We have been looking at subagents, comparing orders and returns for papers and magazines using our benchmarking project.
Our conclusion after examining 736 magazine and 2903 newspaper orders over a month, is clearly the subagent channel is controlling newspapers better than magazines.
I feel it is because newsagents are sending out more newspapers for each order than magazines. In our sample, an average subagent order for a newspaper was 26 copies while the average order for a magazine was about 3.7. If you supply someone 26, it is a much easier decision to make the order one more which might increase the return rate to 1/26 x 100% = 3% than to change an order from 3 to 4. The latter might change the return rate 1/3 x 100% = 33%.
This lower supply number also is reflected in the sell-out rate of magazines. In the sample, almost 40% of magazine orders have no returns compared to 30% of newspapers' orders. Still it is not a good result, as it means that many subagents are running out of stock so backing up my early results, there is a problem in subagents' supply.
Usually it is the subagent that asks for extras so it was interesting to see how our subagents were looking after newspapers compared to magazines. A newspaper that sold out was twice as likely as a magazine to be sent as an extra. This was not unexpected as a weekly magazine, a few days-old that runs out will not attract a subagent's attention but daily newspaper running out will.
Probably trying to compensate for this, newsagents are oversupplying magazines' orders. You can see magazines have a much higher return rates in percentage terms than newspapers.
Clearly magazine companies should look again, at their return policy of 7%. Although increasing orders for magazine orders to subagents will result in dramatic increases in returns, yet this policy from our benchmark study it is costing in subagents' magazine sales dramatically much more then newspapers.
