I was reading this story about how the suddenly now after so long the newspapers are agreeing that their readers find the large formats difficult to handle on public transport or on a plane.
I would have told them 20 years ago. If they had asked me!
Today where every sale counts, I think there are good reasons to go to the smaller tabloid format. That is what the Courier-Mail did in Brisbane. Interestingly Courier-Mail decided to call it compact rather then tabloid as in newspapers tabloid has a bad connotation. It is now used in many good papers in many countries as this article shows.
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 give newsagencies and other retailers 25%, I presume that they are taking 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 then 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 a extensive confidentiality agreements. 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 consider 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 to CeBIT in NSW to see the half I have to chase up.
Last time I went it was great to run into some clients of mine there also checking it out. We had lunch together.
What I am particularly interested is in seeing some of the new printers because of the problems we are having sourcing printers for DOS and because I think we have a big need for banner printing for retail signs.
I am particularly looking forward in particular to hearing Mitchell Baker who is the chairwoman of firefox. She is giving a speech there and anyone that can beat Microsoft has to have plenty interesting 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.
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
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!!!!!!!!!!!
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.
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