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There has been much discussion about poor availability of magazines over the past few months. Back in September I asked ‘who owns your shop?’ Taking this theme further I now ask, how much does your display space cost you to provide each day?
Taking the establishment costs like rent, rates, power, telephone, staff and all the other expenses of running your business one finds how much it costs to open your shop each day. Next by going around your shop and adding up how many metres of display racking you have and dividing by the annual cost you can calculate the cost per metre.
So £60,000 of annual running cost divided by 40 metres of display racking gives a figure of £1,500 for each metre. That is how much each metre of display needs to provide in profit before the owner starts to make any profit. On a 25% gross profit margin one needs £6,000 of sales ex VAT just to cover the cost of opening the door.
A three-meter racking with ten shelves provides 30 metres of space to display magazines on. Each shelf costs £150 and each fully faced magazine’s space (at 4.5 facings to the metre) costs £33.33 per year or 64p per week.
In my store a profile magazine facing costs us 90p per week. Knowing this information the next step is to look at our range and discover which magazines are earning us most. Our top performer is Radio Times with an average weekly gross profit of over £13 so the title more than covers its cost of display and fully deserves at least a full facing.
We use a Bartuf tiered magazine display racking which allows for 4 ‘front rows’ (54 full facing) and clearly these are where we put our best sellers. Looking at our magazine top sellers report we have 40 titles that earn a full facing and 10 that justify a double facing for the first few days of each new edition.
The best of the rest certainly earn a half or third of a facing, but the tail needs constant pruning and new titles added to the range to take their place. I intend to look at finding titles to add next.