Source Interlink Integration

How will Source Interlink's distribution system shake out?

By Linda Ruth
11/17/2008 -09:58 PM

Source Interlink is re-integrating their magazine system.

Years ago, magazine publishers, in concert with their direct distributors, unstitched the channels of distribution by setting up separate distribution, separate billing, separate shipping, and separate kinds of service for their highest-efficiency outlets—the bookstores and specialty retailers.

It could be argued that, by taking away their bookstore distribution—among the most profitable of the outlets that wholesalers serviced—and leaving the wholesalers with lower-efficiency outlets, publishers paved the way for the subsequent collapse and re-organization of the wholesaler system.

It could be argued that, by setting up a system wherein a national chain could consolidate their magazine billing under a single distributor, publishers set up the initial conditions for the bidding wars, deterioration of wholesaler route density, and loss in profitability that make magazine newsstand distribution such a tricky and expensive business today.

Is the solution to put it all back together, as Source Interlink is attempting to do, billing their Levy (wholesaler) business and their bookstore business on one system, co-mingling them in the same warehouses? Or will this re-blurring of the distribution lines set up similar conditions to those that caused the separation so many years ago—but at a greater cost to the publisher?

Whichever turns out to be the case, one thing is certain: there is no turning back the clock. Source Interlink—publisher, distributor, RDA consultant, and wholesaler—is creating a re-integrated approach to their operations, and the chips will fall where they may.

Linda Ruth is Principal of Publisher Single Copy Sales Services. Her book of case studies, "How to Market Your Magazine on the Newsstand," is available at BookDojo.com and at Amazon.