Ugh!

All of the effort by around 2,000 newsagents and newsagent software companies counts for nought when a magazine distributor ignores the sales data and ships stock without justification.  Gordon & Gotch yesterday sent us more stock of Food & Exercise Diary and Calorie FAT & Carbohydrate Counter.  We still had stock from the initial allocation by Gotch.  The sales data they have in their computer system for our store would tell them this yet they sent us more stock and billed us.

I bet I am not along in receiving more stock of these two titles yesterday without justification.  It would be good to know how much newsagent cash was sucked out of our businesses by this decision to send us stock without taking into account sales data.

Magazine distributors need to understand that they have an obligation to supply on a fair basis.  Supplying when the sales data shows supply is not necessary is a blatant cash grab.  Either that or the sales data we are sending is an absolute waste of time.

Yep, it’s been a frustrating week on the magazine distribution front.

We received a truckload of Complete Wedding Melbourne from Network Services and published by Universal Magazines yesterday.  We had no spare space in our wedding section so we decided to take Melbourne Bride off the shelf and early return this.  I chose this title because we had sold one copy in six weeks and because it was distributed by Network Services – the same distributor wanting more space in this section.

On Melbourne Bride, I need to sell a copy a week to cover my costs.  As it is it will cost me close to $10 to return the unsold stock.

No wonder some in magazine publishing and distribution circles say we have the best magazine distribution system in the world.  That’s because newsagents are the bank and we fund half the freight.

A few issues back Network Services increased our supply of Puzzler Collection by around 50% without justification in our sales data.  Since the increase we have continued to sell around the same volume.  We have supported the title with co-location – crosswords and in with our women’s weeklies titles.  Network’s response will be that we can early return and use Netonline to adjust supply.  That would be a lame and ignorant answer.  A fair and efficient magazine distribution system would not have created the problem in the first place.  The extra copies sent have sucked just that little bit of extra cash from us and how many other newsagency businesses?

We received the Beckett 2010 World Cup Guide in store on Friday, long after the last goal of the 2010 World Cup had been kicked.  Gotch should never have sent out this title.  Sure there will be some die-hard fans who will want it as a souvenir but I doubt sales will be enough to justify the cash-flow cost to newsagents.  I would have given the title a go had I received it two months ago. We received three copies at $21.95 each.  I broke with my own rule and early returned them all.  I am not prepared to have $60 worth of out of date stock sitting on my shelf when I have more current and fairly priced stock available.  And while on the price, this magazine sells for $9.99 in the US.  How do we get to $21.95 here given the current exchange rate.  Surely freight cannot be that much.

We returned all stock of Gameinformer magazine earlier this week after keeping it on the shelf for the full on-sale period.  As I mentioned in my blog post last month, this title is not working well for us yet Network Services increased our supply.  There was no justification in our sales numbers yet they decided to spend our money.  And magazine distributors wonder why newsagents get angry and why paying the bill on time is such a challenge.

What I want is a magazine distribution model where I can choose the titles I want and the quantity I want to receive.  I suspect that if I had this, my magazine sales would grow – I’d carry a wider range of titles and more stock of titles which work for me.

Instead we have a magazine distribution model which is not based on sales – despite what some on the disribution side say.

Smart publishers would try and tap into the growing pool of newsagents who want more control over magazine supply so that they can grow magazine sales.  We are out there people – come and find us because we can help you grow your business too.

We received Monarch magazine at our Forest Hill store this week for the first time.  I was surprised since this is a magazine which according to the publishers: commemorates the lifestyle of affluent African American Professionals.  I have owned Forest Hill for fourteen years and cannot recall seeing that many African American customers shopping with us.  What would possess Gordon and Gotch to send us three copies?  Certainly nothing in our sales data for other titles. Supply to us was plain dumb!  It wasted my time and money.

Publishers with more relevant stock vying for time and attention in Australian newsagencies ought to be as frustrated as me by this story.

As a rule, I do not early return stock the day it arrives but I did with Monarch magazine.

Newsagents should check their supply of gameinformer magazine. Yesterday, we received 10 copies. The last issue we received 4 and returned 4. The issue before that we received 8 and returned 5 and the one before that we received 8 and returned 6. I can see no justification in our sales numbers for Network services to increase our supply by 100%, I doubt that even an amazing promotion would lift our sales by 100%.

Publishers reading this blog need to understand that every additional copy sent to newsagents which does not sell has a cash flow cost to our business.  Retail real estate and labour account for between 21% and 24% of revenue in shopping centre newsagencies.

Come the 20th of the month Network will be chasing payment yet when if we try and use the regular processes they have established for newsagent communication they will not be as attentive.

With magazine sales down significantly on last year and 2009 down even more on 2008, magazine distributors and magazine publishers have an obligation to stop sucking cash out of our businesses with poor supply decisions.

Sit in the office of the accounts office of any magazine distributor in the last week of any month and you will soon realise how serious cash flow relating to magazines has become for newsagents.  They don’t care, all they want is their cash.  They accept no responsibility for creating the cash flow problem.

I has data from several newsagents for April showing that they paid some distributors more than the money they took through the register for their titles.  This happens because of a failing supply model.  Yet the accounts people do not get it, yes, all they want is their cash.

This is a crisis no one seems prepared to address.

Network Services sent us 20 copies of Cook Fast, a cookbook published under the Weight Watchers brand (not connected with the Australin Weight Watchers magazine).  I questioned the supply at the time as we did not have any space for this unexpected arrival.

Last week, we took all 20 copies off the shelf having actively promoted the title at the counter and with newspapers as well as in with food titles.  Not one copy sold.

In addition to having to pay to process the returns, we had to find the retail real estate, the labour creating displays and the cash given the model of paying for all stock supplied and then claiming a credit for returns.

We need a model which offers fair compensation for titles which do not achieve a minimum sell-through rate.  I’d suggest a 50% sell-through is fair.  Titles which achieve less than this should be paying their way.  I would have some exceptions such as selected Australian small publisher titles we want to support for diversity of range.

Cook Fast looks like a cheap magazine, made up of material repurposed from elsewhere.  While this may not be the case, it is what it looks like to me and I am a food magazine consumer. It does not have the quality of the AWW cookbooks which sell for $3.00 less.

If I had been given the courtesy of being asked whether I wanted the title I would have said yes to three or four copies, enough to fill a pocket.  Since I was not given this courtesy and the title failed abysmally, someone needs to be financially accountable.  Since my relationship is with network Services, I blame them.

To send twenty copies at a time when newsagents are being loaded with new and reissued food titles is poor behaviour by Network Services.  While I am sure they will have an excuse, I won’t buy it.  They have an obligation to treat newsagents fairly, with respect.  The supply model for Cook Fast, based on my own experience, did not respect newsagents at all.

As I have written here many times previously, newsagents need a magazine czar, someone who controls what titles get access to our national retail network.  Magazine distributors get it wrong too often and newsagents end up paying the price.

So I have written my piece and I feel a little better.  Nothing will change.  Newsagents will blame distributors.  Distributors will blame newsagents and publishers.  No one accepts responsibility for the failure of a title.  Well, actually, that’s not true.  Newsagents accept responsibility because they are contractually bound to do so.  This is the unfairness of the current Australian magazine distribution model.

There, now I feel better.