The Bendigo Advertiser is reporting the closure of a newsagency in the centre of the city. The photo published with the report shows a letter posted in the shop window casting some blame at suppliers to the business for the business closing.
They say the business was not given a fair go by some suppliers because of what happened with the previous owners. The previous owners went broke.
I’d be interested in knowing if this is the case, if suppliers treated the business unreasonably because the previous owners went broke.
I have heard about this happening in our channel and wondered if it was an urban myth. If suppliers do treat a new newsagent poorly because of the actions of a previous owner of the business then they should be dealt with through the appropriate channels.
A month after we took over our previous business (not a newsagency) a supplier walked in and said they were taking $10k worth of stock because the previous owner owed them money. Even though we purchased the stock at take over the previous owner had not paid his debts so the supplier said they were legally entitled to take what ever they wanted from our business. Dont know if they were correct or not but I’m sure it happens a lot more often than we think
We had problems with Network when we took over 4 years ago. The previous owner had held back paying his last account knowing that he had the months credits from returns owed back to him. We didn’t recieve delivery of network mags for a week while it was sorted out. We had paid a $4000 bond to them on account application before we went in. This was one time that NANA was very helpful to us! It was sorted but took a week for the dust to settle. Not what you really need in your first week of a new business.
Shayne, we had something similar happen to us too, but on a smaller scale with a postcard supplier.
They walked in and demanded to take stock they said was on consigment only (no paperwork to back this up, said it was a verbal agreement), along with payment for stock we’d sold and two spinners they claimed were only on loan.
I politely informed them that they needed to sort that out with the previous owners but that the stock and spinners had been purchased by us when we bought the business and they were staying put until they had paperwork to prove their claim.
Needless to say they didn’t even speak to the old owners, had never had any such agreement and were just trying to see if they could bluff the new people.
There’s always the odd unscrupulous supplier out there, you just need to be wary.
As a supplier to a certain newsagency, i can say the following; In light of the loss incurred to suppliers from other newsagents in the past, a strict credit policy must be enforced on ALL agents. In certain cases, there is only so far a supplier can stretch before it has to pull the pin. In our case in particular, we are very supportive to all our agents, some would say we are too lenient. You are right, it would be a shame for one to hold a new owner responsible for the previous owners mistakes. In this case, this agent was given every opportunity, other newsagents in the area recieved, if not more. It is a very unfortunate end result, but unfortunatley is also not the first time within the newsagent industry.
In my region a nearby Post office took over a Newsagency which had gone bust. On taking over the Newsagency business, Fairfax media told her she must pay the over $10k debt from the previous owner before they would supply her. She did so, and Fairfax then made a deal with another agent to take over the area. She is now a subagent!
Whilst I agree suppliers have the right to supply who they want, and employ strict credit facilities, it would be naive to think such actions from major suppliers does not occur.
We are a small businesses who supplied stock to this store on consignment. Not only have we lost the money owed to us, this store allowed us to put a new stand in just two weeks before they shut the doors and now the Chartered Accountants handling the matter won’t allow us to have our stand or stock even though we had a signed agreement with the store owner. So we’ve lost that too. We also lost money with the previous owner.