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supplier arrogance

Unfair magazine KPIs

I am trying to help a newsagent get approved by a magazine distributor for processing magazine returns electronically. The distributor says no because the newsagents has only sent sales data for 50% of the trading days of the month.

Fair enough, the newsagent should be sending sales data every day. However, this is a one-sided relationship. The magazine distributor imposes tough KPIs on newsagents on sales data, invoice payment, displays etc and accepts none in return. They are supplying some titles which sell through at less than 30% yet the newsagent has no mechanism to use against the distributor.

Let’s play this scenario through a bit. The newsagent fixes processes at their end and does send sales data through every day, they are then permitted by the magazine distributor to process returns electronically. What happens about underperforming titles? Nothing.

This is a one-sided, unfair relationship. A magazine distributor treating newsagents as partners would have used the electronic returns request as a carrot rather than a stick.

The magazine distributor ought to stop managing newsagents by blackmail and start treating them as business people.

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magazine distribution

Newsagents, publisher in court

It is good to see the case WA newsagents have against West Australian Newspapers finally get to court. The Australian had the story yesterday. This battle has been around for years, costing newsagents hundreds of thousands of dollars as they had to absorb increased wages and costs including fuel. No increase for ten years is appalling behaviour by a supplier.

News Ltd, the publisher of The Australian, ought to check its own record, it’s not a whole lot better than WAN. Kerry Stokes, WAN shareholder seeking a seat on the WAN Board, is quoted in the article as offering an alternative to newsagents:

“How about instead of this being just about you delivering papers and getting so much per paper, what say we take a base and we give you a much higher commission for every increased paper you sell?” Mr Stokes said. “So if you sell 1000 papers now, (and then) you sell 1100 papers, maybe we double the commission rate on the next 100. We’ve got to find ways to sell more newspapers and we’ve got to make sure we don’t send our suppliers broke. The system is inequitable.”

I like the sound of that – a supplier talking to newsagents as if they are business people and offering a remuneration based on achievement. It’s about time.

Newsagents are the most important channel to many suppliers yet we are treated as second class citizens through poor trading terms and poor service levels. But we’re not as organised as we could be so we may facilitate some of that shabby treatment.

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Newsagency challenges

Silly Stationers Supply

Stationers Supply, a warehouse supplying newsagents in Melbourne, Sydney and Brisbane, has reportedly decided to remove 3M products from its product mix. This is nuts. 3M brands like Scotch, PostIT and Command are important to newsagents. For a warehouse to remove them will only harm the warehouse as newsagents will source what they need elsewhere.

UPDATE 02/04/08 (10:30AM) : Stationers management has reversed its earlier decision and will continue to stock 3M.  A 3M rep has contacted me and advised me of this this morning.

I have had a conversation with the MD of Stationers and he says he never made the decision about 3M in the first place.  Personally, I doubt this.

UPDATE: 02/04/08 (01:42PM):  Stationers Supply has contacted me again and threatened legal action if I do not remove this post altogether.  While I could do that it would not represent the events.  I heard through 3M yesterday about the decision – one of my newsagencies had been told.  I subsequently heard through 3M this morning that Stationers reversed their decision.  No legal threat can alter what happened.

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Newsagency challenges

Reconsidering Christina Re

c_rea_fhn.JPGWe have carried Christina Re invitation and paper craft products in our newsagency for more than four years. Sales have been up and down over. The fall came when the supplier put the range into another store in the centre – they closed a year or so later.

It’s a fashion business this invitation and paper craft area and customers need to be regularly reminded you’re in the space. The range needs to be refreshed as well – so that there is always something new on offer. Volume is not sufficient for the retailer to carry the cost of this turn.

We were promised supplier support and since it has not happened we’re looking at alternatives.

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Stationery

Poor supplier respect for newsagents

art_cart_art.JPGLast year we reached agreement with the folks at Art Cart to put their unique range into the three of our newsagencies. We felt the products, pencil cases, would work with young kids and take us away from traditional stationery and into a more socially connected product. We spent considerable on the range in the stores and talked about a broader relationship. We provided excellent high-traffic real-estate to promote the range and the brand.

While sales were slow, we continued to support the brand believing that the consumer interest would grow. Imagine our surprise therefore to read in the feature on Art Cart in the Herald Sun last month – no mention of newsagencies in the stockist listing.

This was a product promotion and the folks at Art Cart would have submitted the material. I am disappointed that they did not return support.

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Stationery

Bic forgets newsagents

The Brand Power ad for Bic pens and markers on TV last night closed with the tag line: check out the range of Bic stationery at your local supermarket now. I guess there is no point in newsagents carrying the Bic product anymore.  I’d guess that across our retail network we have in excess of $2,000,000 of Bic product – recieving not one cent of advertising support for our shingle.

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Stationery

Hello Kitty, gee you’re expensive

kitty.JPGNewsagents have been supplied these Hello Kitty Crazy Beans by Gordon & Gotch. The price to newsagents is 90.07 cents with a retail price of $1.25. Other retailers are selling the same item for the suggested retail price of 99 cents. The pricing from Gotch makes newsagents look expensive. No wonder many newsagents are refusing to even put the stock out.

This is an example of a distributor accepting a contract for an item which disadvantages and disrespects our channel. Someone in Gotch ought to have checked I the pricing to newsagents was going to price us above other retailers. In such a situation the product ought not be accepted by Gotch.

Newsagents don’t want the expensive tag and it is easy to see where suppliers like Gotch can cause a problem for newsagents. We are returning this stock early in our newsagencies.

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supplier arrogance

Lying reps say anything for a sale

A rep visited my Frankston store on Tuesday telling Simon, the manager, that I had asked them to visit to discuss putting their stock into the business. I had made no such request. I am tired of reps turning up without an appointment and lying to get an order. Newsagents deserve better.

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supplier arrogance
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