Too many people, not just newsagents, are jumping at shadows in relation to the newspaper distribution model News Limited has announced it will trial in Brisbane this year.
Rather than look at the evidence of what has been achieved in managing consolidated newspaper distribution territories in a range of regions in Victoria, the achievements of the migration project in SA and the information provided by News, some people prefer to put about inaccurate commentary.
I know from my work with the newsagency software company I own, Tower Systems (serving 1,800 newsagents), there are newsagents who have consolidated to the scale targeted in the News plans. The software handles it, management embraces it and newsagents from separate territories join in.
My own assessment as a distribution newsagent eight years ago was that scale was vital. This is why I put together the Circulation Fulfilment Australia business plan. I was not alone. VANA shortly thereafter hosted a one day forum to explore and discuss newspaper distribution models. I spoke and several newsagents who were already involved on consolidation spoke.
Details of how to and why to consolidate was out there for newsagents to see. the reasons for consolidation were also in the public domain.
The result is that more newsagents consolidated. I’ve been involved with most through my software company.
My point here is that the target News has announced and the need to consolidate is not new. The marketplace itself was aware from around seven years ago.
While a target of 10,000 newspapers delivered by a distribution business will be too big in some situations, in suburban areas there are live examples of it working for consumers, newsagents and publishers today. There are other valid questions being asked which need to be answered. Drawing conclusions without answers is inappropriate right now.
I am concerned that the agendas of some are driving inaccurate debate and commentary. In a couple of cases these are people who failed to act years ago. It’s not the channel’s job to move all newsagents together – such is the nature of a competitive marketplace.
As I have noted, I appreciate the concern about change and the challenge of navigating change. It will be important to watch what happens over the next six months and to hold News to account for being transparent through the process.
No agendas here Mark. Just expressing what I believe is unethical behaviour and my view. Expressing concern for family business’s future. My question is why should we hold them to account in 6 months, we should be fighting to retain the 12.5% now for those being affected.
Derek I understand your position. This post was not about what you have been saying.
From our perspective, we receive around 4,000 Sun’s and 1,000 Ages’s per day.
We have believed for some time that we need to double the size of our business, and then double it again to at least 20,000 papers.
The information we have received from VANA since late last year has been in line with the announcements from News Ltd last week, so I cannot understand newsagents who are in shock over what is happening. In fact we were disappointed with the lack of information we received, like the territory maps and the tender process.
The News Aust. announcements contained absolutely no surprises. On the one hand the possibilities have been under discussion for years, especially in the last few months. On the other the proposal is generally very sensible.
The only point of contention is why are they forcing non Queensland distributors to wait until 2013.
Surely if proactive groupings of news agencies in other states can get themselves organised voluntarily, and are ready to operate at this volume, or greater, they should just be allowed to get on with it.
Instead they are being told to back off and wait until next year. This doesn’t make a lot of sense to those concerned.
Kate, that was my position too. I changed my mine once News explained what they see the QLD process as being about and what they expect it to reveal to them.
Mark, I am sure that is their reasoning and it suits their perspective. None the less if we have done our home work properly then whatever is learned from the Queensland experience can be incorporated later. With our group, and our very detailed analyses, we have found that as individuals distribution is either a financial or an emotional strain, while collaboration is potentially profitable and time liberating.
It would take very compelling arguments, and none so far have been offered, to convince us that waiting until 2013 is a sensible course.
Mark how about you start a poll those for and against it , just like you did for Darral lee the other month . I am curious as to how many actually like the idea .
Kmc is there anything stopping you from you and your group PURCHASING what ever runs you want instead of waiting for some poor old newsagent to have to hand there’s in ?just a thought..
Shaun,
The problem with buying a run at the moment is the price.
The buying agent if they pay 1 year’s earnings are break even as they may lose it in a year, so need to pay less to justify the acquisition.
The selling agent is understanably going to want more than 1 year’s earnings.
I have recently made an offer on a territory at 6 month’s earnings and am waiting for a response. The seller is unlikely to even submit a tender, however he can earn more than the price I offered over the next 12 months but it is not worth my while to pay more.
Why would he pay for it now Shaun when he knows he won’t have to in 12 months time.
Shaun the key issue, and the beauty is, that it is possible to create groups of newsagencies who are all volunteering to work together. Such a consortium can achieve the required scale without having to buy anyone out, or take advantage of anyone else’s misfortune.
Is there any information or (Blueprint) of the working model? I assume each party has to pay the wage of the drivers, consumables and or do there part of deliveries. And it could not just be a break down on delivery numbers as area would have to come into it as well I am guessing?
What about the poor old newsagenct that does not have a distribution run but only have a retail shop , but their profit drops from 25% to 12.5%
KMc – ‘take advantage of anyone else’s misfortune” that is the key from my perspective. By the way I was not aware of the T2020 specifics until I read it on this Blog.
John – This is a question that should be asked and is where I am coming from.
Dean you can double, triple your distribution run, I dont have any problem with that but I donot agree it should be at the expense of other Newsagents misfortune.
I work hard to make run profit.
I sick of people not doing run telling me to b positive and tender for bigger run.
Problem is News not put price up from a dollar for decade. Give papers away free. Give free thing with paper that make people think they desperate for sale as news no good.
If u think such a good idea, put your money where mouth is and tender for it.
Wendy I think that’s the point. If you think it’s not a good deal or not appropriate for you then don;t tender.
I will not tender. My focus from a newsagency ownership perspective is on being a retailer.
I know others who are focused on being distribution newsagents.
That is what this is about.
On your point about the cover price – i AGREE 100%.
Mark
I do not understand why I have not seen any positive support from you regarding the Newsagents who will be disadvantaged financially by this process.
Correct me if I am wrong.
Derek, I’ll help any newsagent in financial trouble in anyway I can. While I understand that is not your query, I wanted to make that point.
The potential for financial disadvantage in your comment / query stems from the proposed break up of distribution and retail businesses and the terms to be offered to retail only newsagents.
While I appreciate my view is harsh, the need, even requirement, to break into two businesses has been on the table for years. It is not new. Newsagents not complaining today are those who saw this and acted.
The is no upside in newspapers (retail or distribution) as I have been writing for years. This view guided my expectation about terms to come out of T2020. For News and Fairfax, pricing has to be about efficiency for them and viability for the distribution network on which they will rely even more heavily as disruption continues.
Those I feel most for are those who paid a goodwill when purchasing their business that was ‘priced’ without considering these moves. Anyone purchasing since 1999 should have factored deregulation into the pricing. Anyone purchasing since late 2009 should have factored a further significant discount in. Anyone purchasing since late 2010 should have factored and even further significant discount in.
The only opportunity over the last, say, three years for a reasonable goodwill for a distribution business could be where the purchase is part of a growth strategy adding to an existing distribution business.
I guess my core point is that the News move is not a surprise. Okay, some details are a surprise, but the move itself is not a surprise.
The financial disadvantage that does frustrate me is around cover price and the deals publishers do which see other retail channels giving away what we sell. Publishers will ultimately pay a price for this.
Derek, the real challenge as I see it is the bigger picture. While we are concerned about T2020, there is a much bigger picture emerging in retail and with other product categories we sell.
A question to newsagents, as retail only agents what is going to be our point of difference as far as products in the future? We will make 12.5% on papers, lotto may be lost if not diluted in the near future and mags may go the same way as papers and stationery is being flooded into convenience stores as we speak.
sure it is great that we get into new categories like gifts and ink but as an industry we need a reason for customers to think of us, we need a core range of products, what is the opinion of others as to what is going to be our point of difference.
If we are going to offer a bit of everything then we will go the way of the corner shop as night owl and 711 can offer everything including lotto and customers think of them as convenience stores, if we are going to be stationers then we need to drive out smaller stationers like office choice as we will not be able to compete against the marketing from officeworks or Big W for back to school or mid yr.
It’s well past time to have an industry wide review on where we are going, so we can all get on board and reestablish our core lines and protect these.
Luke I think it is too late for an industry-wide strategy. At the marketing group level certainly, but not channel wide.
We, all of us, need to develop our USP:
http://www.newsagencyblog.com.au/2012/06/17/sunday-marketing-tip-how-to-develop-your-unique-selling-proposition/
Divide and conquer Mark but together we stand, can we look at the positives of our industry and not just the negatives, we have 3000 odd business that think of themselves as newsagents. Marketing groups are johnny come lately as far as customer perceptions go, when they think of newsagents they do not think of newspower, newsxpress TLC etc first,so if we are to hold onto the shingle I would like to know what is it we are to be thought of as?
If everyone else thinks like Mark, that newsagencies as a brand are dead then we get what we paid for as far as resale value. If Mark is the only voice then the same applies.
Luke, yeah you can take your cheap shot. The thing is, the newsagency channel is not commercially unified and never will be. It is not possible.
The largest commercial groupings in order are: GNS with around 3,500 newsagents with accounts (I guess), maybe a card company or two with 2,000 accounts and then Tower Systems with 1,800 newsagents with accounts.
Luke,
In Western Australia there have never been more than one or two combined agents in the metro area, it has always been either retail or delivery specialists. In the 13 years I have been in the business we have never enjoyed more than the 12.5% on newspapers, yet there are many newsagents doing OK, even quite well, over here and have been for quite some time.
I have no idea what the drop in commission is likely to cost you, but I agree that print is a dead horse that is getting flogged on all sides and your energies would be far better spent developing alternative revenue streams and looking at print as second tier products – at best. Concentrate on products where we have margin, and only do what you have to do for those that don’t.
Maybe we should regard ourselves as specialist retailers rather than newsagents. Customers will remember us for a combination of reasons, and those include product, but more importantly the experience they have in our shop and the service they receive – that’s where we can walk all over the opposition if we do it right.
Mark
Thankyou for the reply, summarily explained gives all of us the background, your post does have merit and I appreciate the less harshness regarding this contentious situation.
I have read many past posts where Newsagents have given/sold runs to others and then receive 12.5% as subagent for Newsapapers.
There is a Grey area. I have never had a distribution run. I have always received a 25% commission. Now they want to half it.
I for one did not anticipate the proposed 12.5% new commission as part of the much needed & ongoing change that needs to happen.
I have hogged this discussion long enough, one can only make their point so many times.
No cheap shot Mark, it is customer perception that matters, and they think of all marketing groups as being newsagents first do they not.
What I was after is a core offer that the vast majority already do and do well and that we must protect at all costs but it seems that that is just too hard.
Chemist have pbs medicines as their core, service stations have fuel, Coles has groceries, everything else feeds off these and they protect them as an industry from outsiders.
IF we were to say the majority of newsagents feel Lotto is our core point of difference, then this is at least one thing that we can act on as 1 unit to stop it being diluted, if it is stationery then the same goes for that, we have lost mags and papers so be it but what else do we hold dear.
No shot Mark but it seems that everyone would rather pull against each other then protect each other, so we are just retailers with no purpose.
I would love to hear some positives.
Just to get people thinking.
The question a customer has is ” I need (?), I’ll just duck down to the newsagent and get it, not the servo, not the 711, not coles/Wooiles but the newsagent.
Luke, plenty of money is being spent to get people to think about retail brands and not the channel shingle.
There is nothing all or most newsagents do that is unique.
Many newsagents do not have Lotto.
For newsagents to protect each other we need to play to (or support) the worst operators. That does not make sense to me.
I want to work with proactive newsagents who are prepared to invest in a point of difference. No, it’s not a size thing. It’s more of a mindset thing.
The days of 4,000 newsagents working together are over.
Derek (#24),
If I was in your situation I’d consider challenging it, to have a regulator or some party in authority to assess the move.
Here in Victoria I’d try the Small Business Commissioner or VCAT first. I’d also raise it with the ACCC. Plus I’d tell other newsagents what I was doing so they could consider the same.
I agree that halving of your margin when there is no change in your work with and support for the product is objectionable and should be challenged.
Have you objected to News?
I am interested in the precedent set by the ‘grey area’ newsagents (Derek 24). According to news I get 25%, 12.5 from my retail activities, 12.5 from distribution. I need to read my contract about how exactly all that is worded but if News head down this path of squeezing everyone down to 12.5% there are a few avenues of dispute open I would think.
For smaller businesses this margin cut is a real issue, if you are not blessed with big city shopping centre foot traffic volume it’s much harder to recover lost revenue.
Down grade were you put you papers , can not have prime space at front this part of the change go for margin
Mark
Thanks for the heads up. I have not spoken to News Ltd at the moment regarding the T2020. It is a delicate situation however my first point of contact will be my rep.
I will lodge a incident with the ACCC if News Ltd is not interested.
The last contract I signed with News was in 2004.
May – I will in time let you know what is the result. The “grey” area could be small or wide as News wants it to be. You are right though the margin cut is a real issue. Sorry cannot give you good news at the moment. The thing is I do not even think newsagents are aware of this T2020 in my Regional area of Illawarra NSW
Here is my issue and the issue is margin. We are no longer agents for newspaper and magazine publishers, we are retailers just like every other retailer. I get it. We no longer have he benefit of exclusivity and the foot trafiic that come with it.
The problem is that to be a successful retailer, an average gross margin of better than 50% is required to be sustainably profitable. Unfortunately a lot of suppliers to the “newsagency” channel are offering products at 8%, 12.5%, 17% and 25% margin. Too many product are offered up as loss leaders or traffic drivers. You simply cannot run a profitable business on a shop full of loss leaders and traffic drivers. I now tell the supplier to stop showing me the loss leaders and start showing me the margin leaders. To be serious, with the way newspaper sales are moving and at 12.5%, Im seriously considering whether that is the best return on the space I can get. It sure aint helping me get to my 50% target margin. The truth is the suppliers are also in for a bit of a shake up as well.
So everyone else out there thinks like Mark, that the shingle is lost?
This is the reason that when NSW lotteries comes up for renewal, it will be lost to us, this is why we get bugger all from suppliers and even our own GNS looks elsewhere and this is why so few are members of associations.
We wonder why we get negative customer perception as not having anything unique to offer.
It is my view that we have a number of things we do that are unique as we do them better then others, but as Mark suggests I will look after myself and those that think like me and bugger the rest.
Luke, newsagent behaviour under the shingle offers the best guidance on its strength and future. Do you really want to be associated with the worst?
What is it newsagents offer that is unique? I can’t think of anything.
Maybe it is regional thing but Lotto IS a major point of difference, I do not remember going into a newsagency outside of capital cities and not seeing a lotto counter, city agents may have lost this fight but regional agents still have a virtual monopoly on lotto.
When we get to greeting cards and seasons, customers still think of us in terms of the go to place for getting cards, sure others try and get these sales and suppliers push their products into supermarkets but we still do it better. 4 times a year customers think of newsagents for cards and other lines no matter how hard the others try.
According to your comments to “stationery news” we underestimate our stationery value and this is a department we can gain market share in.
There are 3 areas we offer something that the average customer perceive us to be better at then the rest, but I would love to hear from others not just back and forward with Mark as he has made is position clear that we have nothing unique to offer as an industry.
Nope, Lotto is not in every newsagency. It’s certainly not a point of difference. 7-Eleven!
Yes, seasonal offers is a point of difference.
I made no comments to Stationery News. They ran the article without my permission or knowledge.
While we have no unique proposition as a channel today, plenty of newsagents have a USP in their business today.
Luke, the shingle at present is “Newsagents” yet newspapers did not rate a mention in your last post. Lotto is a mixed bag in Victoria with many stand alone lotto agents as in our centre.
The strengths in our business are much as yours and while we don’t have lotto, I rate magazines where you don’t mention them.
I doubt with the coming changes that any retail newsagent will place much value on newspapers as a revenue source and thus the shingle is likely redundant. The new distribution channel will be newsagents but retail will simply be their end customer…..along with schools, supermarkets and everyone else they deliver to so th question is what do we retailer become that is relevant to our current core business which will NOT be newspapers.
If, as some suggest, the Shingle is lost, then we need a replacement. At the moment the term Newsagent is synonamous in many customers minds with a specific set of merchandise, not just Newspapers.
As James said, we can not survive on all loss leaders and traffic drivers and we need to consider whether 12.5% for Newspapers gives them a place in our business and where.
If we throw out “Newsagent” what will we use that has our customers going “Look there is a “OOOOOOO” they will have what we are looking for.
I don’t have an answer but would love us all, well most, to agree on something, meaningful and stunning.
Martin this has been a theme of my Newsagency of the Future workshops for some years now.
I am not sure that we could get 4,000 managing directors to agree since some early adopters have broken away already.
The future will be more to do with marketing and other commercial groups than the channel acting as a whole.
Some suppliers no longer engage with the channel but only at the marketing group level. National landlords have done this for years.
Update; Have waited for a reply from my News Ltd Rep T2020. No reply after a week! Will try circulation and ask them to pass on my questions to someone who can succinctly answer my specific query which is
“There is a Grey area. I have never had a distribution run. I have always received a 25% commission. Now they want to half it.”
Another scenario regarding this T2020 could happen like this. Once Newspaper Publishers gain your customers details, can they then you these details to leverage our customers with subscription offers for their existing magazine portfolio’s to our customers.
If I were a Magazine Publisher, I would be asking this question and if I were a Newsagent I would also be asking this question and what does this mean?
Derek
I can imagine Murdock mags and News are already talking about subs and how they can lever more from the Newsagencies. I can not see how News can force you to hand over your own subscripions for them to manage. Would there not be a privacy issue handing over your list of subscibers without the subscibers knowledge.
some good points Brendan but “news” in newsagents does not have too mean newspapers, it can be digital news, DVD’s, books, gifts that offer news as well as everything else.
I do not see newspapers or mags recovering and will continue to decline so to have a business that grows we have to move past them, I’m second generation newsagent and I remember a time that we were the go to place for toys, books, educational supplies, games and all of these did not rely on newspapers. We can do better as a group to stop losing revenue to competitors and to say just because we are individually owned we cannot work together is a cop out by some.
Chemist are mostly sole traders but they still work together if and when needed.
It is all about brand perception from customers and while some will trash the brand while still wanting to trade off it, it is still a brand customers recognise but for what, that is the question.
If you do not want to be newsagents anymore then go off and call yourselves whatever you like but make the full cut, stop trying to have it half arsed both ways, trashing the name but still associating with it.
Luke well said
Gregg,
News Ltd are not forcing you to hand over your subscriptions. You don’t own the customer, News Ltd does. Simply put, they are now going to manage their customers subscription account rather than have you as their agent do it.
The benefits for Distribution Newsagents are:-
All the expenses associated with invoicing will rest with News Ltd.
No more bad debts to follow-up.
No more commissions or payments to Collectors.
Most importantly, no more time spent doing all the Admin work associated with managing subscriptions.
In respect of the privacy issue you raised, News Ltd’s legal people have that covered. It is a futile exercise going down that path.
The best thing I could suggest is you lay back, enjoy the ride and think about the benefits to yourself of News Ltd taking over management of subscriptions.
Dennis Robertson
Dennis is it just the subscription customers they want or all the delivery customers ? the bulk of my customers are direct with me and have no agreement with news . so do i hand all that info over ? or does some one buy it from me ?
Dennis
I appreciate your comments. On the issue of privacy, News bought this issue up with me when i asked for email details for existing and new Carrier Collect News subsciptions for email billing. They would not supply me with them as I might use this as a direct marketing tool to promote our business and it was a privacy issue?
On the basis of this i stopped accepting Carrier Collect subs from News.
Dennis. Have you got shortman syndrome or something?
Take it easy.
News Limited do not own any human being either and they also do not own the Newsagents private customer details.
Newsagents over a period of many years have worked hard to build customer goodwill.
I would not like my details if I were a customer given to a Corporation, only a nieve person would think they would be used solely for in this case Newspaper subscriptions. The question of privacy is a legitimate one of concern and should not be dismissed.
The benefits for Distribution Newsagents are as you say great.
If you are an example of the New Distribution Agent I pity the poor customer.
Derek,
Check your contracts. News Lts do essentially own your direct customer’s details. You have simply been acting as an agent, maintaining a database on behalf of the publisher.
Jarryd
I cannot dispute what you have written if the contract is current.
Do Newsagents direct customers know this is the case and were given all the necessary disclosures when they sign up for a subscription?
I think I maybe one of the very few that thinks the way I do on this whole shabang.
Its not my blog and its not fair to continually air my own views, disrupting the good that happens in the Newsagency Channel.
Shaun,
From my migration experience, any customer who receives home delivery of a News Ltd title will have the Administration of their account taken over by News Ltd.
Locally, what you named as a “direct” customer, we called an ‘Agent Collect’ customer, meaning that the HD customers account was administered by us within our own software.
Prior to migration, our total HD customer (throw) base was broken up into about 48% Agent Collect and 52% Subscriptions. It is now 100% subscriptions based and I could not be happier despite having a great relationship with the Agent Collect AND subscription based customers prior to migration. That good relationship still exists albeit on a much reduced scale. In overall terms the time I now have available to myself since migration is a huge bonus and I would not go back to the way it was for all the ‘tea in China’.
The only Agent Collect accounts we now maintain are Fairfax titles and HD Magazines.
In response to the second part of your question, no-one will buy your direct customer base from you. The customers are owned by News Ltd (see post 48). This is the aspect I had most difficulty accepting prior to migration, but to believe anything else is a myth.
Two reasons I posted on this site
1. The subject heading seemed to urge the bringing forward of the facts of the matter. It is what it is.
2. To be useful in explaining what the benefits of migration are, which seemed to flow on as part of the post.
An attempt at an insult from one other aside, I remain happy to tell anyone of the migration experience. It was not an easy experience to go through by any judgement.
Late last year, I also purchased some additional rounds in preparation for what is now known as T2020.
Dennis Robertson
If I agreed to hand my run over ,then yes I would happily give all my customers details but if it is not by choice then I am sure to forget a few .
Question .
If my customer was getting a magazine deliverd first and then decided to add a paper to his order does that men he is my customer or PAPER Company ?and I should point out that he pays the delivery fee on the mag and not the paper ?
regarding number 42 LUKE’s post – “While some will trash the brand, while still wanting to trade off it, it is still a brand customers recognise, but for what, that is the question?” I wonder if the way customers relate to their local newsagent varies according to where they live, as Mark said in no 39. I believe the shingle is lost because of this variability. No cohesive and distinct national offer. I see the future identity being a local one, perhaps with a newsexpress or newspower being the conduit, the source of deals for supply of goods. promotion of each business would be in the hands of each owner. We can already see the terrible trouble GNS has in trying to get all the butterflies flying in formation even for a couple of major promotions per year.
Shaun s,
In regards to the customer with both a newspaper and magazine being delivered – it is my understanding that they would be both your customer and the publishers. You would be entitled to keep their personal details as you are extending credit for and delivering a separate product published by someone for whom you are not acting as an agent.
Gregg, (@ post 46)
On the issue of privacy, I am aware that another Newsagent, at time of migration refused to supply email addresses of his customer base to News Ltd on the basis that the Agent Collect customer did not want their email address information onforwarded to News Ltd. I understand News Ltd did not pursue the information. Certainly, whilst I did not canvass my Agent Collect customers, I did not provide News Ltd with any email addresses that I had on file and they never asked for it.
Is there a right or wrong answer, I don’t know, I just wasn’t comfortable with providing email addresses. Email information feels a bit different to other information. News Ltd staff in your Carrier Collect instance probably sought advice from their Legal Dept.
Maybe the subscription systems worked differently over there. On my data base I have all of the News Ltd’s subscriber customer details (Name/address/phone/subs#) nb not email addresses. News Ltd do not forbid me from contacting subscribers, although of course subscribers are directed to the Customer Service Dept of News Ltd for all stop/starts/delivery instructions/cancellations etc.
I guess if I wanted the email addresses of subscribers who also shared an account with me for magazines etc, I would ask them (the subscribers) for the information.
Dennis Robertson
Shaun s (@ post 51)
The reality of migration is that some Newsagents did not transfer all their Agent Collect accounts to the News Ltds subsciber base. Some preferred to keep Agent Collect accounts for a few HD customers for eg: Nursing Homes. News Ltd did not take issue with this decision.
Even though we supply to half a dozen Nursing Homes/Aged Care facilities, I insisted all be migrated. Why? purely on the basis of operational efficiencies and for the sake of consistency. Have I lost any HD’s for the Nursing Homes? None – in fact as you would know, this is a growth area.
Yes, and some ‘forgot’ to include all customers when migrating the base load.
As indicated by Jarryd Moore post 53, the HD magazine and newspaper subscriber is a joint customer. My software has their details in one account file that can distinquish between Agent Collect and subscription. The magazine of course attracts a delivery fee whereas News Ltd pays me a delivery fee for the subscriber.
Shaun, it doesn’t really matter which came first, the magazine order or the newspaper subscription. The customer is a joint customer.
Dennis Robertson
I am now of the view that the New Breed of Distribution Agent is now a competitor to the Newsagent Channel Newsagents.
Derek,
You need to start to listen to very experienced Newsagent’s who have chosen to go down the HD only path. Large HD only are becoming the norm – their is no reduction in customer service just a single message from trained and very experienced Call centre staff. To say that HD only Newsagent is a competitor to the Newsagent channel displays your total lack of understanding of our channel.
Dennis @ post 54
Thanks Dennis. I did 12 months ago i simply asked customers for their email address it was not a problem and all where happy to supply it. Just would be so much easier if News supplied it with the subs.
John
Appreciate your response, not that I was after one and you are entitled to your view.
I appreciate your years of experience in the Newsagency Channel, you have fixed many of the issues of oversupply, Had great relationships with Publishers over the years, Had even better relationships with Distributors as well, managed to unite all Newsagents to be on the same page, managed to allow Newspaper Publishers to own customer subscriptions and their details. Manage to help many family business to a fantastic deal on commission on selling newspapers for a mighty 12.5% commission, the list goes on, I do not wish to have that kind of experience, that is why I speak up on issues that will affect many hundreds of Newsagents.
A lot disagree with me however some may agree with me.
It is my view that the New Breed of Distribution Agent and News Ltd will prey on obtaining more subscription based customers, these will come from existing Newsagency foot traffic customers and News Ltd Offers. It is the objective for News Ltd to grow this area of their business.
That is why I view the New Breed of Distributor as a competitor.
Looking down the road a bit a replica of what I see will also be done with Magazines although the platforms are already availiable, they will evolve and affect Newsagents and more will move over to Subscription.
Please keep up your work with News Limited in dividing the channel. You are a competitor and people with foresight may also see this.
Gregg @ post 58,
Glad to know I was on the same page as yourself 🙂
If you want to know anything else about the Migration process, let me know.
Having been through it quite a few years ago now, I can still recall the heartache it caused as we grappled with what it all meant. The emotions were high at the time………I used words like ‘thieving bastards’ etc in relation to ‘stealing my customers’………until I worked out what would actually happen when the change was completed as distinct from the usual perceptional based fears most of us have with any serious change in our lives.
So I can easily empathise with anyone who is about to go through it.
In the end it was fine and we enjoy an improved lifestyle as a result.
Dennis Robertson
What were the payments made to exsisting Newsagents that keep there deliveries going until change over?
I can not get a real answer to this from News as I get the feeling that they are not sure (News Staff) either.
Derek you are right to point out the competitive situation. If I was a distribution newsagent or the publisher I’d push subscriptions given their benefit to the overall financial model. This leaves retail only businesses with the need to carefully consider their investment of time and space – as the publishers will expect.
Mark,
I think it’s common knowledge that Publishers have always placed high importance upon HD Subscriptions. So I don’t think anything has changed there in relation to what the Publisher will want once he has cleaned up the Distribution Model.
Distribution Newsagents have of course assisted the publisher with promotional throws etc, in the past and will do so in the future with a view do increasing HD patronage. Of course as a Distribution Newsagent, I don’t see anything wrong with that. Just business as normal as has been done for many years before this consolidation of rounds.
In relation to the question of competition (for customers) between Distribution and Retail Newsagents, again nothing has changed with the introduction of Publisher initiated moves towards consolidation.
It’s always been there, it’s just that it hardly rates a mention in my opinion.
The thing is the numbers of converts impacting upon foottraffic in a retail outlet is miniscule in relation to the total foot traffic in my opinion of course. Certainly the Retail Newsagent I supply has never raised this issue with me. That is what I base my opinion on. So for me and the Newsagent I service, competition does not exist.
So I think that in terms of overall impact, I think raising the spectre of competition between the two might unnecessarily distract from what people need to focus on in relation to consolidation of rounds.
It’s going to be tough enough coming to grips with that.
Perhaps it is totally different in your state. I can only relate to what happens here.
Dennis Robertson
Dennis,#50 why would you purchase other rounds just last year when you knew that in 8!or so months you get it all for free .funny just last yeAr they had value now they are worth nothing and the agent taking over cleans up .
What you are saying about who owns what all sounds correct it is exactly what I have been told in the past almost word for word . Do I agree with it ,hell no.,but yeah I signed the contract. Overall for a smooth transition there has to be some coin exchanged ,those that hand over this info without are crazy as far as I am concerned . Ok some with say but it’s in your contract ,my answer to that is what contract because if you are handing it all over pretty much means you contract has finished
Update from post 24 & 40
My Rep called who acted professionally without Prejudice, also sent email to circulation to forward onto the person who can give correct answers. Rep verbally explained from News Ltd point of view what their position is. I asked this to be put in writing as I did not want to misquote my Rep. Correspondence came in writing from Ray Bartholomeusz Newsagency Administration Manager NSW & ACT Nationwide News – Note I was transparant in sharing that any information supplied will be submitted to the Australian Newsagency Blog hosted by Mr Mark Fletcher
Good afternoon Derek,
Under the T2020 model, the standard retail commission payable under the new retail agreements will be set at 12.5%. As we are retaining the current retail percentage commission structure in line with our current agreements, if our cover price goes up, so does your revenue. In addition, retail agents will be eligible for a bonus payment of $20 each time they sign up a new subscriber.
As a separate matter, retailers who elect to accept in-store subscription payments through an electronic payment system will be paid a processing fee – however this is separate from any retail agency arrangements.
Further, we will continue to invest in the branding and in-store merchandising solutions for retail newsagents that differentiate newsagents from other channels.
We have developed the T2020 model for areas where consolidation is a practical possibility and are taking a staged, collaborative and considered approach to the roll out of this new model, with a focus first on metropolitan and regional areas in Queensland, NSW, ACT and Victoria. We plan to finalise the maps of territories in the rest of Queensland, NSW, ACT and Victoria and to provide them to newsagents early next year, once we have assessed the learnings from the launch region of the South side of Brisbane.
We intend to roll out new retail agreements, which cover the change in commissions, in a phased manner as we implement the T2020 model across territories. At this time, as the T2020 model is being implemented only in the launch region of the South side of Brisbane, there is no immediate change to distribution or retail contracts anywhere else in Australia.
I hope this clarifies the position for you. If you have further questions, please let me know.
Sincerely,
Ray
I have written back for an answer to my question again although the answer is actually in his correspondence above I believe – No grey area -.
My reply Hi Ray
Thankyou for responding to me regarding the proposed T2020 roll out. The information you have provided me does cover much information without being too long and drawn out, I do thankyou for that.
If you can please answer my question, in this instance regarding myself. Currently I get 25% commission, I am told that this is made up of 12.5% retail commission and 12.5% for distribution to myself. I was under the impression that the 25% commission was my payment for selling your product.
From my perspective it does not seem logical that I get 12.5% commission to distribute to myself, I ask you to consider this scenario because their has been no change in my work circumstances.
To be honest I really just do not understand this reduction in my particular case. I do however understand that the new retail agreement when it is ready to be rolled out with a 12.5% commission will be offered along with other incentives for increased revenue however one must sign this agreement to continue their relationship with your company.
I guess I am just frustrated and feel this is unfair because nothing has changed in my work circumstances.
Thankyou again for spending time in your busy work environment to write to me.
Thankyou
Derek
Mark -Post 62
I agree with you “This leaves retail only businesses with the need to carefully consider their investment of time and space”
Shaun s, @ post 64,
I gambled that it would take a considerable amount of time and effort before any new model was bedded down. I say gambled, but I have had some experience with Event/Change Management so I figured there was time available.
With some hard knowledge of the ‘new model’ at last coming out of News Ltd, I now know that I have some more time to do the work involved with capturing synergies of scale.
Shaun, between the time I purchased the rounds and the time I will have the agreement terminated and commence participating in the tender process, about 2 years or longer will have elapsed. It’s now about 11 months since the first one (purchase) and it will take News Ltd quite a while to review what they have learnt from the launch phase in south side Brisbane.
So with the amalgamation of the 3 rounds into one, we are now a bit more than double the size and heavily involved in gaining efficiencies.
I don’t like the scenario of one Newsagent doing another out of his round, whether by tender process or other means. I worked alongside (communal depot) the blokes I bought from and I paid what they were asking for the rounds. I remain quite happy with that decision. They both wanted out.
I don’t know how News Ltd will manage this social aspect of new model, although there is the statement from them that “no compensation is payable”. I think there are benefits to Newsagents who tender together. There are still unanswered questions.
Regarding the second part of your post, for the moment, only existing Newsagents with agreements can participate in the tender process. In terms of achieving a smooth operational transition at the time of round consolidation, News Ltd have said the following at FAQ No.34.
“What if I decide I don’t want to deliver your newspapers anymore?
If you decide you don’t want to deliver newspapers in your territory you can terminate the contract as per the current terms by providing the required notice and can apply for a separate retailer agreement if you choose.
When T2020 is implemented in your territory, if you continue to meet all terms of your distribution agreement through until the agreed transition date, you would receive a contract fulfilment payment to enable a smooth changeover to the new distributor. You will also be eligible for a new retail agreement with News Limited.” (FAQ ends)
I don’t believe there are details available regarding the ‘contract fulfilment payment”. In my opinion, this is not a round purchase payment, but, in a sense, I guess some people will view it as a payment for data information.
Like I said there are still questions to be answered.
Dennis Robertson