Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Supplier distress

Mark Fletcher
August 3rd, 2018 · 4 Comments

A wholesaler who supplies a range of small business retailers including newsagents with whom I have never had any contact or commercial engagement called me late last week to discuss debt collection challenges. They have been owed more than $20,000 by five different newsagency businesses, with which I have no connection, for more than four months.

The purpose of the call was to talk through options.

Theirs is a small family business, with annual turnover of around $350,000. They are not strong on credit checks. They prefer to take people at face value. The $20,000 in bad debts is hurting.

The goods were supplied on time and in good order. No credit claim has been made. They know from personal visits that in three of the shops the goods have been sold.

The supplier is contemplating taking action. however, they question the value of the time and cost investment for the relatively small amount in each case.

What was interesting from the supplier was the comment that they think in at least several cases, the newsagents involves moved from supplier to supplier, buying on credit knowing they could not pay and expecting they would not be pursued for relatively small levels of debt. I don’t know if this was the plan of the newsagents in question,. However, it is concerning that the supplier thinks it was.

This small business supplier I spoke with is distressed. They say others are too. This is not good news for our channel in terms of reputation and in terms of supplier strength.  We need successful suppliers. A reduction in number will only hurt newsagency businesses.

I write about this today because the supplier asked me to, to see what conversation follows.

16 likes

Category: Ethics · Newsagency challenges · theft

4 responses so far ↓

  • 1 Colin // Aug 3, 2018 at 7:55 AM

    The supplier needs to wise up. Get a stringent credit check procedure in place and consider putting all new customers on pro forma basis for initial orders.

    The non paying newsagents must be persued. If the supplier doesn’t have the stomach to fight then sell the debt to an aggressive debt collection agency.

    1 likes

  • 2 Mark Fletcher // Aug 3, 2018 at 7:58 AM

    Colin their mistake was they thought they were dealing with friends.

    0 likes

  • 3 Colin // Aug 3, 2018 at 8:35 AM

    Sad story. With friends like that, who needs enemies.

    We have come across suppliers who previously couldn’t supply us as already represented in the area. Now they can because of poor payment history by competitors.

    It’s a tough world. Your supplier can roll over or listen to Chopper Read.

    0 likes

  • 4 Kevin // Aug 3, 2018 at 2:36 PM

    I suppose it’s not too different to when we have a sub agent or nursing home go delinquent on us.

    Whenever that happens we have found it is best to get face to face with the owner and be very frank about what you want and what you will happen if you don’t get what you want. The conversation needs to be as one sided as possible. if you let them talk they will only tell a story that you don’t want to hear.

    I don’t agree with the position of not taking any recovery action due to cost and time. Not collecting at all is a far worse position to be in.

    2 likes

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