Distribution deja vu?: Comag's new single-copy distribution system assigns wholesalers to geographic regions

Folio: The Magazine for Magazine Management, March, 2002

Attempting to improve how magazines are sold, delivered and marketed to newsstands, bookstores and retail chains around the country, Comag Marketing Group plans to roll out a new distribution system this summer that assigns wholesalers to geographic regions.

Comag, co-owned by Conde Nast and Hearst, is accepting wholesalers' applications through March 29, and expects to start IMPACT (Innovative Magazine Partnerships and Channel Transformation) in July. Key distributors will be assigned to retailers in specific ZIP codes.

Sound pre-1995? "That's the last thing we want," says Mike Sullivan, Comag's president and CEO. "What we're trying to do is say that some folks do better jobs than others out there--and we're trying to bring some uniformity across our business."

Comag will pay wholesalers to provide retailers with additional services, such as category management "We're trying to raise the service level commitment of the wholesalers that are handling out product," Sullivan says. Retailers can choose any distributor, but those who sign up for IMPACT will be guaranteed a "certain level of service."

Time Inc. proposed an ambitious plan last year that called for publishers to work closely with retailers to merchandise, track and sell magazines. It expects to test its so-called cost-to-serve system in Wal-Mart stores later this year. Under this plan, wholesalers wouldn't be paid commissions; instead, they'd be paid for services: marketing, billing and shipping.

Both proposals are sure to be discussed at the Magazine Publishers of America's Retail Conference & Expo this month in Dallas. "If it isn't addressed publicly," says Jim Borth, group circulation director for Dennis Publishing, "it certainly will be talked about in the hallways."

Some industry leaders doubt that either plan is the optimal solution. Many think the answer will be a hybrid of the Comag and Time Inc. plans. Even Sullivan notes that at some point, cost-to-serve and scan-based trading could be built into IMPACT.

One thing is certain--the current system isn't popular with anyone. Tami Long, Emmis Publishing's newsstand director, says, "I've heard positives and negatives about both programs. Of course, who completely likes the program we've got now?"