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

Blogging for government small business policy change

I have sent this letter to the Federal Minister for Small Business today in response to her inadequate response on Australia Post – see my earlier post today. I’m not confident of a considered original response. Here are what I consider to be the key points in this letter:

In 1999, your Government facilitated the deregulation of newsagencies. You took away our exclusivity and allowed others to cherry pick our top selling magazines and newspapers. As a result, newsagencies like mine have been left with a supply model which is fundamentally flawed and a significantly higher customer acquisition cost. Your deregulation has left newsagents severely disadvantaged.

I agree that deregulation of the supply of newspapers and magazines was appropriate. However, since you did not put in place any review process, you do not have data to show what a mistake you made and how much you have hurt this small business channel. Good governance requires you review the impact of such significant deregulation on the 4,600 family businesses affected.

Australia Post has seized on the deregulation you brought about and now your Government is profiting from these regulatory changes.

While Ministers in the Government say it’s an Australia Post issue and that they will not meddle, I say it’s a policy problem which they created:

Australia Post is selling products which fall way outside what is permitted under the Act. Their Last minute gifts catalogue, which was released December 4, provides proof. I have enclosed a copy for your information.

Australia Post is looking more like a newsagency every day. Newsagents cannot compete because we do not have the exclusive postal product which drives people to Post Offices. Australia Post is abusing its exclusive postal products and government ownership to the detriment of small business newsagents.

These are policy matters and go to heart of the Government’s small business credentials. I urge you to act for your small business constituents and not just an enterprise the Government wholly owns.

I know I go on about Australia Post a lot in this place. These are not the ranting of a lunatic. Rather, they are valid complaints by someone who feels the impact of a flawed Government policy and can see that it will cost jobs in small businesses.

Is anyone listening?

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Australia Post

Small Business Minister fails Business 101

The Federal Minister for Small Business, Fran Bailey, has responded to my November 16 letter about Australia Post. However, calling the Minister’s letter a response is inaccurate. One of her assistants has selected an off the shelf letter which is vaguely related and sent this to me.

My letter is specifically about the 865 Government owned Post Shop outlets and that many of the products they sell are not permitted under the Act under which Australia Post operates.

Rather than deal with my letter, the Minister reminds me that 3,611 Australia Post outlets are privately owned. My letter lists non postal items being sold by the Government business in competition with businesses like mine. The Minister writes about courier and related postal services. My letter raises the issue of Australia Post using its monopoly brand to land people in its stores for far less than I or any commercial business can. The Minister is silent on this.

The response by the Minister is grossly inadequate. It is a non response. If this were a High School assignment in business letter writing I would fail the student as they have not demonstrated any understanding of the original letter. From this letter I receive no confirmation that Minister Bailey actually read my letter nor that the Government understands the nature of my complaint.

The vague nature of the letter allows for the Minister an AWB type defence: she can claim she did not read my letter; that the response was prepared by an adviser; that her letter was factual.

There is a disconnect here Ms Bailey. I am a taxpayer bringing to you a serious problem caused by a Government owned enterprise, a problem which is costing jobs in small businesses like my newsagency. My take-away from your letter is that you care more about Australia Post than my small business. Your vague disconnected response is the latest in a stream of communication from this Government .

I urge the Government to amend the Australian Postal Corporation Act 1989 to limit what Australia Post can sell through its own retail outlets and to names postal items such as envelopes and Post branded packaging materials. Such would be the action of a Government committed to small business.

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Uncategorized

Magazines the hit of Christmas sales

Magazine sales were very strong in my newsagency this Christmas – double digit growth in the three weeks to Christmas Day. The main kick was in Women’s Interest, Crossword, Special Interest and Sports titles. Looking deeper, it’s in titles where newsagents do not have a competitor. Balancing the growth was a significant fall in computer, motoring and teen magazines.

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Newsagency challenges

Distribution is king – online and offline

Distribution, Content and NOISE is part two of an excellent piece by newspaper executive and blogger Brad Robertson, Vice President of Advertising for the Des Moines Register. I like what Brad has written for several reasons: he’s a newspaper executive NOT in denial!; his views are well thought out; he’s right to say that distribution is king online and offline; his writing is a wake up call to newsagents – if only the read it.

Like newspapers, newsagents need to invest significantly in attracting online traffic. Hang on, newsagents need to build online businesses first – now there’s a challenge.

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Newsagency challenges

Newsagents miss a lottery opportunity and put the network at risk

Last night’s OzLotto prize was a $13 million jackpot and such a jackpot usually means a sales kick of between 10% and 20%. Yesterday, I drove past many newsagent Tattersalls outlets which were closed. While this was good for outlets like mine in shopping centres, it sends the wrong message to Tattersalls. Newsagents, in lotteries, have a great traffic generator. We know from press reports last week that there is talk of supermarkets getting in on the action more. We cannot afford to demonstrate poor service. Those stores closed yesterday sent the wrong message to Tattersalls and to Government, they gave them a reason to think we’re not serious about gambling product. Hard as it is to open Boxing Day, the $13 million jackpot should have seen every store open and actively promoting the dream.

If we lose some or all of the gambling product we have today, in part we will have ourselves to blame.

Thanks to others being closed and o our marketing our Tattersalls sales were up 200%. While that makes me happy, that many in the network were closed is a huge disappointment.

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Uncategorized

Australia Post abuses Government ownership today

The government cannot have it both ways. On the one hand they say they have to compete and have presided over their Government owned Post Offices moving into many lines sold by others including newsagencies. Then, on a day like today, they operate like a public service business and close. This behaviour demonstrates abuse by Australia Post of their Government ownership and benefits available to them which are unavailable to businesses like mine.

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Australia Post

Tattersalls extended by a year but supermarkets circling

The newspapers today have the story about Tattersalls being given a one year extension of their lottery licence in Victoria. The stories focus on the profit Tattersalls will make without having to pay for the additional year in rights. Missing from the story is the joy being felt in newsagencies and other small businesses like mine today. The one year extension is another year of certainty of traffic. Tattersalls products generate huge traffic for my business and this extra year is most welcome.

Related: Two days ago there was a story about supermarkets possible getting scratch tickets. Yeah, supermarkets don’t have enough to sell and need scratch tickets. Not! Scratch tickets should not be sold in supermarkets. Any government approving this is a government which has no interest in small businesses and their employees.

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Lotteries

Christmas greetings

Here’s a Christmas photo I took of the team at newsXpress Forest Hill this morning. I hope their smiling faces bring Christmas cheer to all who visit here.

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Left to right back to front: Shaun, Luke, Jane, Steven, Laura, Lauren and Ben (the boss)

We’re having a good Christmas season. Cards, wrap, confectionery, calendars and even magazines are all up.

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Uncategorized

Newspaper bumper editions mean 100s of calls for help

Merry Christmas and thanks Fairfax. More than 75% of calls at my software company this week have been from newsagents asking how to handle bumper editions for The Age, Sydney Morning Herald and Australian Financial Review. Fairfax didn’t tell us about the bumper editions – they rarely do. We found out from newsagents last week, did further research and published an advice sheet by mail, fax, email and on our website. Because of the time of the year and lack of forward advice from Fairfax, newsagents are calling us with many questions. It’s frustrating being hammered with hundreds of calls every day this week for something which has nothing to do with us. The software handles it beautifully if our simple point-form instructions.

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Newsagency challenges

New free dating and personals site a hit

What’s a dating site got to do with newsagents? I’ll get to that in a moment. Check our the map below – 3LOVES offers a Google Maps mashup showing the suburb location of our members – it’s an Australian dating first and we’re the third or fourth dating site in the world to do this.

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We have attracted more than 1,500 profiles in just three weeks. We offer free: profiles, photos, videos, sound, winks and messages. Chat will be live soon too.

3LOVES is a social media site built to feed traffic to our Find It online classifieds and directory business. 3LOVES will provide us with a high traffic platform for use in advertising Find It and Find It ads online. This way we eliminate high cost pay per click advertising. We knew going into this online business that we had to control traffic generating costs as much as possible – hence our building of what seems, at first blush, to be an unrelated business.

Newsagents are our retail presence taking payment for ads (when we start charging) and promoting the brand in return for commission and profit share.

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Online classifieds

The year of the calendar?

The performance of calendars is dependent of many local factors. I learnt that last year when our sales were in the toilet while others had a bumper year. This year, with 66% less stock, our sales are up on this time last year. In fact, we’re chasing more stock. It’s a nice position to be in but one not really of our doing. Last year our centre had two major calendar discounters as well as ourselves. This year we have no competitors so we make the decision about discounting – and don’t discount. The challenge is to make it happen that way next year.

Our newsXpress calendar is proving a hit with more than two thirds of the $2.99 calendar sold – most often adding to an existing shopping basket.

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Calendars

Newsagent injunction against newspaper publisher extended by 7 days

Further to my Dec. 18 post about moves by a major newspaper publisher to take away the rights of a newsagent to distribute their product – such rights are the bread and butter of small business newsagents.

In a hearing yesterday I am told the judge in the NSW Industrial Court extended the temporary injunction another week.

It is disappointing but not surprising that newspapers will not publish this story. They’re not transparent when it comes to reporting actions they take, from time to time, against small business newsagents. I am not saying they ought to have no rights to protect their businesses but rather that they demonstrate transparency.

This is a big story – then guts of a small business being ripped apart by one of their biggest suppliers on the even of Christmas and for what, to someone looking from a distance, seem to be dubious reasons.

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Newsagency challenges

Anger at Australia Post holidays

Tasmanian Liberal Senator Guy Barnett (finally) takes aim at Australia Post closing their corporate offices for several days over the holidays in a story by Angus Hohenboken in The Australian and The Murcury. These extended holidays are further proof of benefits of government ownership. Australia Post retail is a mess, it’s delivering profit to the Government at the expense of small businesses.

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Australia Post

Employment ads moving online faster than expected

Borrell Associates has published a new report which predicts that online employment advertising in the US is expected to pass all other media, including newspapers, by year end. Editor and Publisher has more:

Advertisers are forecasted to spend $5.9 million in online help wanted ads compared with $5.4 billion in newspaper ads.

The 2007 outlook on online recruitment advertising report also found that online help wanted advertising is expected to grow to $10 billion by 2011.

The news isn’t totally bleak for newspapers: “If newspaper Web sites were counted as a single entity, they would control the largest single share” of online recruitment revenue at 18.6% or $1.1 billion, according to the report.

Well, the news is bleak for newsagents because they are not part of the online newspaper mix. This is not new information, that online advertising will pass traditional offline advertising, and affect newsagents. The speed of migration is faster than expected. Many in Australia will deny this is happening here – you usually hear this from within newspaper companies where they need newsagents and other offline partners to stay focused on the offline product.

Newsagents ought to go to the Borrell Associates website and access the free executive summary of this report. It’s a sobering pre-Christmas read. Once you;ve read the report, put the gloom aside and start to plan for your newsagency of the future.

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Media disruption

In store promotion drives growth in lottery sales

We’re tracking year on year same store growth in excess of 25% for ‘online’ (non scratch tickets) lottery products at our newsagency. This is, in part, due to our wall of dreams approach:

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We thought it would be a risk to have a $675.00 per share syndicate for the $33 superdraw on December 30. It sold out in a week and yesterday we started another. We find syndicate purchases are most often in addition to regular lottery product purchases.

We have the production of our posters creation of syndicates down to a streamlined process so as not to interfere with the more general management of the newsagency.

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Lotteries

Another magazine we do not need

mag_airports.JPGI thought this was a TV show, you know, stories about the going on in airports. Why produce as magazine and why import it to sell in Australia? I will not even try and sell the title – we received two copies and cannot afford to give a pocket of space to it. Where would I put it anyway? Travel? There’s nothing like it in travel. Range sells stock and this title, all on its own, would languish for a month before being returned.

This title should never have been placed with newsagents.

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magazines

Newsagents winning from IT investment

I heard this morning that almost 300 users of my Tower newsagency management software are now live with EDI returns with Gordon and Gotch. This is fantastic because it means they are at the most compliant possible when it comes to IT. The business benefits are: faster and more accurate magazine returns processing; faster crediting to their account; and, better sell through rates thanks to more accurate supply. Tower newsagents account for 95% of all newsagents live with EDI returns.

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magazines

Reader’s Digest oversupply: unconscionable conduct

rd_cover.JPGIn April this year I blogged about gross oversupply of Reader’s Digest by their distributor NDD. At the time, my supply had been increased without justification. As a result of my blogging, supply was reduced to a more reasonable level. Last week my supply quantity for Reader’s Digest was increased to a gross oversupply level again. I have been supplied more than three times what I will sell even in a good month. NDD and its computer systems know this. They have knowingly taken advantage of my newsagency and, I suspect, many other newsagencies. This is unconscionable conduct. It is the type of magazine supplier behaviour that newsagents ought to complain to the ACCC about. It is the type of conduct which places newsagents at a disadvantage as it removes cash from small businesses as they have to fund this gross over supply.

Newsagent competitors in the magazine category control what they receive. Newsagents do not. NDD will say that I’m wrong on this and cite many examples of how newsagents can control supply. My questions is how is such control evident in the supply quantity for Reader’s Digest this month? Following my blogging in April this year I reached agreement with NDD about supply quantity for Reader’s Digest. Barely eight months on and it is being ignored. I do not control what I receive. This disadvantages my newsagency.

Data I see suggests that Reader’s Digest sales are falling. If we allow for shrinkage (theft and other loss) the sales fall looks worse. Reader’s Digest is easy to steal given its size so I’d suggest shrinkage is above the average of 2% I see for magazines.

Photo source: reader’s Digest website.

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Blogging

Successful newsagents forced to undertake unecessary training

Newsagents with years of success are being told they must undertake an accredited retail training course if they purchase or open another newsagency. The course must either be a Certificate 4 in Retail or the Australian Newsagents Federation industry specific week long course. The requirement for conpetency training is established by suppliers who decide if a newsagent is to receive supply dirct from them.

When the training requirements were established in 2004, the suppliers (News, Fairfax, ACP Magazines and Gordon and Gotch) agreed with the ANF Board that existing newsagents of good standing would not be required to undertake the training. There has been no explanation to newsagents when and why this changed.

I’ve owned my newsagency at Forest Hill in Victoria since February 1996. By any measure it’s a success. To force me to undertake training if I buy another newsagency would stop me further investing in the channel. Respect must be shown by suppliers to successful newsagents of good standing. Requiring such training will encourage us to not invest again in the channel.

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Newsagency challenges

Tattersalls ought to share online revenue

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The email from Tattersalls is more than a courtesy reminder about their upcoming $33 million Superdraw. It’s a full on promotion and includes a link which gets you a ticket in the draw in just one click. The State Government in Victoria would do well to look at Tattersalls’ online strategies as it considers whether to renew Tattersalls’ gambling licence in Victoria.

I understand the need for Tattersalls to play online. However, that they do this without sharing any revenue with its retail network is appalling. We actively promote their brand every day; we build their database; we create the local buzz which the online strategy feeds off.

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Lotteries

Christmas conga line at Australia Post

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I took this photo last Friday at the Government owned Australia Post shop opposite my newsagency. The line snaked from the counter right back to the door. Two thirds of the people in line were buying non postal service items – picnic sets, calendars, Christmas cards and books. Many of the folks are in line because they need stamps and along the way buy these other items. Thanks to its postal monopoly, Australia Post is landing these people in its stores for far less than its competitors. No one cares – no one in the Government at least. They crave the Post profits more than a strong small business sector.

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Australia Post

Good Health re-launch a success

gh.JPGGood Health and Medicine, the relaunch, renaming of Good Medicine has been a tremendous success based on data I have seen from several newsagencies. In my own newsagency we sold out in under a week. The health category is showing strong growth, so much so that it’s time for retailers to consider re-location and consolidation. For example, it currently has its own area with cross-over into food, sport and women’s interests. Half the health titles are in other categories in the traditional layout – by combining we give the category stronger presence.

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magazines
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