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

Bill Express creditors stalled on an agreement?

Bill Express (BXP) owes me close to $2,000 in unpaid fees for each of my newsagencies. These debts are growing by an estimated $500 a month across the two businesses. In the four months that Bill Express has not paid the Advertising Rebate it guaranteed in writing in 2003, its indebtedness to newsagents for this has increased by at least $3 million. Its indebtedness is considerably higher if you add in the rebate tied to the equipment lease – estimated to be at least $3.5 million.

While the Bill Express directors will argue to the ANZ and other key creditors that they do not owe the money to newsagents, courts will be left to decide that. Newsagents are stumping up cash to fund various legal moves against Bill Express. With in excess of $6 million at stake and this accruing by more than $1 million a month it is no wonder newsagents are prepared to fund legal action.

My speculation is that the question over the company’s growing financial exposure to newsagents is one reason their mooted restructure has been stalled. I would expect that creditors would want to know that the Bill Express hole is not getting deeper by the month before they agree to new financing arrangements. Creditors would be well advised to talk direct to newsagents.

When I signed for Bill Express I did so on the basis that the Advertising Rebate of $210 was guaranteed. The company stopped paying this guaranteed rebate in February without reason. At the same time it advised it would withhold around 30% of my bill payment commission to advertise the service. No advertising has been done. I want the 30% back so I can put it to better use in my business.

In the meantime, I am contributing to a group legal action against the company.

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Bill Express

Empty lottery scratch ticket bay

scratch_bay.JPGWe are out if instant scratch tickets as are most newsagents and other lottery outlets in Victoria. Tattersalls say we cannot use the space for anything else even though they do not have new product approved by the State Government for this space. Premium counter real-estate is left looking pathetic – see the photo I took yesterday.

Tattersalls is not responding to our concerns nor is the State Government. While these two parties ignore the problem, retailers are left looking bad to their customers. I think we will have to take matters into our own hands if we are to maintain a professional retail presence at the counter.

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Lotteries

Apple’s iPhone a classifieds medium?

Steve Outing writing at reinventingclassifieds.com speculates that the Apple iPhone could be a good platform through which to deliver access to smart classifieds.  His Garage Sale example demonstrates how the iPhone and other similarly enabled devices can kill many categories of print classifieds once handset use is widespread:

Design a garage sale iPhone app that will pull in ads for local garage sales and map them. (This app would — no, must — bring in ads from the local newspaper AND other sources, especially free-classifieds sites like Craigslist and Kijiji.) Utilizing iPhone 3G’s new GPS functionality and ability to show map directions, the app would be a fantastic tool when driving around on a Saturday morning looking for garage sales.

The arrival o the iPhone in Australia is very exciting.  It is a disruptive device to old media businesses like newsagencies and maybe we will start to take notice of how the world is changing.

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Media disruption

eziPass stand alone shipped to first 50

The eziPass stand alone product, a platform competitive to Dialtime from Bill Express, was shipped a week ago to 50 newsagencies in advance of wider release. This is in addition to the 500+ Tower newsagents using eziPass integrated with their point of sale software. The free eziPass platform can be installed on just about any Windows computer with a broadband connection. It turns the computer into the equivalent of a Dialtime or ePay type terminal – dispensing phone cards and other product.

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phone recharge

Jamie Oliver mugs in Frankston

frankston_mugs.JPGThe team at our Frankston newsagency has claimed ownership of the new range of Jamie Oliver mugs we have. Each mug has a saying like I’m Single, Dead Handsome, I’m Cooking. Someone at our newsagency has allocated mugs to team members based on these sayings. They are great gift, a perfect add-on to a card purchase. I really like the personalisation of the display at Frankston.

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Gifts

Best of British promotion

The folks behind six British magazines have a promotion running across the titles under the banner of The Best of British.  I like the offer because it promotes more than one title.  I also like it because it connects with a demographic which is successful for us.  My only disappointment is the card insert in the magazines themselves.  A ratty insert for a Beautiful Homes magazine is not a good look.

uk_mags.JPG

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magazines

Bill Express and the ACCC

The Queensland Newsagents’ Federation is engaged in dialogue with the ACCC on behalf of newsagents on the Bill Express issue. This has developed as a result of the advice provided by the QNF to its members around two months ago. Many newsagents have written to the ACCC expressing their concerns about the recent removal of rebates by Bill Express and providing details of information and representations on which they relied in deciding to sign the Agreements.

The QNF has graciously offered to funnel relevant Bill Express information to the ACCC on behalf of any newsagent. If you have information you may consider relevant please make contact through:

Ann Nugent
CEO, Queensland Newsagents Federation
58-62 Pineapple Street, Zillmere Q 4034
P: 07 3862 7100 F: 07 3862 7111M: 0488 763 236
E: anugent@qnf.org.au

Alternatively, newsagents with concerns about representations made to them prior to signing agreements related to Bill Express which have subsequently been found to have been misleading could write direct to the ACCC.

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Bill Express

Promoting Dolly magazine

fhn_dolly.JPGDolly magazine is our counter promotion this week. The free Napoleon Perdis Lip Gloss is a perfect giveaway to drive impulse sales.

The Perdis brand is promoted on Fox8’s Australia’s Next Top Model. We expect brand recognition to be high even among parents. This counter display will be seen more by parents than the usual (younger) Dolly consumer.

Understanding the back story to gifts with magazines can be helpful in making suggestions to customers.

We did not receive point of sale material for Dolly. We created what you can see in the photo.

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magazines

Selling Optus prepaid

selling_optus.JPGWhen we realised that the best options for selling Optus prepaid was to revert to physical stock we groaned. Today, eight weeks on, it is working a treat. Selling is much faster than through the Dialtime terminal. Scanning the cards gives us good stock control and the supply chain is more cerain. We have managed around our initial frustration and everyone is happy.

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phone recharge

Software training for newsagents

jt_training.JPGTower Systems‘ free online training courses are a real hit with newsagents. Hundreds have participated from the comfort of their homes and offices. Courses covered so far include: magazine management, new newsagent training, stock management, magazine returns and putaways. We have also run training sessions for suppliers with staff involved from different state offices.

One of the two sessions covered yesterday was on stock management. Jonathan Tay, pictured, led the session. Eight newsagencies from around the country participated. This is what makes online training valuable – we are able to connect newsagents who would otherwise not talk with each other. Connecting them as we do opens more possibilities for fresh business ideas.

One reason the Tower courses are rated highly is the technology purchased by the company to ensure the best possible attendee experience. Tower uses tools from WebEx. While these are expensive, the experience is better and the knowledge shared therefore more valuable. People who have had bad online training experiences have usually been using cheap online training software and infrastructure. This is not something you can be cheap with.

We are developing more online training and expect to announce new courses to the 1,500+ Tower Newsagents next week.

Tower continues to offer face to face free training as part of its user meeting program, having just completed a thirty city tour across the country. We also continue with our free face to face training for new owners out of each of our offices around the country.

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Customer Service

The Age, now also on your mobile

age_mobile.JPGThe Age yesterday had this flyer inserted with the newspaper. This is a clever promotion around access to The Age through Telstra BigPond on a mobile phone.

I am thinking of framing the flyer and putting it on the wall to remind me and others about the future of news distribution. Newsagents need this image to be top of mind as they develop their business plans.

I have nothing against The Age on this. They need to pursue readers wherever they can. Cross-promoting with Telstra makes sense.

Across at The Australian yesterday I saw a different take on the distribution of news in the form of another ad from the Newspaper Works.

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Media disruption

Newspaper mugs a hit

newspapermugs_a.JPGWe have had these newspaper mugs in two of our newsagencies for less than three weeks and they are selling well. At Frankston we have sold 17 and at Forest Hill We have sold 12. Without any special promotional effort. We have placed the newspaper mugs near our greeting cards because they are a natural add-on o a card purchase. We would not have discovered these mugs had we not attended the Gift Fairs and seen the products which gift shops look at. Gifts is a challenging category which needs careful management attention and plenty of trial and error if it is to work.

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Gifts

Bill Express, who knew what and when

While the future of Bill Express remains unknown – the company extended its trading halt another five days today (groan) – the hunt for evidence and for people of interest by those behind several possible court and other actions continues.

Prior to joining the Board of the Australian Newsagents’ Federation in December 2003, I was provided Board minutes and papers for the previous year. This covers the period during which the Bill Express decision was taken. I have a dilemma around what I should or should not do with the information to which I am privy. In navigating my dilemma I need to consider my obligations to the “Company” as well as my obligations to its shareholders, newsagents. These considerations are complex for many reasons. I am certain that I am not the only former Director or officer of the Association with the same dilemma.

At least three legal briefs are being prepared around the issue of whether newsagents were deceived or misled into signing agreements for the Bill Express service and if so by whom. At least two Government agencies are asking questions of newsagents and others who may have evidence on which a case could be built. Three reporters are asking questions, two about the company and one about what due diligence was done (or not done) prior to the offer being put to newsagents in 2003. As I said, this is complex.

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Bill Express

Kleins and newsagents

Newsagents should read the report in The Age today about the closure of the Kleins jewellery group corporate stores and the re-branding of franchise stores. Philip Hopkins’ interview with Administrator James Stewart of Ferrier Hodgson is telling:

Mr Stewart said Kleins had failed to stay relevant to its market and customers. Its stock was not fresh.

My question is how relevant are newsagencies? Not how relevant do we think we are but how relevant are we? Consumer research data by at least one major supplier to newsagents suggests that our relevance in the minds of consumers is fading with time.

“In the past few years, new competitors such as Diva and Groove have appeared,” he said. The changing dynamics were reflected in the companies’ respective websites.

“Diva’s website offered a more sexy vision than Kleins’.”

Most newsagents don’t have any web presence. The YourNewsagent website is an excellent initiative for newsagents to at least get a basic web presence up and running. The Find It free online classifieds business for newsagents project I launched a couple of years ago failed to attract interest from more than 30 active newsagents. Newsagents need to understand the need to be online before it is too late. Once there, they need to be relevant and to evolve – in a way that Kleins did not.

Stewart’s comment about stock in most interesting for newsagents to consider. How fresh is our stock, especially our stationery? I know from data I see that many newsagencies have stock which is years old. In today’s market, stock which is six months old is too old.

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Newsagency challenges

Photocopying a fading service

pcopier.JPGFrom data I am fortunate to see from a range of newsagencies, photocopying revenue is falling in our channel.  It was down year-on-year in two thirds of newsagencies participating in the recent sales benchmark I undertook.  The average fall was 20% with the lowest 5% and highest 48%.  I put the fall down to the lower cost of computer printers, the lower ownership cost of copying machines and more players offering discounted copying.

For newsagents, the copying service is all about convenience and the personal service many of us provide.  These are reasons why we can charge more than Officeworks and others.  In my newsagencies we have established a common price list at the higher end of the usual newsagency offer.  While it may seem counter intuitive to charge more for a service people are getting elsewhere based on price, we need to consider the cost of having the service and the reason people come to us.

In addition to the pricing issue is the efficiency of the product.  Around 75% of copying in newsagencies for which I have data the service is provided with nothing else in the sale.  This is what I mean by it being inefficient.  You’d think that a service which usually involves conversation would result in up-sell.  No, it does not in the majority of newsagencies.

We will watch the return achieved and if we don’t make what we need per square metre we will re-think cutting the service altogether.

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retail

Staples wins Corporate Express

The boxing match appears to be over and Staples has won its battle to acquire Corporate Express.  I expect this to lead to the most significant shake up in the stationery offer Australia has seen since Officeworks first opened.  Now is the time for newsagents to work on their stationery story, it will be too late in a year when we may be staring at Staples opening here.

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retail

The real Treasures of the Earth

treasuires_real.JPGYesterday was the lucky day for one of our customers! Of all magazines to have an unexpected bonus it had to happen to Treasures of the Earth. Perfect!

One copy of issue #10 of Treasures of the Earth which arrived yesterday had sealed inside the package with the Galnea, a plastic shelf fixture – circled in yellow in the photo.

Now if only this piece of the warehouse shelving system was in the shape of a famous person or a religious icon. Then we could have sold it on eBay.  It did give us a laugh though.

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magazines

Cashing in on Kung Fu Panda

kung_fu_panda.JPGThe movie Kung Fu Panda is getting plenty of press here even though it does not open until June 26.  Hallmark cards has the licence so there is an excellent promotional tie-in for many newsagents.  The gift bag featuring the panda character is fantastic – when you open the flap at the front the panda just about jumps out at you.  It is around card and gift licences like Kung Fu Panda that we can drive sales outside of the traditional card and gift space.  Connecting with hot licences adds credibility to newsagencies with the target generation of the licence.

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giftwrap

Stalking in blog comments

Thomas T, Mary Perna, Mark Anonymous, Ron Johnson, and Robbie Mascon, a specific group of people who have posted comments here over the last two months, are all posting from the same IP address.  This suggests they are either living together, working at the same office or that they are all the same person.  The email addresses they have used are: thommo69@optushome.net.au, mperna2@gmail.com, mark.anonymous@hotmail.com, Privacy@preferred.com and robbiemascon@live.com.au respectively.  The IP address is 58.161.17.183.

Most of their comments are puerile and malicious.  Why they stalk this place when they clearly don’t like what the read is a mystery.  One can only speculate as to their agenda, especially given one stream of comments which was deleted for their own protection.

Anyone standing on a soapbox and sprouting their opinion has to be open to debate and criticism.  Others participating in public debate owe it to all participants to be on-topic, fair and honest.  If they don’t like the speaker or have an off-topic axe to grind, they ought to move on.

I am all for open discussion.  All I ask is honest identification of yourself and genuine contribution to the topic at hand.

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About us

Tattersalls vs Intralot and retail space

fhn_scratch_bay.JPGI was interviewed last night by Mark Hawthorne for his report in The Age today about how Tattersalls is treating its retail network over the handling of allocating space to Intralot. Jon Faine on ABC local radio in Melbourne today covered the Tattersalls / Intralot story from a different angle and interviewed a Tattersalls agent from Cheltenham.

Media coverage of the challenges facing newsagents and lottery agents is most welcome. In my own case, Tattersalls is demanding I follow a rule book which the company has conveniently ignored for the last five years. The space I have allocated to Intralot is space I have used for other products all this time. Now, it suits Tattersalls to dust off the rule book and threaten my livelihood and that of all stakeholders in my newsagency.

Silence from Tony Robinson, the Minister for Gaming in the State Government is deafening. Having created the challenges for small businesses, his government appears to care less about the business owners, their employees and the families which rely on them.

Commonsense ought to prevail. Tattersalls ought to have business rules which focus on our sales performance and not the real-estate we allocate. It suits me and them that I and my team do this.

The photo shows one of our scratch ticket bays this morning at Forest Hill. We only have two packs of scratch tickets left. Tattersalls has no new product for this and currently does not have Government approval for scratch ticket product. Why they demand we keen this space vacant for them without a revenue opportunity is beyond me.

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Lotteries

Network rewards tech savvy newsagents

Magazine distributor Network Services has joined other magazine distributors and decided to drop paper based magazine returns forms for newsagents with compliant software and business practices.  This move is most welcome.  It gets newsagents closer to genuine time savings from returns scanning.  The less newsagents hve to interact with the Network website for tasks their sofwtare can transact automatically through to Network the better.

The company has also announced a move to weekly returns from January 1, 2009 – again for compliant newsagents.

These moves reinforce the need for newsagents to have up to date magazine distributor approved software and that its use is based on compliant business practices.  The benefits for newsagents, beyond time savings, are more accurate allocation, faster credits for returns and better business data on which to make decisions.

All of this is further evidence that DOS is dead when it comes to newsagency software.

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magazine distribution

Magazine workshop for newsagents

mags_wshop.JPGI have put together a magazine workshop for newsagents which looks at retail and online trends and presents strategies newsagents can use to grow magazine sales. The goal is that by the end of the workshop each newsagent has an action plan of changes in how magazines are managed and marketed in their business. Most of the changes I discuss do not involve any capital expense and only a small investment in labour.

With magazines considered by most newsagents as a key point of difference they have over other retailers, I figured it was time for us to manage the department as if we believe this.

The workshop is free. I’m happy to present it to any group of fifteen newsagents or more. If you are interested in a magazine workshop in your area, please contact me.

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magazines

Fairfax launches online paper in Western Australia

Fairfax launched WAToday online newspaper for the WA market yesterday. WAToday joins Perth Now, an online paper launched by News Ltd last year and Perth Norg, a citizen journalism site service Western Australia.

Not so long ago a publisher wanting to enter the market would have needed printing presses and an expensive distribution infrastructure.  Today, the barriers are all but gone and new markets can be opened for little in the way of capital investment.

Newsagents ought to take note of what has just happened in Western Australia and what happened last year in Queensland.  While our channel is important to newspaper publishers, we are not part of their current expansion plans.  We have to make our own future, as it should be.

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Media disruption

Borders to discount magazines in UK

Borders is to discount magazines in its stores with a buy one get another at 50% off deal during Magazine Week in the UK.  I am not sure how I would react to that given that more than half magazine sales in most newsagencies are two or more magazines.  If it is genuine incremental sales we want we would need to do something like buy three and your fourth is free.

While Borders claims their campaign is the first discounting across all magazine titles, here in Australia, our Magazine Club Card launched in mid 2004 is the first.  It’s still running at Forest Hill where we started it as well as all newsXpress newsagencies where yeasr on year same store growth is considerably above the industry average.

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magazines
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