There is not a single expletive that can alleviate the frustration I am currently feeling. You would think that mag nation being a small geographically focused business would be somewhat immune to a fricking volcano somewhere in Iceland… wrong.
We import a hell of a lot of magazines direct from Europe and bring them in by air freight. While the chaos amongst international air travellers has now been well documented, what about the hidden cost to trade. If a small business on the other side of the world is affected, what are the global ramifications?
Those unfamiliar with our business might be forgiven for thinking that the effect on us is minimal, but this volcano will have a major impact on us. So many of our sales are skewed towards international air freighted titles. Moreover, we import these in directly, and pay for them up front. In other words, we have already paid for many goods that are now languishing in a warehouse near an airport on the other side of the world. Again, not a major deal for many retailers as these products can normally still be sold. However, in our case, by the time the current issue of Vogue Paris arrives in our store, the next issue will be arriving on its heels. Our customers will buy the most recent issue, leaving the one that got delayed to gather dust.
On top of this, we have thousands of subscribers who are expecting delivery of their latest air freight issues. We have proactively contacted all of these customers, explaining that the delays to air travel also mean delays to cargo transportation. There is a massive back log in Europe, and as it starts to clear, magazines will be lower on the priority list (we think they represent an essential good, but the powers that be may not quite agree with us!) All subscribers will all get their products, but the cost to us in lost over the counter sales and the cash flow implications will be large.
As an aside, did any of our local suppliers proactively reach out to us as one of their customers to convey the delay of product that they might supply to us? No. Are we the only ones in the magazine industry who communicate with customers???
Anyway, all of this has served to remind me just how interconnected the world is today. It is one thing to know this in theory, but another thing altogether when it starts to hit your wallet and impact your business. Damn volcano.
Yeah, stupid volcano. Why couldn’t it erupt quietly and not jam up the whole world? I’ll come past and buy a mag to do my bit for the silent small businesses over our side of the world. You guys do a great job, keep up the fight to the volcano man, man!
[...] The Volcano and Global Connectedness – Even we’re impacted [...]
I feel for you but have to point out that price gouging your storefront customers to make up for lost revenue isn’t the way to encourage return custom. Prices on some of the magazines (Fanastasic Man, Lula) I saw in-store today were well above the retail price set by the distributor. I can bet your ass I spend more in your store each month than a momentaril-aggrieved/impatient subscriber to one, two or three of your titles but I won’t keep coming back if you continue this practice.
Hi Kate. Thanks for your comment. To be really clear, we have not raised a single price because of the deliver delays caused by the volcano. We have simply worn the loss.
Comparing prices across magazines is tricky, as you are not always comparing apples with apples. Most newsagents only stock sea freight issues of various magazines, while we stock air freight copies. These have a substantially higher cost base, and hence, a higher RRP. Take Lula for example. We stock it as an air freight magazine, and then when our sea freight copies come in a few months later, the price drops significantly. This allows customers to make a choice – they can purchase the air freight if they are time sensitive or wait for the cheaper version if they don’t care as much. Some magazines only come in as Air Freight, some only as Sea Freight, and some as both.
Also, even within the air freight versions, there are multiple suppliers, each who set a different retail price. We are price takers, so often our pricing depends upon which supplier we are stuck with for a particular title. Sometimes we can be a dollar more expensive than other players given the RRPs we receive, but more often than not, I think you will find that we are in fact cheaper than most other niche mag providers for most titles where supply discrepencies do exist.
If all of this sounds confusing, then imagine how this is for us dealing with it daily across thousands of titles. If anyone could simplify the supply chain, especially for air freighted titles, we would welcome it.
But rest assured, we haven’t raised prices to make up for lost revenue as per your comment.