Supermarkets have had scan-based trading for years with magazines, from back in the days on the now defunct Gordon and Gotch, then to Ovato, and now to Are Direct.
Scan-based trading is where retailers pay the magazine distributor for what is sold. That’s it.
The distributor / publisher carries the cost of shrinkage (theft, damage) etc.
The retailer makes margin from what they sell. They do not have margin ‘stolen’ by theft, or damage or failed supply … and I include damage and failed supply because the Are Direct process for handling claims by newsagents is a mess, time consuming, starting with the assumption the newsagent is wrong. Indeed, it is so bad that plenty of newsagents don’t even lodge a credit claim.
Scan-based trading is unfair in that newsagents don’t have access to it while their competitors do. This provides them an unfair advantage, facilitated by the magazine Are Direct and magazine publishers.
It’s unfortunate that Are Media spends on the old-school display competitions and similar yet fails to deal with the unfairness at the core of the magazine distribution model to newsagents.
The magazine distribution ‘experts’ at Are Direct will say it’s a data issue, that newsagents cannot provide the same accurate sales data flowing from supermarkets. This was nonsense when put 10 years ago, it is nonsense today. I say that as the owner of the newsagency software company serving more newsagents than. any other with newsagents icy software.
I tell you what … turn on scan-based trading for newsagents with accurate data and even more newsagents would achieve the desired accuracy.
This is an easy step for Are Direct to take, a fair step, a socially responsible step and pro small business retail step.
Look at a local newsagency competing with a major supermarket a couple of doors away. When it comes to magazines, the supermarket has a better deal, they make more money and save more time from how they are dealt with by Are Direct than the local small business newsagent.
Every single person at Are Media who is in contact with newsagents needs to understand this, they need to understand the unfairness of the situation as in related to newsagents.
Turn on scan-based trading for newsagents and create a fairer model for our channel, show your support for us in a practical way, show us some respect.
Newsagents are still treated as a cash cow by ARE. I’ve observed for years the volume of magazines delivered to our local supermarkets on the last magazine day of the month are no different to any other day. Our own on the other hand are often double or triple the quantities delivered on an average day. What pisses me off the most though is as you pointed out, every time we report short deliveries (ie every Monday and Thursday) we get the automatic reply accusing us of lying which forces us to waste more time following up again.
For plenty of newsagents, magazines are a big deal. In my biggest shop they are $450K+ a year. I sell less in cards in less space and with less floorspace used and I make more, way more.
My issue is that in terms of fair compensation, socially responsible compensation – in this model where our income is tied to cover price and when cover price has been suppressed, it is time to find other ways to respect us and reward efficiency.