FEATURE 

Choosing and getting the most from a distributor

Distributors are central to the success, or otherwise, of your title on the newsstand so it is important to select the right one. Peter Johns provides some tips on what to look out for and points out that, whoever you chose, the relationship will only prosper if you have realistic expectations, a clear understanding of your respective roles and a willingness to get involved – after all, it’s your title.

By Peter Johns

Nothing is guaranteed to wind me up more than a conversation with a publisher where they say "it’s time to change distributor again". I have this conversation once or twice a year with one publisher or another. It’s the word "again" that winds me up. It is a sure sign of a weak product, weak publisher or perhaps a declining market, and rarely a sign of a weak distributor. It is far too easy to blame a third party and not be self-critical of your own product or, more likely, its limitations.

I am sure that most distributors have had that call from a publisher to say "I’m on holiday in Auchtermuchty and my magazine is not in the local newsagent, what’s the problem?". The usual answer is either "there’s not a great demand for surfing magazines in Auchtermuchty" or "OK, we’ll discuss a strategy for getting Metal Detecting News into all UK newsagents – do you want to think about whether we should set a supply target for 200,000 or 300,000 copies and I assume that you’ll be OK with a retail promotion budget of at least £60k".

This is not so far from the truth and it illustrates the point that it should be the publisher in charge of what happens not the distributor. At the end of the day there is not an awful lot to choose between distributors: how well they perform depends on how well you manage the relationship as much as how "good they are". Another phrase that’s a pet hate of mine is "you’re the marketing expert". Anybody who says that is wrong, it’s another illustration of the Auchtermuchty problem – you the producer (the publisher) should know your market better than anyone, certainly better than a distributor, otherwise you shouldn’t be producing it!

The distributor is there to exploit the marketing channels but you should advise them on where the magazine might be best placed in terms of region and type of outlet. Having said all of that, how do you choose between distributors? Let’s look at some of the factors.

Remittance

Clearly the remit you receive from your distributor is a factor. But keep a sense of proportion and don’t get seduced by high remits to the exclusion of other factors. It certainly affects the revenue you receive but so do cover price and net sales. Look at the two scenarios below: under scenario 1 the remittance is £16,225. But even with a 9% lower remit, if circulation is just 5% higher and cover price 5% higher, total remittance will be higher - see scenario 2. (The mathematicians and pedants amongst you will appreciate that it is 5/55 which is 9%, or five percentage points but definitely not 5%; I’m happy to explain in greater depth to anyone who does not follow!)

Scenario 1Scenario 2
Cover price£2.95£3.10

Net sales

10,00010,500
Remittance55%50%
Revenue£16,225£16,275

Given that there are other benefits from higher circulation (advertising sales), I would argue that choosing a distributor to maximise sales is much more important than chasing remittance percentage per se. The big difficulty is knowing who will maximise sales! Unfortunately the simple answer is that it is not possible to know!

Data provision

I’m a little biased here. If you read my piece in InCirculation (July / August 2004), you’ll realise that I’m into data analysis in a big way. There’s a lot of data you can get which you can break down broadly into the following categories:

(a) Market intelligence. This can relate to individual titles or it can cover groups of titles: sub-sectors (eg boating), sectors (eg leisure) or industry-wide data. For individual titles the following are all available: index data, RSV rankings, tierings and box handling.
(b) Own titles. Apart from the top level data of total supply and sales by issue, the following are the key areas for each title:

* Breakdown by wholesale house, by issue for supply, returns, number of stockists and number of sell-outs
* Same breakdown by retail groups
* EPOS data from multiples
* Box level data

The frequency of data provision is also critical. I tend to want to perform analyses quickly once I’ve identified a need and expect to receive data very quickly. More generally, it is crucial with some data to receive it regularly and frequently. The format of the data is important. If you want to perform your analysis it needs to come in spreadsheet format and by email – though this seems to be the norm for anyone these days. An internet based format with continual updating of data is also widely on offer now and is a great aid to instant access to information. Finally, if you are not keen on analysing your own data, then be sure that your distributor can analyse the data for you and explain to you what they are doing!

Size and profile of distributor

The number of distributors available to independent publishers is not vast. There are a small number of very large 3rd party distributors and a not much bigger number of smaller ones. According to newstrade sources, market shares in magazine newstrade currently run something like this (although these figures do leap up and down quite sharply):

Approx market share
Marketforce28%
Frontline22%
COMAG18%
Seymour9%
Bauer8%
Northern & Shell4%
MMC3%
DC Thomson2%
Advantage2%
Others4%

Not all of these distribute third party titles and there are very, very few entirely independent distributors (ie who only distribute third party titles and none that they publish themselves).

Independents tend to argue that they have no conflict of interest with their own titles as would have other distributors who distribute their own and third party titles. I think this argument holds little weight. Those distributors in the latter category assign account managers to specific publishers. They don’t overtly favour Easy Living over Waterways World or SelfBuild & Design. They will be handled by different account managers and if you handle your account manager correctly (more on this below) their loyalty will be to you not the magazine publisher who owns the distributor.

There is some merit in the argument that you should use a distributor who already distributes similar titles. For example, if you publish a modelling title use a distributor who already handles a portfolio of modelling titles (or more broadly, if your titles are male-interest hobby titles then go to a distributor who distributes similar titles already). "But won’t my competitors find out about what I’m doing?" Well, they shouldn’t through that route, they will anyway through other routes and how much does it matter anyway!? Distributors can legitimately target competitor titles via the wholesalers who will provide information on handling levels. For example, if you publish Metal Detecting News and want to target Metal Detecting Monthly you will be able to find out how many newsagents in each multiple group and independents sell the latter and if you are weak then push in more copies with the support of appropriate promotions. So, if the information is available anyway, you might as well utilise a distributor who is used to handling those types of titles because they already have the experience of knowing which multiples and which areas of the country are strong sellers of these titles.

The old arguments in choosing between large and small distributors come down to clout vs anonymity. The larger distributors arguably have more clout with the retail multiples and the smaller distributors can provide a more personal service.

I think the ‘clout’ argument has some merit. However, the ultimate factor influencing the success of a title is the quality of the product itself. The clout and resources of a large distributor may be useful in bringing success a little earlier, and possibly a little cheaper, as a result of the strength of their relationship with multiples. On the other hand, most multiples have a standard offering of promotions at fixed prices and it comes down to who gets in at the right time with what degree of push – and smaller distributors can achieve that as well as larger ones.

I think the personal service argument of smaller distributors has little merit. You are the customer and there is no reason on earth why you should not get the level of service you require from your distributor whatever their size. Which leads me on to my final argument.

Account managers

I think the key to success with a distributor is your relationship with the people. A bit of a tautology I know, but, by stating it like that, I make the point that you should work on the ‘bleedin’ obvious’. Much of business is about key relationships and that comes down to inter-personal relationships.

If your relationships are strong you’ll get the most out of a distributor, whether big or small. The key person, to my mind, is the account manager at the distributor – with smaller distributors that may be a director but the principle remains the same. They are your champion and you need them to be fighting for your cause and providing you with the service you want. If they are good they will understand your needs, provide you with what you want and mobilise the resources of the distributor to achieve your objectives.

Don’t be afraid to ask for a change of account manager if it is not working – you are the customer! There is an element of personal chemistry in all business relationships.

It is a two-way relationship but you are responsible for the decisions. They may suggest that you could put 100,000 copies of Metal Detecting News into 2,000 supermarkets at a promotion cost of £15,000, but be realistic; it’s your money they are spending, they don’t take the risk!

But, ultimately, remember that the product needs to be right and you must be the marketing expert. It is your responsibility to convey an understanding of your markets and your titles to the account manager and for you to utilise their knowledge to achieve the best out of the system for your titles.