When the latest copy of the MPA - Magazine Publishers of Australia came along today that advertising is up by 7%. My first thoughts were cool as it helps the industry.

My next thought was recently a director of a magazine publisher came to see me about getting sales data. He told me that circulation dollars are not worth much. So I asked, “If advertising is so important to you and since advertising dollars depend on circulation, as you can increase circulation by just giving it away, why charge for the magazine?”

He just looked at me, then gave me a strong hint that I should not ask this question and that we should back to the subject.

So while scanning the MPA newsletter as I am a curious person, I would like to get an answer. Since newsagencies rarely deal with un-audited magazines the figures here are perfect for me to get an answer.

The MPA newsletter stated, “Magazines increased ad revenue in 2006 by 3% to $749.2 million.”

Okay, so what is the circulation dollars. So I went to the MPA website where it states “Australians spent an estimated $1.06 billion in 2005 on ABC-audited consumer magazines.” Say about a 3% increase for inflation which every business got but POS Solutions that has not increased its fees in ages. We now have 1.09 billion dollars in 2006. There is a slight increase in magazine sales so say the same so we have about 1.12 billion dollars about in 2006.

The magazine business model in Australia is the magazine publisher gives it to the magazine distributor and the magazine distributor gives it to the newsagent and the newsagent sells it to the public. I don’t know where printing costs come into the equation.

Since everyone in the chain gets a slice. If the magazine distributors are given newsagencies and other retailers 25%, I presume that they are talking about as much. This I don’t know. It is a guess but it sounds about right. The problem here is that they are public companies and these companies do not release their cost of good sold figure.

So as a punt, I would say that circulation sales in 2006 would be about .6 billion dollars to the magazine company. Much probably goes into other indirect costs involved in production and distribution.

Since advertising is giving than about .75 billion dollars a year, I suspect the magazine publisher are correct when they say that they make more from advertising then circulation. It also explains why magazine publisher are interested in the number sold rarely the circulation dollars and rarely bother with newsagents. It also explains why the MPA concentrates so much on advertising dollars and little else. It would also explain their strong interest in the internet.

Now it looks like Coles is being sold. I wonder what will happen about Officeworks. Harvey Norman, Wesfarmers and Woolworths are interested in buying Officeworks.

Wesfarmers is likely to be given access this week to Officeworks figures supplied by Coles note they have to sign an extensive confidentiality agreement. Soon the others will get the figures, I bet it will cause them all to do some real number crunching.

For newsagents, I suspect that Harvey Norman purchase is probably the best. They handle at least half of Officeworks products already. They are not into office stationery selling. Woolworths also will be more of the same. Probably the worst is Wesfarmers. I have dealt with them before and they are an extremely professional company. With their stress on technology, huge stock inventory shops, high volume and low prices they could be a real challenge.

However whoever buys Coles and if they lose out on Officeworks will probably be tempted to try to get back some of this stationery market.

Also, both Harvey Norman and Woolworths are saying if they don’t get Officeworks they are considering starting a rival stationery supply chain.
So it is quite likely in what is already a competitive stationery market at least a few new players will enter.

Newsagents have to work out where they want to position themselves in the market.

I went to a client today and I see plenty of proof that we are still getting products coming in with no barcodes.

The problem is that unless the supplier of the product is thinking of selling into Australian supermarkets who demand barcodes, they often don’t bother as it costs. Most other retailers, as this newsagent showed, will still take it. Although it must be a real pain to him as he print barcode labels and stick them on to the item.

It is 2007 and it still happens!

In business, half the time, people chase you up, and the other half, you have to chase them up. So off I am to a computer show soon, CeBIT in NSW, to see the other half I have to chase up.

The last time I went, it was great to run into some clients who were also checking it out. We had lunch together.

I am particularly interested in seeing some of the new printers because we are having problems sourcing printers for DOS and because I think we have a big need for banner printing for retail signs.

I am particularly looking forward to hearing from Mitchell Baker, the chairwoman of Firefox. She is giving a speech there, and anyone who can beat Microsoft has to have plenty of interest to hear.

Yesterday I was talking to a family friend, a colleague of my wife. He told me how impressed he was, when he went into a newsagency. His wife asked him to get a magazine and since he had not written it down, he was unsure of the exact title of the magazine. So he asked at the front counter. The people at counter were immediately able to look it up. Then tell him that they had two in stock and where it was on the shelf. They then took him to the magazine. Then when he went to pay, they told him when the next edition was due.

I said yeah, where was it?

My face lit up when it turned out to being one of our client’s Middle Brighton Newsagency.

I was listening to a politician seriously saying that Australia should follow Ireland and introduce a levy on every plastic shopping bag. Seemingly there it led to people cutting down which plastic bag use by almost 90%. I believe it. I can see in Bunning’s how few people take plastic bags when they have to pay a few cents for it.

I think these people have some good points. I am sure we have all seen these waste plastic bags somewhere having an undeniably negative effect on our environment.

Anyway if you go to supermarkets now and you see these green bags. People often use them in the street to cart everyday stuff. It is giving good PR to some big companies. You can see this one in the picture thought so!

I don't see many newsagents doing anything. So they cannot even argue that they are doing much to help this problem so being good business citizens. Most don't even have a plan B if such a levy appeared soon what are they going to do? So what happens if suddenly we need something besides plastic bags?

Even offering an alternative would look good to many newsagents. For example now what if in your VIP system you give some free VIP points to any client over a certain dollar amount that brings their own bag or offer them extra points for buying a non-disposable bag.

http://en.wikipedia.org/wiki/Neo-luddism

You push and push and get somewhere. Then suddenly slowly we get dragged backwards.

A well known supplier in the newsagency field almost every time they produce a file for import into a newsagency software changes the format. They don't bother checking. Then they broadcast it immediately to thousands of clients. So often, we get phone call swamped when our users get a file from them. I don't see them care as it happens every time.

That is why we tell our users to use these files which we have checked

For this and other supplier files please visit here

So this is a list of good suppliers. That is not to say these are 100% correct but at least they will import without errors and look on our inspection to have correct information. The advantages of doing this are that they are easily downloaded into your system. When you processing stock you don't have to input the product you have received as all the details are there. This makes it easy for our clients to put their suppliers stock items into their systems rather then manually type it in.

However another example of a bad supplier is one in virtual products for newsagents who used to provided our clients with a standard stock format. Now suddenly they produce a different file and announce "with the best of intentions, we cannot provide other formats at this time. We are hopeful however that systems developments going forward will enable production of specialised formats." After years, who are they kidding! Because they don't care they have gone backwards so their agents now will type in manually the stock.

Luddites! Because we do nothing so they get away with it!!!!!!!!!!!
http://en.wikipedia.org/wiki/Neo-luddism

The update for DOS will not be released as scheduled on the 3th April but is now re-scheduled for the 18th April. This is because we are doing some work with HWT subscription models and we may need to release some more extra functions to increase the number of newsagents on the trial program.

Sorry for the delay.

You cannot just setup the software and start sending off Gordon and Gotch return and stop sending the paper returns.

What we recommend to all our clients is to keep sending off the paper returns forms by mail even if they are sending the returns electronically until Gordon and Gotch confirm that you can go live with EDI returns.

Network Services are planning to rationalise their returns by combining Mills & Boons and magazines in the same return form. This will remove the current 2 returns a month specifically for Mills & Boon books.

To group the Mills & Boons titles on the form, they want to do a mass title change and add a leading asterisk to the titles.

Can anyone see any issue with this proposed change with this proposed title change?

I did an article for our DOS newsletter on Newsagency software which did strike a cord with a fair number of people so I decided to rephrase it slightly and put it in our blog site.

We go to meet newsagents, suppliers and key industry players all the time. We are both the most progressive in the meeting and the most backward. On those days you feel you are crashing your head against the wall about Newsagency software.

Let me be clear we have as strong interest in the Newsagency industry as you do. We want newsagents to be successful. We want suppliers genuinely to partner with newsagents. We want suppliers to provide electronic invoice data and newsagents to have the capacity to send sales history like what happens in many other industries. Because we know it is necessary.

The reality is we do have a terrific DOS system. It is better then most window systems on the market for the same role. How do I know, because we have converted over newsagents with others windows systems to our DOS system! But the reality is that it is second-rate. Many of these changes done for you now is bluntly good money after bad, what you are doing is paying to keep a horse and buggy going in an age of motor cars.

The other issue is DOS needs programmers to look after it. We used to have five programmers on the DOS version. About a two-year ago it went down to two part-time programmers. Now we don’t have enough paid software adjustments coming into the DOS system to justify even that. Mind you when we did advertise for a DOS then we got not one response. They are now almost impossible to find. So now there is only me and I don’t have enough time to do it even for the ones that people have agreed to pay.

Interestingly many suppliers make it clear that they don't care less about technology in newsagencies. They have the technology and they know what is happening better then you do in their industry. They know and you don’t, that is good for them. They will have fewer newsagents sending back product, rejecting product and querying product.

Now imagine you had
1% better sales how much potential sales slip through your fingers now
1% less computer work as run sheets, backup, reindexes all automatically
1% less dead stock though better and more detailed reports
1% better stock ordering though more information
1% better customer service for example old customer and subagents statements with full detail on demand
1% less computer work as automatic run sheets there is no doing reindexes, automatic repairs, and automatic updates
Etc etc etc

If does not take many for these 1% to start adding up to real money and time savings.

In other industry technology is where everything is happening at the moment. It is happening in newsagencies too but not where you are.

It is time to consider technology in your business. Attached is a brochure for the upgrade for Newsagency software – posbrowser for you to please consider.

/blogs/pictures//POSupgrade.pdf

It is nice to break up stock into different categories. It helps to get a feel how birthday cards sell compared to your wedding cards similarly it is good to know how your sales of fine points compared to your medium point pens are doing.

Say a supplier of stationery rings up. The conversation might go like this.

Supplier: Hello I would like to talk to you about the category field in the standard stock import file.
POS: What do you want to know?
Supplier: Some newsagents have asked us to put in categories into the stock.
POS: Okay
Supplier: What do we put in the category field?
POS: Well your categories but remember that they must be two characters or fewer.
Supplier: We don’t have this range classified but we can put anything you like in there.
POS: ?????????

The problem is there is nothing we can say at this point as except in magazines, no industry standard exists.

Now why not? It is not a big job. I don’t think we would need the suppliers as most of them are more then pleased to follow an industry standard.

Say we say there are about ten top departments for newsagents without magazines.
Say every department in the Newsagency would break down into about eight families, then each family is broken down into about five categories. So we have about forty categories per department. In practice, many more get confusing.

This could not be done in a month if the will was there!

We could probably go even faster by using a proven system, for example office supplies are all nicely categorized in
www.AMAZON.COM
Why not use that as a model to start us off?

The ABC audits of newspapers and magazines are clearly the measure used in the magazine and newspaper industry. Suppliers, whenever you meet them, almost immediate point to the previous figures and express concern for the coming one. They will often then go on about how the current changes in the audit affect them.

If you want to know what is the first concern of such suppliers look to their ABC audit figures as it will probably tell you.

Yet interestingly, although National newsagent will regularly publish the results, newsagents rarely bother with these figures.

I decided to check it out.

The ABC audit results for 01/July/2005 to 30/June/2006 by category is

So I went over some newsagents databases and came up with my own newsagent comparison. Which is below and if you want more details please click on the picture below.

As you can see the figures look different some by over 200%. Not surprising as there are so many different factors in the ABC audit figures that are irrelevant to retail sales for example subscriptions. Also some magazines may have changed categories in the latest round of changes in the ABC audit methods which may account for why Women’s interest is over while Women’s weeklies is under.

Looking at these figures, I can immediately say certain points. You may want to change your shop fit slightly. The problem is that the two sets of figures are giving different results. For example Men’s lifestyle, if you just took the ABC audit figures it is a good category. Yet look at mine and you would probably say marginal at best.

If these figures are going to be useful to us, we need some industry standard figures. This would not be too hard to do. All you would need is for 30 newsagents to fax a report once a quarter to someone say in the MPA who then spends a morning to add it up.

A while ago, I meet a couple and we started to talk. The discussion drifted to a subject of how the newspaper companies go to so much effort to make sure the public get a newspaper. I quoted an example of when an HWT sales representative went to a newsagent with a few newspapers when the newsagent rang up, that he was running out. As I pointed out it made no economic short-term sense for HWT to do that but it was an example of how large companies look at the long-term.

Then the wife stated “Well that explains why we are still getting an SUN long after our subscription has run out!” I just listened some more but I have heard this story many times. Then I replied “HWT is not in the business of delivering free papers. I can guarantee you that every paper of HWT is accounted by them. Someone is paying for that paper. What I bet is the newsagent has mucked it up and he and/or she is paying for your free paper. If the newsagent knew they would not be happy.” Then I told them that “It would be nice to tell the newsagent”, I wonder if they did?

This problem has been around since newsagencies began. Someone somewhere has mucked up the delivery. The newsagency then delivers papers for nothing. Year ago computer solved this problem. So much so probably 10 years ago this problem no longer existed.

However since then subscriptions have taken over. Now days it is so easy to make a mistake with a computer, all it takes is one wrong keystroke. Once that happens, bang you are delivering a paper for nothing. Part of the problem is now there is no-one that knows what the customer should get. Ring up the newspaper companies and ask then whether xyz should be getting a paper and the odds are they are not sure. Someone needs both your and their records to work it out. Although the way the system works now day, it is not a problem to the newspaper companies although to be fair to them they are looking into solving this problem. However expect no miracle solution in the immediate or medium future.

We regularly change people from other systems to ours. So we have installers that do little else but set up new systems for clients. From conversations, I have had with them they say in a well run shop they expect about 1 error in about 200 papers delivered. In a conversation I had with a group of them once, someone reported that on his last install he found almost 10% errors, the others quoted sites like that too.

So let us say you had 400 accounts, the installer would expect to find 2 or more errors.

So say a paper for 7 days is about $9.40 a week that works out to about $1.34 a day. Over a year for two papers a day in error we have 2 (papers lost) x $1.34 (a day) x 365.25 (days a year) = $980.00 retail minimum lost a year to that newsagency.

Say the error rate was over two a year well that I will leave you to work out at the rate of $1.34 (a day) x 365.25 (days a year) about $500.00 a year.

The solution is auditing your accounts regularly. Go over them. Yes I know it is work but for $1,000 dollars saving so you can afford a few days of work. All you do is call the newspaper companies up, ask them to send a subscriber report. Then when it comes go over your accounts one at a time starting from A. Check the account is it being paid for. If yes cross it off the list and if no put a stop on the account. Next one and keep going to Z. If you check them, you will save.

If your interested in going to the next level and getting on-line communication between you the booksellers and book publishers. Please let me know AS SOON AS POSSIBLE. Note this service is not a free service and there are charges. I believe that ECN currently charge $40 a month plus 30 cents an invoice to a user. This makes it roughly compatible to XchangeIT.

If we get enough people showing interest in this service now we can use our existing system to communicate with them. Then there will be no charge to you for that from us. The ECN will wear the extra charges. However if not, the ECN will charge and we will have to do a major development in which case there will added charges.

So we do need more users for the ECN Group for our users to subscribe now.

If you’re interested let me know now.

When the representative from the MPA came and showed me their category system, I immediately asked “Are telling me that all the major companies are using this now and it’s coming thought XchangeIT now?“. When she said “Yes”! I can still remember the WOW I felt. Instantly I thought that this is what we need as it is a great way of organizing the magazines on the shelf. You can now just look up the magazine on the computer and you will know where to find it?

However as I looked though it I found it puzzling. So I asked “How is this classification system derived?” She replied “We did research.” I asked “Can I see this research?” I received an answer suggesting they would send it out, but got a hint that it came from the US. I found that answer both intriguing and puzzling. Most magazine sales in the US are by subscription, not retail. I have been assured that most US magazine sales revenue comes from advertising. It is amazing that in the US retailers get a higher margin than here, but fewer people there want to sell it. But if anyone would do such research on retail sales, it would be the Yanks and I would like to see what their professors and wise men come up with, although it would probably be something so complex no-one could understand it.

Meanwhile, we immediately did some changes to our software. I went to a few newsagents and asked them to try it out AS SOON AS POSSIBLE. It was an instant success.

But I am yet to see this MPA research. But I have my suspicions. Magazines have two main sources of revenue, sales and advertising. One of the main roles of the MPA is selling advertising. I suspect looking though the MPA codes that they for different industries. What we are getting is the breakdown that a magazine salesperson uses to sell advertising space to clients. The reason magazine companies are determining these categories is because they use them to get advertising dollars.

Still no-one is complaining as in practise, it works great. What the MPA has done for magazines is a model for other industries like the greeting card companies. Something we are talking to John Sands now about. It is also something the newsagency industry as a group should push in all their major departments.

Our software manager is a keen but not good golfer. Every year he is off to the VANA & Industry Partners Golf Day. Which we are one of the sponsors.

We tell him, don't let us down on the course. Just beat someone, anyone.

So I am pleased to say that this year one of our clients, Gary Lovell, representing Lovell's Shepparton Newsagency, came back with the NAGA and not him.

Apparently, it was a great day.

http://www.browntrout.com.au/

The BrownTrout catalogue file is now available for download

For this and other supplier files please visit here

The reason most suppliers in the newsagency industry do not supply a file such as this is because newsagents as a group do not ask for it. Therefore newsagents have to manually type the stock items into their computers.

It should not be like that but it is.

I put together a slideshow of some types of premium chocolates.

I hope you like it.

Let me know if you want to send me some pictures of your shop to merge into this slide show or if you want some original pictures to put into your advertisement.

The printer consumables industry is a rapidly growing market. It is expected to grow at a rate of 12% a year, which represents a growth opportunity.

Today almost every business has one or more printers in the office and probably half the households in Australia have their own printers. Newsagents well positioned to capitalize on this opportunity being both local and having a business-to-consumer focus.

Now over one million homes and businesses have received this flyer in the past 30 days.

Several newsagents have told me how good it was to cut up price lists from woolworths and officeworks showing it next to this pricelist just to show they are competitive. That they are fighting back.

It is also proving very effective as people can see which one they want at home and bring in the flyer having marked the one that they want.