Like any business organization these guys keep their little secrets. So it was interesting when Gordon & Gotch Australia Pty Limited and Horwitz Publications had an argument over the changes in return policy of magazines.
The dispute seems to be that once Gordon & Gotch Australia Pty Limited went away from checking everything to spot checks, Howitz became upset and complained the returns data became less accurate. Since large sums of money was at stake, ad they could not agree they went to teh courts.
This is all lucky for us as it makes interesting reading and gives us some answers to some questions we occasionally ask in the industry.
If you click here
http://tinyurl.com/3dbrxn
Do a search for SCHEDULE 1
You can see what Horwitz Publications are paying Gotch, a fee for sending each magazine. In 2004/2005-year it was $0.215 a copy. They also get a fee for collecting the returns of $0.075 for an unsold magazine. I was surprised how low these fees are. If you think about it for a company to do it for that price shows an efficient operation. Note there are obviously extras as further down you can see for example they get a bit extra if the magazines are not barcoded. Which is good as it encourages suppliers to use barcodes. Anyone who does not use barcodes in retail today should be punished.
There is a big issue in returns I noticed that I never thought of before as I read this document. It is the magazine producer in this case Horwitz Publications, are going to much trouble to make sure that unsold copies of magazines are destroyed. It makes much sense when you think about it. An unsold magazine is often a dangerous rival product to the current magazine.
However what I found particularly interesting is that supermarkets are not required to return copies if unsold! Why supermarkets and not newsagents in many states, I am not sure but I would be interested in finding out.
Another point I can see is that not all clients of Gordan and Gotch are required to send return forms unfortunately this appears not to be important in this dispute so no details were supplied other then it happens.
Still it appears that this round Gotch lost and I suspect it them a lot.
Enjoy reading it, I think you will find it interesting.
