Author: Mark Fletcher

The newsagent channel must move beyond its self-destructive petty bickering and fear of governmental collusion roadblocks and adopt a program that reduces the display rack overcrowding conditions that are plaguing the newsagencies. Nothing less than the future of the newsagency channel is at stake. Newsagents: get off your collective duffs and start doing something.

These are not my words. They are from the closing paragraph of an article by Baird Davis which I have quoted here previously. I have substituted references to publishers and newsstands with newsagents – so it speaks to the Australian audience.

Davis’ emotive pitch to publishers in these words, as originally written, is as relevant to newsagents.

We MUST be able to collude to fairly represent our asset otherwise our individual ownership will work against us. We compete with national chains which can act as one and this is why they succeed in controlling the magazines they carry.

One alternative which could possibly get around collusion concerns is that newsagents sub-let the magazine space in our stores to a newsagent owned entity which then negotiates with magazine distributors and or publishers as appropriate. It would have commercial control over newsagent magazine real-estate and would be negotiating on its behalf. I’m sure lawyers would have issues with this but it’s worth investigating.

We have to do something if we are to fix the supply model. In Townsville yesterday as in Newcastle last week and Adelaide, Melbourne and Sydney the week before that – newsagents are hurting financially as a result of oversupply, undersupply and poor management of the returns process.

Here are my initial views on how a magazine czar / gatekeeper – call the position what you will – could work:

Newsagents to acknowledge that their retail network is their asset and that it does not ‘belong’ to magazine distributors to use as they choose. If newsagents don’t believe this there is no point in proceeding. It is essential that newsagents stop operating as process workers and start making business decisions for their businesses.

Newsagents to select a committee of respected, expert, knowledgeable and industry compliant retail newsagents to set magazine KPIs against which the czar will assess net titles seeking to gain access to the channel.

Newsagents each write to magazine distributors advising that they approve the appointment of a czar and ask that prior to any new title being supplied they gain approval of the czar.

The committee selects a czar who is vested with authority by newsagents to approve or not approve all new titles proposed to be sold through newsagencies.

The position should be employed by newsagents using seed funds from magazine distributors and newsagents – each newsagent asked to contribute $50 and each magazine distributor asked to contribute $50,000 for the first year. This provides the czar’s office $690,000 in first year funding.

The czar to seek ACCC input on the structure and processes of enforcing compliance. This may well require elements of collective bargaining and authorisation.

While this needs work, it’s a start. The sooner newsagents take control for circulation product provided to their businesses the better. The current situation provides newsagents with no control. It’s time we started to manage our most crucial asset.

I initially posted this yesterday here as a comment but have posted them here to facilitate broader comment.

A couple of months ago we created a new health section, bringing together magazines from several categories – health, fitness, lifestyle. We placed the new section next to food and moved the health related food titles so they abut the new health section. The new section is in our ladies aisle – opposite our women’s weeklies. The results have been excellent as I have blogged previously. Yesterday we checked sales for the food titles – our ACP Magazines healthy food titles have benefited the most from the move. Sales are strong. Annette’s Sym’s Symply Too Good range is also selling better but that is more due to the release of the fifth in the series.

What we have done in creating this new category and locating it next to food breaks with tradition but the results speak for themselves.

Our only problem in the food space now is the US and UK titles. Sales are soft.

The sell through rate for any magazine is an ideal metric indicating the efficiency of the magazine supply model. The crossword category is an ideal place for comparing titles. Take NDD crossword related titles for example: more than half NDD supplied crossword titles in my newsagency have a sell through rate of 30% or less. That is, 70% of what NDD sends fails to sell.

I have Dell crossword titles with an annual sell through rate as low as 6%. The overall average for Dell titles is appalling – if the NDD supply model was as good as they claim to publishers I would not be receiving this range. That NDD still supplies me says more about their business model driving their cashflow than what is best for the title and the newsagency.

Other ranges which sell poorly include: All Star, Easy and Variety. In can tell this from my sell through arte data – the same data the experts at NDD have access to when deciding what I should receive.

NDD has good titles like the Lovatts products – they have a sell through of 70%. The problem is that crosswords space for Lovatts is taken by the overseas and other junk from NDD.

Before people say I should contact the publisher – they do not supply overseas crossword product as these titles are purchased by NDD and distributed here solely by them.

Life magazine is selling very well this month in my shop. Maybe it’s Julia Gillard on the cover or the Enough Rope DVD. What is usually a soft title is doing well.

Life is a challenge since it does not easily fit into traditional magazine categories – placement different in most newsagencies. When we saw the Julia Gillard cover we decided to co-locate so more people would see her face and that seems to have worked for us.

This issue of Modern Wedding Cakes has been supplied to us by NDD four times. 12/7/06: supplied 7 (we returned 6); 3/11/06: 5 (4); 7/2/07: 4 (2); 9/5/07: 2 (probably – 2).

Given that NDD has our sales data and given the commitments on their website, I cannot understand how this issue of this title has slipped through the cracks and continues to be supplied.

After the July 2006 experience the next delivery of Modern Wedding cakes I ought to have received is the next issue, not this same issue another three times.

This ‘pusher’ type behaviour suck cash out of my newsagency and, I am sure, hundreds, if not thousands, of others.

New Woman magazine this month is fat. Well, wide. So wide in fact that it takes two pockets to display. The free umbrella stuck on the side is too big to fit into a single pocket.

I like the giveaway but hate the way they have gone about this. It makes retail display challenging and leads to mess. However, I know that putting the umbrella behind the counter would dilute the benefit of the giveaway.