Magazine Marketing Company

Who does what and where do I start?

The first challenge is to understand who does what for whom and how they are paid. Below you will find a brief guide to the newstrade and the role of each of the parties in it.

How do I choose a distributor?

You won’t be surprised to learn that the world is increasingly influenced by the use of information systems. Magazine distribution is no different, and so a fundamental area for differentiating distributors is by their ability to monitor and analyse sales data. In practice this means that your distributor can ensure that your copies are put into outlets that sell a competitor's titles, remove copies that are not selling and put more into outlets that are selling out. MMC has recently developed a new sales planning system, the only one of its kind built specifically for distributing specialist magazines.

We also have a dedicated sales force at both wholesale and retail to gain acceptances to stock your launch. We have an enviable record of success and because we are independent of any house publisher you can be sure that you come first.

A leading importer of foreign magazines and exporter of UK magazines.

MMC has a great reputation internationally with one of the most experienced export teams in the business. We work with over 77 agents in 58 countries. From promotion to pricing strategies to launching local language editions, we can give your export sales a real boost and introduce your title to markets that you only dreamed of reaching. We also import titles from other countries and, unlike some distributors; we lavish the same attention on overseas clients as those based in the UK.

Finally, we are experts in specialist magazines. These are not all small but they are of niche interest. So why not use our expertise gained from many years of doing the job and ensure that your launch gets the attention it deserves? So before you call us, brush up your knowledge of the newstrade and see what you need to give us to allow the best chance of success.

The structure of the supply chain and how it works...

Distributors supply wholesalers, who in turn supply retailers. Distributors collect money from wholesalers and pay their publishers according to the terms of their contract. However because most magazines are supplied on a sale or return basis distributors also have to give wholesalers credit for unsold copies. For these reasons most publishers need a distributor to gain access to the newstrade.

There are two flows in the supply chain at different times of the product lifecycle. When a magazine is put on sale and when it is withdrawn from sale. A brief summary follows:

A magazine goes on sale...

A linear representation of the supply chain shows magazines moving through the following cycle. When a magazine is put on sale, the publisher prints the copies and these are delivered to the distributor who supplies wholesalers and export agents. Wholesalers then pack out copies to retailers. Distributors invoice wholesalers who invoice newsagents. These invoices are paid. This can be represented as follows:

A magazine comes off sale...

When a magazine comes off sale (e.g. because a new issue is published), the retailers return the unsold copies to wholesalers who pay them for these returned copies. The wholesalers scan the barcodes of the returns and claim these unsold copies from the distributor. The distributor pays the value of the returned copies. Most magazines are destroyed and so a publisher should not expect the unsolds to be returned. The only exceptions to this are partworks and collectables.

How is everyone paid?

Each person in the supply chain receives a discount from the full cover price of sold copies. In the UK the publisher fixes the cover price of a magazine and the remit, or share, that the publisher gets from each copy sold is agreed between the publisher and the distributor.

The role of the distributor in launches

The first job of the distributor is to advise how to turn an idea into a marketable reality. Unless retail buyers are convinced that the product is going to increase sales through their shops they are unlikely to give up valuable shelf space. You will need to demonstrate:

Why the magazine will appeal to its readers (perhaps at the expense of an existing magazine),
How many people are interested in your magazine,
How you are going to tell them about it,
How will you help wholesalers and retailers to sell more copies.

Once you have agreed a strategy, the distributor will 'sell-in' the magazine to wholesalers and retailers. Increasingly the focus is on retailers and each retail group has its own suite of promotions which can or must be used to support the launch of a magazine. MMC has an excellent record of ensuring that publishers pay a competitive price for promotions, but it is necessary for a new publisher to factor in some expenditure on retail promotions within their budgets.

What is needed by a distributor to sell-in my launch?

The following elements are vital to give the best opportunity for a successful launch.

A strong idea backed up by a well argued rationale.
Sufficient time to allow your distributor to approach all of the key wholesale and retail buyers (3-4 months is a good average).
A dummy of the magazine and its contents.
An excellent marketing plan.

The reasons for this are clear. MMC can turn around a launch very quickly but the more time we are given, the better it will be for your launch. A rationale with some quantifiable research will help persuade a sceptical buyer as will a good promotional plan. Finally, a quality dummy with examples of editorial spreads and a plain paper bulking dummy will give everyone a good idea of how your magazine will look and feel. Armed with these things, your distributor can do battle with the newstrade on your behalf.

The awarding of distribution rights for a magazine is cemented with a Distribution Agreement. This sets out the remit level, the payment phasing, the duration of the distribution right and service levels.

Who is important?

Wholesalers

Wholesalers are MMC’s immediate customers. MMC supplies copies to the wholesalers who in turn supply retail outlets in rationalised areas. There are 3 multiple wholesale groups and also a number of independent wholesalers.

To gain a full UK distribution, all wholesalers will need to agree to handle your magazine.

Fig 3: UK magazine wholesale market (approx %)

Retailers

The UK wholesale network supplies almost all retail groups who sell magazines. With such a large number of magazines available for stocking, a key success factor for retail groups is the range offered to the customers. For example, WH Smith stores stock a very wide selection of magazines. They are known for this and view it as an essential part of their offering. Supermarkets, on the other hand, prefer to stock only the larger sellers because they have less shelf space.

So, although MMC’s direct customers are wholesalers, the focus of the distributor has increasingly become the sale of its clients’ titles to retail groups. MMC’s sales drive to retailers can be subdivided into ‘channels’ which include supermarkets (Tesco, J Sainsbury etc), the high street (WH Smith Retail and Martin McColl Retail etc), CTN groups (Star News, GT News, Eastcliffe), convenience groups (One Stop, Co-op, Spar), travel points (WH Smith, Alpha etc) and independent newsagents. Most multiple chains have buyers who need to be visited and advised of publishers’ activities. This activity is usually centred on launches and promotions.

An approximate share of the sales by multiple group is shown in Figure 4, for a large volume magazine. Please note, however, that for many specialist magazines WH Smith command a much higher share of a title’s sales.


	An introduction to the newstrade...


Copyright 2008 Magazine Marketing Company Ltd