I have been talking with a couple of smaller publishers this week about the damage which early returns can do to newsagency businesses and to publishers. Here are two concerning stories:
- A newsagent early returned 19 copies of the 20 they received of a title with a close to 100% sell through for this store.
- A newsagent early returned 8 copies of the 12 they received of a title which consistently achieved a 60% sell through in the store.
I understand why this happens. Newsagents early return for three broad reasons – at the time the stock comes in because their software indicates they have received significantly more stock than they will sell, during the month when they see a title is not moving and they need the space and/or in response to the need to manage magazine cash-flow.
It is the third type of early return, in a scramble to manage cash, where less rational decisions are made. Indeed, I have seen situations where early returns are selected almost randomly. While this will frustrate publishers, they need to understand the extraordinary pressure on newsagents to settle their magazine accounts on time.
The best approach to early returning is to select titles based on sales data. There is no commercial sense in returning stock you are likely to sell in a reasonable timeframe.
smaller publishers need to increase margin for niche market, otherwise with treat you the same as others.
Was it really that the newsagency had sold 100%, or was it that they had failed to achieve a credit for their returns? Many magazines muck around with title and issue codes and return dates. If the newsagent fails to jump through all of the hoops correctly, the system is set up to deny credits.
Cameron I am sure of the information. It is based on physical rturn data.
Many magazines do not “muck around with title and issue codes”. I would estimate it to be less than 150 titles a year. Out of thousands it is not bad – my recent comments about Express notwithstanding.
Im sure that early returning the odd title incorrectly does happen but not even a spec in the ocean compared to the number of oversupplied titles. I know which does most damage to my business. Early returning is a product of a severely incompetent magazine model.
I would encourage newsagents to spent a little more time on arriving their mags and use the past 4 issue sales/ returns data that is given. This is a fantastic tool within the arrivals function which eliminates oversupply even hitting the shelves. I have saved over $1,000 per week per dist using this method and that’s only eliminating titles with nil sales or as the case last week when British football weekly comes off of its reduced forecast cycle thru network and jumps from 3 to 9, although I only sell 1 or 2 per week. I have tried all the other ways to reduce supply, now I don’t get mad I just early return the unwanted crap.
I have to admit that I have been guilty of using early returns to manage cash and doing so without much thought. I would not be forced into this situation if I was not oversupplied to the point that my magazine account is 95% of my magazine sales in a month. Gotch and Network give me no choice.
Eric
As a small publisher that has done exactly that I can tell you that the 19 returned of 20 from a 100% sell through is my higher margin product. Hence I think Mark is fairly confident on the numbers Cameron.
It is in infrequent individual cases where the extra margin has made a difference. Big mention to Taylor Square Newsagency who give us great love for our extra margin, I am sure there are loads more out there who I don’t know but wonder if every newsagent remembers us and our extra margin when we are delivered.
FYI we work hard to allocate reasonably with Network but deal with extreme volatility of sales based on location, season and editorial coverage (if we cover mention Margaret River for example sales will spike in the WA market) to minimise early returns.
As always all ears. qlong [at] australiantraveller.com
Cheers
Q
question for over seas magazines why is it that a magazine from the us is 6.99 and when we sell it reaches 17.95?? when the guts fell out of the aussie dollar they sky rocketed in price and this was blamed on the aussie dollar falling so why are we still buying and selling at these rediculous prices ? who is still pocketing the difference in all of this ?