A big supplier walks into a newsagency and dumps cash, thousands, and in some cases, hundreds of thousands of dollars on the table. The goal? To buy their business.
Their pitch is about the money, and not the box. Now here, the box I refer to is product.
To a retailer facing rising costs and tight margins, that bag of cash looks like a lifeline. But in the long run, it’s often a noose. I have seen this so many times in our newsagency channel.
The Lure of “Free” Cash
When a retailer’s focus is on the immediate cash injection, business logic often goes out the window. I have seen this happen.
Taking the cash is almost always the wrong decision. It makes you a weak servant, often supplied with less than ideal boxes (products).
It’s not free cash though. There are strings, strings that can shackle the business and leave it work off, for years. I have seen this happen.
There is often no consideration as to whether the products they are now “locked-in” to taking are actually the best fit for their business. There’s no deep dive into the lost opportunity cost, the money they could have made over the next five years if they had the freedom to stock better-performing lines. The decision becomes about the “free” cash today, ignoring the debt it creates for tomorrow.
Lazy Marketing vs. Genuine Value
When a supplier uses cash to buy your commitment, they expose a lack of faith in their products and their sales people to adequately represent their business:
It’s lazy marketing. It prioritises the supplier’s desire for guaranteed volume over the retailer’s need for agility.
Stripping the “Independent” out of Independent Retail
Independent retailers, especially newsagents, survive by being different. We thrive by pivoting quickly to trends and offering the unique, local, or niche products that big-box stores won’t touch.
When a supplier locks a small business into a rigid, long-term supply contract, they strip that agility. Without even realising it until it’s too late, the local indie retailer has been turned into a static franchise outlet for a single brand.
A Broken Ecosystem
This money strategy hurst our channel. It kills innovation.
- The retailer loses: They lose access to better-selling, higher-margin products.
- The customer loses: They lose access to variety and local discovery.
- The only winner: The big supplier who secured years of revenue without having to actually compete on quality or service.
A Message to Suppliers: Earn Your Space
If you believe in your product, let it fight for its place on the shelf.
Real loyalty from a newsagent isn’t bought with a lump sum; it’s earned through turnover, margin, and service. Don’t handcuff retailers with a contract they only signed because you dangled a bag of cash in a moment of weakness.
It’s time to stop buying market share. Start earning it.
As for the retailers? Next time you’re offered “the money or the box,” remember: your future is in the box. Choose the products that work, not the cash that binds.
I’ve been deliberately vague in this post because I don’t want a legal threat from suppliers offering bags of cash today to win business from newsagents. I mean, I would have thought they would have earned their lesson from hundreds of thousands of losses when businesses they gave cash to failed.
Suppliers paying for business newsagents is bad for your channel. Maybe the suppliers need to lose more money before they stop the practice.
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Mark Fletcher founded newsagency software company Tower Systems and is the CEO of newsXpress, a marketing group serving innovative newsagents keen to evolve their businesses for a bright future. You can reach him on mark@newsxpress.com.au or 0418 321 338.