Order Regulation

We periodically review the sales history of your publication, store by store and issue by issue, so as to scientifically adjust orders, thereby maximizing sales while minimizing returns. It is in our mutual interest that we continually strive to improve on these statistics. If you feel we are ordering too many or too few copies, then you should give us a call and request that we modify our standing order with you. We will then perform an order regulation and fine tune our orders. In general our sell-through percentages exceed market standards. However if you are very cost conscious and the prevailing rate for your publication does not meet your expectations, keep in mind that we can always lower our allotments to our retailers by another notch to bring it in conformity with your needs.

It is important for publishers to understand that the sell-through percentage is in part a function of the average order size per store. Upon request we can inform you of how many dealers we supply with your magazine and what the average order size is, so you can get a better idea of the it's popularity and the market conditions we face. If the average order size is on the high side it is easier to adjust orders to optimize the sell-through rate. This is because it is relatively simple to trim an order by one or more copies without sacrificing any sales and sales patterns tend to offer some consistency, even though they may trend upward or downward. On the other hand, if the average order size is on the low side, it is much more difficult to achieve this objective. This is because the when orders are low, in the range of three copies or less, then sales tend to be more volatile and unpredictable, with a higher degree of randomness. For example, a dealer may sell two out of two copies for two issues and then zero out of two copies for the next three issues then two out of two for the final issue. As of the fifth issue it appears appropriate to cut the order to one copy or even cancel it , but as of the sixth issue it appears reasonable to keep it at two copies. Another problem, especially when orders are two copies or less, is that you cannot fractionally reduce small orders that can only be expressed as integers.

For example, you cannot trim a two copy order to 1.50 copies so that the order is more closely aligned to an average sale of, say, one copy. Either the order is one copy or two copies. Of course the order can be reduced to one copy and this may make sense if the dealer usually sells one copy, often doesn't sell any copies, and only rarely sells two copies. However if sales are randomly distributed between zero and two copies, or tilted more to two copies than zero, then it is more difficult to justify an order reduction. When an order is restricted to one copy the second sale will always be forfeited and there will be no way to statistically know thereafter what the sales potential will be, which changes over time. A one copy is a statistical sell-out situation which normally prompts us to increase the order. The second sale helps boost the average sale to one copy.

To illustrate this imagine a situation where a dealer receives two copies for three successive issues and sells zero copies of the first issue, one copy of the second issue, and two copies for the third issue. In this case they sell a total of three copies out of the total six that they received, so their average sale is one copy per issue and their returns rate is 50%. If the 50% figure if viewed as being too high, then the solution is to cut the order to one copy. However then the dealer would sell only one copy of the third issue so that while the return rate would drop to 33%, their net sales would drop to two copies and their average sale would drop to .66 copies per issue. To get a better idea of what this means on a larger scale, imagine if this scenario was played out across a network of 100 similar dealers. Initially, with a two copy order and average sales of one copy per store, there would be a net sales of 100 copies on average for the three issues. But after the orders for all the dealers are cut to one copy, then only 66 copies would sell on average, a 33% reduction in sales. This loss has to be weighed against the 17 point reduction in returns rate.

Another factor of consequence is that the more copies a dealer receives of a given title, the greater likelihood that they will be prominently displayed and command their display space for the full duration of the issue. When an order is very small, or the unsold copies on hand are few after other copies of the same title have sold, it becomes increasingly likely that other magazines will be placed in front of it or on top of it and block it from view. Also customers perusing a copy may not put it back in the correct display section, so that the magazine cannot be readily located by other customers unless a stack of additional copies remain in their original position. If any copies are torn or marred in handling there will be extra copies available that are in salable condition.

____________________________________________________________________________
UBIquity Distributors, inc. is a distributor of periodicals, magazines and publications.
607 Degraw Street. Brooklyn, NY 11217. Designed by AlfeNet.com, Hosted by nydatasecurity.com