I have been contacted by a small rural newsagency which has been presented an ultimatum by Gordon & Gotch: pay $30.00 (plus GST) for a once a week delivery or switch to being a sub agent. Here’s part of their email to me:
The other day i received in the mail a letter from Gordon & gotch informing us that we were an uneconomic store due to the low volume of magazine currently sold in the store. It went on the say that they want us to have a one day a week delivery costing us $30.00 plus GST a week or move to being a sub agent and arranging the pick up of magazines our self’s.
I understand why Gotch would make a move like this on an account worth well under $100 a month to them. That said, the newsagency model was, in part, established to reach into all parts of Australia, bringing country town and hamlet access to newspapers and magazines.
Newsagents have in the past been told by Gotch representatives that the profitable titles help cover you for the loss making titles. Surely, the profitable deliveries for gotch help fund the public service of reaching these remote parts of the country.
One option for this newsagent is to accept the once a week delivery and charge customers more. The challenge for them is that they are 15k away from a bigger town where people do their weekly shop and will be able to get magazines more regularly and for no premium cost.
If this is a change in policy from Gotch – and I’m trying to find that out- then it’s a conversation that ought to be had in the open between the company and newsagents. Gotch needs to be fair and prepared to enable newsagents to NOT have to take unprofitable titles just as it is refusing to service unprofitable accounts.
We do live in a world of user pays. Fair enough. Gotch (and magazine publishers) can’t live that mantra only when it suits them.
$100 A Month is this correct ? or is it a typo
We have just taken on a small sub agent service station who were given the same ultimatum. Gotch actually told them the threshold to maintain direct supply is $4500 per month. If thats going to be the case down the track a lot of newsagents should be worried
Shayne,
If that $4500.00 per month is correct, I would be borderline with Gotch. I would then display my Network titles better which is always above $4500.00. I wonder what Pacific Magazines would say to Gotch. pacific mags would lose 200 New Idea each month and about 250 Thats Life each nonth from me. Add those to every small newsagent and there goes Pacific Mags main titles. ( Ps add on about 40/50 Better Homes and gardens )
I know that in the last few years GG and NDC are reluctant taking on new accounts, you have to do so many $ in first 6 months or become a sub.
I live in a small village and our general store/newsagency/post office/cafe still get a direct drop of newspapers but since changing hands doesn’t get direct magazine supply.
As a sub they now carry a great range of magazines, rather than just the couple of weeklies and odd monthly that they used to get.
With 3 villages between two full newsagencies it is good for the Newsagent supplying these small shops.
It doesn’t make good business sense to carry small accounts , and it’s no different to a newsagents refusing to let anyone become a paper sub just to sell half a dozen papers a day. The admin outways any profit and at the end of the day profit is what it’s all about.
Which mag would miss out on one day a week delivery either New idea on monday or TL on Wed, if we do not get supply on that day you may as well toss the bulk. We are a store that does not do $4500 per month as we are retail only and make most of our mag sales on weeklies.
These comments are the reason I raised it – for the channel more widely to discuss this. Gotch can’t say to small newsagents its user pays when it refuses to give newsagents the same respect.
$100 per month makes sense but $4500 per month would probably be a concern for many newsagents. They supply Coles and Woolies petrol direct with magazines and I bet the ones near us (country) would not do any where near that amount. Maybe publishers should rethink their distribution if they don’t want to see more newsagents close.
Do G&G want to sell magazines?
even if this account is small it still means a sale.Do they really want the day to come that you have to read all magazines & papers on the internet to save freight costs?
I think G&G & Network are spending to much on freight any way with the over supply of unwanted Magazines that then have to be returned at a cost to the newsagency.
And Barry these are good questions for publishers.
Are the monthly figures we’re discussing net sales, or gross supply figures? We’d average a gross supply of $6000 per month per distributer, but our net sales would be half that.
i have picked up a sub (newsagent) in a small town not far away as both GG and NDC have said they are too small to warrant delivery. So NDC are also looking at smaller newsagents
Network and Gotch are also blocking our attempts to consolidate 8 major newsagency’s distribution prior to T2020 by refusing new accounts for the hub entity. It will be a logistical nightmare to service our sub’s if magazines had to come from our retail shops.
It’s no surprise some big distributors have already stopped delivering magazines for sub agents citing uneconomical reasons.
Gary, depending on your location there may be action you can take on this. Shoot me a private email.
Vicki, Net – Gotch invoice value.
Can not wait for the 7 11 up the road to stop or will it only be the little people they stand on, the 7-11 who gets 5 new idea 7 womens day 3 tv week 1 auto action,lets see
What is nana doing about this? Not much I suspect.
I’ve had both Network and Gotch do this to us this year. Network was first, they would continue to deliver 3 days per week but charge for each one, coming to about $3000 per year. Gotch was $30 per week, one delivery. We were spending about $500 per month with each of them. We now have to pick up our mags from an larger agent in another town. There are a couple of positives though: Firstly we will save up to $200 per month as we no longer have to post returns back; and as our range is reduced we can convert that space into more gift lines!
What baffles me is that these two companies are content to close down their delivery network rather than utilise it to sell more products (by which I mean a greater range of products).
No Gotch delivery today. They obviously didn’t get my cheque by Thursday even though it was posted on Monday. This happened about 6 months ago and they phoned me, but never stopped supply. The cheque eventually turned up about a week later.
After 25 years of paying this company I am dsgusted that they have done this at Easter, one of our busiest public holidays of the year.
I wonder if the publishers are aware that I haven’t received their magazines, this has to lose sales for them.
Jenny,
If you in NSW and your mags come with the Tele deliveries ring the courier if you have their number. They can tell you if G&G have put you on hold.
Thanks Gregg, one of our delivery drivers does the mags and he said we are on hold.
I now have to buy No Idea from the supermarket for home deliveries then spend time arguing with them on the phone tomorrow to hopefully get mags on Wednesday. Really frustrating.
Jenny what is interesting in this scenario is that they hold you to account for your indebtedness yet do not give you adequate tools with which to control the level of indebtedness. This is how you should frame your complaint to the small business commissioner seeking mediation. I’d be happy to help.
Thank you Mark, I’m out of here in a few weeks so this will not happen to us ever again! To be honest I haven’t had too many unmanageble supply issues with GG or NW but from what I read here a lot of other newsagents do.
any newsagents have trouble to claim credit for missing AFL team card let me know please. we have trouble to collect our credit from Gordon and Gotch
Salem no not with these but NRL cards from NDC claimed on the 25th because they did not arrive and it looks like it is still pending review
Just received email threatening to cut off if account not paid by today. It’s the 24th!!!!!!!! They have always got their money, is it just me or are others getting told the same.
Your Lucky, we get the email on the 20th and on hold on the 21st if we do not pay.
i broke a six year record this month and actually paid them on time 😉
Actually paid them in the first week of the month so it is one less thing to pull hair out over at the end of the month .