Magazine distributor Network Services has announced today it is moving to a Monday / Thursday magazine delivery roster.
This not unexpected move will alter workflow and shopper traffic in newsagencies. I can think of plenty of Take 5 shoppers who will be disappointed. You only need to look at the seven day sales decay curve to see the impact.
I do wonder if this is part of a broader move around other changes – time will tell.
I’ve supported the launch of Australian mag renegade Collective in my newsagency as shown here, here and most recently here and so I was disappointed to see subscriptions being promoted at 45% off on the ad screens in the public areas in my shopping mall.
There was no call to action to get the title at retail, no mention of my newsagency in this centre where the advertising was running.
I get that the ads are part of a national campaign to run, probably, in multiple locations on the digital ad network. I also get that subscriptions are part of any magazine supply mix. But don’t use traffic generated in part by the many thousands of dollars I pay centre management to bring traffic to my centre to sell products I sell direct to my customers.
I and many newsagents are helping launch this title with display space without cost. Some shoppers could recognise the title in these digital ads because of the free help we have provided.
Yeah, I’m not happy about this campaign.
And magazine publishers wonder why newsagents early return. This week we received a 71% increase in supply of Nexus magazine without any justification in our sales data and for no obvious reason in this issue of the magazine.
Our sales data indicates that no increase was warranted yet some person or process within Network Services thinks otherwise.
This is yet another example of gross oversupply over which newsagents have no control, oversupply that disadvantages us and impacts on our ability to effectively compete in the magazine space.
If this behaviour continues consumers will suffer form lack of competition.
Take note magazine publishers – if you want newsagents to keep selling magazines, fix this type of oversupply!
The 7-Eleven Facebook page is promoting TopGear at $6.00 – $2.95 off the usual price. The deal is also being promoted on various websites that list deals and discounts – such as OzBargain.
This 32% discount shows 7-Eleven as a place for magazine deals – better than newsagents.
I would not be surprised if Bauer and 7-Eleven have negotiated a rebate based on sales to top up lost margin dollars – so 7-Eleven would be no worse off. However, I have no specific knowledge of this.
I am not happy about this deal. Newsagents account for more sales of magazines for Bauer than any other single channel. We should be offered cover price deals like this with backend rebates to protect margin dollars.
We have to ask – why is Bauer boosting the smaller 7-Eleven channel with a 32% off deal ahead of newsagents?
Here’s an announcement about this promotion that fell my way yesterday:
TopGear Australia has partnered with 7-Eleven in an Australian magazine industry first.
The innovative marketing partnership allows TopGear fans to download an e-voucher to their desktop, tablet or mobile phone from 7-Eleven’s Facebook page.
The voucher can then be presented at any 7-Eleven store, and guarantees purchase of a brand-new issue of TopGear Australia for just $6 – a saving of $2.95.
The promotion is the brainchild of TopGear’s web and news editor Dylan Campbell and was implemented by marketing guru Georgia Mavrakakis.
The voucher has been shared across TopGear’s 84,000-strong Facebook fan base, along with 7-Eleven’s 506,000 Facebook fans.
Like many newsagents I suspect I was surprised to see the Rocks, Gems & Minerals partwork reissued yesterday – even though it did not look like a reissue thanks to new packaging and National Geographic branding. I don’t remember it looking like this last time around. The stock code in the EDI file points to the previous issue so this is connected to the previous rocks title we received.
72 copies, that’s what we received in one of our stores.
What do other newsagents think?
If we had control of our ordering, we’d have asked for 30. here’s what galls me and, I am sure, most newsagents. We have to pay to return the unsold stock. We are penalised for a poor scale out decision, we have to pay for someone else’s mistake. It’s a disgusting impost on any business let alone small business newsagents at the end of the magazine food chain.
And magazine publishers wonder why some newsagents are actively and openly discussing exiting the category altogether.
Supply is the problem. It is drowning the newsagency channel and no one in authority appears prepared to do anything about it. The result will be even more magazine sales lost from the newsagency channel to supermarkets.
nourish is another magazine launch we have to make space for. This one is challenging since it looks like a guys magazine aimed at the fitness section but it could also fit in general health as well as food.
We have it with men’s health and fitness titles. I’d love to know where others have it.
Notice the card sticking out of the magazine – the nourish publisher is taking space from titles behind it in a move sure to upset the affected publishers.
The re release of the Art of Crochet part series is too soon. Judging by our initial allocation they must have a ton of stock left in the warehouse.
Our sales history for this title indicates that we will be lucky to sell 30% of what they have sent us so the distributor has just cost us a ton in freight to send the unnecessary stock back.
It is scale outs like this that make newsagents less competitive than supermarkets when it comes to magazines. It’s a pity the competition regulator refuses to engage on this.
Check out a quote from Richard Goyder, CEO of Wesfarmers, from a couple of weeks ago in The Australian Financial Review:
Any business in this country has to be looking at how efficient it is. Our business is not to prop up inefficient suppliers but supply great products to our customers in the best way we can.
This is very true. The problem for newsagents is that we have contracts in place with Gotch and Network that see us propping up inefficient suppliers. We are treated differently to our competitors by these companies, with less efficiency, and this costs us tremendously.
There was a crisis meeting of all newsagent associations almost a year and a half ago about this and to my knowledge nothing has happened.
I predict that once the issue of newspaper home delivery efficiency and value is resolved, more newsagents will turn their eye to the value of magazines. I have already heard of several newsagents actively considering closing their magazine distributor accounts because of inefficiencies they cannot overcome due to the poor business practices of Gotch and Network.
Magazine publishers should get engaged in the issue of supply efficiency – otherwise they will find newsagents not wanting to carry the category.
Richard Goyder is lucky, his one account is so big that suppliers must take notice.
We are early returning the two boxes on One Direction lollypops and patches we received with our magazines last week. We should never have been sent these in the first place.
Besides the lollypop / patch packs not being magazines, I have no interest in selling One Direction product for 25% GP.
The other issue is that we have nowhere to place them except at the counter and I use that space for products for much higher gross profit.
I have access to a broad range of more relevant One Direction product from which I can achieve 50% gross profit and more. I’ll take the magazines but nothing else. I don’t need a magazine distribution company getting into this space – their interests are not aligned with mine.
That newsagents have been sent this and have to fund its return is another example of the disadvantage we face over other retailers selling magazines. The costs of being in the magazine space are far greater for us that for petrol, convenience and supermarket outlets. This disadvantage could hinder competition if newsagents get out of magazine altogether because of our continued inability to manage magazine (and other product supply to our businesses by magazine distributors.
Having to pay to send this product back disgusts me.
The Everything is Mathematical partworks was released in newsagencies this week. It’s an odd title, certainly not your usual part series. Beyond the limited appeal of the content, the retail package itself is dull, uninteresting. It does not led itself to retail display. This mar be a part series we kill off early given it drags us down and we’re not about to spend more than we should making it look good.
The comments from a team member in one of my newsagencies are insightful:
It’s a strange partwork in the sense of … who would want this? My first guess would be VCE teachers or students as the content is far too advanced to be placed with our kids magazines. I’ve placed it near Business, Science and I.T and we’ve sold the one since Monday.
I’ve checked out the website they promote on the front of part 1 – this is another reason to maybe ditch the title … no promotion of newsagents at all. I don;t mind being used to promote their model but they should pay me more than a few cents to do this.
With a couple of new partworks arriving in newsagents today – Build a Dollshouse in some places, Classic Pocketwatches in others – it is unfair to lob such volume on newsagents on the second last trading day of the month.
I love partworks, usually – many newsagents don’t. Publishers and distributors would get more engagement from newsagents if they let us choose if we took them and if they let us set our own initial allocation. Instead, we have an archaic system that fails newsagents and consumers. The distributor, makes money moving stock in and out. The publisher gets subscriptions offer promoted for very little cost. They ought to treat us with more respect.
Below I share a story from a magazine publisher about a recent experience they had. This story underscores my concern that the treatment of newsagents by magazine distributors is leading to some of us making decisions that hurt our businesses and distance us from the one point of difference we share as a national channel.
Here’s the story:
We had a phone call from a lady last week who wanted to subscribe to our magazine because she couldn’t find a newsagency anywhere in her area that sold it. She stated that her local newsagency used to get it but doesn’t any more (i.e. since IPS began distributing it last October).
I know this publisher and when they get such calls, they always check their IPS allocations list and advise the caller of newsagencies in their area that stock the magazine. This is an excellent and supportive service. It demonstrates practical support of newsagents
Our title’s presence in newsagencies is very important because we understand that most people do not want to subscribe to magazines.
When we checked the allocations list for our caller last week it showed several newsagencies in her general area that stock and sell the magazine, and she was very happy to be given store names and addresses.
More importantly though, a subsequent check of earlier allocations showed that her local newsagent had received stock, with null sales after we changed to IPS (along with several hundred others) – a clear demonstration that those newsagents would not accept supplies from IPS.
I understand it is every newsagent’s prerogative about who they deal with, but am concerned that those who won’t deal with IPS are effectively sending hundreds of customers who are determined to buy a copy of our magazine to other newsagencies, where they might spend much more than just the cost of our magazine. I wonder what percentage of those “turned away customers” become “thrown away customers” because they change their allegiance to the new newsagency and only shop with them.
Yes, the magazine disribution model is sick, we are oversupplied by Gotch and network and their service of newsagents is poor compared to their service of the majors and, yes, we need to reduce our magazine range. however, we need to make moves on a commercial basis. IPS at least gives us the best tools for doing this.
Further to my recent post, I have this week seen another example of Bauer suppling an AWW cookbook title, sweet things, to Woolworths at the same time as newsagents.
The exclusive-to-newsagents period Bauer (then ACP) provides newsagents with was a good and much appreciated commercial advantage for us. It gave us an excellent opportunity for sales ahead of sales in supermarkets. It differentiated us. With this exclusivity window gone it sees us treated as the same as Woolworths by Bauer.
I wish Bauer announced their change in position on this to us. This goes for all suppliers who take something – a benefit, an opportunity – away from their customers. They should be transparent about good and bad. When they are not, trust is justifiably diminished.
Here is an example of why I want to control my magazine supply. In a newsagency in Queensland last week I saw this food title. I’d love to have this in my newsagency, it could work as part of my Keep Calm Carry On range. the current push model makes it difficult for us to use what we know to get more of what will sell in our shops.
Magazine distributors rely on flawed models that continue to supply magazines in an inefficient way. If only they wanted to sell more magazines.
It feels like there has been a rush among magazine publishers to send more titles to newsagents with delayed billing. It feels like someone has opened the floodgates.
I am concerned about the number of delayed billing titles I am seeing in my own newsagencies – from multiple publishers! Do other newsagents feel the same?
Delayed billing of itself is sort of fine, it’s the long shelf life attached to the delayed billing that offends and as long as there is not an increase in the range of titles supplied.
Four months is too long for us to hold a title – unless it is selling well and is profitable for us after allowing for shelf space, labour and opportunity cost.
Delaying billing does not make a long shelf life okay and magazine publishers need to understand that.
delayed billing does not justify a publisher using our space and labour to showcase their stock. Space and time cost money!
I know some publishers think newsagents are less likely to early return a title that is not billed until the end of the on-sale. While their assumption is probably right for some, it is not the case for all. Retail space in shopping centres is expensive and this is what I consider when early-returning … am I getting the return I need to deliver a profit? If not, the title goes back regardless of whether billing is delayed. The only way I will keep an underperforming magazine title on the shelf longer is if the retail space it takes is being paid for by the supplier through a subsidy.
If you are a magazine publisher considering delayed billing as a way of keeping your title on newsagent shelves longer, be aware that delayed billing of itself is not the way to achieve this.
Representatives of The Examiner, a Fairfax owned daily newspaper serving Northern Tasmania, started meeting with newsagents four weeks ago to advise them that they, Fairfax, would be taking control of home delivery customer management.
Newsagents were shocked, it was the first they had heard of this move. Up until now, newsagents have managed all aspects of home delivery of The Examiner – customer billing, payment, stops, starts, run management.
I’ve been told that ANF was advised by Fairfax of the move in November last year. It has also been put to newsagents that the ANF ‘ticket off’ (approved?) the move back then. Newsagents I have spoken with want to know why the ANF kept this news from them for four months.
UPDATE (1:15PM) The ANF has advised that they first heard of this in January and even then in extremely vague terms. They did not and have not ‘ticked off’ the Fairfax plans. I note that my original information came from someone told by fairfax. the ANF has written to Fairfax to correct this misinformation.
The Fairfax pitch is that they will take charge of the customers, manage all aspects of the account, promote subscriptions and promote an associated digital offer. This appears likely to lead to a lower level of remuneration for newsagents.
Fairfax is offering nothing for the effective take over of the customers, many of whom have been acquired directly, through the hard work of newsagents.
Fairfax representatives have apparently said that they will give customers the option of paying for home delivery at the post office. Really? I’d be shocked if they did this. there is a perfectly good retail network in place today – newsagents.
Fairfax is also planning to require all customers to pay in advance. They are apparently offering customers a voucher to sweeten this move.
As recently as five years ago The Examiner purchased territories off newsagents. Back then, the company considered the home delivery customers acquired by the newsagents had a goodwill value. This latest move could be seen as takeover by stealth. This is one of the concerns of newsagents – what happens to their goodwill?
The ANF is getting legal advice in Tasmania. This feels too little of a response too late. I’d prefer legal advice from those with national experience in this space, experience in dealing with publishers. This legal advice ought to have been sought in immediately Fairfax advised the ANF of their intentions.
UPDATE: (1:15PM) Based on what the ANF has advised their timeliness in getting a legal response has been good.
The Examiner prints between 30,000 and 35,000 copies a day. This low number makes me wonder about the viability of the print edition. Okay, as a regional newspaper the economics are different and a lower print run can be more profitable in this situation than in a capital city. Still, 30,000 to 35,000 copies is low. I wonder if the Fairfax move is to prepare the business for a switch to digital only or, at the very least, to reduce print days. They can’t easily do this unless they own the customers. Currently, the don’t own the customers.
I was in Launceston yesterday and spoke directly with several newsagents affected. Outside of their concerns about losing the customer accounts asset of their business and therefore significant goodwill, they explained the nature of their customers and an expectation that a decent percentage would not want the details held by their local business being handed to a national business.
Some said they’d expect to lose at least 10% of home delivery customers because of the move of account ownership from the local business to Fairfax.
Some said they expect Fairfax would lose more customers by requiring payment in advance.
These issues could have been fully canvassed through a more open consultation. As it has been done, the newsagents involved are stressed at the late notice grab for an important and valuable part of their business.
What is happening with newsagents in Northern Tasmania ought to concern all newsagents. Some of our own are being treated with disrespect and unfairly. They have been let down by their association. Hopefully this blog post leads to more active engagement by all to treat newsagents fairly.
Bauer sent us more than double the usual supply of the OK! and Cosmopolitan discount bundle. I’m not aware of any reason for the increase. We didn’t receive any collateral with which to promote the cheap bundle.
Regulars here will know I am not a fan of these promotions, of educating shoppers to not pay full price and of us having to fund the discount for what is already a slim margin product. My on-going frustration aside, this increase in supply is frustrating as Bauer has the data necessary to make a better decision.
Changes by Network Services around the handling of supply of and backorders for the James Bond DB5 partwork are causing newsagents and their customers considerable frustration, lost time and, in some cases lost money. And the company appears to care less about it.
For some time now we have had issues on backorder to address undersupply issues. Around two weeks ago, network advised that they had cancelled all backorders. We called customer service and they advised that we would have to reorder issues and that they would be firm sale. We were also told that as our orders had been cancelled by Network and reorder would place us at the bottom of the queue.
Regulars here would know that I am a big fan of partworks. These flip flops and poor customer service from Network challenge that commitment. Their ineptitude in relation to the James Bond DB5 make us look bad. For a meagre margin it’s not worth it with this title.
We received five copies of The Simple Things last week. It’s a new title for us. Looking through the pages it’s another magazine that is hard to place. It has no obvious category or segment home in our current mix.
As for the five copies initial supply – too many. Two would have been a good start at this price.
On the back of a sell through of less than 50% for People magazine, the allocations system / allocations people at Bauer have given us a 25% increas in our supply. There is no reason for any increase in our sales data. Indeed, a decrease in supply is warranted. So, I ask the question of other newsagents: has your supply of People magazine been increased without justification?
I’d rather not write a blog post like this. I’d rather not have the experience of a supply increase without justification in the sales data, sales data I provide to Bauer daily. I’d rather not have these mistakes occur – if they are mistakes. I’d rather not be put in a position where I think that publishers do this because they want newsagent cash to fund their businesses.
It’s not too much to ask to be supplied fairly based on the accurate data I provide.
Further to my post last week about Speedimpex introducing a $3.50 delivery fee, they have also introduced a $1.00 charge per electronic invoice. This is set to lose them accounts. Maybe this is what they want.
Check out what one newsagent wrote to them about this:
Today I received Elle Decoration, it was single title, my cost was $7.50, the delivery charge was $3.50 and the invoice charge was $1, so it has cost me $12. The retail price for the title is $11. So I am making a $1 loss for the privilege of selling one of your titles, which is also taking up a pocket that could house a magazine that I actually make money on.
Well said. Maybe Speedimpex will take notice and reverse their decision.
For years, Bauer (formerly ACP), provided newsagents with around six weeks exclusivity for new AWW cookbook titles. This was an excellent opportunity for us to promote the new titles without competition from supermarkets.
It looks like the exclusive window is over as the latest title, baking puffs and pastries, is on the shelves in Woolworths already. In one Woolworths I visited on the weekend it was a feature on the service counter – a position suppliers usually pay extra for. We received baking puffs and pastries on March 6.
Supplying newsagents and supermarkets at (or close to) the same time as newsagents would be a blow to our channel … and something I’d expect to have been widely announced. If this is a policy shift, it further strengthens our case for being treated more equally with supermarkets in terms of title selection, payment for premium placement, full copy returns and other financial benefits afforded supermarkets. Also, Bauer they will need to reconsider their scale out to newsagents and the expected on-sale period.
I’d prefer to order my own stock of AWW cookbooks as I’m expected to be financially responsible for it.
Gotch sent us these four gluten free cookbooks in January. They all failed to sell. What is frustrating that we were sent some of the titles twice. even more frustrating is that Gotch has not sent us some titles that could sell. How they work out what we should and should not get is beyond me – clearly it is not based on data they should have about what would work for us. It feels like some scale out decisions are based purely on moving stock from a warehouse to another location – even if temporarily.
This is what we need the ACCC to look at. They oversaw the deregulation that left us with a magazine distribution model that makes newsagents less competitive.