A blog on issues affecting Australia's newsagents, media and small business generally. More ...

magazine distribution

Who’d be a magazine distributor?

Source Interlink, one of the biggest magazine distributors in the US announced Friday that it will soon end “substantially all” of its business operations, putting 6,000 out of work. The Wall Street Journal report documents some challenges for the category:

Companies such as Source Interlink play a major role in the magazine business, arranging for printed magazines to be distributed to retailers large and small. It has become a more difficult part of the business in recent years, as consumers increasingly use the Web to read digital content, including magazines. That shift has upended the economics of newsstand distribution.

While this story has no direct Australian connection, the challenges and economics are not dissimilar.

4 likes
magazine distribution

Aussie newsagents are not the only ones oversupplied with magazines

ukmagspocketguideA colleague newsagent from Ireland shared this story and photo, demonstrating that the magazine distribution challenges that frustrate us here in Australia frustrate newsagents on the other side of the world:

The World Cup is fast approaching and we are inundated with various World Cup titles trying to cash in.

When going through my magazine delivery this morning I came across a supply of “Pocket Guide World Cup” which is a “box out”, not ordered.

That in itself is bad enough but what really took the biscuit is that it was clearly on sale in another shop first, as their “Centra” price tag is still on the magazines.

Obviously this Centra store returned the magazine to EM News who then decided to pass them on to me, thanks very much!

Its the old chestnut of not being able to get the titles and supply you need whilst battling the box outs you don’t need and can’t sell, especially the ones that other stores couldn’t sell either.

Looks like it’s the same issues for Newsagents all over the World!

I share the frustration expressed.

6 likes
magazine distribution

Confronting the Thursday shift in high street newsagencies

It is almost a year since magazine distribution changed from Monday, Wednesday and Friday to Monday and Thursday. Newsagency sales data I have seen indicates that high street newsagents have been confronted with the most significant impact. In one case Thursday sales are down 33% and the change can be tracked to the change in magazine distribution.

If your newsagency is in a high street situation I urge you to look at your Thursday data, compare the last four weeks to the same four weeks ago. If you see a considerable decline ask yourself what you are doing to fix the decline in traffic. Action is essential to rebuilding the lost traffic.

If I was in a high street newsagency situation I’d be focused on making my newsagency the destination for everyday magazine traffic. I’d work hard to lock in the habit based visit – so much so that shoppers go out of their way to get their magazines from me and not the supermarket with their weekly shop – as the change in distribution facilitates.

Check your data. Understand the impact of the changes on your business. The knowledge in your data can guide your business decisions.

4 likes
magazine distribution

Bauer Media launches reader rewards to encourage newsagency magazine shoppers to purchase Bauer titles

The Bauer Media Connections program has launched Reader Reader rewards, an App-based loyalty program for Bauer titles purchased in participating newsagencies. Consumers are rewarded with free magazines – collected ar participating newsagencies. Funded 100% by Bauer. Click here to read more about this program and see a couple of videos and see how it will work in a newsagency.

The program in its current form is designed to encourage readers to purchase Bauer titles. If it does this to the detriment of non Bauer titles then newsagents would be concerned.

Bauer has been running road shows around the country over the last week.

9 likes
magazine distribution

Magazine distributors should not distribute books

returned-bookI was surprised to receive this book with magazines yesterday. We don’t sell books –  not full price titles and not for 25% in gross profit. We need to be able to stop products like this being sent to us without out approval. As it stands we have to pay to send back this stock we don’t want. Some newsagents will look for other ways to strike out at Network for this scale out. This is what all magazine publishers need to understand when wondering about why newsagents early return stock.

7 likes
Book retailing

A look at Bauer Media

Respected journalist Ben Hills wrote a long and fascinating piece for Good Weekend – published March 28 – that looked at Bauer media, the business formerly known as ACP. Hills was thorough in his research – I know because of questions he put to me as part of the research.

The article is something newsagents should read as it takes us behind the scenes and provides some fascinating direct quotes like:

Tony Sarno, who resigned as editor of Bauerʼs two technology titles before the magazines were sold last year, believes the writing was already on the wall before the takeover was consummated. “When Yvonne came out we were told to have our offices all scrubbed up and clean and tidy,” he says. “We were told she was in the building… and then nothing happened. She never arrived (to visit us). It was all very disappointing, but I now think that they couldnʼt give a shit about the menʼs titles and technology. They are not interested in fostering an Australian magazine culture, just in rehashing all the stuff they have from overseas.” He says that on one occasion, when an editor asked how they were supposed to translate an article from German she was told to try Google.

While it will be a while yet before any reasonable assessment can be made of the purchase of ACP by Bauer, those affected by the purchase – employees, former employees, suppliers and newsagents – all have an opinion on how its going. This article by Ben Hills will get people thinking about their own perspective.

6 likes
magazine distribution

Do changes at magazine distributor Network Services indicate newsagents are less of a focus?

Changes announced internally at Network Services last week read to me like a downgrade in focus on newsagents. While the company will deny this, my view is based on the backgrounds of those they are promoting into newsagent related roles and considering the experience of those they are promoting out of newsagent related roles.

  1. After 7 years in the role of Group GM of Network Services including responsibility for Magshop and Netlink in NZ, Niall Murphy is moving to a non distribution role at Bauer Custom Media. Niall’s knowledge will be a loss.
  2. Tony Edwards will take the role of Group GM – Retail Distribution. He’ll have  responsibility for  Network Services and Netlink in Australia and New Zealand. Tony 13 years experience of working within the industry including managing Netlink NZ and more recently as Client Services Director for Network. The downside is a lack of knowledge and experience of the Australian marketplace. Our magazine distribution model is unique.
  3. David James is taking on the role of Group GM – Magshop & Subscriptions Services. The goal here to build a more integrated service offering within the Print & Digital subscriptions according to the internal announcement. David moving from a management role in Network in the distribution area will be a loss to the business and to newsagents.
  4. Marena Paul takes a newly created role – Commercial Manager Retail & Operations. This role will oversee  distribution and subscriptions areas as well as providing commercial strategy support.

Further to this, the person now with management responsibility of the call centre has a large corporate account background. They have no experience with small business owners like newsagents.

Last year network lost key call centre staff and we are still feeling the experience of this today. Whereas Network services used to have a clear escalation process that worked, today the company does not – although it will deny this.

Network Services in 2014 appears to me to be more focused on national retailers than single business operators like newsagents.

11 likes
magazine distribution

The danger in returning bagged discount magazine packs

magsbaggedretThis bagged pack of current (when released) issues of Elle and Cosmopolitan is tagged by the publisher as a topped return. If we did that we’d top the covers and return both separately. This could open us to a fraud allegation by the publisher owned distribution business. Instead, we return the whole bagged pack – to avoid any allegation of impropriety.

Maybe I missed something, maybe we could return the empty bag. I’d love to know how others handle returning these particular discounted bagged products – not the Express and Universal bagged packs with back issues, but these bags containing current issues of different titles.

5 likes
magazine distribution

Newsagent frustration at Network Services invoice changes

networkdeliveryFollowing off-topic comments here about recent EDI changed by magazine distributor Network Services, as promised I am opening a post here so newsagents can comment and through this provide feedback to Network.

This week, Network released EDI changes including the following (I have pulled this info from correspondence from Network – the image is the explanation sheet the provided):

No more multiple invoice numbers (Except for reorders sometimes)

No more pains for customers reconciling statements

Cleaner delivery documents

Changes in SA, WA, TAS and NT from 24th February delivery

  • The number of Statement Reference Numbers in the delivery will be substantially reduced.  However, it’s possible that a bundle may contain products charged on multiple Statement Reference Numbers.
  • Stores will receive an Outlet Summary with their delivery, which is the key document to enable reconciliation to the monthly statement, as it groups titles by Statement Reference Numbers, and also identifies the bundle each title was packed in.
  • DD2 file will remain sequenced in Statement Reference Number order, rather than physical packing order (as per above).

Network, through Netonline, can give newsagents something closer to the EDI experience they are used to. This is called the EDI late File option. Here is information from network again:

File creation begins at 6pm (Sydney time) the night before delivery, the file will then be available to you between 6.30pm and 9.00pm (Sydney Time)Quantities will match the quantities packed at the warehouse

The order of the titles in the delivery file WILL CLOSELY MATCH the order of your deliveries’ physical packing.

This is a new option that aims to streamline the process of physically receiving a delivery through closely matching the order of your POS labels to the order your stock is packed in.

While Network is big enough to defend itself, I’d note that back office magazine distribution software is a large and complex beast. Bending it to serve even the simplest change is expensive and challenging. Adjusting the software to serve newsagents is complicated by many voices seeking different changes.

8 likes
magazine distribution

Insights into the ACCC and how they could help newsagents

ACCC Chairman Rod Sims, provided an insight into the activity of the ACCC in a speech this week at the CEDA conference. Early in the speech he shared some useful stats:

Each year the ACCC receives roughly 160,000 complaints and inquiries. From this pool we have to make a judgment on which matters merit an investigation. This process narrows our scope to about 500 initial investigations, around 140 of which are then conducted at an ‘in-depth’ level.

This activity directly or indirectly sends warnings that often instantly change behaviour. A simple call from the ACCC can be very effective.

From this activity we take around 35 cases to court each year, accept around 30 court enforceable undertakings and issue infringement notices in around 30 matters.

Further on, he talks about unfair contracts for small businesses:

Last year, we looked closely at unfair contract terms. Following the ACCC’s intervention, a range of businesses amended their standard form contracts, removing potentially unfair terms.

This discussion ended with:

There is more work for us in relation to unfair contract terms and we will be taking further enforcement action.

I urge newsagents to read the whole speech.

I wonder if anyone representing newsagents has provided the ACCC with a copy of the magazine distribution contracts and asked for these to be considered against the contracts provided to our competitors. I expect that any comparison would show the newsagent contracts as unfair and anti-competitive.

11 likes
magazine distribution

Magazine distributor Gordon & Gotch harasses newsagents on payment

Gordon & Gotch this morning emailed a newsagent claiming that their account is overdue when there is still half a day left to pay the bill.  This is appalling treatment of this newsagent by Gotch, a company that does not provide newsagents with reasonable control over their level of indebtedness. I suspect others have received the same email.

Here is today’s email from Gotch to one newsagent:

Dear Customer,

We take this opportunity to remind you that your January 2014 account was due on the 20th of February and is now overdue.

Regrettably supplies to your outlet will be suspended unless payment is received promptly.

Please see payment methods below:

· Direct Deposit (Bank details) ANZ Banking Group,
Cnr Queen & Creek Streets Brisbane, QLD.
BSB: 014 002 Account: 7758 12207
(Please use your Gotch Billing account number as reference)

· Credit Card using GotchConnect Please note that only Mastercard and VISA accepted

If you require a copy of your statement, please log on to www.gordongotch.com.au to view / download.
For any queries or clarification, please contact your credit officer on 1300 650 111.
We thank you for your cooperation.
Yours Faithfully,

National Credit Department

Some newsagents actively discussing closing their magazine accounts down.

9 likes
Ethics

Are magazine distributors cutting small newsagency accounts?

Several moves in recent weeks suggest that magazine distributors Gordon & Gotch and Network services are reviewing small accounts with a view to cutting accounts that to not meet minimum sales criteria. While they have had thresholds for new accounts and in the past have review performance, I anticipate the review this year will be felt more widely.

Call it a conspiracy theory but I wonder if any such review and plan to reduce the number of smaller accounts related to the withdrawal of support and requirement for the previously mandated five day training course for new newsagents.

While there is active discussion among newsagents and their suppliers about the closure of newsagency businesses and what this means for the future of the channel, there has been little discussion about the support for the channel by core suppliers such as magazine distributors.

Magazine distributors continue to treat newsagents unfairly. They supply us using rules and processes established in the days of regulation yet our competitors are treated differently, in a de-regulated way. This creates an unfair playing field that newsagents have failed to have addressed.

While the ANF invests in a struggling bill payment platform, its member newsagents are facing more challenges from an old magazine distribution model that leaves their businesses uncompetitive in this slim-margin product category. And while on the ANF – any distribution account review should see newsagents treated the same as another direct drop account.

I’d encourage newsagents to share here if their account is being reviewed or has been cut.

12 likes
Hubbed

The five day training course for newsagents quietly slips away

Ten years ago the then federal Minister for Small Business Joe Hockey launched the magazine distributor and newspaper publisher mandated new newsagency training program at the offices of the ANF in Sydney. I was at the launch and supported the introduction of the training.

The goal of the five-day training program was to ensure that all new newsagents had a consistent base level of training in the operation of a newsagency, especially newsagency-specific aspects of the business.

Over time, with course materials not keeping up with real-world changes, tough training requirements from the various lottery businesses and other obligations on new newsagents, the ANF course faded in relevance.

A few months ago, the five day training requirement for new newsagents was dropped. Neither the magazine distributors or newspaper publishers require that such training be undertaken.

While it is good that this barrier to entry has been removed and that training that had become irrelevant was no longer forced on new newsagents, it’s appropriate to take a moment to think about this move and consider what it could mean, if anything. For example, does the removal of the requirement of training mean our channel is not as important as it once was? 

My understanding is that those behind the decision say the training requirement was eliminated because it was not making any difference. If that was the case they could have driven changes to the training since they had exerted control over training course content in the past.

It’s is interesting to think this through. On the one hand we want to be treated the same as other magazine and newspaper retailers but then we could worry when special treatment or attention is removed.

While I doubt we would get a completely honest answer, I’d like to know from magazine publishers and distributors whether they see us as relevant today as they did ten years ago. I think we need to ask this question. If we look at the regulation and monitoring imposed on newsagents via XchangeIT we could say that nothing has changed. But if we consider the elimination of the requirement for consistent basic training for new entrants to the channel I am not so sure.

While many newsagents are angry at the treatment of the channel by some magazine publishers and the two major magazine distributors and may not care about the training, I think we need to consider it a reflection on bigger issues, bigger challenges for us.

What do our businesses look like without magazines? I for one would not like to see this. However, I want fair and equitable supply. Unfair and inequitable supply makes me think about life without magazines – but on my terms. The removal of the training requirement leaves me wondering if the decision about the future of magazines in the channel is being made elsewhere.

9 likes
magazine distribution

Why is it overseas magazines still take so long to get to Australia?

magazines-christmasMy newsagency like plenty of others I am sure has Christmas themed titles still arriving from our magazine distributors. International shipping has changed dramatically in recent years. Many online retailers offer free fast shipping on low margin items.  Hence the question: Why is it we can get single copy overseas magazines here on time but not bulk copies?

I am certain that we could grow magazine sales if we got overseas titles sooner.

2 likes
magazine distribution

Bauer continues to oversupply Elle

magselleThe allocations experts at Bauer have increased our supply of Elle Australia on the back of a sell through of less than 50%. Five issues in and this magazine is loss making for us and, I suspect, many newsagents. We have promoted the title, given is excellent positioning, co-located a couple of issues and ensured the full cover is on display. It’s not working yet Bauer thinks we need more stock.

4 likes
magazine distribution

FOUND! The missing Australian Open Tennis programs!

austopenI was in a couple of transit location newsagencies yesterday and discovered plenty of stock of the Australian Open tennis programs. The sighting of all the spare stock made me wonder if these were the copies Network failed to supply me. Regulars here will know that we expected to sell close to 30 copies this year based on previous sales. The allocations geniuses at Network cut us back to 2 copies, denying us hundreds of dollars in revenue. Calls to the company resulted in nought.

5 likes
magazine distribution

Magazine supply failures cause newsagents to protect their business and fail XchangeIT compliance

We sold out of a top-selling monthly magazine in the week of on-sale just prior to Christmas. We ordered more online and a day later were advised by the distributor they were out of stock. I contacted the publisher and they helped the distributor discover that they did indeed have stock. We were told we’d have stock in two days, on the Thursday. The replacement stock actually arrived the following Monday but it was the old issue.

Frustrated that we had been out of stock already for several days I bought copies of the magazine at retail and put them on the shelves for sale. I’m in a shopping centre with five other magazine outlets and I refuse to encourage my customers to buy magazines elsewhere – hence my decision to purchase additional copies at full retail for re-sale in my business.

By doing this I have set my business up to fail the data compliance requirements of XchangeIT. I am sure I am not alone in this.

XchangeIT, magazine distributors, magazine publishers and newsagency software companies need to agree on a mechanism by which I can report that I have acquired additional stock elsewhere.  My newsagency software background tells me this is quite achievable. I envisage a simple transaction through which I add quantities of an item purchased outside the usual magazine supply grid with this transaction advising XchangeIT electronically and through them the distributor.

This approach can stop me and other newsagents who engage in this practice be being told off by XchangeIT for failing by being a good retailer. It can also give visibility to the distributor so that they know what I could have sold had they been able to supply the additional stock I sought.

While there have been discussions around the XchangeIT table about this on several occasions, no action has been achieved. This needs to change – especially in this current era of undersupply of some key titles.

Magazine distribution failures hurt our businesses not only in lost immediate sales but in educating shoppers to consider other retailers that compete with the newsagency channel. We need to do everything possible to serve our customers for the future of our businesses. If this causes us ti fail XchangeIT standards in the meantime so be it.

How prevalent is this move of purchasing magazines at full retail and selling them in the newsagency? I’d guess that it happens between 1,000 and 2,000 times a year.

On a side note: I wish magazine distributors better handled spare floor stock. Too often I am told there is no additional stock where there is stock.

13 likes
magazine distribution

Another new title from Bauer challenges space

magssoapextraWith a full allocation of pockets in the weekly & TV magazine sections of the magazine department, Bauer is challenging newsagents with launch of TV Week Soap Extra. In addition to making space we’re dealing with too much stock. This is a title they could have used sales based replenishment for rather than using newsagencies as warehouses.

6 likes
magazine distribution

Dealing with the breach of privacy by magazine distributor Gordon and Gotch

Further to my post Friday about the breach of privacy by Gordon and Gotch with their publishing of email addresses of many newsagents they claim to be delinquent in paying accounts, The Office of the Australian Information Commissioner offers newsagents an entry point for complaining about the breach and requesting it be investigated. In the states where there is an active Small Business Commissioner you could also complain there.

Before complaining to the OAIC, you will need to complain to Gordon and Gotch. I’d suggest you put your complaint in writing to:

David Hogan
General Manager
Gordon & Gotch
26 Rodborough Road
Frenchs Forest NSW 2086
FAX: 02 9451 6157

I suggest a letter to Gotch documenting the breach of your privacy and asking what Gotch intends to do about the serious matter. Make note of the Privacy Act and that you consider Gotch has breached this.

If newsagents whose email addresses have been published tin the communications about delinquent accounts do not complain to Gotch about the breach the company has the opportunity to consider that it has done nothing wrong.

If you’re on the list and you think its too hard to do anything, think about how a supplier might react if they have access to this list of newsagents how have now been publicly tagged as being late at settling their Gotch account.

In my view, Gotch needs to right this wrong.

9 likes
magazine distribution

Shock as Network Services is guilty of magazine oversupply again!

magsnetwv8V8X Supercar magazine failed the last time we had it in 2011. Network Services responded to the failure supplying the title to us recently as a volume three times the failed 2011 supply.

This scale out by Network doesn’t many any sense.

The Bauer controlled Network expects newsagents to pay their accounts on time yet they do not provide newsagents with reasonable levers with which to control their level of indebtedness. Network misbehaves on a daily basis, lumbering our businesses with unreasonable debt and insufficient tools with which to mitigate the situation. 

7 likes
magazine distribution

Gotch engages in premature stress for newsagents

gotchpayNot content with running a flawed magazine supply model, magazine distributor Gordon and Gotch  today emailed newsagents reminding us to pay November accounts by today.  If only the company was as attentive to fairly supplying newsagents.

This email request from Gotch reflects disappointing double-standards. All newsagents want from the company is fair and equitable magazine supply. Gotch, on the other hand, wants on time payment for what is often unfair and inequitable supply.

While one could argue that the money is due today, there is also the consideration of gross oversupply and the other, expensive, challenges of the magazine supply model.

21 likes
magazine distribution

Note to magazine publishers: delayed billing will NOT reduce early returns

Newsagents are being swamped with titles where billing is delayed. It feels like title range and volume has increased as a result. This is nuts. I early return a title based on its sales performance and not based on when it will be billed. Retail space has a cost. Delayed billing will not and should not remove a title from consideration for early return. Anyone saying otherwise to magazine publishers is not accurately representing newsagents – the people paying for the retail space, labour and shrinkage in newsagencies.

Publishers: Stop using us as your warehouse. If your title has an on-sale of more than  four weeks, hold the stock and send additional stock bales on our sales data. While your distributor may say that they don’t have accurate sales data, challenge them as they are probably wrong.

If the increase in delayed billing titles does not stop more newsagents will strike out by cutting magazine space and sending more titles back early.

For Christmas, newsagents want magazine distributors and some magazine publishers to treat them with more respect.

There was a time delayed billing was used by a few publishers with care. The free for all we are seeing now has ruined it for everyone.

25 likes
magazine distribution
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

What do you think of the Powerball changes?

Published on February 16, 2018

IPS releases new magazine contracts

Published on June 21, 2011