Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Fairfax increases newsagent margin for The Sydney Morning Herald and The Sun-Herald

Mark Fletcher
March 27th, 2012 · 30 Comments

In a move NSW newsagents are certain to welcome, Fairfax has announced that it will increase fees paid to newsagents for The Sydney Morning Herald and The Sun-Herald an average 10 per cent as part of an overhaul of its payments to its home delivery distributors and specialist newsagents.

Fairfax claims that the increases represent the biggest single injection of funds – $3.5 million – into the newsagent network in many years.

I like that Fairfax briefed the newsagency software companies on the move in advance of the announcement to ensure that the software handled the fee changes.

This move reflects the learnings from changes made in Victoria a couple of years ago.

Click here for a copy of the media release from Fairfax about the move.

0 likes

Category: newspaper home delivery · Newspapers

30 responses so far ↓

  • 1 Luke // Mar 27, 2012 at 7:27 AM

    There is nothing in there that I can see to suggest that the increase has to be passed on to either subagents or retail only agents only the direct account holder?
    At least it acknowledges that it has got it wrong by pushing direct supply into other channels as it now has very little control over the brand.

    0 likes

  • 2 BruceH // Mar 27, 2012 at 10:05 AM

    Any fee increase is welcome, but I think i will wait to see the detail later this week before I get too excited. If the fees are no longer tied to the retail price, how often will they be reviewed? And if our new fees are say 10% higher now, but they put up the retail price of the SMH by 20c (about 13%) in say 2 months time, what happens to the relativity between Newsagent fees and the retail price? Just asking!!

    0 likes

  • 3 Jon // Mar 27, 2012 at 10:18 AM

    BruceH

    My thoughts exactly. The wording in the fax appears to be a little misleading. On top of this a Fairfax rep told me they are going to increase the price of weekday SMH to $1.80 (a nice 20% increase we will miss out on)

    0 likes

  • 4 MAX // Mar 27, 2012 at 12:19 PM

    The fax came across as if they were hiding something or am I being cynical ?

    0 likes

  • 5 Garry // Mar 27, 2012 at 1:44 PM

    I will be reading the fine print.

    0 likes

  • 6 ted // Mar 27, 2012 at 10:55 PM

    Do the increases apply to subscriptions or just normal home delivery customers?

    0 likes

  • 7 peter stewart // Mar 28, 2012 at 5:53 AM

    $1.80 for the SMH…… that will slow down sales.

    0 likes

  • 8 ebo // Mar 28, 2012 at 6:23 AM

    Another way to look at this … time to terminate distribution agreeements, if not already.

    0 likes

  • 9 Mark Fletcher // Mar 28, 2012 at 6:35 AM

    Max I think it’s genuine. They see this as part of their strategy for dealing with this period of transition.

    0 likes

  • 10 Shayne // Mar 28, 2012 at 7:06 AM

    The small increase is of course welcome, but the fixed commission worries me. It means that Fairfax can increase the cover price and there is no obligation to increase our commission – ever.
    Down the track we may find ourselves earning much less than the 25% we currently get.

    0 likes

  • 11 andy // Mar 28, 2012 at 10:45 AM

    Mark if we are going to be better off why change? also do you know who will be condidered remote agents who wont receive any stock

    0 likes

  • 12 Mark Fletcher // Mar 28, 2012 at 10:52 AM

    Andy not sure what you mean.

    0 likes

  • 13 andy // Mar 28, 2012 at 1:10 PM

    Mark
    what i mean is i have been led to beleive that fairfax needs to cut costs so i find it hard to beleive that we will be better off for more than a few weeks under this new system. do you really think that we will?

    0 likes

  • 14 Mark Fletcher // Mar 28, 2012 at 2:28 PM

    Andy, it is what it is. Newspapers as we know them are dying. You can fight about this or focus on more profitable parts of your business over which you have more control.

    0 likes

  • 15 MAX // Mar 29, 2012 at 10:26 AM

    Read my fairfax letter today. Will have to read it again.

    0 likes

  • 16 andy // Mar 30, 2012 at 5:32 PM

    Mark
    how will we go when they put up the paper and blame the carbon tax? iam not able to charge more for delivery and now wont receive any from extra from price increase

    0 likes

  • 17 Mark Fletcher // Mar 31, 2012 at 7:43 AM

    http://www.newsagencyblog.com.au/2012/03/30/what-are-you-worried-about/

    0 likes

  • 18 shaun s // Mar 31, 2012 at 9:35 AM

    Sorry off topic ,but just a warning to all to check your supplies for the sunday mail on easter sunday ,mine where cut back to just enough for home delivery and a few subbys and nothing to sell in the shop

    0 likes

  • 19 Luke // Mar 31, 2012 at 12:57 PM

    i think you are being very dismissive about this issue and it’s effect on a lot of agents Mark (comment 17).
    If newsagents should only worry about things that we can control, they why do we worry so much about Australia post stores? You cannot control what they do or offer but it does not stop you writing multiple posts about the injustice of it all or loads of people commenting on it.
    just because newspaper commission does not mean a lot to you or even me as retail only shop does not mean it is not the life blood of a lot of delivery/retail newsagents in which it could be the difference between profit and loss.

    It looks like fairfax is trying to freeing itself of those pesky newsagents and it’s % commission so it can do what it likes to increase their profits going forward but keeping us on a fixed fee.

    Beware of Greeks bearing gifts.

    0 likes

  • 20 Mark Fletcher // Mar 31, 2012 at 1:45 PM

    Not dismissive at all Luke. If you think Fairfax is trying to rid itself of newsagents ditch them. Given we know the trajectory of newspapers, why not?

    Newsagents worry about the wrong things.

    Your comment about Australia Post is wrong. Some things I write about here I do not worry about in the context of one of my own newsagencies.

    0 likes

  • 21 andy // Apr 16, 2012 at 3:45 PM

    did not take long forfairfax to put up the cover price

    0 likes

  • 22 BruceH // Apr 16, 2012 at 4:43 PM

    It was always going to happen. I’m just surprised how blatant the timing of the price rise is relative to the timing of the fee change.

    0 likes

  • 23 Nathan // Apr 22, 2012 at 11:44 AM

    Am i the only one that see’s that we might be getting around 10% more when you look at the increase in dollar terms but we are no longer getting our 25% of the cover price on the SMH. As it stands now under the new pricing structure its dropped to around 24.1% and knowone seems all that phased by it. I know that i am, first Faiafax taking more of a cut for themelfs then every other supplier will follow suit.

    0 likes

  • 24 BrettS // Apr 22, 2012 at 12:15 PM

    About the new fee structue is there a way already in Tower software to imput it?
    Looking through the advice sheets I can not find anything.
    As for being not phased or not there is no recorse on this that I can see like it or lump it really.

    0 likes

  • 25 Mark Fletcher // Apr 22, 2012 at 12:38 PM

    Yes, the help desk published advice a week or two ago. They could assist tomorrow.

    0 likes

  • 26 Amanda // Apr 23, 2012 at 10:16 AM

    Mark, sorry buddy but you are totally wrong
    On this one.
    The Sun-Herald rose $0.30 in NSW yesterday. News agents should have received under commission basis $0.527 income per copy with the new price. Fair fax has now said u are getting a flat-fee of $0.50. Do the math. That is a decrease!
    If u want to make it sound dramatic like Mr Whitehead from Fairfax has, then use a percentage reduction to dramatiste that this is a DECREASE not an increase.
    This is blatant use and abuse tactics of a company which has NO morals. The news agency Chanel is simply being used to subsidies the price the consumer pays for the paper.
    Mr Whitehead himself stated that price increases in the RRP have little effect on consumer buying habits.
    So the answer is simple. Double the RRP price and give news agents a REAL incentive to sell their paper by giving them a realistic flat fee of $1.00/copy.
    Otherwise, if they can not make money printing the paper close it down.

    0 likes

  • 27 Mark Fletcher // Apr 23, 2012 at 10:21 AM

    Amanda, I’m not here to support Fairfax, far from it. This move makes sense to me when I look at the future of print and where Fairfax is making money today compared to where they will make money in the future.

    There are far more important revenue sapping decisions for newsagents to worry about.

    0 likes

  • 28 Garry // Apr 23, 2012 at 10:55 AM

    Mark, I disagree. What will stop News ACP and Pacific from cutting our commision I`m sure they are watching with interest to see what happens. Just my thoughts

    0 likes

  • 29 Mark Fletcher // Apr 23, 2012 at 11:01 AM

    Garry yes this may happen. Newsagents love to complain and all too often do not offer commercial alternatives.

    We have to make our own success.

    0 likes

  • 30 Jon // Jan 25, 2013 at 4:22 PM

    I have just noticed on the Fairfax connect site that they are increasing the price of the SMH to $2.00 weekdays & $3.00 Saturday. They have also increased the commision.

    0 likes

Leave a Reply

Your email address will not be published. Required fields are marked *

Reload Image