Australian Newsagency Blog

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A newsagent owned startup seeking to compete with GNS?

Mark Fletcher
June 20th, 2014 · 16 Comments

A group of newsagents met in Perth Wednesday night to hear a pitch that they invest money money, rumoured to be $3,000, to fund the importation of pens and some other stationery items from China for their businesses.

The pitch to newsagents is that the imported stationery can be marked up 200% to 300%. The promotional information mentioned the China products as competing with products from Pilot, Papermate, Bic and Uniball. It suggests newsagents consider increasing stationery sales and increasing gross profit.

While increased gross profit is enticing, it is not the only benefit newsagents should consider when assessing supply options. Newsagents are supported by the ilot, Papermate, Bic and Uniball brands with in-store collateral, in-store rep visits, out of store marketing, newsagency channel event support and other activities that support newsagents and drive traffic to their businesses.

The financial support for newsagents by branded pens and stationery is considerable.

This China import strategy seeks to replace the brand name products with unbranded products and give newsagents margin that would otherwise have been used to support their businesses in a variety of ways.

Newsagents considering the cheap China product need to think through the implications.

Newsagents will only grow stationery sales if they promote stationery. In fact, I suspect individual newsagents will need to spend more than the additional margin they will make to achieve the growth claimed that they could make. If this is right, newsagents will be financially worse off.

Some newsagents would not chase gross profit, they would price the China stationery at a lower price, hoping that this will increase sales. Anyone who has been involved in cheap China stationery in the past will know that products are cheap for a reason – poorer quality raw materials, cheaper manufacturing, less quality control, less back-end support for the retailer. this will matter to some newsagents, but maybe too late.

The best place for newsagents to own part of the supply chain is through ANCOL in SA and GNS nationally. It’s a newsagent-owned business with a strong national footprint. Why newsagents would consider importing pens and stationery to cut out GNS(and ANCOL in SA)  is beyond me. And why newsagents would think they can do better with an unknown brand against branded products also does not make sense.

Since we’re in a free and competitive marketplace, newsagents can do what they like. This post reflects my opinion. Please, contribute and lets have a good open discussion about this.

Footnote: I have no commercial agreement or arrangement with GNS other than as a newsagent who buys stationery from them.

20 likes

Category: Newsagency management · Stationery

16 responses so far ↓

  • 1 Brucez // Jun 20, 2014 at 6:41 AM

    Agree completely. GNS needs our support. In my experience consumers wish to buy brand items not cheap imports.

    3 likes

  • 2 Chris // Jun 20, 2014 at 7:29 AM

    On the other side it is hard to keep supporting a company that allows my direct competitor (Officechoice) in my town to shop at GNS!

    7 likes

  • 3 Wally // Jun 20, 2014 at 8:15 AM

    There are cheap pens etc everywhere. The customer is not trying to buy price. If they were they can buy cheap themselves. They want convenience and service and they want recognised and consistent product. GNS’s problem is they cannot get an order correct and so they fall down on that service element that THEIR customers want. I know they are working on their systems and web page but it cant come soon enough for me.

    3 likes

  • 4 June // Jun 20, 2014 at 9:24 AM

    Isn’t this about buying Australian. Why would we be supporting business in China and letting the money leave the country.
    Yes, I know we are already getting some product from Ancol/GNS that is from China but the vast majority is still Australian product.
    Please Perth agents, consider this before you make a decision.
    Times are tough but if we all did what the Perth agents are considering we would see more local unemployment in our own country.
    This is far more important than a bit of profit for a newsagent.

    1 likes

  • 5 Mark Fletcher // Jun 20, 2014 at 9:48 AM

    June I think it’s more about supporting national brands and the newsagent owned warehouses since plenty of products through these suppliers and channels is already made overseas.

    1 likes

  • 6 June // Jun 20, 2014 at 10:34 AM

    Mark I understand that but surely if we were all buying either overseas ourselves or online? we would be putting people out of work e.g. 80 employees at our local Ancol warehouse.

    0 likes

  • 7 Bill // Jun 20, 2014 at 3:53 PM

    Thy stationers supply

    0 likes

  • 8 Leo // Jun 20, 2014 at 4:53 PM

    Agree, last thing we need is a flood of chinese junk. Cheap knock offs will damage the name of our whole channel.

    0 likes

  • 9 Amanda // Jun 20, 2014 at 5:54 PM

    Who owns the Sovereign brand?

    1 likes

  • 10 ANDREW // Jun 23, 2014 at 5:15 PM

    HI.I HAVE BEEN SUCCESSFULLY IMPORTING
    MY OWN PRODUCT FROM ASIA TO MY NEWSAGENCY FOR ABOUT 3 YEARS I THINK PENS ARE A BAD IDEA BUT OTHER STATIONERY AND GIFT LINES ARE A WINNER Profit anywhere between 275% and 1200%.There is so much stuff out there,quality has improved.Mark up’s
    In Australia are too high from the middlemen.I don’t why more newsagents import Direct.

    0 likes

  • 11 ANDREW // Jun 23, 2014 at 5:15 PM

    HI.I HAVE BEEN SUCCESSFULLY IMPORTING
    MY OWN PRODUCT FROM ASIA TO MY NEWSAGENCY FOR ABOUT 3 YEARS I THINK PENS ARE A BAD IDEA BUT OTHER STATIONERY AND GIFT LINES ARE A WINNER Profit anywhere between 275% and 1200%.There is so much stuff out there,quality has improved.Mark up’s
    In Australia are too high from the middlemen.I don’t why more newsagents import Direct.

    0 likes

  • 12 shauns // Jul 15, 2014 at 4:40 PM

    Who else does GNS supply other than newsagents ? Just had a stationary shop call up to see if I had a certain item and when I said no they mention oh well didn’t really want to do an order with GNS this week . Thought it stood for GROUP NEWSAGENCYS SUPPLIES .

    0 likes

  • 13 Jenny // Jul 15, 2014 at 7:22 PM

    Shauns this changed a while ago for wholesale stationers. I think they used to pay a bit more than us but now it’s the same.

    0 likes

  • 14 Andrew G // Jul 16, 2014 at 1:04 PM

    GNS stands for Got Newsagents (by the)Short (and curlies.)

    6 likes

  • 15 Brendan // Jul 17, 2014 at 4:14 AM

    GNS now supply LPO’s and other stationers including the office supply shop in my small center. I suspect that this has become important to them as sales have fallen partly through poor support from some newsagents. I but all my stationery from GNS and would be dissappointed if we do not get preferential pricing to other retailers. I am sure that the other suppliers do not get offered the catalogue deals we do. GNS need to ensure that they do not become just another supplier option for newsagents.

    1 likes

  • 16 Carol // Jul 17, 2014 at 11:37 AM

    So they could be supplying our opposition and I wouldn’t know? GNS needs to greatly improve their site so it is easily negotiated it we are to try and get local business to use it. They would not be loosing as much business if they were up with the times. I don’t think that after 13 years I know fully what services they provide. I am still do OK with stationary but have had to do it all by myself.

    0 likes

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