magazine distribution

Newsagents may want to check how many copies of Kitchen Yearbook they have received from NDD.  This is another long shelf life Universal Magazines title oversupplied to newsagents.  The sales performance, its size and long shelf life combine to make this title loss-making for us and, I bet, most newsagents.  Our average sell-through is less than 50% yet NDD has increased supply with each of the last three issues.  NDD says I can early return.  The weight means that for each four copies I will have to pay $3.00 in returns costs – I am funding the failure of their supply model.

Almost a month after I asked NDD and Network to stop supplying Universal titles they are yet to act.  This is my business and my money, no supplier can force me to take product which will cause me to lose money.  To force that I will have to take the matter to the ACCC.  I should not have had to but it now seems likely.

Have I missed something?  I thought that the old issue of a title was returned when the new issue came in, in most cases at least.  We received the January issue of Australian Gold Digest yesterday.  The December issue is not due to be returned until next month.  Of course, we have sent it back early.  Many newsagents would not.  I have checked out the December issue of Australian Golf Digest.  There is no reason I can see inside the magazine for it to have an extra month on the sehlves.

We have sold eight copies of Bargain Shopper from Universal Magazines since it arrived eight weeks ago.  They sent us 73.  several years of sales data shows that we will sell a fraction of the 73.  The oversupply is from a company which says it cares about the environment and cares about newsagents.   As regulars here will know we gave the title a crack and promoted it in a high traffic area.  All we could sell in eight weeks in 8 copies.  And the title still has months to stay on the shelf.  The behaviour of Universal around Bargain Shopper is another reason I do not want their product in my newsagency any more.  No amount of requesting has altered their behaviour, so I am better off without all of their titles.  Universal would know from the data they have that I and many other newsagents will lose money on Bargain Shopper yet they did not alter their supply model or financial terms.  Based on my experience I would say that this title is bad for the environment and bad for newsagent cash-flow.

I am undecided about the increased number of compact size magazines we are receiving with their full size parents. Traditional newsagent magazine fixturing is not designed to cope with these yet I can understand that some customers would prefer the smaller size. Beyond the display challenge, which can be fixed with a block of wood, there is the stock issue. When a title introduces a compact version we are often supplier close to double the usual supply until the sales level for the store is reached. Newsagents fund this until the level is found.

I wold like to see us agree terms for new titles and title extensions such as is happening at the moment with Cleo and its compact edition. Bill us once you know what we have sold and not in advance. the technology can handle this easily. It places responsibility appropriately with the publisher for the launch.

Network Services, the distributor handling Cleo, aggressively chases payments on the 20th of each month from newsagents for everything supplied for the month prior. They pursue payment more aggressively than any other newsagent supplier. With some of this money due to titles still being tested in the marketplace, a fairer approach would be for more flexible terms around these titles. The current arrangement sees small business newsagents unfairly funding this testing.

The 2006 and 2007 issues of Australian Senior’s Guide to Digital Photography from Maximedia each had a sell through of 0%.  NDD sent us three copies of the 2008 issue – with a six month on-sale.  The sales history which NDD has ought to have resulted in supply of this title being cut entirely.  NDD’s decision is inexcusable.

At the Maximedia website consumers can buy this title for $14.95.  The price through newsagencies is $16.95.  Maximedia will do deals if you buy 20 or more copies – discounts start at 25%. While I understand the need for publishers to pursue a multi channel approach, the disparity between the direct to consumer versus newsagent offer is concerning.

We are early returning the copies we received in each of our newsagencies.

On the title itself, I think it is a dud, certainly not worth the prices they charge.  Our shelves are well stocked with better Digital Photography content.

I have written to Network Services and NDD advising that I do not wish to receive any Universal Magazines titles in my two newsagencies in the future. In the letter to each I have outlined two scenarios under which I would gladly reconsider.

Retail real-estate is expensive. Labour is expensive. Once these are factored into the cost of managing long shelf life magazines (greater than 30 days on-sale) most of them become uneconomic.

We newsagents have the magazine supply model we have because we permit it. The space is ours. The labour resource works for us. The key asset everyone craves is our network reach.

You will see that I take a considerable swipe at magazine distributor NDD today along some publishers.  They deserve it.  They permit titles to be oversupplied and on terms which financially abuse newsagents.  NDD can fix this.  In fact, they will tell us they have been talking to publishers and to the ANF and that progress is being made.  Progress is not being made.  NDD has no financial interest in fixing this, no distributor does.  Magazine distributors are paid a fee to distribute titles.  They get paid regardless. Newsagent, on the other hand, are only paid for what they sell.  We provide capital to magazine publishers and we weather the cost of theft.

I like the folks at NDD and I like many of their titles.  I just wish they had the balls to act fairly for newsagents.  More important, however, I wish newsagents had the balls to act against unfair publisher behaviour.  Mat action by us could kill off some of these poor performing magazine titles.

The over supply and long shelf life of the three titles I focus on today is an example of the cancer hurting newsagents.  Other suppliers ought to care about this – for the good of the channel.

Renovate & Extend magazine is a good example of an un-viable title from Universal Magazines about which I blogged last week. The five month on-sale is an unreasonable financial and space impost on newsagents. A fairer solution would be that we are paid for stock as it sold. The technology has been able to facilitate this for years.  This takes the financial risk and the cost of theft away from us. 

In addition to the unfair long shelf life there is the supply model itself. I have received too many copies, considerably more than I sell. The distributors know this. The publisher knows this. Yet they continue to supply.

The proof of their gross overprinting is seen with each issue when they bag it with old stock – the never seem to run out of old stock.

Universal Magazines causes the problem by printing far more than they sell. NDD, their distributor for this title aids and abets this crime against newsagents by permitting poor trading terms and supplying too much stock.

I am early-returning part of what we were supplied yesterday as I should not have to carry the cost of their bad behaviour.

The cash Universal sucks out of our channel with titles like Renovate & Extend reduces the cash we have available for better selling magazines and other product categories.

The latest issue of New Home Trends is the other title which received yesterday which has been provided on unfair terms.  We have been sent considerably more than we could be expected to sell, thereby demanding more real-estate than is fair.  The seven month on-sale is too long – this is what really suck our cash.  If the publisher and distributor want a seven month on sale they need to back themselves and let us pay based on scanned sales.  Otherwise they let us pay once they have the returns.

Newsagents will continue to be treated poorly by some publishers and distributors unless we stand up to this appalling behaviour.

We returned every copy of Printing Digital Photos magazine which we received yesterday from NDD.  This publication will not sell inn our shop where we are well satisfied with digital photo magazines.  A copy or two may be stolen because it is small and convenient to steal but it will not sell.  The six month on-sale period is another reason we early-returned the title.  This title is an unfair impost on newsagents.  It should not have been allowed into our channel, certainly not on the terms NDD has negotiated on our behalf.

The only way to teach the publishers and distributors that we will not be abused this way is if we return titles like this and not pay for them.