For almost 25 years we have been developing software for Australian newsagents. Nine years ago we bought one of these newsagent businesses. We still own it today. It’s a busy business in a shopping centre here in Melbourne. I bought the newsagency so we could put into practice what we tell our 1,300 newsagent clients to do. I also bought it to get close to what our users experience.
This week we have been experiencing the benefit of being a user of our software even more so than usual.
One of the challenges newsagents face is lack of stock. With supply quantities for magazines tightly controlled it is not uncommon for newsagents to sell out of the top 10 or 15 titles well in advance of the next issue arriving.
This has bothered me for some time … primarily because of the frustration I experience in my own newsagency when we’re out of stock. I estimate this lack of stock in my business is costing us around $25,000 in lost sales a year.
Our suppliers have sales data but not the day by day data necessary to measure the likely impact of an increase in supply. So I needed to build a business case, one so compelling that the increase in sales was proved by the data I could present.
While our software has good reporting tools, it was missing the ability to report on what is called sales decay in the magazine sales world. That is, the rapid fall off of sales from the on sale date through to the off sale date. We created the report, checked with the magazine companies to ensure it would suit their needs and then released in for trial to our user community with a background to the business case they can make with the results achieved by the report.
The report has uncovered sales patterns which challenge convention in the case of a couple of magazine titles. This is important new data which will help the small business newsagents. It’s helping in my business.
Had I not owned a newsagency I would not have seen the need for this report. Newsagents certainly have not asked for it. Nor have magazine distributors. Both sides talk (too much some say) about the need for certain business outcomes. It’s only when we sat down and deeply analysed this specific situation of sell outs that we uncovered a patch of turn which was not covered by existing newsagent reporting tools.
The Magazine Decay Report is now an important tool in my business both in terms of understanding sales patterns and leveraging more equitable supply from by magazine distributors.
This new report gives us a competitive advantage for a while.