I was surprised to see Mollie Makes in a Woolworths supermarket yesterday. I see this as a specialist title, too fringe / specialist for the limited pockets in a supermarket. Makes me look at them even more competitively.
A difference between newsagents and supermarkets on magazines is our range in niche titles. If supermarkets enter this space I’d be concerned.
If you’re reading this blog post because you did a Google search for Mollie Makes – buy your copy at your local newsagency and support independent small businesses … we’ll love you for it!
That’s scary.
If they start to enter our niche space it is a huge concern to me, slowly slowly eating us up!
I bet they will pick and choose what titles they want, not get dumped with a whole lot of other rubbish that doesn’t sell like we newsagents do.
Will not be sold in my store if it turns up
cant blame the publisher for wanting to get their mags in front of as many people as possible. i will still stock it. BUT what i do hold the publishers responsible for is their complicity in the overupply of mags. As it stands at the moment Molly Makes is not oversupplied, so still in my good books. Publishers have a big role to play in addressing the oversupply problems in the industry.
Rick I can’t blame the publisher either and I’ll happily stock the title.
I agree re the publishers sharing the blame on oversupply of their titles. The distributors control assortment and this is a key problem too.
I saw a new cooking magazine “SWEET” from the publisher of Mollie Makes. It was in my local Newsagency. I can think of alot of different cooking magazines that Supermarkets don’t have, as many are imported from UK and U.S. This “SWEET” Magazine my mum loves, as she is always looking for new inspiration in the baking department. Do you all stock “SWEET”? and do you sell alot of this?
Mark, we receive a few copies of Sweet, it’s not a big seller in my shop, but I can see why your mum likes it.
Mollie Makes we only sell 3 or 4 each issue but there are also a lot of other imported craft titles that we also sell 3 or 4 so together they help our sales. Crochet and knitting are really popular at the moment even in summer.
Last week we got a new mag from UK called Daphne’s Diary, sold our original supply , ordered more and have now sold 10. Had a customer today enquiring when is next issue die.
I bet if supermarkets had these titles and sold out they wouldn’t be chasing more stock like we do.
I checked out our Woolies today to see if Mollie was on their shelves. What a mess of magazines! Think we are safe for a while yet.
Mark, I enjoy your blog and hearing other perspectives and opinions. It is an informative blog, which i get many ideas from. It has certainly improved our business and the way we do things.
But on this one, Im sorry but you fell for the oldest trick in the book on this one.
I too fell for it and since seeing Molly Makes on your blog I have pushed it in-store with counter placement and front of store displays, much to the disgruntlement of a certain sceptical man, and am now getting the “I told you so” look coming from him!
My partner is a bit critical of your naivety on the magazine category and he saw this coming when after he saw me reading an article on this blog on Molly Makes some time ago.
He said, “Publishers print magazines to make money. Classing a title as ‘niche’ is simply a promotional tool to target a specific market. The magazine is a business and ultimately wants to crack into as many markets they can and sell as many magazines as they can. This Molly Makes will use and abuse the goodwill of the naive newsagency channel until it breaks into bigger retailers. By advertising it here on this blog, it is only playing into their hands. Shouldn’t be flogging any new product that does not provide a 50%+ GP.”
This is his theory(as explained to me again!):
*The publisher puts the title into the marketplace preparing for launch.
*If its not an ACP or Pacific magazines title then The big two (Woolworths and Coles) don’t want a bar of it, and tell the publisher they will have to pay to get it into their store.
*With a limited budget, the publisher says they are a niche title and targets newsagents should to support this ‘niche’ title.
* Newsagents take the bait and give the title unwarranted space(based on no sales history) for the opportunity to leverage sales from a title exclusive to the newsagency channel.
* Title is pushed by marketing groups and industry blogs.
* Publisher uses it’s own subscription campaign within the magazine and with an online presence on iSubscribe and other online magazine subscription outlets to improve circulation beyond the newsagency channel.
* Newsagents have done the ground work and most expensive part of the magazine’s launch in ensuring it is a success and can grow. Title now has a supporter base from which to grow into other channels.
* Title reaches circulation numbers attractive to the big two, and they drop a title form their range to make way for the new title.
* the niche title is no longer, it is now mainstream in any retail environment they can get into.
While this may be the case Amanda, my naiveté has helped be achieve a net increase in magazines sales in 2013 over 2012. How has your husband’s approach gone?
Does your husband do basket analysis showing what else magazine customers purchase?
Yes, we will be used and abused. I get that. However, Supermarkets don’t get 80% o the titles we have access to. My point about Millie makes is that the move to Coles in my mind reflects a change in their range – unless I am missing something.
The only way for your husband to be satisfied is for you to stop carrying magazines.
There are some truths to what you have commented on Mark. I can see both your points of view. Im sure if we got 50% commission on magazines his opinion would change. Ideally if we received better financial incentives to promote and sell magazines I’m sure you both would be on the same page, and our move to expand gift lines would not have occurred.
He views magazines and newspapers as “loss leaders”. It’s not that he wants to get rid of them, we have simply culled the range to reflect what actually pays for its space.
He/we made the decision to get out of Distribution and concentrate solely on the retail business. Although we had magazine growth of 7-12% for many years up until 2010 when we saw a decline of around 8%. It was realised the traditional newsagency model we had was not going to pay the rent in the future. So we expanded our gift offering and reduced magazines.
I suppose his thinking is that we now attract consumers with new gift lines we know consumers won’t find in Woolworths or BigW (our competition). His argument being why use a display space to sell $1000/wk in mags when we can easily sell $1000/wk in gifts to get twice the profit.
In regards to your point about Mollie Makes reflecting a change in their range, they already carry Craft and Quilting magazines so i would assume they are merely expanding on that success, whilst an under performing title will be removed from the range.
Amanda what I am about to write will sound offensive but I do not mean it that way:
You are not entitled to 50%. You go into your business knowing it was 25%. Live with it. Make the most of it.
Newsagents make more than the 25% from magazines if they use magazines to leverage other products.
The alternatives are: keep complaining; embrace the opportunity; quit the category. The first option is the only one that achieves nothing.
Yes I complain about aspects of magazines and appalling behaviour by some suppliers but I also embrace the category with success.
Mark, we don’t find your comments offensive, there are just different trains of thought going on.
True Mark, you go into the business knowing 25% is what commission is currently the going rate on magazines. But that is not to say higher commission cannot be achieved.
Have you achieved a higher commission / or discount structure for card sales over the years? I know we sure have. Im certain it is higher than when you first entered the newsagency channel, perhaps increasing with the numbers of stores you had or maybe because you became wiser to the deals that are available if you shop around?
Or alternatively phone cards have gone in the negative direction as the supermarkets took market share away from the Newsagency channel, we have lost commissions offered 5-10years ago.
To say Newsagents are not entitled to 50% i would flatly disagree. Other retail channels achieve higher commissions, publishers offer higher discounts to consumers than what is offered to newsagents. The ability is there to achieve greater commission.
Do Newsagents have an inability to join together collectively and change the commission they receive? I think history has shown this to be the case. Are newsagents resigned to 25% commission level?….absolutely!
And here lies the problem.
higher commission could be achieved if we negotiate on the sale or return safety net. but we would have a battle with the distributors as im pretty sure their model would not work if they could not oversupply. we would also have to be prepared to micro manage our supply levels.
Amanda,
I agree with your partner. If I’m reading your comments correctly Mark may be missing the point.
All the admin, capital outlay on furniture, floor space, promotion, crap from suppliers, wages, for twenty five percent. Yes we are only entitled to twenty five percent, according to the distributors, but is this is the same GM we were entitled to forty years ago? I wasn’t in the business back then so I’m not sure of the GM in those days. The magazine game has had a major change of rules and players since then. To keep up with other parts of my business mags would have to gross fifty percent.
Mags do play a small part in my business but I cannot justify special effort to increase sales on a twenty five percent GM category.
Tower is magazine centric so I understand Marks need to keep everyone focused on mags.
Gary, this blog and this blog post are not about Tower Systems. The Tower newsagency software is not magazine centric. Yes it offers excellent magazine facilities but it offers much more.
None of what I write here is to serve my need. Believe it or not, I write here for the future of the channel because I believe we offer Australia and Australians something the counter and we as a people need.
I am not forcing anyone to agree with me. You’re all adults. However, the data speaks volumes on this topic. Check the data.
Think, too, about the consequences of your decision to not engage with magazines beyond the bare minimum. The supermarket duopoly and others are keen for a bigger slice of magazine revenue. Fast forward five years and think what life would be like if less 30% of the remaining ‘newsagents’ have direct magazine accounts.
If you manage magazines effectively they can be more valuable for your newsagency. Like I said, check the data.
This is an important debate for newsagents to have.
Good morning Mark,
As I have commented before, you are a man of vision and a leader in our channel. Something we sorely lack. You provide great editorial comment and ideas through your blog. The hallmark of a great blog is that it creates good robust debate.
As I’ve also commented before, don’t fight battles you can not win. We lost the magazine war in the 80’s when our leaders of that time allowed magazines into supermarkets.
There are battles out there that I can win My resources will be allocated to these.
And as for your comment on Tower, this blog is peppered with your own comments on Tower and how it can help with magazine management. I think Tower is a wonderful software package and I rely on it heavily to manage my business. In fact I have just invested $3,800 on a PDA so I can use Tower more effectively.
As the editor of this blog you really should respect the opinions of others. I certainly respect your opinions. The fragmented nature of our channel dictates that we will all walk our own path.
Gary, nothing I have said here should reflect that I do not respect the opinions of others. That I created this place and have comments set to unmoderated reinforces my view that debate is healthy.
If newsagents let magazines go and retreat from engagement we will lose the category and its traffic to another retail channel.
Mark I am not suggesting we retreat from magazines. I (and the other half) value magazines…. (me so more than him, sure).
I am suggesting magazines need to start paying for their space like other parts of the store. 25% does not cut it in retail space increasing 4%year on year.
In regards to your comments “fast forward 30 years and 30% of current newsagents have magazines” this is already happening, it will take 10 years not 30. This will be controlled by suppliers, not newsagents under the current environment. Just like newspapers. They have already begun this process.
Amanda while I think we should professionally and robustly fight for better GP from magazines, we also need to look at the opportunity value to our businesses. The GP is 25% because of this. I’m not defending it – just stating how it is.
What else do you sell with magazines and would you sell that if you did not have magazines.
On the 30% of newsagents, I asked about what if in five years less than 30% of newsagents will have direct accounts.
We were contacted last week to begin supplying a Newsagent who no longer met sales level requirements. Mark, this process has already started.
The letter basically stated that Gordon & Gotch were re-considering the number of drop off points as it was becoming too expensive to pay freight companies. The particular Newsagent in question was told they could transfer to a one day a week delivery (Thursday ONLY) at the cost of $30/week. Alternatively they could receive continued supply via a distribution agent, and that Gotch would assist them in their transition to a subagent system.
would newsagents accept firm sale in lieu of a higher % commission?
I wouldn’t Rick. I’m happy too for every thing else but not newspapers or magazines.