I have been talking to home delivery newsagents about their businesses these past couple of weeks and have seen two distinct groups. The pessimists who are close to quitting and the optimists who are powering on and making considerable changes in their businesses.
The optimists, the smaller of the two groups in number, are chasing critical mass and using technology to cut costs out of the back office function. It is good to see some publishers finally becoming more flexible on arrangements in this area. It is great to see newsagents be so positive.
The pessimists are the challenge. Their mindset has developed because an historically inflexible newspaper distribution model. Their biggest challenge is the inability to reduce costs to allow distribution to break even. With wages and fuel rising and margins falling in some cases, it is no wonder they are frustrated.
If publishers want to keep newsagents participating in home delivery they need to act fast, in weeks, or face a considerable increase in newsagents handing their runs back to concentrate on their retail businesses.
My handback was traumatic to say the least. No help from the publisher with respect to seeking a new way, a more efficient way to get papers out there. A flat NO was the response to my suggestions. Then the threats began about not getting any papers at all and now the sullen attitude, the slow respose to commercial requests.
They (the publishers) live in the past and will rue their refusal to modernise, to embrase the changes and move ahead.
I don’t miss them one little bit!
Home deliveries and the magazine supply model are the 2 major issues which need addressing in my opinion. We are stuck between a rock and a hard place. We have to pay higher fuel and wages costs, we have to abide buy the publishers rules regarding delivery fees, we have to pay our driver for a minimum 3 hours even though the run takes 2. We have to bear all the pain and hardship with no help from the publishers. Delivery fees need to be somewhere near 40c per paper rather than 10c to make it worthwhile. Of course,that is never going to happen
Shayne what about a statment or account keeping fee of about $2.00 per month to cover costs?if you send out say 200 statments 400.00 per month net in our pocket. cheers andy
Is their opportunity to use the home delivery run to provide some sort of targeted advertising or offer to get them to come back to the store with a 10% off.
I think newsagents should use the delivery run as an opportunity to either get involved with the “Junk Mail” bandwagon or offer exclusive offers just for home delivery customers.
Either way your at the front of their house, what happens next you can decide.
It costs 55 cents to have a single letter delivered, and they have the advantage of doing bulk deliveries to the address, ans the cost remains 55 cents per article. what do newsagents get per paper for a far more personalised service??? your getting ripped off big time
Marco, we are forbidden by the publishers from delivering anything else with the papers.
Get the ANF sorted and go on strike???
Shayne, how would they know? and what about the country areas where they deliver all sorts of things with the papers.
You’re not delivering with the papers, are you? Aren’t you putting the flyers in the papers? Just a thought.
Andy, not sure about elsewhere but in QLD, you aren’t allowed to charge “account keeping fees” or “statement fees”. The only fees that QLD Newspapers allows is the late fee to a maximum of $2.75 inc GST. However, you should see what it is like when customers get a fee – late or otherwise. Most newsagents would agree it is “character building”.
Marco, sending out advertising with the statements does not compare with leaflet drops. Besides, QLD Newspapers’ new marketing strategy ensures that customers don’t come into your store by luring them with a discounted deal if they paid directly. Which customer wouldn’t take the deal?
Helen, when you bought your newsagency, didn’t anyone tell you that you would be doing things for ‘LOVE’???
Hey Luke,
We have counter acted QLD Newspapers approach and phone every customer that starts a new discounted subscription and offer other services such as magazine delivery with the papers.
Our initial take-up rate for additional services would be around 10% – 15% and we charged a higher delivery fee.
We also explain that by paying QLD Newspapers direct they have to deal with them for all stops and starts. In about 90% -95% of the instances they request that a change be made and will be invoiced through us. That way we keep them coming back to the shop.
Cheers
Peter
So is it all worth the hassle? Are you all earning a decent wage doing it?
Peter, thanks for the suggestion. A campaign has been planned to take back those customers paying direct and also to prevent QLD Newspapers cutting us out of the loop.
Michael, you can view the worthiness of this business in many angles. My view is about customer loyalty and repeat business from these customers. Sure there are newsagents, Coles, and Woolworths around them, but by having the connection with home delivery, they are more likely to come to our store – no matter the travel distance.
My main gripe is about the tactics used by the supplier in this instance. They are targeting my customers to pay direct. What is worse is the fact that they are targeting those that are already getting a 7 day delivery. Then they turn around and tell me that it is because “it increases loyalty”. If they are trying to increase loyalty to the brand, then they should not devalue the paper.
Optimist or pessimist I don’t know what I am ? As for technology I don’t know how that can be put in place when the papers have not arrived at my shop yet. We receive our papers between 5.45 am to 7.15am. 1 ½ hour difference between one day and the next. My contract with HWT says I must have them delivered by 7 am, try and figure that one out. The people of Melbourne should be grateful HWT don’t run the train system. I do make a profit from our delivery run but only because delivering the local paper compensates the loss I would suffer if I was to do HWT on its own. Some of us in the country travel a lot of miles for the amount of papers we deliver. With running costs of vehicle, petrol and wages to pack and deliver, if I was to deliver the HWT on its own, my costs would be 58 cents per paper. The allocated delivery charge per paper and the profit from the sale of the paper equals around 53 cents, which means I would run at a loss. On six days of the week I have local papers to deliver so I do make a profit, but on Sundays the loss I receive by deliveries, eats up the profit from shop sales. The driver is the only one that gets any pay on a Sunday. Aust post 55 cents for a letter, Toll Priority $$$$ . VANA can help run a golf day but leave it at that.
Your right Luke, there are many angles to view it!
So it would be better for all if the suppliers would be more reasonable with how they handle it?
I keep viewing it on in the old days when they delivered milk. No one talks about how they stopped that, but now people automatically go to the store to buy it. – Driving more people to the shops.
The crucial line is “If publishers want to keep newsagents participating in home delivery”
The difference between newspapers and milk is that if home deliveries on papers were stopped, the publishers know that a large percentage of people would not bother to buy the paper. Luke La is right about the fees, customers just will not wear it! I got abused the other day by a customer who gets a 7 day delivery on subscription for $2.70 per week – yes, $2.70. After the second month without payment I charged a $2.20 late fee to the account. The customer carried on like I had cut their throat. I disagree with a couple of previous posts in that I would prefer all delivery customers to pay the publishers direct. That way we dont have to waste valuable resources chasing account payments and end up having to wear bad debts.
Shayne I think a account fee would be the same as when beer goes up all the screaming in the world wont change the result and then people forget about it.I only want to be paid what is reasonable and i think most people would agree.that 12 cent to deliver a paper is not realistic cheers andy
Michael, no business would want to bag or engage in confrontation with their supplier(s). The key is for both parties to work together. Unfortunately, history has shown that it is always about the supplier. Entrepeneurs like Brett (and I am sure many others) have provided alternatives and devices to provide a win-win situation. Unfortunately, these have been thrown out before you can blink because “the supplier knows best”.
Newsagents value newspapers. Woolworths and Coles do not. Visit one today and you will see exactly what I am talking about. They don’t get dictated to. They dump the papers on the ground or on a flimsy news stand. Yet they are treated as business people. When newspaper suppliers wake up and treat Newsagents like business people, perhaps customers would take more interest in papers. Certainly the value of papers will be more than scrap for packaging.
Shayne, I don’t like customers paying QLD Newspapers direct for many reasons. The main reason is that I can not decipher my weekly statements. How can any one know what they’ve been charged and credited? When I raised a discrepancy during the Olympics, the initial response was ‘no, no, it’s right’. But when I provided proof they came back with ‘you will receive the credit’. I still don’t know where that credit is. What ticked me off was the fact that they gave Woolworths the credits and charged me for the papers.
I also like to add that in Retailer, I am able to draw direct payments from customers via EziPay. By doing it each month, I don’t need to worry about late fees or bad debts. If I am able to do this, why take it off of me?
Andy, socially, alcohol is cool. The tax has raised how many millions for the government this year? No one cares. Believe me when I tell you that you may be murdered if you dare putting on an extra fee for the papers.
Luke La sooner or later a change has to occur and change is alway a drama at the start.if it continues the way it is then there will be no home deliveries as there will be no newsagents.Andy
Andy,
I think that the newsagent will stay (though it may well be under a different name) but I think that the home delivery of a paper is dead. All that movement we are seeing now is just the corpse twitching.
You can get a paper everywhere now, at the train station, at the corner store, at the service station, the supermarket, the newsagent. Why would the distributor/publisher even WANT to spend even the 12 cents for a newsagent to deliver? I used to hear the customers say that unless it was on the lawn by 0600 then don’t bother as they were already on the road to go to work.
The demographic is changing, the work ethic has changed, the shopping has changed. Since stopping delivery we have INCREASED foot traffic, our store paper sales are up over 100%. No more time spent on stop/starts, no more van repairs, no more calls at 2 in the morning. We took our delivery team and morphed it into a product line that WE dictate, we took the most valuable piece of real estate in the store back from the publisher and use it how WE need to to suit our retail needs. Once more I am a business, with my own goals and objectives.
Now … lets start on the magazine supply!
Luke and Brett, I can’t say a bad word against what you’ve put forward on this issue. It is a tough issue and you’ve both summed it up well.
I am a former newsagent considering buying a run only. 40% flat wrap, 60% rolled, in a mix of resi/commercial/ subs.
The newsagent wants to sell off most of the run, retaining the immediate strip area. I assume these are`putaways.
My question is has anyone here bought a run, or sold a run, and if so how do you handle newspaper/customer accounts. Are they through the newagency?
How does the account system work in relation to publisher and customers and me?
Any feed back would be appreciated, as it seems to me, to be a very grey area.
Cheers
Peter
Peter,
We sold our run two years ago. We still collect payment for the distribution agent and receive a small fee for that.
Get clarity on what they are retaining. Most sales I have seen see the purchasor take over all deliveries and only supply the shop as a sub agent. They may be wanting to keep a small territory to retain a direct account.
Hope this helps.
Mark
Thanks for the reply Mark.
Would the publishers split a run like that?
I would have thought one contract is less messy than a split.
Peter it all depends on the publisher and, to a lesser extent, the contract supplied by the vendor. My experience is that the publisher will want the run sold as is, meaning supply to their shop and shops around them.
Mark
This is really just a whinge. I have just bought a delivery run off a neighbouring newsagent, and have been setting the runs up in Tower for the last couple of days.
I have to tell you that Tower’s functionality here sucks. I try to put a home in the run through the run setup menu, and it just picks some random place in the run and inserts it where ever it feels like. A 15 minute job becomes several hours. Normally Tower is good, but this is one area where it needs major work.
I recently ran a non performing report on tower for all 3 distributors with a 100% return level from July to Sep 2008.
The amount of unsold titles was staggering.
I quickly saved the pdf file and emailed each supplier to delete every tilte on that list.
It will be interesting to gauge how many titles are deleted as the months roll on.
All suppliers emailed back saying the titles will be deleted. Somehow i dont trust them.
For what its worth, we are cutting our magazine range, and have deliberately allocated less space to magazines in our new shop fit.
Let them try suing you Mark. I am with Lorraine on this one.
On home delivery, we no longer take an interest in it. We have a very small round and we focus on our retail.
There is no money in home delivery, and this nonsense about customers being loyal because you deliver the paper to them. Soo outadated thinking. In our new shop fit, papers are being place into the store and away from our prime landing strip, and high margin items. If anyone was serious about retail then you would do the same.
I totally agree with Brett, and we dont call ourselves a newsagent anymore.
We ceratinly have not experienced a drop in patronage because of our name or that silly ANF logo “we home deliver” what a useless piece of shit metal. Sorry meant to say sheet metal.