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Vodafone cuts newsagent sales commission by 37.5% and hurts small business

Newsagents are reeling after Vodafone announce a 37.5% cut in sales commission.

Around 2,600 newsagents have invested heavily in technology, delivered valuable in store real-estate and increased sales significantly. The reward for all this effort? The 37.5% cut in commission.

Under the new pricing newsagents receive 5% for Vodafone recharge sales.

Vodafone says that newsagents will make more because of growing sales an that the higher commission is competitively unsustainable.

Newsagents have high operational costs: around 11% of turnover goes in wages; rent – between 6% and 12% (depending on location); theft – between 3% and 5%; overhead – 5%.

While Vodafone recharge brings traffic to newsagencies, most customers want the recharge and nothing else.

To lose 37.5% of revenue having just invested in equipment and real-estate is a body blow to small business newsagents and something Vodafone could have managed better.

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