I was at a magazine retail business in Los Angeles two weeks ago where they were arriving new stock in for the day. I got to see an invoice. This shows gross profit of 34% from the magazines supplied. yes, the model is sale or return.
Where there is an extraordinary difference between the magazine distribution model in the US and that of Australia, this gross profit percentage is interesting.
Retail space in the US costs less as does labour. These two data point differences compared to Australia highlight the challenge of the 25% GP we see in Australia today. We are far worse off that our US colleagues. This needs to change for magazine sales in newsagencies to grow, which I firmly believe they can.
I would like to question GG , why US mags retail value printed on the cover us$7 ansd we sell them here can be up to $20 or more? none customers in the right mind will buy them now and it is 2 months old . Don’t be greedy Gotch!
Our magazine sales yesterday and today have been the strongest they have in sone time. Maybe the supermarkets are dropping the ball in the face of falling overall sales, maybe our nearest competing newsagent has reduced their range, I don’t know. I do agree with Mark that at least in the medium term magazines have a future and can grow as other chanels turn away from them. Longer term is still a big question.
The publishers and distributors need to do their bit though and ensure that the model is viable for smaller retailers.