Home' The Channel Magazine : July 2011 Contents National Newsagent July 2011
David James, General Manager,
Distribution Services, says they are
Magazine sales overall during the last 12-18 months have
been, at best, patchy. Similarly, retail we know is extremely
tough right now. The challenges newsagents are currently facing
is something we are very much alive to. All magazine suppliers
have a vested interest in newsagents getting a competitive return
on their investment and being engaged in the category.
Our focus is on reducing category management costs whilst
working with publishers and agents to bolster sales. Over the
last two years we have made some solid inroads. Advances like
weekly electronic returns and on demand EDI supplementary
returns mean agents are realising credits instantly with less
effort. Programs like SBR mean fewer sell-outs and sales growth
without blowing out returns.
There is however further to go. On this front we are working
in a number of areas to further improve category profitability.
Firstly, with all our publishers we are implementing an improved
set of circulation guidelines. These cover all aspects of supply
including lifting overall sales efficiencies. This is the immediate
focus. Over the last nine months, since the closure of NDD,
we have brought on 140 new publishers – many representing
specialist titles. Our initial task was bedding them down.
The emphasis is now on improving sales efficiencies without
compromising sales. Another key is expanding the range of titles
using SBR. This allows us to capture sales when and where they
arise while minimising returns. Underpinning all of this is the
appointment of a Channel Manager to drive Network’s overall
newsagent channel development program.
Newsagents wanting to maximise category profitability have
a role to play. From the basics like keeping up to date with
returns to participating in two-way EDI. As an example only 1475
newsagents are using EDI returns and around 800 providing
accurate and timely daily inventory data (scan sales). Agents
not engaged in full EDI are turning their backs on improved
Online processing is supposed to give newsagents some
control over their magazine supply – the ability to adjust supply.
Newsagents complain they cannot adjust titles down and receive
copies they don’t want and too few copies of what they do want.
They say copies they have deleted from their inventory reappear
some three or six months later.
Taking into account rent per pocket and wages, less than half
the magazines are cash flow positive.
Some have said “it may be time to consider becoming a
subagent and hand picking those lines that are profitable or
getting out of magazines all together. ”
If the magazine publishers and distributors still need
newsagents, why do they create these difficulties for newsagents
thus creating negative feelings about magazines and
consequently lower sales?
National Newsagent received some response to the questions,
the most thorough one from IPS which is trying to address
many of the issues and create a new model, better suited to
Will newsagents pick up the new model which gives them
more control over they own magazine supply?
Will publishers see that this distributor has something to offer
– or is it really about just sending as many niche magazines as
possible into the newsagency channel and keeping supply of the
popular best sellers for supermarket chains?
ISSUES FROM ALL SIDES
National Newsagent asked each distributor why they were not making magazine
management easier for newsagents since newsagencies were so important to
Network Services’ response
What question would YOU now
like to ask Network’s David James?
Questions Asked of all Distributors
Do you understand all the newsagents’ costs in processing
magazines and the limitations?
Do you over-supply? Why?
Do you under-supply? Why?
Why do supermarkets regularly get more of the key stock?
Eg Royal Wedding issue?
Why reallocate magazines after the agent has deleted them?
What do you think would happen if newsagents had control
over the magazines they received?
How many newsagents effectively use XchangeIT and
manage their magazines without any issues?
Why should newsagents persevere with magazines?
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