At the ANF’s National Newsagent blog this week, under the headline of My heart bleeds for these newsagents, the ANF published a letter from a Western Australian newsagent about magazine supply issues including oversupply. Rather than providing leadership on the issue, what is supposed to be the peak body of the newsagency channel offers emotion and “sympathy”.
This post from the ANF reflects the extraordinary failure of the ANF to serve newsagents. It shows why newsagents should save their money and cancel their membership of this organisation which is bereft of ideas for addressing the single most important issue facing newsagents, as voted by newsagents.
The ANF opens the post, before publishing the letter, with:
… and all the other newsagents who write in with the same story. It is so depressing that such distribution practices almost bring these small businesses down and cause them turn away from magazines. What do you think they should do?
Saying it is depressing is unhelpful. Asking newsagents what to do is ridiculous – you know what they think. This was your moment to be a leader!
The ANF representative says in one comment at the end of the post that the ANF is working strategically with the MPA. My understanding is that the MPA has been working for some time and only recently has the ANF become involved. That project, while welcome, is unlikely to address what newsagents need addressed.
Here is what I would have said to the newsagent had they written to me as they did to the ANF.
Dear newsagent,
Thank you for sharing your story. It is one we hear often. Your situation is not unique. The vast majority of newsagents face similar competition pressures.
While it can be hard to confront, you need to face your situation with the knowledge that you chose this, you chose to purchase your business, you chose to sign the magazine supply contracts. I will do everything possible to help, but resolving your situation starts and ends with you.
Lobbying government will not help as politicians care less about small business. Sure they will sit and listen to us but they will not change legislation for us. The ACCC, too, over the years has proved good at listening and a failure at even trying to understand the unfair competitive situation in which we find ourselves.
At the core of the magazine distribution system is a set of practices imposed on newsagents by magazine distributors that are from an era of regulation, monopoly, where they were appropriate. In 1999, when the distribution of magazines were deregulated, those involved, including the ANF at the time, agreed a framework that disadvantaged newsagents. That framework continues today. It is unlikely you or anyone can change it. So, your focus has to be on mitigating your own situation.
The only parties with which you have a contract are the magazine distributors. They need to be the focus of your attention. They are tricking companies, paid for each parcel they shift through their warehouses and on the vehicles they contract. The more parcels they shift the more money they make. It suits their business model to move as many parcels as possible and care less about why they are moving parcels.
In your letter, you mention subscriptions. Let go of this. They have always existed and will always exist. They chase a different shopper. Yes, they are cheaper. However, those buying them are not likely to be your customer. Worry more about what you can change.
With all due respect, you need to take the emotion out of the situation. For example, your question Lastly do these companies understand how many hours a week we devote to their magazines in our stores? is not relevant to any discussion on oversupply. Yes, I understand you invest more time than is warranted and that if this were added to your business costs, magazines would most likely be loss making.
Take the emotion out of your letter and start again.
If you are being consistently oversupplied, write to the offending distributor(s) and seek a change in behaviour. Ask for a response in seven days. Provide examples where you have received more than 50% above what you would reasonably sell of a title. Explain that this consistent oversupply is, in your view, unfair treatment of your small business and that you feel powerless to alter their behaviour. Ask for a review of supply to terms you consider are acceptable.
While they consider your letter, gather your evidence. Use your computer system to produce a sell through rates report by distributor. If this shows long-term gross oversupply, it becomes vital evidence for your next step. If you don’t have a computer system you will need to manually gather the evidence.
Once the seven days is up, take the matter to the Small Business Commissioner, apply to have your dispute mediated. This will bring you and those you complain about to the table. You should file a separate request for each distributor if you have evidence of sustained misbehaviour.
Send a copy of your correspondence to the distributors and your evidence to the ACCC with a covering letter explaining what the reports show – sustained oversupply of product that makes your independent small business less competitive than your nearby supermarkets.
Stick to the facts. Use the state and federal government departments but always communicate with them on the basis of facts.
While you do all of this, plan for your future. Create a newsagency that brings in traffic for items outside newspapers, magazines and lotteries. Create a business that is known for other things over which you have more control.
I know of newsagencies in towns of 2,500 people where the businesses are enjoying excellent growth. It can be achieved by you being a leader of your business.
Complaining cannot be part of a business plan. A business plan requires tangible action points. In this letter I outline specific actions you can take. I will gladly help you with any of the steps covered. But remember, no emotion. regardless of your faith, remembering the Serenity Prayer can be useful through this: God, grant me the serenity to accept the things I cannot change, The courage to change the things I can, And the wisdom to know the difference.
If you know who wrote to the ANF, please pass this letter on to them. Let them know I’d gladly help them through the steps outlined.
Newsagents can achieve more individually on the issue of magazine oversupply than they think. It takes planning and commitment. It requires a whole of business approach not only to magazines but what else you could do to bring traffic into the shop.
The issues outlined by the newsagent in Western Australia are not new. The ANF has held countless meetings and strategy sessions on the issues. It has achieved nothing. It is time for newsagents to deal with these issues themselves.
The AFR story yesterday on specialty stores recording 2.8% year on year revenue growth in shopping centres in Australia is incomplete as it did not record that these stores have been hit with at least 5% year on year rent increases as agreed in their leases.
