Rather than getting involved in commercial deals outside the remit of a traditional association, newsagent associations should spend their time and newsagent money on association services. One such service could be the development of a code of conduct for newsagency brokers.
Newsagency brokers are vital to the renewal of the channel. They assess, package and promote newsagency businesses for sale. They chase the highest price for the vendor as their key goal yet they look for support from existing newsagents to help their businesses.
Some newsagents have paid more to purchase their businesses than real net profit can justify. Even one is too many.
One newsagent I spoke with recently shared the profile provided by the broker. It was a work of fiction. The figures did not meet even basic accounting requirements. Beyond the usual (an sometimes questionable) add backs, there was no accountability on the veracity of the claimed sales. I know the business. The sales claimed were not being achieved in the business at the time it was offered for sale.
Brokers have an obligation to the future health of the channel. Incoming newsagents paying too much to purchase their businesses will kill the channel.
I know some excellent brokers. This post is not about them. It’s about those who package businesses with information which inaccurately reflects the financial performance of the business.
We need a code of conduct for brokers. Newsagent associations could develop this if they consider themselves to be relevant to the businesses. It would be money well spent. Brokers who sign up and submit to auditing could get a seal of approval. This could give buyers more confidence.
Of course, good brokers could establish this for themselves and pub list it on their blog or website.
Any newsagency broker code of conduct should be framed within the view of the incoming newsagent as they will be there in their business after the broker receives their commission and the vendor moves on.