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magazine distribution

Are internal changes at Bauer the cause of magazine supply increases to newsagents?

I am told that a reason for the increase in supply of Bauer magazine titles to newsagents beyond what is justifiable in the sales data has its roots in a change in how allocations are managed for these titles.

ACP Magazines used to do their own allocations for ACP titles and had done so for many years – closely aligning supply to net sales. Undersupply was a common complaint by newsagents for ACP titles.

Since the Bauer takeover of ACP, I am told there has been a structural change affecting supply allocation. They have split circulation management into two areas, separating the circulation manager from those analysing sales data. Circulation reports to finance.  This change sees less focus on sales data and it is this that is resulting in newsagents receiving a significant increase in supply of Bauer magazine titles.

If my information is right and these changes have occurred at Bauer and they are feeding the consequences we are experiencing in our newsagencies then we as a channel need to consider a plan of action. Oversupply at the current level is commercially unfair to newsagents.

Newsagents who are not in the elite Connections Emerald group have to return full copies of unsold stock most of the time. This acts as a penalty on oversupply, taking cash from businesses as a result of an action over which they have no control.

With the staffing changes at Bauer it is no wonder people from inside and recently departed from the company are talking.

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magazine distribution

IPS / Speedimpex commercial alliance to help newsagents with magazine supply

Magazine distributors IPS and Speedimpex have today announced they have formed an alliance that will see IPS manage distribution of titles from both companies. This move adds 1,000 titles to the IPS stable.

Newsagents will have access to Speedimpex titles at the IPS commission of 27% plus they will have online control over supply.

This is a welcome move.

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magazine distribution

Has Bauer adjusted its newsagent magazine supply model?

We have been grossly oversupplied with Wheels magazine this month, an increase of 30% on the back of a low sell-thorugh. I noticed it Saturday and was going to call them today. But talking with newsagents yesterday at the ANCOL trade show in Adelaide many complained about gross oversupply of Bauer titles – Motor, Top Gear, AWW and Gourmet Traveller.

Different newsagents reported oversupply of different Bauer titles.  Five or six newsagents expressed concern. Their experiences coupled with my own make me wonder if there has been a change made in the Bauer allocations process. Something is broken and newsagents appear to be carrying the cost of this.

Given that Bauer owned Network Services takes a zero tolerance approach to returns credits and given that their accounts office acts quickly to cut supply to newsagents even though the company may have a security deposit, it does not apply the same discipline to its own dealing with newsagents when it comes to oversupply.

The sooner individual newsagents test this in a forum of authority the better.

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Ethics

How to avoid a dispute over your magazine returns

Here is magazine returns packaging advice I published here in July 2012 in a post called How to avoid being fined by Network Services.  I wrote the post after hearing from several newsagents about claims against them by Network Services about magazines not being returned to the Network warehouse.

This advice remains best-practice advice today:

How to avoid being fined by Network Services

Magazine distributor Network Services operates as victim, prosecutor, judge and jury in the handling of disputes arising from magazine returns.  While they will say that statement is unfair, it is how it is.  It is how newsagents who have experienced a dispute often feel.

While I have seen Network act fairly in some situations, I have also seen them act unfairly in others.  The frustration felt toward their handling of disputes is magnified since they relate to products over which newsagents have very little control thanks to the push model of magazine distribution in Australia.

Here are my suggestions for newsagents to be better able to deal with a magazine returns credit dispute:

  1. Make sure that you understand and carefully follow the current Network process for packaging and shipping returns and returns forms.  Do not ask another newsagent what the current process is, ask only Network. Get it in writing.
  2. Keep a copy of all forms, emails and other documents relating to returns in a separate date-sequenced file for Network.
  3. Create a log of returns shipping activity noting the date you sent returns, the courier used, number of packages and the name or the person who completed the returns at your end.
  4. Photograph each Network returns package – clearly showing the label.
  5. Get a receipt from the courier you use to deliver your returns to Network.
  6. If you deliver the returns yourself, take a photo of your packages before you leave the distribution depot.
  7. Make notes about any phone call relating to returns.  Include the full name of the person you spoke with plus the date and time.

The better you are able to prove what you did and when in the event of a dispute the faster the dispute will be resolved.

The process outlined above will also show some newsagents mistakes which led to credits being denied.

I urge newsagents to print this advice and train their employees to follow it for Gotch and Network returns.

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magazine distribution

Frustrating bagged magazine pack from Bauer

I heard from my newsagencies yesterday about the bagged discount pack of Woman’s Day and AWW. It frustrates me that I have no control on receiving these bagged discount packs. They take time and space & are loss-making for us. It is unreasonable that I’m forced into this situation. Every newsagent ought to be able to cancel these bagged discount packs if we wish.

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magazine distribution

Serving older female magazine customers

Another magazine move we have made this week is to shift our magazines that are purchased by our older shoppers together and placed them opposite our weeklies at the entrance to the magazine aisle.

We are adding more titles here as these customers are valuable for magazines, cards and gifts. We want to better serve their needs.

This posts and others recently documenting magazine placement adjustments and our overall magazine relay strategy demonstrate our commitment to magazines. We are committed because growth is achievable. Magazine customers are vital because they shop by habit.

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magazine distribution

marie claire sells out

We’ve sold out of marie claire as have many other newsagents and there is no spare stock to be found. While it’s a good problem it have it’s proving to be frustrating to regular customers who have not purchased their copy yet. We’re using it as an opportunity to remind them of our magazine putaway service.

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magazine distribution

Here’s how a partwork can make you real money

Thanks to the attention driven by the new Hello Kitty partwork we had a customer a couple of days ago spend $117.45 on Hello Kitty products, on impulse.

By ordering in Hello Kitty product to time with the launch of the part series was genius on the part of our team member responsible.

This is the type of action newsagents need to engage in – being proactive retailers based on trends they see in store. It’s action that can be taken within a budget, even a small budget. magazines and cards provide wus with excellent guidance as to brands and trends we can tap into to drive sales.

While some newsagents will prefer to be agents making a percentage from products and services controlled by others, I am certain there is more money to be made by us exerting more control ourselves. Every day I see examples – like this Hello Kitty one.

Now if only we could get partworks supply sorted out.

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Gifts

Gotch and Network fail publishers and newsagents on partworks allocation

There is no better illustration of the diversity in the newsagency channel than partworks. Some newsagents hate partworks with a passion. Some newsagents love partworks with a passion.

The newsagents who hate partworks tend to display them poorly if at all and early return – angered at the freight cost. Newsagents who love partworks often sell out and vent anger at the delay in getting more stock to sell.

A smart magazine distributor would give newsagents control over their partworks allocation. I suspect that if they did this the channel would sell more partworks. Newsagents would be happier and publishers would be happier.

Why is it so hard to implement smart partworks allocation?

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magazine distribution

Another crazy magazine day for newsagents

It’s ironic to me that a couple of weeks after PMP announces in its FY13 results a decline in Gotch distributed magazine volume of 10.9% that newsagents experience newsagents are hit with what feels like a considerable volume increase in magazine supply.

The most insidious increases are those by one or two copies where we’ve not sold out of recent issues. There is no justification for such increases.

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magazine distribution

Promoting Peppa Pig products and partwork

We’re promoting the new Peppa Pig partwork along with Peppa Pig plush and activity packs in a move that is driving sales of all products.

Our only frustration is the lack of stock of the Peppa Pig partwork. I am surprised the publisher was not more prepared for the success of this. The data on sales of Peppa products in Australia indicated the scope of the opportunity here. No matter, we’re selling all we can and reordering extra stock when it becomes available.

Peppa Pig is a good example of the value of brands in our businesses. By sourcing what we can from multiple suppliers we can leverage traffic generated by a partworks launch to drive margin dollars per sale. The result is excellent for us as it takes the small GP we make on the partworks launch issue and increases that many flow thanks to the 50% and 60% GP on the plush and other items.

This is another example of how newsagents can make money out of magazines.

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magazine distribution

Network Services vs. Gordon & Gotch

Several newsagents have mentioned to me that during the Bauer Connections conference last week a comparison was drawn between the performance of magazine titles from Gotch versus Network with the inference being that Network success reads as Bauer success over Pacific.

If the feedback I’ve heard is anything to go by the comparison did not help build support for Bauer / Network. On the one hand Bauer people say they want the channel to be stronger yet their newsagent engagement is selfish, often seeking to drive consumers to their titles and away from competitor titles. A publisher focused on the broader health of magazines in newsagencies would take a more co-operative approach.

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magazine distribution

New video: how newsagents can grow magazine sales

Further to my post yesterday about our growth in magazine sales here is a brief video I shot late yesterday where I explore the sales results, explain how we achieved this and call on all newsagents to embrace the category.

I am concerned that newsagents are giving up on magazines. This would be a mistake. With good management and hard work newsagents in almost any situation ought to e able to grow magazine sales – despite the best efforts of some distributors and publishers to make our channel less competitive.

Footnote: this is the first video I’ve shot with a new lapel mic. The sound quality is much better.

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magazine distribution

How I’m growing magazine sales 10% year on year

A check of year on year sales at one of my newsagencies shows that we’re achieving 10% year on year unit sales growth for magazines and even more at some category, segment and title levels.

Woman’s Day sales are up 6%, New Idea up 15%, Who 31%, Take 5 up 7%, TV Week up 7.8%, AWW up 4.5% and craft overall up 40% off a good base. While magazine sales are challenged for many, things are working well for us. Here is what we do to drive magazine sales:

  1. We obsess about the category because it’s a key traffic driver. We manage it as a point of difference and not as an obligation. By obsess I mean that more than 50% of my time in the shop is spent on magazines.
  2. We react to covers. I topical cover gets extra attention.
  3. We regularly relay magazine categories and titles to keep the layout fresh and relevant. For example, we moved craft from deep in the women’s section to be opposite our weeklies. Bam! Sales went nuts.
  4. We co-locate titles to chase impulse purchases. For example, That’s Life puzzle titles with That’s Life and the AWW crossword book with AWW. Anyone reading my recent posts will know this one move is driving double digit year on year growth.
  5. We often promote magazines on the lease line to passers-by – sometimes weeklies, other times categories.
  6. We use smaller format in-locations displays more so than the publisher preferred billboard displays.
  7. We reward genuinely loyal shoppers for above average behaviour. There is no doubt that the discount vouchers facility is driving good growth for us. Every day we see shoppers purchasing a magazine on impulse as a result of a cash discount opportunity we give them.

I don’t mean to sound big-headed but to me it’s these initiatives publishers should be promoting to newsagents. Our channel can grow magazine sales if we all engage in the kind of activity noted above.

The most important reward any newsagent can win is sales growth. We all must chase this for magazines as this product category continues to be very important to our businesses despite the sales declines reported in many newsagencies.

I’d be happy to help any newsagent address magazine sales challenges.

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magazine distribution

No sales data justification for discounted magazine supply hike from Bauer

Despite not selling out since March and with an average sell through of under 50%, someone or some broken system or process within Bauer has decided we need more stock of their discounted magazine packs. It makes me wonder if Bauer has an allocations problem.

Click on the image and see the sales history for yourself.

Our supply should have been reduced, not increased. My preference is that I not get these discount packs at all as they send the wrong message. Shoppers have opportunities for discounts through a more whole of business approach. This serves my needs more than the Bauer enforced discount pack over which I have no control and in fact have to find another pocket to display.

But if I have to take this stuff then get the allocation right please!

Some in Bauer will complain that I am complaining unfairly. The data speaks for itself.

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magazine distribution

Another tough magazine sales audit for publishers

The latest magazine sales audit results released overnight covering January through June 2013 compared to 2012 show a decline in sales around what I have reported here in the newsagency sales benchmark study.

Overall magazine sales are down around 8%.  Car magazine sales are down on average well into double digits, girl magazines, Dolly and Girlfriend and both down more than 12%.

The Australian Woman’s Weekly has achieved what I’d call a good result, down 1.4%. In this market I expect Bauer would be happy.

Better Homes and Gardens has also achieved a good result with no change. Pacific would be happy with that.

As I wrote earlier today, frankie is the shining light with growth of more than 10%. This is interesting since frankie plays close to the Dolly and Girlfriend space.

In the weekly space, the results are not great but not a disaster considering the overall market situation: Woman’s Day down 4.2%, New Idea down 4.4%, Take 5 down 8.9%, That’s Life down 12.2%, Famous down 14.4%, NW down 6.9%,OK! Down 7% and Who down 8.9%.

I would like to see data comparing titles performance in the various retail channels and even comparing individual businesses in the newsagency channel. I’d like to see if there is migration of the magazine shopper from one channel to another. I’d also like to see how shoppers respond to the different tactics newsagents use in the category.

I have used the magazine club card loyalty program since mid 2004 and for years this helped achieve a better than average result. In February this year I switched, cold turkey, to a unique discount voucher program that front-ended loyalty. My basket data shows that this program has generated considerable incremental magazine sales for us, sales I am certain we would not have achieved.

So, I’d like to see more thorough store level analysis so the channel can understand the success of the various tactical programs being used by newsagents. I’d be happy to share my data, for the good of the channel, to see how what I do stacks up.

From where I sit the evidence is pretty strong that shoppers are over the old points based approach. They prefer a dollar value discount as a reward for above average behavior.

It would be a mistake for newsagents to see the audit numbers and feel encouraged to retreat further from the category.

I am certain we can increase magazine sales by churning shoppers from one retailer or retail channel to us. While it’s hard work, sales are there for the taking.

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magazine distribution

Magazine distribution changes benefit shopping centre newsagents more than high street newsagents

While we are only a few weeks in, I am seeing data indicating that shopping centre newsagents are less likely to experience a negative affect from the recent magazine distribution changes which saw Wednesday and Friday deliveries combined to a Thursday delivery. High street newsagents, however, appear to have lost some sales.

Looking at sales by day reports I have looked at sales on Thursdays and Fridays in particular and they show a difference between shopping centre and high street businesses.

I did check a couple of rural / regional newsagencies and there was no discernable change.

Not all shopping centre newsagents have benefited from those I looked at. It’s clear that how one engages with magazines is a factor. Guiding shoppers to change their habit is important given the risk of losing sales to supermarkets on Thursday especially.

I’d like to see the major magazine publishers more fully research the impact of the magazine distribution change. If they do not want supermarkets to significantly grow magazine sales at the cost of newsagent sales they will need a plan to support our channel.

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magazine distribution

Sunday newsagency management tip: use day of week sales reporting to spot trends

The changes in magazine distribution from Monday, wednesday and Friday to Monday and Thursday are certain to change shopper traffic flow to newsagencies as many regular magazine shoppers are creatures of habit. It’s important we spot changing trends in our businesses early. For this, the best report is one listing sales by day of week.

Newsagents software should be able to report on at least eight weeks of sales on a page, making comparison easier. While I have started doing this in my stores, I am mindful of the impact of the our of sequence publishing of the royal baby issues.

In looking at day of week analysis newsagents need to look carefully at Wednesday, Thursday and Friday as I think these are the days on which we are most likely to measure an impact of the magazine distribution changes.

As I noted last week, I am seeing early evidence that suburban high street newsagents are losing some sales which capital city shopping centre newsagents could be beneficiaries.

Regardless of your situation, tracking sales by day of week and comparing reasonable periods can unlock a better understanding of what is happening in your business and open your eyes to trends you can leverage.

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magazine distribution

Are other newsagents experiencing increased supply of AWW cookbooks?

We received 23 copies Number Cakes, the latest mini cookbook published under the AWW brand, 16 more copies than we should have been sent based on our sales history.

Escalating the issue through network Services we know the allocation was a mistake by an allocations person at Bauer. While I appreciate that I’m able to return the covers of the excess supply, it’s frustrating it happened. Why a human is involved at all is an issue for me. This should be automated and based on the considerable dataset they have for my business.

Bauer should give newsagents a mechanism by which we can preset our title requirements as I noted recently including this:

Here’s what retail newsagents need from magazine distributors Network Services and Gordon & Gotch to enable us to compete with supermarkets, petrol and convenience:

  1. Scale out based on sales data – you don’t ship all copies provided unless the sales data warrants it.
  2. Increase or decrease in supply only if we approve.
  3. Add a new title only if we approve.
  4. Top only returns.

There are other things I could put on the list, as I have done before, but I wanted to keep this simple. This list of four items is easy for you. Technology could make steps 2 and 3 easy for us and you.

Our competitors have these benefits already. That newsagents do not makes us less competitive and less profitable.

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magazine distribution

Bauer Divorce magazine has newsagents laughing this morning

The Ultimate Guide to Divorce is a new magazine title from Bauer out today. Beyond the surprise that it would be published, newsagents are laughing that the barcode used is the barcode for the 2011 royal wedding magazine. While this is probably not intended commentary by Bauer about the wedding of William and Kate it’s giving newsagents a good laugh if the calls and emails I have received already are anything to go by.

Another laugh newsagents are having relates to the feature promoted on the cover of the magazine: Family getaways you can afford. Of course it depends on how the divorce goes as to whether you can afford a holiday.

As for the title itself. the scale our is another example of oversupply from Bauer. When will they start using their much vaunted sales based replenishment?!

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magazine distribution

Bauer needs to act on Network Services oversupply of magazines to newsagents if they want a financially viable newsagency channel

We sold out of the December 2012 issue of Puzzler 125 Crosswords was. network responded by increasing us from 7 copies to 8. While they have their reasons, the sales data does not support it as I am happy to sell out of a magazine late in the on-sale – note that publishers please!  However, that is not the reason for this blog post.  No, on the back of no sell outs since the December 2012 issue, Network Services has increased my supply of Puzzler 125 Crosswords to 9 copies.

Okay it is only one copy more you might say, big deal. The sales data indicates that supply should have gone the other way – back to 7 copies. That’s if network Services was providing the professional magazine distribution services it claims to provide.

No wonder more newsagents are cutting magazine space as a way of taking more control over magazine supply.

I was talking to a journalist last week who is contemplating writing about the magazine retail channels in Australia. He was surprised to hear now newsagents are treated differently to our competitors and that we have no control over the titles we receive and the volume of each title we receive and that our competitors do have this control. He asked how can that be? Welcome to the unjust and unfair magazine distribution model that is structured to make newsagents less economically viable that other retail channels. It’s holding us back and will ultimately account for many newsagents exiting magazines.

Bauer owns Network Services. Bauer management participates in discussions with other publishers on the future of our channel. They say they care about the newsagency channel yet our oversupply continues. The best move Bauer can make to support a healthy and profitable newsagency channel would be to get to the heard of the Network Services supply model that sees my supply of of Puzzler 125 Crosswords increase by one copy on the back of no supporting sales data.  Stop this oversupply creep and you will instantly improve the financial health of newsagency businesses and stop some newsagents looking at how to retreat from magazines.

Bauer is in a better position than any other magazine publisher in Australia to address this. For years, under ACP ownership, they ignored the opportunity. If they do not provide newsagents with the same magazine supply controls afforded to our competitors soon more newsagents will leave the category.

This is a serious issue, one for which there is excellent data supporting the need for urgent attention and supporting my position that gross oversupply of magazines occurs harming newsagency businesses, making us less competitive. Every publisher who wants a strong newsagency channel will call for action on this. If you are a publisher – what are you doing about it?

Click on the image to see the supply and return data for yourself.

Here’s what retail newsagents need from magazine distributors Network Services and Gordon & Gotch to enable us to compete with supermarkets, petrol and convenience:

  1. Scale out based on sales data – you don’t ship all copies provided unless the sales data warrants it.
  2. Increase or decrease in supply only if we approve.
  3. Add a new title only if we approve.
  4. Top only returns.

There are other things I could put on the list, as I have done before, but I wanted to keep this simple. This list of four items is easy for you. Technology could make steps 2 and 3 easy for us and you.

Our competitors have these benefits already. That newsagents do not makes us less competitive and less profitable.

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magazine distribution

Bad news for James Bond DB5 partwork customers as publisher runs out of magazine

Check out the letter provided by the publisher for part 65 of the loved James Bond DB5 partwork collection. The publisher says they have run out of magazines! Seriously! The publisher has run out of magazines.

When I heard this I thought it was a joke, a good joke to play on a dedicated partwork collector. What a hilarious joke on the fans obsessed with this car!

But then I realised it wasn’t a joke. The publisher really has run out of magazines. Instead of the magazine they provide a letter pointing customers to a page on their website. Does Australia not have printers? Does this buisness not engage in planning? Surely they would have known some weeks in advance in which time they could have printed something? They had enough time to print a letter, in colour.

Some avid collectors will not want to continue with the series. I expect some will ask for their money back – and there is a precedent for this. I understand that the distributor has already been asked the question abut this.

There will be newsagents who will say this is another reason to NOT offer partworks. It will be hard to disagree with them. This mess over issue 65 of the James Bond DB5 will generate considerable challenges for newsagents.  Someone somewhere is responsible. It’s disappointing that the Australian importer did not have the courage to print a name and phone number on their letter. This shows they do not accept responsibility.

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magazine distribution

Newsagents could have sold more copies of Locomotives of the World partwork

The supply of the Locomotives of the World partwork is another example of how the distribution model does not achieve the sales it could. I know of newsagents who could have sold more stock had the allocation more accurately reflected local interest in trains. I know of others who will return their supply because of no interest.

had newsagents been able to control their supply of the first issues of the Locomotives of the World partwork I have no doubt the publisher would have achieved a better outcome.

Magazine distributors prove time and again that they are not expert at what they do.

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magazine distribution

21st Century Australia party uses newsagents to distribute election propaganda in the form of a ‘magazine’

Yesterday some newsagents received 21st Century Australia from magazine distributor Gordon & Gotch. Retail price is $9.95 and the on sale period is around three months.

21st Century Australia is not a magazine. It’s election propaganda from a political party: 21st Century Australia. Go to their website and see for yourself.

Indeed, go to their website and download the whole magazine for free. Seriously.

The leader of the 21st Century Australia Party is Jamie McIntyre. He calls himself an educator, author and mentor.  Reading through the website he comes across to me as someone peddling a familiar rags to riches story. There is little in the way of substance. From what I can see, his businesses don’t appear to create real value or engagement for those connected with them.  Maybe my suspicions are on alert because he has Max Markson as his publicist.

If he uses people the way newsagents are being used for this ‘magazine’ no wonder he’s done okay for himself.

Check out the report by Mark Hawthorne in The Age about an allegation that Jamie McIntyre is faking Twitter follower numbers. Also check out The Sydney Morning Herald report from 2011 and issues with ASIC. While you’re researching him you might want to check out this.

This ‘magazine’, 21st Century Australia, should never have been sent to newsagents. It’s not a magazine. Someone in Gotch should have stopped it getting on the trucks. If not for the election propaganda nature of the content then for the design. It’s dreadful.

Our glorious magazine distribution model is such that we have to pay to send this junk back. Gotch has declared it a full copy return. So even if newsagents early return this title they have to pay freight as well as the labour handling costs.

This is another example of what’s wrong with the newsagent magazine distribution model. We get sent this junk and have to pay ourselves to handle it. None of our magazine competitors get this junk. It makes us less competitive. It’s this stuff that is driving more newsagents to shrink engagement with magazines and some to exit the category altogether.

The magazine distributors say the sale or return model protects newsagents. This is nonsense. Labour, freight and storage costs for junk like this ‘magazine’ are a cost of business newsagents face that our major competitor magazine retailers do not face.

Gordon & Gotch has ethical social responsibilities to newsagents, responsibilities they have failed to fulfil with the distribution of 21st Century Australia.

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Ethics
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