again before running the report.

Once you have the report on the screen, save it as a PDF and email it to me at mark@towersystems….

I will review every report. My expectation is that I will see a pattern of behaviour which could form the basis of a submission to the ACCC and other potentially interested parties on the magazine supply model.

While our software has excellent facilities for managing supply, I remain of the view that newsagents should not have to do this – the magazine companies should supply on a fairer basis and based on sales data.

Mark Fletcher
M: 0418 321 338