Wholesalers Increase Distribution Prices
Anderson and Source plan 7-cents-per-copy increases; some balk.
A week after Anderson News in January announced a 7-cents-per copy distribution price increase, Source Interlink also says it will also raise its rates by 7 cents. The two wholesalers account for around 50 percent of the magazine distribution market.
Anerson CEO Charlie Anderson says that all wholesalers were in a money-losing business. â€śThe business has not been profitable and has not been for a very long time. What we are trying to do is give some stability to the channel. Short of that, there will be an implosion in the business.â€ť
This raise represents about a 3.5 percent increase for Anderson. Discussions with Comag resulted in a three percent offer, and separate talks with Time Inc. arrived at 2 percent. The pricing is non-negotiable for either Anderson or Source, with both implementing a February 1 deadline for signed agreements, and plans to drop non-compliers.
Comagâ€™s president, Michael Sullivan, tells the New York Post that his clients have no intention of paying. â€śAs we understand it, Andersonâ€™s proposal is a unilateral effort to shift substantial costs to magazine publishers,â€ť andÂ doesnâ€™t â€śaddress the fundamental inefficienciesâ€ť of newsstand-distribution.
Part two of Andersonâ€™s program outlines an exit from bearing the costs of scan-based trading. â€śThe last thing we want to do is exit the business, but why should we be in a business that doesnâ€™t give us any return?â€ť
Jay Annis, vice president of single copy sales at Taunton Press, says: â€śThe attempts by both at extracting a 7-cents-per-copy fee for distribution is unfair for any number of reasons, and the method in how they have gone about it is ridiculous.â€ť