The front page of The Australian Financial Review yesterday carried a story headlined Plan to help newsagents. It was about the launch of Hubbed, a new business venture backed by Matt Handbury.
From the opening paragraph, Michael Smith’s report reflects, in my view, sloppy reporting.
Former magazine industry chief turned book publisher Matt Handbury is back with a new venture he hopes will breathe like back into the struggling local newsagency.
Matt Handbury hopes to turn a profit. Newsagents provide a network that could be useful to him. He has not invested in Hubbed out of a love for our channel. We serve his need for a retail footprint.
Handbury should tell it like it is and not treat us in such a paternalistic way. We’re more knowing and more independent than back when he last dealt with newsagents.
Smith’s article says there are 4,400 newsagents in Australia. While it is hard to nail an exact figure, I’d put the total number at no more than 3,800.
Smith quotes Handbury about Hubbed:
I thought ‘wow, I like that because it is going to keep the newsagents going’.
If Handbury really thought that then Hubbed must be set to generate $50K or more gross profit a year for each newsagency involved. I don’t see that happening. The numbers quoted in the article don’t make sense.
The article is built around the notion of Handbury saving the channel. More sloppy work by Smith and the AFR. The article says the plan is to install Hubbed in hundreds of newsagencies – even on my numbers it’s a fraction of the overall channel. How will he save the rest? The article has no balance.
Smith makes out that the Hubbed offering is unique. The reality is that more than 1,500 newsagents today offer parcel collection services and have done for close to a year. We also offer gift cards – hundreds of corporate branded cards if we want to carry them. Some of us also offer financial services. And, yes, some of us offer magazine subscriptions.
My point is that Hubbed is not as unique as the AFR article would have us believe.
A Hubbed kiosk will need around one square metre of space including access areas. In a shopping centre, a newsagent will be looking for somewhere between $8,000 and $10,000 a year GP without considering labour, operating and opportunity costs. In a high street and regional situation the return could be less. My estimates blow out the moment a newsagent has to spend any time on Hubbed.
There is also the question of what this looks like to shoppers? Is it at the front of the store? If so, the opportunity cost would be significantly higher.
My other concern is whether Hubbed is a net traffic generator. Will it bring in new traffic or will it rely on our existing traffic. If the latter then it is off less value to newsagents. The last thing we need is a product or service that relies on our existing traffic.
I know from my benchmark studies that there are newsagents doing very well, creating new models, building strong and profitable businesses. Hubbed will not be for them as they have moved away from the agent model on which Hubbed appears to rely.
Now for my back story on Hubbed…
I was approached by them in January this year. They wanted to meet and present the idea. I get approaches like this all the time and have developed some barriers / bullshit metres to stop my time being wasted.
Through a series of emails over five days, they wanted me to sign a confidentiality agreement. I refused. I could see no reason for it. It came across like they wanted some form of support or endorsement from me.
We never met because I refused to sign the confidentiality agreement. In one of the emails they said they were launching this with the ANF. I asked if they had a commercial relationship with the ANF? They refused to answer the question. All communication ceased.
The ANF question is important to me. Associations have no place being involved in commercial enterprises. The ANF track record on due diligence is poor – look at Bill Express … they did no due diligence at all, aggressively promoted it and it cost newsagents tens of millions of dollars.
If there is a commercial relationship between the ANF and Hubbed it needs to be declared from the outset. Also, the ANF would need to be transparent with newsagents on the due diligence it undertook in relation to Hubbed. Has the business plan been professionally reviewed by the ANF for example?
For the record, I don’t have any product or service that competes with Hubbed.
Hubbed could be excellent, only time will tell. Right now there is too much smoke in the way to know. The sloppy AFR article only adds to this. My advice to interested newsagents – approach it with your eyes open. Do your research.
Funny how someone else who is also a Newsagent gets a different reading from an article like this that I should say I also read when it arrived in my shop yesterday.
Mr Handbury who I might say is well and favourably known to the Newsagency Industry is free in my mind to make statements about his view of the Industry and his focus for the future. If he has a viable product that the Industry can benefit from I believe that the right approach is to front the ANF for them to evaluate.
We are in the year 2013 now not the 90’s and I would trust under a stronger
united ANF that they would undertake the right processes for Newsagents who are struggling as a whole and looking for new markets.
Packaging and transport of small packegaes is the business venture of the future and we have seen that with the TOLL N Parcel venture which was instigated by VANA and that has turned out to be very lucrative indeed. This service is now Australia wide and blooming. We make handsome returns from this Industry lead service.
My point is that we deal with people we know and trust in this Industry and I believe that Matt Handbury is just that.
I was reliably informed that at the VANA awards night, it was quoted that the N Parcel initiative had put $30,000 into the Newsagency channel. I cant verify whether that is correct or not however my quick mathematics says over 6 months and say 100 trial sites, thats a long way short of a $50k per annum GP per Newsagency. I recognise it as a good initiative to move newsagents into a new space and Im sure that some are doing well at it, however it is yet another product line over which the newsagent has no ability to either drive business or control pricing and income. And as one newsagent in a major shopping centre quoted to me, $40 per week isnt really helping me with my $7,000 per week rent.
Whilst I applaud the initiative, Im not sure parcel pick up is the silver bullet (at least in the short term). And with Google also entering this space utilising a pick up booth (I see an elaborate PO Box) type concept, it seems competition in this space is hotting up.
Parcel pick up like parcel point which I have and nparcel are good but I agree no silver bullet. My shop sales are growing from products I decide to carry. Services don’t pay enough.
Beggers cannot be chooses they say.
Either you welcome new self driven business into your shop or you go backwards.
Get out of the negative zone and welcome new initiatives in this case driven by State associations. Handbury is a good man and favourably known to our Industry over 25 years.We need to start supporting those who even at least want to invest in our network, get behind them Nationally like the Toll experiment and start being and talking positively. I am sick of the negative people who say they run a Newsagency and do little to support new concepts.
Hey David lets meet up at my Southland shop and then visit your Hampton East shop and see who is supporting new concepts.
It’s not negative to say to newsagents: My advice to interested newsagents – approach it with your eyes open. Do your research.
Nor is it negative to present facts that contradict a front page puff piece in the AFR.
I agree with the other David, services don’t pay enough – except for photocopying.
Being an agent is not a plan for the future.
If this is aimed at people who are not tech savvy, then why would they go to a store where they have to use (kiosk)tech? if they are tech savvy, all the services named can be done on a smartphone.
Also how was the $130 a day calculated? If the biggest product could generate $13?
Very poorly written article.
Anyone know where i can find out more info on this , i have googled and nothing is popping up ,info on the HUBBED thing no so much the FR article .
shauns
where are uou based
http://www.hubbed.com.au/Pages/connect.aspx
North qld
had already had a look at that web site and didn’t really find much at all
Mark Fletcher
You say you have a Newsagency at Southland Shopping Centre ?
Is it an authorised Newsagency ?
In any case and not that I am ashamed of it; you broke confidentiality in naming my Newsagency in response to my comments under the name “david”
Seems to be all your way Mark and I think that you do not like criticism either….
David, there is no such thing as an authorised newsagency and has not been for close to 15 years.
There is no confidentiality commitment around comments.
I’m happy with criticism as long as it is based in fact. I didn’t take what you wrote as criticism. I took it as a rant from an old school newsagent who prefers to be an agent.
you are so rude Mark Fletcher
No respect for others either….
David, I’m not being rude in disagreeing with you.
There is no confidentiality commitment around comments. -that all depends on who where why what and when
100% agree with mark!
Poorly written article. Nothing stacked. Came across as a bad idea ….which it may be. Handbury may be a good bloke, but he needs to better explain how this terminal works for upsets and retail operators . I researched it, and it’s not ticking boxes to be viable. Needs more tuning.
Hubbed or Connect as it was called in the Newsagent magazine was first mentioned in the 2013 N view under “Whats in store for 2013” and again in the Feb Newsagent magazine. In the article it says “The ANF is in partnership with Hubbed. in the Feb article Alf Maccioni is quoted as saying ” The ANF is behind Connect 100%….”
I am surprised that no one appears to have read the magazine or heard about it through their association>
Wally , i read the mag all the time , apparantly not good enough , i have never read any artical on this at all except what i came across on here . So i have now looked at the ANF web site and there is a bit on there about it , seems ok to me takes up no room just a computer screen from what i can see . Will it work i am not sure , would i give it a go ,well i would have to find out more about it .
Wally I don’t get the magazine. I quit the anf in disgust when they told me to keep paying Bill Express. This hubbed thing may be okay but I will wait and see. I agree with mark, the financial review story was not good journalism.