Several newsagents have sent me the Preferred Agent Terms and Conditions for Hubbed for comment. It appears to be their contract. In each case they asked me to look at the contract because of concerns about what happened years ago with the ANF endorsed and promoted Bill Express.
While I have business questions about the Hubbed offer are questions I have about the contract:
- Hubbed Competitor. The definition in the contract is broad and could change over time as Hubbed changes. Today, Touch Networks, N-Parcel, Parcel Point and even facilities in some newsagency software products could be considered competitors of Hubbed.
- Territory. The newsagent is restricted as to where they can offer the service. Hubbed has no restrictions on who they can sign to offer the service.
- Equipment. Newsagents must obtain the equipment Hubbed requires from Hubbed and this must be financed by a finance company approved by Hubbed.
- Financial Services. Newsagents taking on Hubbed are directed to use Moneytech Services to be able to use Hubbed. The finance agreement appears to be separate to the Hubbed agreement. I have not been given a copy of a finance agreement. If I remember correctly this was the case with Bill Express too.
- Sales target. Newsagents need to understand their target and the implications.
- Insurance. Newsagents neet to take out insurance for parcels and equipment.
- Responsibilities of the agent. Newsagents have to erect signs if required by Hubbed – there does not appear to be an opportunity to negotiate on this. The price you charge is set by Hubbed and you cannot vary it. You must get written approval from Hubbed to sell, promote or accept business from any competitor service. You have to notify the sale of your business 60 days in advance. You have to give 60 days notice if you plan to move your shop.
- Access. You have to notify your landlord that you’re taking on Hubbed.
- Fees. Hubbed may set off amounts payable.
- Access – termination. Newsagents agree that Hubbed can enter the premises without notice and remove equipment.
- Money. Hubbed and their agents get access to your bank account and you must authorise their direct withdrawal.
- Subcontracting. You authorise Hubbed subcontractors to have the same rights as Hubbed. You can’t subcontract your own writes without written permission from Hubbed.
- Termination. While Hubbed or the agent can terminate the agreement at 90 days notice this would need to be considered in association with the finance agreement. Termination fees apply and they are in schedule 5 – none of the agreement I have been given have a schedule 5.
- Financial guarantee. Part of the Hubbed agreement requires newsagents to provide a financial guarantee to the Hubbed Financial Partner.
- XchangeIT. In Schedule 4 newsagents are required to use something called the XchangeIT inventory management and payment system. Is this a new service or a mis-naming of XchangeIT?
While I am no expert, it seems to me that newsagents signing up for Hubbed will need to seek written permission to continue to offer Touch or ePay products as well as to offer Parcel Point or N Parcel. I would also be concerned about the future business opportunities that Hubbed may deny me from taking on given the tight no compete obligations in the contract.
More complete assessment of the Hubbed offer can only be undertaken in-conjunction with reading the finance agreement which I have not seen nor have newsagents I have spoken with.
It is not my intention to attack Hubbed. Rather, I have sought to document the concerns I would have with the Preferred Agent Terms and Conditions for Hubbed if they were presented to me for consideration. I’d like to think the ANF has read the contract with the same intent as me.
Hubbed may have answers that satisfy newsagents on these and other points. As with any contract newsagents are presented to sign, read it all carefully and ask questions about anything which concerns you or you do not understand. Get the answers in writing.
The margins on their products are truly pathetic. After you take off the equipment rental fees, it’s very slim pickings indeed. Plus you have to have another bloody machine taking up valuable space.
Like you Mark, I was also concerned regarding conflicts with our other services like N-Parcel.
They don’t have any issues with N parcel. Only if you are a sub post office (not sure if that’s the correct term in Australia) can you not have hubbed. We are in the final stages. Not signed contract yet though. Still checking it.
Penny if that’s the case they need to document it.
Yep, it sounds like it would conflict with any in conjunction post office as they’re pretty well offering the same services. Mind you that does run both ways to some extent and the LPO agreement would have some impact on what you could do or whether you could take on Connect as I understand it.
We found it an inconvenience when customers paid their bills. The time taken didn’t seem worth it for what you earn. We wouldn’t bother with this
Sound way too familiar to me. Who needs another Bill Express experience?
The thing is this may not be another Bill Express. The best way to show it’s not is for the promoters to be more accommodating toward newsagents and to be more transparent on these and other issues.
As a matter of principle, in 2013, and in the future, we, as retailers, need to utterly reject small margin high service items.
Its time, we, our marketing groups and the ANFs leveraged our national footprint and demanded more. Failure to do this will see us out of business in under 10 years.
End of rant.
i am sick of the foot traffic argument as well, pay me rent for floor space and a decent commission that has a growth component to give some incentive to grow the business and I might be interested. Any increase in foot traffic is only a bonus if they spend more $$$$, and comes with no guarantee
In my short time in this industry it seems that on a lot of occasions the newsagency has become the bucket full of small commission products that no one else will take.Drives foot traffic is an argument that does not sit well with me either.
There is no way I would look at any small margin service that includes Parcel Point or N Parcel.
When can we obtain some real leverage out of the Newsagency footprint in 30 years I still have no seen a real forward step.
As for the ANF going down this path after Bill Express really.
Sorry, not desperate enough for Hubbed. Not interested in any low margin products.
Bill Express….gone
Stamps…..gone
Bus Tickets…..gone
Home Delivery…..gone
ATO Forms…..gone
Photocopy/Fax Services….gone
We are ridding our business of low margin services relying on OUR foot traffic. We serve fewer people because of it, but we are happier in SERVICING the people who visit our store because its a destination. And our customers are happier because we have the time to help them, advise them and even have a conversation with them! (OMG)…And as a result they buy things we make lots of money on.
The core question I posed in the most recent Newsagency of the Future workshop series is: are you an agent or a retailer? Is yours a conveyor belt newsagency where you do your piece-work or is yours a business where you chase margin leveraging your smarts by focussing on products that generate repeat business for you> Is yours a business focusing on convenience or attracting people from some distance because of products and services you offer?
Hubbed could be ideal for some newsagents. It is not what I want to grow my retail businesses. However, that view has nothing do do with the questions arising from the contract.
I agree Mark I need to see the finance agreement before the whole picture can be understood. Why it’s all not part of the one agreement is a BIG question I have.
Amanda, I agree with you except for photocopying and fax services. These are extremely high margin and as we have the ability to set our own prices you can serve many people for a good margin are less people at an obscene margin, either way I feel they are worth providing. Everything else I agree with, especially stamps which only take counter pressure off an already advantaged competitor.
Yes, all agreements should b e presents at once. Otherwise you cannot make a fully informed decision.
I looked at this and have 70% of what they offer covered without having to pay anything. The hype from their sales guy is something to see. I can understand why some sign up.