I have just seen different treatment for supermarkets versus newsagents by ACP Magazines for their recent Cosmopolitan Health publication. A newsagent was sent supermarket and newsagent stock. While the publication is the same, the supermarket stock was provided with a 30 day shelf life and the newsagent stock had a 90 day shelf life.
The cash flow impact of the 90 day shelf life on newsagency businesses is significant, it disadvantages newsagents compared to supermarkets.
While there may be an argument around sales cycles in newsagencies compared to supermarkets, I don’t accept that. A title supplied to supermarkets with a 30 day shelf life should be supplied to newsagents under the same terms.
It is unfair on small business newsagents that they have a higher carrying cost for this or any title.
Magazine publishers ought to be transparent with newsagents about the terms they offer our competitors since we have less control over what we are supplied. We are constantly told how important we are to publishers, transparency on the difference in terms would show if that is the case.
IAM GOING TO RETURN THEM ALL TODAY . THANKS acp
What a lovely state of affairs! If this isn’t unconscionable business conduct then please tell me what is. Perhaps too risky to comment on here but I have heard some straws in the wind advise me of rebates offered to supermarkets from publishers. If true would that not be unfair as well? I provide prime retail space in my Newsagencies for magazines at the expense of other more profitable merchandise.
On a side note it looks like many Queensland newsagents won’t be receiving the new Take 5 issue today. There appears to be a major supply issue according to the girl @ network I spoke to.
Disappointing to have to miss any sales in the current environment.
Paul stock should be in by Friday. There was a warehouse shortage.
Thanks Mark.
Looks like you know more about it than the staff at network do !
To be fair they have been chasing the issue and once they knew what was happening needed to communicate through the company.
Is there not a case here for “restriction of trade” or similar to be sent to the ACCC?
Niall, Maybe not restriction of trade but certainly under the provisions of the act which discuss the treatment of small businesses.
Where’s the ANF in this type of situation? Still dithering no doubt
More than likely the terms of trade comes under the settlement deal done with the retailer and supplier. Being Coles or Woolworths the settlement (payment) each month or whatever term would be one BIG cheque. This means one contract one payment. In the newsagents case we sell more collectively still have one payment per outlet. Adds up to lots of little payment = not much clout.
I doubt that there is any proviosion for this discrimination under the ACCC. It would be a settlement discount or trade term arrangement decided by payment due as is the normal big business deal I would think.
No doubt going on since the year dot.
When was the year, dot, BTW? How long have such deals with supermarkets been in place?
And is it similar for servos and 711s as well?
Graeme if that’s the case shouldn’t the publishers make one BIG delivery of magazines to woolworths et al who then have to distribute to their outlets? As it is now it costs the publishers the same in distribution costs (supermarkets/newsagents) but the supermarkets are getting huge payments for stocking the product.
we should be getting extended terms on magazines like this. another 60days to pay if they want long shelf life
Probably in fairness they should make one delivery however most franchises and mutiple store outlets have similar arrangements even RetraVision Mitre 10 had special terms becasue of the one payment deal. We could also however no one will (undestandilbly) put their hand up to carry the can
Ross,
To be fair, this practice has long been suspected. What has changed this week for me is that I have seen evidence.
I’d think it appropriate for the ANF to approach ACP for a resolution.
It occurred to me the other day that the Supermarket in our centre has never put topped mags in the recycle bin we share.
Do they also have a different return method?
We never got our Take5 but Coles certainly has got stock out now!!!
Coles do not send theirs back just fill in on line ,no checks their We can not be trusted
Trust a pimple faced teenager that doesn’t give a shit vs a Business owner? An idea from a bright spark?
And the latest ‘exclusive to woolworths’ offer… A free full size umbrella with AWW! Not one of those pop out cheap ones that we always get forced to shove down pockets or cause a lopsided mag stack.
Could it be time to broach the unspoken topic that underpin’s many of the inbalance in power in the distribution problems – the legacy of “authorisation” If newsagents weren’t under the authorisation model, they could be a retailer free to accept and reject stock, collectively bargain for better trading terms. It is a stronger case now that so many are no undertkaing delivery. jsut a view from consumer and keen industry supporter. i am not realted to a publisher or any of the vendors in any way.
Interesting comment re the current decline of the newspaper delivery model potentially freeing us up to take more control of our businesses.
Rumour (and I make it very clear that it is only a rumour) has it on the coast that four newsagencies, including three distribution stores, have closed up here.
That got me to thinking about how papers would be delivered – if at all – if neighbouring territories were under no obligation to take them on.
On the flipside I am a superamrket who is a subagent from a newsagent and I would be hapy if they could supply me with magazines. I am probaly going to go direct. Its a real shame as we could sell so many if we had good supply
Y&G,
Newspapers were not home delivered in our old territory when we decided not to renew our contracts for almost 6 months. Recently the adjoining agent started delivering weekend newspapers in our old territory. It may be that in Australia the decline in home delivery eventually deals the biggest blow to newspaper circulation, not the natural progression of consumers to digital media … ?
Thats the spirt Jarryd.
While I applaud you in the advanacement of your futuristic W-Gen branded store, some of us still deliver to our customers.
But seriously, why are we not more powerful with the mags, as we have had them since year dot???
Hemi
Jarryd without being unkind I find your statement is coming from a very isolated position thus having an insular point of view.
In other words what do you base this on?
Home delivery is loss making for mroe newsagents than it is profit making. Newsagents are foolish (and scared) to stay in the space and it is only their generosity to the publishers which keeps the service operating. It will not get better.
While I have tremendous respect for newsagents who are committed to home delivery, I think Jarryd is right, the decline of the system, caused by poor treatment by publishers, will seriously impact newspaper sales.
Hemi, we are not powerful because we do not have the guts to fight for our rights.
Graeme,
The newspaper distribution system is now more than ever showing serious cracks (or for many gaping holes that bleed cash) in its armor. As it becomes less profitable for distribution agents, or in some cases more loss making, the system inherently begins to claps on itself.
At some point the home delivery of a publication does not contribute enough circulation to justify the distribution method. This is the point at which the biggest shift from print to online is likely to occur (excluding of course the complete cessation of a publications print medium).
My driver does 1 and 1/2 hours per day. Now have to pay him 3 hours. I won’t be doing that for much longer. My daughter is a student and pegged a job on Sat mornings for a couple of hours at a Real Estate business…pays for her Uni bus fares $28pw. Now no job because of the same ruling. ‘How can my Gvt stop me earning some money ?’ Ask her how she is going to vote. The Newsagency of the future seminars are right on.
Interesting comment from Ross Greenwood this morning on Alan Jones that Fairfax are presently “doing the numbers” regarding migrating their business online, that is stopping the presses.
Graeme I expect that all newspaper publsihers have been doing this for the last year or two – based on US experience over this time.
Look at AFR. Give away an iPad if someone subscribes for two years and there you have the migration.
Ink and paper prices are rising along with distribution costs – their costs and not so much newsagent costs.
So, migrating to an online only model is worth considering. Look at the Seattle Post Intelligencier.
Jarryd,
Whilst I agree that newsapaer circulation is slowly declining (this is regulary evidenced in the Audited figures of newspaper circulation) however on my own research into newspaper deliveries there is evidence of the “transfer” from shop sales to subscription home delivery sales. This may be because of the GFC and cost cutting for the most predominant areas are those that house a lot of retirees. Unfortunately this takes traffic flow away from the newsagency therefore putting less cash in the ’till. My survey is over 100 newsagencies overthe past 12 month period. The biggest increases have been over the past quarter.
Graeme,
It doesn’t suprise me that in many areas there would be a transfer of retail sales to home delivery. As you say the GFC would play a role in this, as would heavy discounting by publishers. In the short term I would not be suprised if we saw even more retail sales shift to home delivery. But the medium and long term future of home delivery is dependant on newsagents continuing this service. As costs rise for distributors and circulation falls for newspapers, publishers are unlikely to be in a position to make newspaper delivery profitable for many agents. Its this situation that is likely to lead to agents abandoning their territories (especially in regional and rural areas) and the resulting drop in circulation that would follow.
Which begs the question:
Would publishers even entertain the idea of taking responsibility for deliveries themselves if there were significant gaps left from store closures or rejigs?
I doubt neighbouring agents of our territory would be real thrilled at the prospect of taking on another one.
Y&G,
I sense publishers may take on deliveries themselves if they can establish large central distribution points that are easier to manage and more cost efficient that the smaller territories that currently exist. However this does mean that all rural and many regional areas wouldn’t be serviced – again resulting in significant drops in circulation for many publications.
Shortly after I took over my Newsagency 22 months ago I was approached by Woolies Petrol and asked to Sub Agent them, with them chosing the titles. I agreed. I forget which titles. Howevere they would only take one each of T5 TL and WD NI doubles and one or 2 other titles. With newspapers sales went to 20-30$ a week (the strongest was the local paper).
They would not allow other titles so I threatened to end it and I was allowed to stock the other halves of the above titles and 1 or 2 others. Sales went to $30 to $40 a week.
The lack of revenue and woolies payment system made me finish it. It was not worth my time particulary as they were a daily delivery, pick process returns and run an acount.
2 things came out of this.
1. The funny thing is woolies proper is on one side of the street to woolies petrol on the other side opposite each other. Woolies proper had all this stock. However they both seem happy to throw shell grit at each other rather than work together, large organisations.
2. With regard magazine titles I believe woolies petrol had done a deal with a publisher and as a result they did fincially better out it than the Newsagent i.e. some form of total group sales bonus/rebate.
Recently Nationwide Sydney put woolies petrol on as their sub agent now I again deliver to Woolies petrol however up to 10 papers packed by Nationwide 7 days a week collect returns and process on connect on which I make less $0 to $4 a week.