Supplier contracts and rules control more than 80% of what is sold in Australia’s 4,600 independently owned small business newsagencies. While these rules may have been appropriate in a regulated marketplace, they are grossly inappropriate in today’s more competitive marketplace. Indeed many rules place uneconomic terms on newsagents and diminish their competitive ability.
To me it all comes down to real-estate, inventory and labour. These are my investments in the business and I need to be free, as the business owner, to manage these resources as I see fit for the best return for my business and my colleague co-workers in the business.
Newsagents need to be freed from what many see as demotivating, uneconomic and stifling contract terms which too often control stock quantities, stock location and the work processes involved in handling the stock in store – because of accounting systems and practices (from the supplier side) from decades ago.
A co-operative relationship with publishers, magazine distributors, lottery companies and greeting card companies can result in am economic revival of the newsagent channel. In my own case I have four good card company relationships and will launch in December significant in store changes to refocus the business on this growth category. The result will be more efficient use of stationery space and trimming of magazine space. I know that I can cut 20% of my magazine range and increase sales as a result of being better able to display the better selling titles.
Back when newsagents were authorised and had control over the distribution of newspapers and magazines in their territory rules were appropriate. Today they are not.
I am certain that freeing newsagents of some of these rules and updating accounting processes and practices would improve sales as the result would be more business focused newsagents.
From my newsagency I look across at the Australia Post PostShop with envy. This government owned shop has a monopoly on stamps, an exceptional government protected brand behind which their retail business trades and the ability to cut deals like a retail giant. I lost all of that when the government facilitated the loss of regulation in the newsagency marketplace.
As Barnaby Joyce said on October 11 in the Senate:
Newsagents, some of the horticultural producers, pharmacies and a lot of small retail shops in regional towns or in suburbs feel that they are over a barrel. They feel threatened and do not feel that they have the ability to go on in the manner in which their parents or grandparents probably went on before them. Our job in this parliament is not only to say we support that but also to publicly show we support that and to do it in such a forum as this, the elected body in this Senate chamber they have sent us to. Why do we believe in this freedom to go into business? The freedom to go into business is a mechanism that gives us our own personal freedom.
Anyone looking at greeting card sales will see healthy growth in newsagencies. In that category we have as many and maybe more than in the magazine, newspaper and lottery categories. Yet year on year growth is good. I’d say this is because of healthier supplier relationships and fewer rules. The result is a more businesslike workplace. The newsagent feels like he is working for himself rather than a school principal.