Cowley/TNG Combines Old & New in Magazine Distribution
John Cowley still visits each of his agencies regularly, starting in Kansas and moving east, day by day. He still gets out into the field every week to check his stores; still checks in with his truck drivers and merchandisers; still finds time to meet with publishers who come to his agencies to see him.
As a partner to TNG (formerly The News Group), Cowley represents a convergence of the old and the new. TNG's footprint covers most of North America. Cowley Distributing, representing about 4% of US newsstand distribution, is a small part of that-but significant in scale when compared to any agency a couple of decades ago. And, while a part of the emerging world that TNG, by virtue of its scale, must lead, Cowley is also one of the very last of a vanishing breed: the old-time independent wholesaler.
"What we have to offer is value and service," says Cowley. "We still know our retailers; we can stay hands on. We have the resources that TNG can provide-their information management software makes sales tracking easier than it's ever been. Publishers can benefit from that. And a connection with the field still matters-knowing your customers, what they need, how to give it to them."
Keeping up a consistent level of service is challenging when margins are falling, but in Cowley's eyes it's essential. "The service is what makes us unique," says Cowley. "Everyone is dropping services, contracting the work out. Not us. We've got 300 people on the trucks and in the field. Some of the agencies out there are struggling, trying to come up with a solution that they can afford. It's hard, but they're going to get it right. I don't think contracting the work out is the solution; you can't control contract personnel. Wait and see. In the next 90 days you'll see wholesalers dropping their contracts and hiring merchandising employees direct."
How are the macro changes affecting his business, I wondered, and what does Cowley see coming out of them? "The world has changed," Cowley acknowledges. "The nuances of our business have changed. If publishers want to come here to see me, I'll put them on a truck. I'll send them out into the field with my drivers and my merchandisers. Because we need to communicate with one another, and we need to understand each other. We're going to stand or fall together, publishers and their wholesaler partners. I think we're going to survive, but we need to figure out a way to survive together."
In terms of what these changes look like and how they will affect us, Cowley says outdated systems must go. "My biggest waste is scanning returns. The next big change will be to drop that outmoded system and start using the power of Pay On Scan to make us all more efficient." Shrink-copies lost from inventory, showing up neither as a sale nor a return-make up an increasingly small percentage of overall copies distributed, between one and four percent, says Cowley. It's a bit higher in certain classes of trade, a bit lower in others. But the cost of those lost copies would be such a small amount, compared to the current cost of returns processing. "I spend a million four a year scanning returns. I have 28 people to do just that."
Sales tracking and reporting will come from POS; payments will be made based on POS. "You'll see the agencies begin to populate the O/R from the POS reports."
For a wholesaler like John Cowley, who has survived many changes, is the outlook promising or bleak? "There is a lot to be optimistic about," he says. "Publishers have never put out better products. Go down to the warehouse and check out what is coming in. You'll see the best product you ever have: full color, more pages, perfect bound. It's a bit more expensive for the customer, with cover prices creeping up, but it delivers the value."
Cowley Distributing is keeping to its core values while at the same time changing with the times. As digital products come to market, Cowley distributes them via downloadable gift cards; the company merchandises them with banners and coupons. He passes on these and other lessons in courses he gives to the journalism students at the University of Missouri. "My passion is getting young people into this industry and firing them up," he said. "On paper it looks like a dying industry. I want them to know that we're not going away."
Linda Ruth, as president of PSCS Consulting (www.PSCSConsulting.com), offers communication companies worldwide the keys to magazine launches, search engine optimization and audience development online and at retail. She is a pioneer in the fields of Online Audience Optimization (OAO) and gamification for content publishers. Her books, "Internet Marketing for Magazine Publishers" ; "How to Market your Newsstand Magazine"; and "Secrets of SEO for Publishers" can be found on Amazon. Find her online at Google Plus, Magazine Dojo, LinkedIn, and Twitter @Linda_Ruth.