Distribution newsagents in South Australia are questioning whether it is worth distributing magazines at all as the returns for their efforts fall below 4 per cent.
Long-time distribution specialist, John Fitzpatrick from Portside Newsagency, says out of and annual $263,000 payment for magazines to distributors the bottom line is just $9,570 or 3.75%. He and other agents say the margins are just too tight to be sustainable.
“We only have to lose one subagent to direct supply and we start losing money and will cease delivering all magazines across our territory
“I believe in magazines, but losing money or just breaking even, means in the medium term we will probably close our accounts and that’s really sad for the end reader and a sad end for all those editors who work so hard to publish their titles.
ANF state manager Colin Shipton says that more top selling titles need to be provided and newsagents trusted to know the numbers required.
“This is a frustration of many newsagents where the top titles are undersupplied and slow moving titles oversupplied.
“If distributors offered consignment stock (sell now pay next month once returns are sent back) to every newsagent or delayed billing (which most newsagents love)- many, many more magazines would be sold each and every week as the newsagent would have an incentive to not early return as much stock. More magazines would definitely sell because of the cash flow ease and there would only be a one month settling in period of the way monies/ accounts are currently paid by distributors and publishers.”
This problem will increase as retail and delivery functions separate across all states and newsagents discover that 12.5 per cent is not enough compensation for the work involved. With magazines sales falling and early returns growing new arrangements need to be made to prevent a catastrophic drop in magazine sales.