In late 2011 the ANF invited me to be part of a magazine summit they hosted in Sydney with the state newsagent associations. The purpose of the summit was to develop a plan of action to confront the on-going issue of magazine oversupply to newsagents in Australia.
I was there for three hours to share my thoughts and provide an insight to the data available to support claims of oversupply. Others to participate included the magazine distributors although I was not for their attendance.
I understood that the ANF and one or more of the states would assist some newsagents through a test case to lay out a path for others. I have not seen any such action taken.
Here is what I proposed to the meeting.
ASSEMBLE THE FACTS
It is one thing to think you are oversupplied with magazines and another entirely to have proof. If you do not have proof that will stand up to scrutiny there is no point is pursuing the matter.
You can’t have proof that will be acceptable if you are not loading electronic invoices from the magazine distributors and scanning your returns with accuracy. This is important because at some point in pursuing your claim you will have to confront the other side, one or the other or both of Gotch and Network.
If your data is accurate and your processes are right then you can use your Magazine Sell Through Rates Report if you are using the Tower newsagency software used by 1,850+ newsagents or a similar report from any of the other software companies. This report shows the percentage of what you have received that you sold by title by month. This report shows if you have been oversupplied and over what period. The sell through rate calculation was developed through discussion with the magazine distributors to avoid a fight over data.
Before you start any action or complaint, read the contract you designed with the company you are about to go up against – read it and think about what you agreed to.
PREPARING YOUR CASE
If your data shows that you have been oversupplied you need to work out what you want. I am serious. If you are going to make any claim, in any forum, you need to be clear in what you want from a mediation or a case. A registrar, mediator or judge will want you to be clear in articulating what you want. So, if you are being oversupplied, what do you want?
MOUNTING YOUR CASE
Where you make your complaint will differ from state and territory to state and territory. My suggestion is to start with an entry level forum like a Small Business Commissioner. In Victoria I have used the office of the SBC to resolve a several issues. It’s inexpensive and informal. It also shows the other side that you are serious about resolving the dispute. Also, it can be a reasonable precursor to more formal action of the matter is not resolved.
Here are the entry point places where I’d mount an initial complaint for mediation / resolution by state:
- Victoria: Office of the Small Business Commissioner.
- NSW: Small Business Commissioner.
- South Australia: Small Business Commissioner.
- Queensland: Queensland Civil and Administrative Tribunal.
- Tasmania: Magistrates Court.
- Western Australia: Small Business Development Corporation Dispute Resolution Service.
- ACT: ACT Civil and Administrative Tribunal.
- Nationally. Australian Small Business Commissioner.
However, don’t rush to make the complaint. Make sure you have your evidence, that you know what you want as an outcome and what you will do if mediation fails.
I’d be glad to help any newsagent through this process. It’s important to me that newsagents and the channel approaches more broadly approaches the matter of magazine oversupply thoughtfully, professionally and without emotion. Mounting an ill prepared, undocumented and emotion-charged case will not help those involved nor the channel more widely.
Each case will be unique. It needs to be from you, in your own words. Your local entry point can usually help you prepare your complaint. Just lodging the complaint will pressure the magazine distributor involved to be present for a mediation usually in your capital city or nearby. In some jurisdictions the numbers of complaints against companies are noted in reports to parliament.
WHAT DO YOU WANT?
You never go into any legal or quasi-legal fight without knowing for certain what you want. When it comes to magazine supply, I suggest that newsagents want one or more of:
- Fair and equitable magazine supply.
- Supply based on sales data provided according to and in time with industry standards.
- Control over the level of indebtedness to magazine distributors the newsagency incurs.
- Levers with which I can grow magazine sales.
- Mutual respect in supply and return management.
If your reports show a sell through of less than 50% I’d suggest you might have a reasonable case to mount. If you decide to do this you will need to be prepared to fight for the long haul. You will need to be prepared to sit across the table from people better resourced and probably more articulate than you. You will need to have a thick hide and be prepared for them to play the person and not the issue. You will need to be prepared to be public about your fight so that other newsagents can support you.
Here are some questions and answers:
Why should individual newsagents mount their case? My experience in business is that
The distributors are bigger? For decades newsagents have felt and acted helpless. One day someone will act and show the way forward.
Will government won’t care? The organisations I suggest in this post have been established by governments to provide low cost and structured places where disputes like these can be resolved.
What is publishers hate me? Who cares? They are part of the magazine distribution process and play a role in oversupply.
I am too small why should I do this? If you do suffer from oversupply and complain about it, you need to have the guts to act on your complaint or stop complaining.
How can the magazine distributors Gotch and Network avoid this? Stop oversupplying. It’s a behaviour they knowingly engage in. This is my preferred outcome – that they voluntarily supply based on the accurate sales data we provide.
Why have the associations not done this? You’d need to ask them. Magazine oversupply is the issue newsagents rate as the most important they currently face.
FOOTNOTE: I will help any newsagent as much as I can to deal with magazine oversupply. Call me on 0418 321 338 or email me.