Magazine distributor, Gordon and Gotch this product these to newsagents this week with magazines. I highlighted magazine distributor because they should get that right first.
I, like plenty of newsagents, already had the product, sourced direct.
From Gotch I’d make 25% whereas from the direct supplier my GP is twice that.
What a frustrating situation!
So, I am returning the stock to Gotch. Here is the unopened box. Dead stock.
A waste of money for me and for the supplier who paid to get it delivered to me any many others.
Dumb.
However, I should not have to return it. Gotch should not have sent the stock. It is not magazine related. The margin is appalling, offensive even. Their arrogance is sending it lands my business with a returns cost that is unfair. They decided to risk this new products, a product from a category unrelated to their core. The problem is theirs, not mine.
It is situations like this that get newsagents closer to thinking why bother with magazines?
straight back in the returns bin.
yes Mark, we did not ask for it
we don;t want it
yet is costs us to send it back
No less offensive than the magazine margin.
Except that these bracelets are not magazines and some of us already have the product with much better margin.
Id be venting my fury at the original supplier. You know once they dump stock on gotch the product is cooked.
There is no difference,. GG send mags/books, notebooks, calendars, diaries, now gifts all at 25% gross margin. We compete head on on in every caption at 50% plus except books where we make mere 40% plus. Our book sales, reintroduced 3 years ago are now close to producing the same GM from half the space and half the effort.
The 25% on mags is derisory, the linked sales disappearing and at 25% it is insufficient to generate a gross margin. Not likely to a problem for us or the channel for too much longer though.
You can’t get magazines elsewhere at 50% GP. These bracelets I can. This is the point of my post.
Jim, stuff like this does not always come from the original supplier.
My children’s books outsell children’s magazines by 5 : 1at almost twice the margin. Cookbooks and travel beat their magazine counterparts. Even fashion and home lifestyle are getting closer.
Colin, yes, plenty of exa males of this. It is still not specifically what this post is about.
OK, if post not about GG, it’s distribution model and the unsustainability of the 25% GM offered. I guess it is really about not dealing with suppliers who see no value in their brand or customer relationships.
Colin, the post is about Gotch sending a product with 25% gross profit to businesses that already have the product, direct, with 50% gross profit … and then about their old-school approach to returning unrequested dead stock.