A newsagents who recently got pinged by XchangeIT for failing to meet their standards expressed anger at abuse of their business by the imagine distributors for overloading them with stock.
Digging into the situation, there was no issue with data quality, just timing. So, the distributors receive accurate sales and return data but it is not always delivered the same day.
In the data from the business I can see more than 60% of titles are oversupplied. That is, for more than 60% of titles this business receives 50% or more stock than they would usually sell.
No wonder the newsagent does’t trust XchangeIT. It is supposed to lead to fairer data-based allocations. That is clearly not the case.
With newsagents more acutely aware of business performance at the product category level than at any time in their past, it is reasonable that the performance of XchangeIT come into scrutiny. All of the attention to accurately recording sales and returns has to play out as a business outcome at some point. Unfortunately, for too many newsagents, the outcome is continued oversupply.
The risk is that newsagents will care less and less about magazines and about XchangeIT – unless this is resolved. But what does resolution look like?
Newsagents deserve:
- Equitable supply massed on sales data with an acceptable gap between recent net average sales and supply. I’d suggest no more than 20%.
- No new titles unless approved.
- Ability to cut a title (in quantity or completely) immediately and without needing to seek permission.
- No on-sales greater than 30 days.
- No physical return of unsold stock.
- Financial penalties for titles that achieve a sell through of vower than an agreed level. I’d suggest 70%.
- Financial penalties for SBR supply where there is no data to support it.
Magazine distributors hold newsagents accountable for their level of indebtedness yet they provide no reasonable mechanisms through which we can control our level of indebtedness. Oversupply is akin to them taking interest free loans from us without permission.
Be careful of not returning unsold stock – should be at least covers or could see a secondary market arise if full mags retained by some newsagents.
The other unstated problem with supply is the unjustifiable DECREASE! I’ve sold 2 copies of the same mag for the best part of 2 years, last three issues I’ve only been given one – angry customer results! Guess who gets to live with the abuse and reputation damage? GG and/or Bauer? No way.
There also needs to be some accountability re supply of putaways. All too often we are receiving decreases in allocations to levels lower than out putaways. Then with 3 issues left of one particular partwork, 57 of 60, they increase the allocation??
We recently started making deliveries to Bauer.
I just received my 1st payment from them, more than 6 weeks overdue.
Almost once a week I have this discussion with Bauers “HELP” desk to no avail. After being particularly insisted I did receive a call back from allocation assuring me that I would in future receive full supply (7 Copies) of the Red Bull model. That lasted two issues and failed yesterday. Another email has been sent. I feel beaten by this supplier but ultimately they harm their own business too, how stupid are they????
You should also ask the distributors how come Newslink get away with No. 5 No physical return of unsold stock. I have seen full magazines thrown into the bin every week now.
Mark – and supermarkets. This is why I say we are being commercially disadvantaged by the way we are treated compared to others.
Yes!!! Unfair competition and Newsagents have to spend hours taking covers off unsold Magazines and return them whereas Newslink gets to throw them into the recycling bin.
Mark, this is the core of the case we need to make to the ACCC. It lumbers us with operating costs our competitors do not have. It costs us time and money and can only lead to more sales for the supermarket duopoly and other groups that compete with us.
So do these big guys pay on scanned sales? We have just put newspapers into Harris Farm Market and that’s how they thought we would bill them, on what they show as being sold rather than on supply less returns.
In some cases Jenny they do. It’s what we should pay on too.
How much easier would that be!
We would save a fortune in labour costs.
And it would make us more competitive.