The CEO of the ANF says the ANF supports the MPA pilot of new magazine supply rules for newsagents to gather data on magazines in newsagencies. The CEO ignores the considerable data set already available in newsagencies. Here’s a new 11 minute video from me outlining some of the data available.
This video illustrates that as a channel we have all the data necessary to support our claim of unfair treatment of magazine supply.
It galls me that our suppliers and the association that ought to be representing newsagents ignore this data.
We have this data because the magazine distributors themselves required us to gather it and provide it to them.
If the ANF consulted with newsagents as it claims to it would have known this data is available. Instead, it falls into line with the distributors and fails its members along the way.
Our sales history for Rocco La Bella titles is not good yet despite this Network sends us six copies of the new title. We gave his title a go initially but lost money. It disadvantages us that we cannot say no to a title and that it is sent despite poor sales history. Shame on you Network Services.
We know Donna Hay magazine with a free tea towel sells well so we are making the most of the opportunity by spreading the title across two pockets – ensuring the value of the gift with purchase is leveraged.
We are promoting Better Homes and Gardens and the BHG branded Your Knitting and Crochet Collection next to each other in each location in-store. They are a natural fit. Placement next to each supports each title and the two as a package.
I like the bagged offer with the current issue of Take 5 magazine as it makes sense to me – the inclusion of their Take 5 fiction title as a sampler with the main title. This type of bundling should help grow sales as opposed to some other bundling which makes no apparent sense.
This morning I made another submission to the ACCC on the issue of magazine supply, encouraging them to collect data to assess the fairness of the newsagent supply model versus the supply model used for our competitors. Here is the full text of the letter:
Magazine Publishers of Australia application A91472
While this letter is written on behalf of newsXpress newsagents, it is written with my experience serving in excess of 1,800 newsagents using the Tower Systems newsagency software and with the support of many other newsagents who have contacted me on this matter.
The model under which newsagents are supplied magazines compared to their competitors competitively disadvantages newsagents.
The disadvantage newsagents suffer will not alter from the implementation of a Distribution Code of Conduct as promoted by the Magazine Publishers of Australia (MPA) and proposed to be piloted as outlined in their Application A91472.
The application by the MPA to the ACCC opens for consideration the various models of supply of magazines in Australia.
For the ACCC to make an informed decision and to consider the public benefit of any change, we submit that the ACCC needs to undertake a thorough assessment of magazine supply.
The current magazine distribution model used by the distributors for newsagents is the same model that existed prior to deregulation in 1999. The model used for competitors of newsagents is one established post deregulation. The two models are quite different. Gordon and Gotch on their corporate website provides insights into how it works with two competitors of newsagents:
GGA met with Newslink in April as part of the ranged review process to discuss ranging needs for the second half of 2015. Results from the range review will be communicated to publishers in the coming weeks, with the updated range to hit stores in July.
WH Smith has new stores opening in Perth Airport, Melbourne Airport and Sydney International in the next six months. In addition to the Airport Sites there will also be a new hospital store opening in NSW. Layla Crawford commenced as the new category buyer for the re aligned Magazines and Books ‘Readables’ category on May 5th. The range review process has commenced for the July – Dec 2015 period with meetings scheduled for late May.
In their application, the MPA submits that it needs data to assess proposed changes. We say the MPA has access to all the data it needs to assess the situation in which small business newsagents find themselves.
We suspect that competitors of newsagents receive magazines through a set of rules, processes and commercial arrangements that competitively advantage them and that this could not be achieved if newsagents were treated the same. We suspect the treatment of newsagents enables publishers and distributors to treat newsagent competitors more favorably. We think there is data available to support this claim.
We urge the ACCC to request from the magazine distributors, Gordon and Gotch and Network Services, the following data points per magazine title distributed over the last year, tabulated in a spreadsheet to enable easy sorting and analysis.
Number of newsagents supplied.
Volume supplied to newsagents.
Volume early returned from newsagents.
Average on-sale (period on the shelves) for early returns.
Volume returned by newsagents.
Sell through %.
Number of supermarkets supplied.
Volume supplied to supermarkets.
Volume early returned from supermarkets.
Volume returned from supermarkets.
Sell through %.
Petrol and convenience.
Number of P&C supplied.
Volume supplied to P&C.
Volume early returned from P&C.
Volume returned from P&C.
Sell through %.
This data will enable comparison of sell-through efficiency by channel. It will also illustrate the range of titles supplied to each channel and the relative volume by channel, enabling an assessment of viability.
We urge the ACCC to request from the magazine distributors statements outlining how title ranges and issue supply allocations are set for each of their main retail channels: newsagents, supermarkets and petrol and convenience.
We urge the ACCC to request from magazine distributors and publishers details by title and by retail channel the wholesale price, stocking fee, marketing fee, returns processing fee and any other discount or financial support provided in any form.
We urge the ACCC to request from magazine distributors statements regarding returns processing requirements by retail channel: who counts returns and when and who pays for this; are returns physically returned?; when are returns credited?
We are confident that the information outlined above will demonstrate a less competitive model used for newsagents compared to other retailers.
Despite claims by magazine distributors and publishers, newsagents cannot control the range of titles they receive nor the volume of each issue they receive.
While the magazine distributors hold newsagents accountable for their level of indebtedness, they offer newsagents little ability to actually control their level of indebtedness.
Newsagents want to run commercial and competitive businesses. The current magazine supply model to them makes them uncompetitive in the magazine category. There is nothing in the proposal from the MPA that will improve the competitiveness of newsagents.
Yesterday, I searched for stationery using my phone and while there are three newsagencies less than 1km from where I was standing, none appeared in the results. This is not uncommon. I do searches like this when I travel and it is rare a newsagency appears in the results.
If your business does not come up in mobile device search results you are missing business.
Each of us can do this search for our own businesses and we can fix any deficiency our search reveals – yet too many do not do this.
Whether we come up in search results or not is 100% on us.
Can you find your business?
I chose stationery for my search because newsagents are quick to complain about stationery wholesalers. If your business cannot be found by the millions of Australians who search for products online you need to fix that before complaining about your suppliers.
Make sure your business can be found and make it easier for new traffic to beat a path to your door.
On the Run is a strong petrol and convenience group in South Australia. Their tag line is compelling: we never close! This must be confronting for newsagents nearby to OTR outlets as they offer more newsagency lines. Their magazine range is broader than is usual for a petrol or convenience outlet. They have lotteries too. Plus bread and other daily staples. I’ve also seen cards and some gift lines.
I am not sure when they first got lotteries or how the move was ‘sold’ to newsagents. The OTR approach is far superior to what 7-Eleven did and what Coles Express has in some stores.
To me, the best approach for competing with OTR is to not swim in the same ocean, to not play in the convenience space.
The best place for us to attract Facebook followers for our businesses is outside our businesses. I use Facebook to attract new shoppers more so than for speaking with existing shoppers. That goal was behind a boosted post over the weekend when I pitched three magazines aimed at mums: Practical Parenting, Mother & Baby and Fete Kids.
Reaching 3,694 Facebook users nearby to the shop over two days for a few dollars was worthwhile. It is part of a regular campaign to pitch the business to people who don’t shop with us today, to drive new traffic.
It is important to me to run these micro marketing campaigns for some of our core products, like magazines. When I do promote magazines, I tend to focus at least in part on titles not available in the supermarkets in the shopping centre.
While magazine publishers prefer to see us create billboard type displays in our shops, I think promotions like I have just done on Facebook are far more valuable for the newsagency and the magazines we sell.
While the margin we make from newspapers is too small, the traffic is good. In addition to placing newspapers further into the business, I encourage newsagents to think carefully about what they place next to newspapers, to make the most of the traffic.
This photo shows the placement in one of my newsagencies as at yesterday. On the right of daily newspapers we have foreign language newspapers. Immediately on the left we have a Pacific Magazines stand pitching five popular titles. Next to that we have the Hallmark Avengers range.
As with all good floor placements, we change adjacencies with newspapers regularly – to make the most of the traffic.
One of the best places to promote locally made products in-store is with the products themselves – using a small shelf talker to call out that the products are locally made. A simple small sign like this can get people who want to support local artists and suppliers considering products they may have overlooked. This sign is a great way to market inside your newsagency.
Since newsagencies are regarded by Australians as the quintessential local business, a strong local community connection is vital. Here are practical ideas for improving the community connection in your newsagency:
Be local in what you talk about – local issues, local challenges, local opportunities.
Be local online – on facebook, Twitter and other social media platforms.
Buy local wherever possible.
Employ local wherever possible.
Be a local resource with a Local what’s on noticeboard.
Publish your own local newsletter with items about local matters.
Support local charities.
Get involved in the local chamber of commerce.
Get involved in a local community group.
Sell products that support local attractions.
Offer a welcome pack to local newcomers.
Show locals how shopping locally helps them.
It takes hard work and persistence to successfully pitch and genuinely live the local message. It needs to permeate your entire business. Get it right and the locals will support you.
While I don’t qualify to use the SBSCH, I checked it out this week for a newsagent I was helping out. I like that you can make a single payment instead of having to handle payments to multiple funds. It certainly offers a reduction in red tape as promised by the coalition parties prior to the last federal election.
Superannuation is one of those obligations newsagents can easily let fall behind because of the work involved. This facility from the government eliminates considerable work. It has been delivered as part of the election promise to reduce red tape. I encourage newsagents to check it out as any time saving has to be valuable.
Saving time on back office tasks can help you enjoy your business more.
Walking through the city the other day I stopped to look inside this shop with a bike and fresh produce parked at the front door. I stopped because a bike like this with produce was out of place in the middle of a busy city. Inside was a coffee shop. The bike and fresh produce offered an indication of the type of business this is – where fresh matters. The bike also offered a visual cue about the business, attracting a certain type of person.
Looking back at the photo, it reminds me that sometimes we can attract people to our shops not by displaying what we sell but by displaying items that appeal to those we would like to attract.
What makes this display of small plush items noticeable and effective compared to average is the impression of motion achieved by one of the cute little characters pushing out of the display. Whether intentional or not, this character reaching out is what got me stopping for a look. Without it the display would have looked flat, two dimensional.
Bringing a sense of motion to a display, by disrupting the look, can drive shopper engagement and that is the best step to driving purchases.
The photo is from a Disney store I visited in the US in April.
An 82 year old male customer told me recently that he started buying cards again thanks to our discount vouchers. He told me he stopped buying birthday cards for his kids and grand kids and great grand kids a few years ago because of the cost. But I started again when I got one of these things when he handed over a discount voucher. He got his first voucher when purchasing some magazines for people in his retirement village and didn’t know what to buy so he bought a card for a great grandchild’s birthday that week. Well that started something he said.
It was a terrific conversation, he was forthcoming with insights that helped me understand the trigger for him becoming a card shopper again. He had a background in marketing in big business years ago and this was a factor in him being happy to share his thoughts. BS turns me off he said and this is no BS. I like that.
It turns out the saving of a few cents off each card is all it took. He likes that he saves money and has, as he sees it, a reason to purchase a card for each family member. He called it his thing, something he had become known for in the family. he was proud.
I talked about other loyalty programs. He hates the supermarket programs. They are useless he said. He didn’t like the clip card programs because there were always rules. With this I know what I save he said tapping the discount voucher he got with his purchase of the birthday card.
At the heart of his embrace of the discount vouchers is an appreciation for the simple. We have a more regular customer as a result. The cost to us is minimal.
Card sales in my newsagency are up close to 25% year on year. Everyday counter cards are at the heart of the growth. These are the birth to death cards. I think a key factor is the growth is our discount vouchers.
I noticed a WH Smith store here in Australia last week discounting titles from several publishers if purchased as a bundle. I’ve not seen this before as discounting is usually only within the portfolio of a single publisher. This offer is not from a single publisher which makes me wonder if WH Smith is funding it.
I expect we will see more deals like this as WH Smith expands – and expand they will. I am told an announcement is imminent about further expansion in Australia through acquisition. One report is 20 stores while another is double that. Only time will tell how their expansion plays out as well as they approach to bundled pricing.
Check out Parcel Nest on Kickstarter, a cool solution to the challenge of home delivery of parcels. It’s an Aussie design addressing the delivery change at the front gate. I mention it here so newsagents are aware a a different approach to parcels compared to the collection point approach our channel has been pitched in recent years.
A newsagent suicided two weeks ago leaving a young family without a parent and a business without leadership. Things had been tough for the business with landlord challenges and difficulties dealing with magazine supply. Colleague newsagents had suggested help was needed. Unfortunately, the first meeting to sort out help was two days too late.
I have known about this situation since it happened and wondered whether to write about it here. This is not the first newsagent suicide I have heard of. Each situation is different and it is unlikely anyone knows all of the factors involved.
I am writing about this today because we need to talk about mental health, the mental health of small business newsagents and how we can deal with challenges where we feel helpless. We need to work together to help any who may feel that suicide is the only option. When I say we, I mean all of us in this channel: newsagents, associations and suppliers including landlords.
Some landlord representatives are bullies. They push small business owners into a corner. I hear too many stories of intimidation of small business owners who are in vulnerable situations.
Some of our suppliers are bullies. They create financial stress and add to this by cutting off product supply when accounts over which the small business newsagents have little control are not paid on time. yes, I am talking about magazine distributors here as they control supply, they control the level of indebtedness and they, sometimes, place newsagents under extraordinary personal pressure to pay them ahead of other creditors.
These people dealing with small business newsagents need to take care in their communication, they need to be aware of the emotional and other consequences of their actions and words, or their refusal to act. They need to consider decisions of the company they represent that could have helped create the situation. They need to consider their culpability.
I am all for personal accountability and often say we need to own our own situation – we sign our leases, we sign magazine contracts. However, we do these things expecting fairness. Too often there are people of the other side of a commercial relationship who do not believe in the same fairness.
It is hard to know the mental health of anyone. That person smiling at you or joking with you could be in a dark place in their mind. This is why it is important we talk and ask colleagues how they are doing and why we all need to help when we think help could be what is needed.
We owe it to each other in small business to do this. I think it starts with talking openly with each other about challenges and how we feel about them and their impact on us personally. It can start within the business with more open communication among all involved. Sometimes, the initiative for this will have to come from the team communicating up to the owner, to open the discussion.
Our suppliers need to play a role. Take the accounts department at a magazine distributor. They are probably the first to see a newsagency in a stressed situation. They have details of calls and emails that can reflect on the mental health of the newsagent in contact with them who is struggling to pay the bills. What do they do about this? Do they have a process of care and support for the business or do they aggressively pursue payment of the debt? My experience is they do the latter with considerable intensity. They will say they can’t do much because of privacy obligations. I’d say that is nonsense. Lives are at stake.
Given the early warning signs in the accounts department of magazine distribution businesses they ought to have a process for rallying support for a newsagent in trouble.
Owning and running a small business can be tough – on families, relationships, finances and your mental health. The ABC published a terrific report about mental illness and small business. I urge you to read this and share it. At the bottom of the ABC article is an excellent list of resources:
Mental health crises don’t always happen during office hours. But if you find yourself having to help someone there are people who can help – at any time.
National crisis and counselling contacts available 24/7:
I have been thinking about the April 23 ACCC convened conference to discuss the proposed magazine supply rule change pilot and, in particular, the contradiction of submissions of newsagents by the CEO of the ANF.
Every newsagent speaking at the ACCC conference objected to the pilot as proposed and the magazine supply rule changes at the heart of the pilot. It was only after every newsagent had spoke that the ANF CEO tore them down. Here’s how the minutes record his contribution:
Alf Maccioni (CEO, ANF) said the ANF had informed its members about the Pilot, with articles in newsagency magazines and newsletters. He said the ANF currently had around 2300 members (of a total 3500 newsagents). Mr Maccioni said the ANF supported the trial because oversupply of magazines was an issue which needed to be discussed.
What the ANF CEO failed to detail is exactly what informing ANF members involved. I have been told it was a passing reference in an issue of National Newsagent magazine and a passing reference in an email to members. ANF members tell me there was no consultation. I am certainly not aware of any effort whatsoever to determine the views of newsagents.
What if the ACCC places more seated in the views put by the ANF CEO than the newsagents at the Conference? What if this one small contribution from the ANF CEO is considered to be representative of newsagents?
Talking with newsagents over the last couple of weeks, I know this is not what they want. The do not want the ACCC to consider for a moment that the ANF understands what newsagents think about this trial.
I am in the middle of the Newsagency of the Future workshops and there are many questions about the proposed pilot and the position of the ANF. Had the ANF CEO made himself accessible I am sure he would have had his position challenges by newsagents who disagree with him.
Footnote: going into the meeting I shook the hand of the ANF CEO. He didn’t seem to want to talk. While some newsagents held back and talked, the ANF CEO was gone. Two more opportunities missed for discussion with newsagents. So much for consultation.
Usually I would not care about what the ANF says. However, in this situation, they have some standing. It is unfortunate they use that standing to sprout ill-informed and ignorant views.
When you contract to sell your newsagency, or any business for that matter, you usually contract to sell the business as it has been trading and you contract to sell the assets of the business. Your business data is part of that trading, your business data is an asset of the business.
Removing data prior to the completion of a sale transaction could open you to a legal challenge. At the very least is would raise questions.
There have been court cases between purchaser and vendor over data on which the purchase valuation was based. These are complex cases from which neither side wins. In one situation the case went of for years, costing well into six figures in legal fees.
If I am ever asked, my advice to newsagents selling is to NOT delete or tamper with data on which your business valuation is based.
What products are lucky for you at the newsagency counter? I am talking here about items shoppers purchase for luck, like elephants, turtles, crystals, dolphins and buddhas. Choose the right item for your area and it can sell and sell.
Adding a $9.99 item to a basket on impulse and with a 60% GP can be an terrific add on and deliver valuable margin dollars.
One way to drive success is to consider how you display them. In some situations, a display with plenty of stock helps whereas in other situations an impression of scarcity works better. You need to work our what works best in your own situation.
Recently, we bent big with elephants. Everything sold, easily. What works for you?
I just saw an ad on TV for the OzLotto $25 million jackpot just now, at 6:17PM. Given that most retailers would be closed by now, why is Tatts paying to be on TV. The cynic in me wonders if this ad buy, if specifically selected by the company, is about growing line and mobile purchases.
It is disappointing that newsagents are unable to offer Netflix cards while EB Games has them in their stores. Distributed in Australia through InComm, no reason has been given for denying our channel access to what should be a popular gift card line – I don’t know if InComm decided this on their own of because of a deal with EB.
I purchased some plastic ponchos from Officeworks for 69 cents. A couple of days later I noticed very similar ponchos at a Coles supermarket priced at $4.00 each. I can’t figure out the reason for such a price difference. Coles and Officeworks are owned by the same company.