I was contacted by a retail newsagent yesterday concerned at their loss of a long term account with a cafe juts a few doors away from them.
The distribution newsagent in town has offered the cafe three copies of the Herald Sun and three copies of The Age seven days a week for just over $13.00 a week – an amazing deal by any measure. The retail only newsagent can’t compete, he can’t retain his long-term customer.
The deal makes me ask if anyone is aware of deals from Fairfax and News that would enable this offer to be put. I can;t see any subscription offers that make such an offer work.
If there is no such deal then I can’t see how the distribution newsagent makes such an offer viable. They’d have to be getting the papers for a few cents each.
Am I missing something here?
This is not something new, they have this offer for years.
Yeah, at least more than 3 years
F58zzairfax do have a cafe subscription
News who would know they have more codes than the CIA
But at that price? I’ve not heard of it.
Something is missing. It would be nice to understand how it works unless this is a isolated situation and a shonky is going on.
All the key publishers provide us with deals for cafes. We could do a similar offer based on the deals we are getting from those publishers. The point we’d like to see debated is whether or not the retail newsagency has the right to the same deal. As a distribution newsagent we handle all of our cafes and bars as direct accounts. (i.e. they are on our home delivery runs) Our retailers sell to walk-ups and casual shoppers. No-one in our territory has ever complained about the arrangements.
Here is a response form another newsagent who will remain anonymous:
The offer is to the local bakery:
Purchase 20 Daily Telegraph Monday to Sunday for 50 cents per copy
Purchase 50 Daily Telegraph Monday to Sunday for 30 cents per copy
The bakery is three doors down from me and the proprietor is quite pissed off about being approached. I have been contacted by my News rep who has found out the name of the Bakery owner and subsequently urging me to speak with them to accept the offer. This on top of the fact that the local Woolies is just 15 metres from my front door.
Why can’t I buy my papers for the above cost and get 50% and 70% commission?
The Age used to have cafe subscription for $299/52 weeks for 7 days a week, 5 copies/day delivery. They recently put up the price to $129.90 for 13 weeks. Distribution agents get full commission for cafe deliveries. News is doing the same offer at $546/52 weeks. Again, distribution agents get full commission for cafe deliveries.
I got an offer last week from my centre management. The offer was to giveaway a Daily Telegraph FREE to any customer who spent over $20 within the centre.
Curious of the details I asked centre management some finer points on how this promotion would work, and I was informed of the discounts they are offered.
The Daily Telegraph is offering discounts of 75-85% off RRP. This is for a minimum quantity of 50 copies and for a minimum term of 4 weeks.
Asked if we could run the promotion for 12weeks at 150 copies. “It should’nt be a problem” they replied!
I have mentioned a couple of times on this blog of the REAL discounts OTHER retail outlets get for from publisher’s. Unfortunately Newsagents are too scared and divided to take action.
Any fool who thinks 12.5% discount is fair or for that matter worthwhile are not only dumb, but I question their business credibility. Accepting 12.5% at a retail is unrealistic, and won’t happen in my store.
Newsagents subsidise publishers being able to offer such discounts because we CHOOSE to accept a lower margin/commission by doing nothing about it.
This is a wonderful BLOG which offers great communication for Newsagents.
But sorry to say Mark, you need to wake up and smell the coffee!
Why do you say I need to smell the coffee Amanda?
Mark
I have been approached more than once by my News rep about the cafe deal also supply to our small supermarket. I refused as i already have 2 subs and people know where they can get a paper if we are closed. I got burnt some time ago with a cafe deal where the cafe would give away papers after lunch so i simply stopped supply to them and reported to News as they where also not paying on time.
We have put our papers at the back of the store ,if they want them at the front the need to pay 25%
Yes it’s a pretty sad state of affairs when every bugger in town is getting their newspaper cheaper than the poor bloke who relies on them to make a living.
The “wake up and smell the coffee” comment was had two references:
one (a pun)referring to the huge discounts offered to the cafe industry,
the second reference being that your comments on this blog appear you have buckled at the knees and accepted a 12.5% commission that Nationwide News / News LTD or FORCING onto retail newsagents.
You have previously commented that “whether its 12.5% or 25%, it doesn’t really matter to OTC sales”. That is an ignorant comment.
For me and I am certain thousands of Newsagents the difference between 12.5% and 25% is almost $15k profit / year.
To strip that away from newsagents FOR NO REASON other than for PUBLISHERS to make THEMSELVES more profitable should be criticised and condemned not supported and understood as has been done by you on numerous occassions in this blog.
I guess what I am saying, and I am trying not to be critical of your blog because I find it very interesting and informative, but on this topic (strictly in my opinion) I just feel your comments have been weak when they should have been more forceful and united.
Once again, just my opinion. (Which i should point out, without your blog could not be voiced)
Amanda, the majority of retail only newsagents are already on 12.5% or thereabouts. It is only since posting abut T2020 here that I have become aware of some retail only newsagents on 25% – as I have noted already.
While you can judge whether I have ‘buckled at the knees’, I consider myself to be a realist. While retail newsagents on 25% heading to 12.5% should protest and explore every avenue, the reality for newspapers is there for all of us to see.
It is the pursuit of non newsagency sales that will hurt us more than the drop in commission to some. This is, to me the bigger issue.
We exist in a competitive, open and commercial marketplace. Public companies have one overarching obligation – to drive share price.
Our obligation to our businesses needs to focus on value of those businesses.
If newsagents fight on commission and even on other sales outlets we do so around a product with no sales upside.
If newsagents fight on making their businesses more valuable through products and services with upside then we have far more to gain.
On the issue of commission drop for some newsagents and News pursuing non newsagency outlets for the sale of newspapers, I have made strong representations to News Limited senior management.
If I were an elected leader of the channel I would certainly have led a fight against the News move through various channels. That this has not been done publicly on a national scale is a matter for newsagents to consider.
It is a contentious issue this Newspaper situation. I am dissapointed that News are offering these deals to the detriment of the wider channel. Post #7 shows that News Ltd have no allegiance to the Channel. It stinks and if this is not the smoking gun the ACCC needs then shame on them.
Moving on at the moment my business needs News Ltd Newspapers and if eventually I get downgraded to 12.5% commission I will swallow it. The positive news is I am working on not needing anything from News Ltd in the near future and that includes Magazines. I will only rely on my Regional Newspapers which are strong. The thing is News Ltd have made their decisions for their future and I am making my business for the future.
I am looking to be News Ltd Free and what a relief that will be. I realise this is not for every business due to the reliance on News Ltd products and the foot traffic that comes along with it and the investment business owners have in their business. It is still a draw card to the business even at 12.5%.
Post #15 last paragraph shows why we find ourselves behind the 8 Ball.
Disclaimer: I am not a fan of News Ltd, they abuse Newsagents.
I ran my 10 x 10 reports through Tower last week and newspapers are looking like a waste of time in my outlet. Roughly 75% of newspapers sold on their own and the other 25% were in the main a mixture of 2 or 3 newspapers. Very few paper sales include an item of any worthwhile profit. Magazines on the other hand had the reverse figures with only 25% being sold alone and even when only magazines are sold they are double the margin of papers. I will continue to sell papers because they have a small footprint in the store but this decision could easily change if we are treated so shabbily compared to some of these deals coming to light. For papers to be secure in my outlet they need to provide a realistic margin OR pay for their space just as they charge for advertising space. We are worth more than they acknowledge.
We are handling the BBC wildlife promo for
a fortnight (another week to go) and yesterday at 2pm we were “instructed” to
give away an advertiser free with any purchase of $2 or more. I had 51 papers
left at 2pm and I gave them all away during the afternoon and now I have to wait 2 x weeks to get the credit (missed last time and had to ring for it). We have
been “requested” to do this giveaway 4 times in the last 3 months and it includes
the Sunday Mail today.
To do this while we are experiencing heavy sales to cater for the BBC wildlife
DVD giveaway just doesn’t make sense.
However, I AM NO LONGER A NEWSAGENT
I AM A RETAILER WHO HAS PAPERS AS PART OF MY MIX AND I CAN STOP THEM ANY TIME I LIKE.
The comments by people over the prospective giveaway generally sound like this _ “Oh Murdoch really values his product doesn’t he” – or – “I guess it is
a way to increase circulation for advertisers”.
Neither response is positive and I think the publishing gurus need to look at WHEN they do these giveaways but, no
matter what we think, it will continue to
happen.
I can recall Crikey having a blitz on News/Fairfax about the same stuff quite
a long time ago. The publishers just carry on regardless.
Luckily, some of us have distanced ourselves.
The DTs been a whoreing around my area to. One chap contacted and offered (not by me)100 Dt Sat and Sun for 4 weeks firm sale at 12.5% of the cover price with the 12.5% in cash paid to me as my commission. When I inquired of the wise one about cannibalism of full value sales I was informed it did not happen on a Saturday or Sunday yet it would be cannibalism Mon to Fri, Go Figure.
Brendan (post 17), your comments are spot on. I did the same report and come up with 70% of paper sales without any other product. If you look at the GP of this 70% based on 12.5% margin and then apply the cost of labour using say 30 seconds per transaction then indeed there is no operating profit (without even considering other expenses) in the sale. Admittedly the man hours used in selling the single papers may be used elsewhere doing other tasks, bur never-the-less it is not a pretty picture.