When you scan magazine returns, your newsagency software should provide to you a report listing discrepancies between the magazines you scanned for return and what your newsagency software thinks are to be returned based on arrival and scanned sales data.
Do you check your discrepancy report?
Checking the discrepancy report is a basic newsagency management task. In a few seconds you can see if you are returning all magazines due to be returned. The report also highlights for you magazines that may have been stolen. This last insight is important with theft accounting for between 2% and 5% of product revenue in a typical newsagency business.
It frustrates me when I am asked to help newsagents deal with a magazine returns problem and discover they do not regularly check for discrepancies between what they should return and have scanned for return. In these instances these newsagents have operated in ignorance by not checking the accuracy of their returns.
One I spoke with recently said their returns were being done properly. It turns out they were;t being done properly. Checking the discrepancy report would have highlighted this when it happened rather than using the report after the event to support the claim back to the newsagent that they were managing the returns process incorrectly.
Scanning returns is simple. The overall magazine returns process is equally simple. That said, people do make mistakes. Time pressures, poor training of new employees, tack interruptions, ignorance and other factors can lead to the scanning of returns being incomplete or wrong.
Laziness about the technology itself – hardware, software status and internet connection – can also play a role in returns not being processed accurately and to the level of compliance required by XchangeIT and through to the magazine distributors.
Given the long established standards overseen by XchangeIT and their process of compliance over the accredited newsagency software companies it is hard to get it wrong, hard to fail at returns processing but fail some newsagents do.
I think all of us who work with newsagents on the management of their businesses need to revisit the basics, we need to help them get these everyday tasks right, to lift the quality of business performance and reduce the occurrences of mistakes as every mistake has time and cost consequences not only for newsagent businesses but also for supplier businesses.
I appreciate this is a long winded blog post. Please, take a moment to check that your magazine returns processes are best practice.
We spend so many hours putting out, sticking on labels, checking off invoices, taking returns off, topping them, scanning them, just another thing to do! Has anyone ever done a cost analyse of this? Do we actually make any money from magazines. I have just been flooded with diaries and calendars, most are delayed billed so I have to have them taking up space in my shop. There are more than the number of residents in my town. Most will buy business diaries. I have one small town to supply. All adds to the cost of business with most likely no net gain.
Carol, yes. I did a cost analysis ten years ago and checked the numbers again this year: http://www.newsagencyblog.com.au/2005/12/13/the_cash_flow_i/
I actually use the discrepancy report as a tool for returns. I sticker very little anymore so on returns day the software kindly tells me what mags to pull off the shelves and how many there should be. Differences have shown me in the past that perhaps a particular title needs to be more clearly watched from the counter and thus shrinkage is better managed. Don’t know how operators can possible ignore this tool.
BRETT with no stickers it must be even more time consuming trying to find title. How do you tell what mags have been sitting on your shelf too long and need sending back. Surely you don’t leave all your mags on the shelf until there actual return date. If they are not selling they go back.
You should only sticker low volume monthlies.
Your software will tell what is in stock and due for return.
Carol,
I have done this analysis twice now on all major categories in my shop, firstly in 2008 and again in 2012. The results were sobering. If you factor in the staff time, rent on the space occupied by magazines, fixture depreciation, the cost of the value in excess stock you are holding at bank rates etc, I was losing about 10% of the value of my magazine turnover – so to sell a New Idea at $4 was costing me $4.38. Back then my magazine turnover was about 50% higher than it is now
Looking at it by publisher, Pacific made me money but all the other crap that comes from overseas dragged GG down to be a net loss generator, so it is important to look at it by publisher as well as distributor when making decisions. There have been changes that I think will reduce that figure now, but I cannot see how I, and the majority of other newsagents, could do better than break even with magazines.
I have tried over the years to work with publishers and distributors, and all bar Pacific and Lovatts were not interested – they clearly have their own agendas. I cut my magazines space by about 40% and replaced it with other product. If I could I would reduce it again by another 40% but shopping centre redevelopments make that impractical currently.
I still lose money on magazines but have realised there is little I can do other than manage my own processes instore with early returns and EOM clear-outs of stock sitting on the shelf for more than 3 weeks with no sales. I have long since made the decision to focus my efforts on the areas of my business that generate profit and just try to minimise my losses on magazines.
I’m with you Glenn.
From my calculations I need a near doubling of margins on magazines to actually make money on them when everything is taken into account. It’s part of the reason why, inclusive of a recent cutting of another 220 pockets I’ve halved my magazine holdings from 5 years ago. I now early return using my Tower POS data religiously and generally will not accept a new title for the shelf at all. If something new arrives 9 times out of 10 it’s immediately early returned. It makes no sense for me to spend more time on a segment that for me is declining (in line with the general figures Mark has published previously) when I can make much better , or should I say non loss making , results from other parts of my business. From my calcualtions even if I was to lift my annual magazine sales by 10% I’m still not at a break even point.
here is a link to my comprehensive report: http://www.newsagencyblog.com.au/wp-content/uploads/2010/09/cashflow.pdf
I still don’t know how you manage to cut pockets. I just keep getting stock that I don’t have space for so what so I do with it. Tell me how I get both companies to stop a particular title. They may stop for a while but within a few months back they come in bigger volume. Delayed billing are driving me mad. So sick of it. I have had two school kids topping mags most of the week for end of month.
Carol I have provided this advice here many times. Tomorrow, I will publish refreshed advice on the process. It is the advice newsXpress stores successfully use to reduce the magazine overhead. I do not believe that you have two kids spending most of a week each at the end of the month topping magazines. You should top returns weekly behind the counter during the everyday running of the business.
That’s my Friday afternoon job. Big box at my feet for the trash, little box on the counter for the tops and do every magazine that’s not on the shelf (except delayed billing and I’m over that as well Carol). Always get a few weird looks and questions so I just explain that Mag distributors deliver over twice what is needed so the rest get trashed and there’s nothing I can do about.
Carol,
You need to use your computer data as you receive in the stock to make decisions about what you keep and what you dont. Top and return surplus stock every time you receive magazines. Box it up and store it ready to ship at the end of processing your magazines. Never leave this until the end of the month to do.
You cannot stop or slow the rate at which the magazines come in unless you do a shop refit and lose space, the advise GG and NET in writing that you now have less space due to your new refit and let them know how many pockets you have and they should adjust supply accordingly – for a while at least.
It seems that magazines are loss making for many, so why not stop stocking them completely?
The majority are loss making when considered in isolation yet the traffic they generate is vital. Cut them at your own peril.
While some newsagents rely on magazine traffic we find in a shopping centre situation the magazine traffic is largely for the purchases of magazines only, with little upsell. If we replace 22 linear metres of magazine space with gifts etc. I am sure that space will create income matching magazine profit.
Sure we are all apprehensive about removing a traditional offering such as magazines, and some newsagencies need them, but we are a destination now for many products.
Those that have acted on Marks advice and diversified do not rely on one category any more. Magazines are permanently declining and are loss making so the end is inevitable for them even as a traffic driver.
Peter check your permitted use clause. Also run a basket analysis to be certain of your evidence.
Our permitted use clause simply states ”the sale of newsagency lines”. There is no elaboration on this clause. It doesn’t say we “have” to carry anything as we do not sell lotto, most agency lines, books and many other lines some newsagencies carry.
Have tried to find how to find what sells with magazines through tower but cannot find the report or I haven’t used it properly if I have.
peter I called at the shop now as this type of discussion is not efficiently handled through blog comments. The reports are Basket Analysis and 10 x 10. Both provide visibility of this and should be consulted before saying magazines don’t sell with anything else. Data is key to any business decision.
Sorry Mark, not in the shop till Monday, unfortunately not everyone is adept at finding or using data effectively and have to go by instinct, which of course may be biased.
While I don’t know is your instincts are biased in this situation I’d note that in the majority of situations where I compare data with instincts there is a significant gap.
As much as I hate that magazines don’t run at a profit, I would never cull them completely. I still think they are an important part of our mix, it is just managing that mix as best as we can that is the challenge.
For that, using our data is critical. To use instinct and gut feel to manage it also requires a whole lot of luck to pull it off – much like winning Powerball.
I see data from many newsagencies. Magazines account for, on average, between 25% and 30% of product revenue and appeal in more than 50% of all baskets.