News Corp has announced details of a Disney book promotion to start in a week. This promotion is designed to sell more newspapers. While promotions like this often sell more papers while they run, I see no evidence of them delivering sustained sales growth for the associated newspapers.
What frustrates many newsagents is the disrespect shown by News Corp with the 7.5% margin offered. Factoring in labour, space, shrinkage, cashflow cost our to timing of payment, this promotion is loss-making for retail newsagents.
Here is the table showing margin from the News Corp. letter:
- Distributing Agents with a retail outlet – commission: 15%
- Retailer commission: 7.5%
- Direct Relationship Retailers & Sub Retailers will receive 7.5% commission for each book sold.
- Distributing Agents will receive 7.5% commission for each book sold by the participating outlets & sub retailers at the conclusion of the promotion.
The News Corp. response on the meagre commission could be – we are bringing in the traffic, it;’s up to you to sell them more. To that I would say: spend time in a shop, observing this traffic. See for yourselves how single minded these shoppers are, that they want something for free or next to free. There is no opportunity for up-sell, none at all.
Shoppers redeeming for the types of offers are not efficient or valuable for retailers. They are often rude, demanding and angry when you have exhausted your allocation because that is the fault of the newsagent.
There will be retail newsagents who have received all stock already and been billed for all of it, having to pay it by Monday. Whereas the distribution newsagents will be billed March 24, based on the letter from News Corp.
No wonder there are retail newsagents who refuse to participate.
Insulting!!
We deal with these promotions by stacking them all on the shelf the day they arrive, no coupons required, and sell the lot.
At 7.5% you cannot afford to have any involvement in “redemption mechanics” and you need to sell the lot.
If the newspaper companies want “compliance”, don’t treat us with contempt by giving a shitty margin, and whilst they do we will give them the same consideration they give us.
Stopped doing these promotions 5 years ago.
You are absolutely mad if you continue to do them for what you are currently paid for them. Minimum should be 40% to make it viable just as we should receive a minimum of 40% commission on the newspapers.
I agree. The amount of operational cost (human labour, subscriptions, labels printing, returns etc.) and shop floor space goes into newspaper and magazine, it’s a loss.
The margin on newspapers makes things worse with the fact that newsagents are required to return the papers whereas big guys like Coles, Woolworths don’t.
I see comments on many issues (faced) but nothing has changed and won’t unless newsagents unite and make newspaper/magazine companies change their process in favour of newsagents.