Responding to complaints, IPS has changed their system so now the week numbers will align to our current business practice.

The recall week calculation for IPS will now start from the first Monday where it is the first full week of the year and be weekly.

It should commence from this week.

You will need to be careful as some week numbers will change from what the documentation supplied states. IPS Customer Service if you have any queries are on 1800 606 477.

PS Thank you IPS from POS Solutions and its clients.

Are things getting better in magazines as some are saying?

The best financial measure for magazines in newsagencies is Gross Margin on Purchases (GMOP).

Cost =(Purchases - Returns)

GMOP = (Profit on magazine sales)/Cost

This formula measures how good people are in handling the department and the suppliers.

For example, say a hundred of a title are delivered at $1.00. The agency sells five at 25% margin.

Profit is 5 x $1.00 x 25% = $1.25

Newsagent A: When they got one hundred, instantly return ninety. That freed up $90 which he brought another magazine title.

Their cost is (100-90) x $1 x 75% = $ 7.50.
Their GMOP = $1.25/$7.50 = 16.7%

Newsagent B: Kept all the titles

Their cost is 100 x $1 x 75% = $ 75.00.
Their GMOP = $1.25/$75.00 = 1.67%

As you can see a good operator can have a dramatic effect. There are other factors too in the newsagency, such as do they ring up items as department sales, shop theft, are they accurately recording returns, etc. The figures in a newsagency as a result are consistent over time but wildly different between newsagencies. This by the way is mucking up every newsagent supplier.

Still there are items that are the same for all newsagencies such as suppliers. If a magazine sells about five, then the hundred copies above should never have been delivered.

So over time how is it going now.

I decided to check last financial year and compare it to previous years by supplier using a few newsagencies databases.

Here are my results.

I do not see it getting better, do you?

ACP are upgrading their magazine stands for shops such as supermarkets and BP service stations. They are claiming that the new model's product produces a sales increase by about 7%, even though the magazine range is slightly smaller.

This is what these stands look like.

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If you are unable load returns through the website, please click here, then print out this form and mail it through with the magazine mast heads/tops.

Please keep copies as it appears that you may need it for a few months.

We still have not got a resolution to the return issues with IPS. We are aware of the problems as currently about 10% of our support calls are IPS related. We are still trying to get a resolution to these problems.

We have another meeting with them scheduled tomorrow and are working on it now.

I am upset about how it was done. What should have happened was a limited trial be done first to check out the system as teething problems always exist! Only once these were worked out should everyone have got it.

There are many problems doing IPS returns online. Many are stuck and unable to do any returns for IPS now as people are being sent up to four different copies of return forms for the same week.

We are currently talking to IPS now trying to resolve the issues.

I was talking to a representative of one of the banks about a some newsagents being rejected for EFTpos. With all these prophets of doom walking screaming doom, I decided to ask Anthony, who is involved in this in his bank, "overall I am wondering how do you consider newsagents compared to other small retailers, good risks, average or poor?"

Anthony's response was "Newsagents are generally very low risk. In fact it is extremely rare that a newsagent doesn't pass credit check or has to have their facility terminated by us. I expect that trend will continue as we sign them up."

As Zac said when I told him this, unlike many others, Anthony does know what he is talking about.

By 2015, South Korea wants all-digital textbooks. Poorer students will be supplied free ereaders.

I have actually been involved in some discussions where Australian teachers were discussing the economics of such a move here but this is the first I have heard of such a technology being adopted nationally. I am sure this would be a major concern to larger suppliers of textbooks for schools which I have a few as clients.

Click here for details

Today I got a lot of emails with discussion by people over newspaper sales over the next ten years.

Not surprising as I am an authorised forecaster and am going as a delegate to the Conference for the International Federation of Operational Research Societies next week. I also have access to the best data in the industry and been around in the industry all my life.

I am yet to see any study showing that newspapers drop will be catastrophic in this time period. If anyone has such a report, I would like to see it released so we can study not only its results but also its data that went into it and the methodology that it used.

Let us take the facts, currently newspaper circulation sales are dropping by about 2.6% a year in Australia. Over ten years if this kept going it would result in about a 23% drop. That is a bad drop but over ten years, it is hardly what I would call a wipe-out.

In Australia, the most respected Operational Research company for industry is probably IBISWORLD. Here is their study for “Newspaper, Book and Stationery Retailing in Australia” dated June 2011.
What they are expecting is the industry to have a revenue Growth expected next year of -1.3%

I would like this figures to be positive as I am sure would most of my readers but these figures show that if this report from a reputable Operational Research company is correct such retailers can expect overall their existing product sale to be approximately the same. Clearly, though newsagents have to be innovative, look elsewhere as no-one wants negative growth but this is true for almost any other Australian retailer. One idea that is not being talked about, but you may want to consider is personal care or toiletries. Here is a stand I saw in a French newsagency while I was there.

I do not think, I am alone in my views, for example, I talked to a few of newspaper publishers last year on this very topic and was told, they expect little to change in the industry structure over the next ten years for newspapers. Then they will have to look at it. I am sure that over this period. there will be much change in the newspaper mix with some going down fast, currently now most of these rumours centre on the Australian newspaper. However, this is true for the newspaper industry since it began.

Please look over some newspaper circulation figures here and make your own mind up.

The first XChangeIT files from IPS are due to be sent on Monday 6th July.

For the latest details and an FAQ please click here.

(Outdated file - decommissioned)

Collins Debden diaries catalogue has been tested and put up on our website.

The general stationery catalogue is now being prepared and is expected shortly.(Outdated file - decommissioned)

(Outdated file - decommissioned)

The latest copy of the Artwrap stock catalogue has been tested and put up on our website.

Those delivering under Victorian rates for News limited products have been authorised an increase. It works out, according to my calculations about 4.46%.

Click here for the new rates.

There are still some queries but once these are resolved we will be issuing informations sheets on how to program your system to do it.

I went to a newsagency in France and discussed with the staff how few greeting cards they had. They told me that their shop was a little one but their main shop had a huge display of greeting cards, and I must check it out. Here is a picture of this *huge* display of greeting cards.

What I did like was the spinner full of kids books and toys, I thought that several of my clients might find adding such a display useful.

Yesterday I was asked if I could get some pictures of the mobile card spinners used in Europe. I will try. What I do think though is interesting is that it is not just the card stands that are mobile but just about any stand. Because of this, the shop can be quickly in Europe re-arranged whenever the shopkeeper wishes it.

Here are some samples of stands and spinners.

I have been re-looking into newsagencies in Europe recently to see if there is a possibility to export our product. Our product is extremely well priced not only in Australia but apparently in Europe even with our strong dollar.

It is also fascinating to discuss with newsagents here the problems that they have and compare them to the problems that Australian newsagents have.

These delightful people that I met own the eight biggest newsagency in France. They have some absolutely beautiful shops.

Cash flow because of bad magazine distribution is much less of a problem in France then Australia. Yes they have the same problems as an Australian newsagent when the goods arrive and the invoices do not match up. If you see here this is a sheet of incoming magazines, the item circled on the photo is wrong.

Only one error in a day is considered extremely good.

What they never get are magazines with a return date of more than three months. Generally it is weekly. Not only that but they have much less of an issue with receiving piles of magazines, that the newsagencies cannot sell.

What I believe is partly the reason is that newsagents in Europe pay for magazines only after they are returned. Not when they come. This means that a magazine supplier cannot use as in Australia, newsagents as a bank.

At the very least what this shows is that magazine suppliers can do a better job then they do now in Australia in distributing magazines.

I told one of my clients that I would send them some pictures of newsagencies in Europe, and I thought to myself that my readers would be interested too.

What really strikes you about newsagencies in Western Europe is just how many of the magazines are covered in plastic. Even cheap magazines in Europe often are plastic bagged. It is to store extra stuff together with the magazine. They call bagged magazines "plus".

Here are some pictures of magazines on the shelves. As you can see they really like to pack them in.

Typical prices are about $1.50 to $8.00.The magazines themselves tend to have fewer pages but higher quality.

What they use is a lot of card spinners. This is because cards are not nearly as big in Europe as in Australia. What people will do is buy packets of cards and simply write into it the occasion birthday, anniversary, etc. The only exception tends to be death cards, which might explain why in Australia, card companies often over empathize this category as they are basing some of their figures on European retail studies. So our system as a result based on Australian retail studies are continuously flagging our clients to send these cards back.

However these card spinners are very good and worth a look. What I particularly like is how mobile they are. The shopkeeper here allowed me to try moving it, and I was extremely impressed how easy and quick it was to move, position and how studier they were when positioned. In the morning, these ones get rolled out in front of the shop and at night they are rolled back.

One of my clients emailed me asking me about newsagencies in Europe and how they compare with Australian newsagencies. If you search this blog you will find some discussions by me on this topic in some of my earlier trips.

Basically Dutch newsagents sell a range of products, including marijuana. German newsagencies are mixed business of tobacco, alcohol and newspapers. They are often referred to this by name. Swiss are very similar to the German, although often they are more modern shops and have lotto as well.

The French newsagencies are extremely similar to Australia. I have a study that we did when we looked into exporting our software to France. When I get from holidays, I will publish some details.

One big difference with all European newsagencies is magazines. These countries tend to have larger populations than Australia, so they often have excellent mass market magazines, but because they lack the numbers of the English speaking world which is according to the Wikipedia between 500 million–1.8 billion, they have a smaller range. As a result European newsagents do not need the space Australian newsagents do for magazines.

Another difference is the retail price seems to be to be cheaper on an equivalent product making it easier to sell but the newsagents gets from the European publishers smaller margins than Australian publishers give to their newsagents.

We have not yet determined exactly what is happening, but it appears that newsagents are reporting problems with at least one title in GG. It is appearing on paper invoices but not XchangeIT. If you are affected you need to use manual invoicing to get these titles into your Point of Sale system as they are not resending these invoices.

Please use the audit facility in our software to determine if this is happening to you.

Unlike previous years this issue has an different price.

Once invoiced with the usual procedures it should be automatically updated in your system with the new price and barcode, but I do suggest that you check to make sure because it is a good seller.

Once invoiced test the new barcode is 977072774502701 and the new price for this issue is $9.95.