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newsagency management

Trump tariff moves starting to impact prices in Australia

I have been contacted by two suppliers in the last few days with notice that their prices are increasing as a result of tariffs imposed y the Trump administration.

Despite the claims by Trump, tariffs are paid by the importer, who passes them on in a higher cost of goods. One supplier has advised there will be price increases they are yet to calculate while another US based supplier has written with details on an increase to apply from April 1.

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Given the routes some goods go through, priced paid in Australia by some suppliers will increase. While some suppliers will re-route goods to avoid the US imposed tariff, for others this will be a challenge.

The reality is that the tariff moves by the Trump administration are having knock-on affects on manufacturing around the world, leading to significant supply chain disruption.

The Trump tariff move has been made, according to him, to stimulate manufacturing in the US. For plenty of these goods Americans will need to be happy paying significantly higher costs due to higher local manufacturing costs if manufacturing is moved to the US for even the log wages paid in the US are considerably higher than in China, for example. Some US suppliers have noted already, the tariffs are lower in cost than US based manufacturing.

Plenty of economists have explained the folly of imposing tariffs, that the additional cost is borne by US consumers and not the exporting country.

A consequence of the tariff move is more people becoming aware of where what they buy is manufactured. You only need to see some of the news out of Canada in the last couple of weeks to see the extent of the own-goal by the US. I think there is good opportunity here for a more nuanced buy local approach.

While the current federal government in Australia has said it will not impose tariffs on the US in retaliation, trade into our country is already caught up in the US moves. It’s messy and expensive.

In my own case we are making alternative arrangements in at least one instance.

The situation is fluid as we have seen in recent weeks. None of this helps with business planning.

Ugh.

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Newsagency management

Quitting MYKI in the newsagency, another agency line

At my Malvern (VIC) newsagency we advised customers earlier this week that we are quitting offering MYKI public transport ticket recharge services.

We will stop offering all MYKI services including card top-up from the end of March.

For years, offering MYKI services has been loss making, costing us more in time than the government pays.

Most MYKI customers don’t buy anything else, making it hard to justify the service.

We’re a business and need to pay our staff as well as rent and other overheads. MYKI is not commercially viable for us.

We understand this will be disappointing.

By letting you know now you have time to consider other locations for your MYKI services.

Thank you.

Your newsXpress Malvern crew.

This is the only agency service we offer at the business. They were doing it when I bought the business a few years ago and we kept it on so as to not disrupt the relationship with customers, just as we have remained committed to the $400K a year on magazine sales.

While MYKI top-ups offer good shopper traffic, it’s unprofitable traffic. Commission is small and 80% of MYKI customers do the top up and nothing else. Of those who purchase something else with a MYKI top-up, for most it is a newspaper, another small margin product (12%).

A review of gross profit contribution versus labour cost made the decision appropriate. It was made even easier by the decision, finally, by the government that public transport users will be able to use their credit card to tap on and off from early 2026. In the meantime, our MYKI customers have a train station where they can top up a few minutes from out shop.

It will be good to be finally done with this last agency line we have. MYKI customers tend to want to tell us their public transport challenges. They also expect us to resolve issues they have with MYKI and no amount of telling them we are not the company by MYKI time is spend being polite to them.

At this newsagency and elsewhere we are not chasing shopper traffic. While good shopper traffic can make you feel busy, it, too often, does not sufficiently support profitability. We are focussed on efficient business profitability.

Selling high ticket price high margin lines for which the business is known and sought out is more valuable than these micro margin agency lines.

I’ll take being profitable over shop business every time.

In considering all of this we have to let go of the shopper expectation of the shingle. Aussie newsagents can sell anything. Being bound by the shingle in 2025 is unprofitable.

The reaction to our MYKI decision has been one of disappointment by customers. They are grateful for the advanced notice and our convcersations around how unprofitable offering the service is.

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Newsagency management

The 10,000th blog post

While I’m not a big milestone person I couldn’t let this 10,000th blog post pass without comment.

What started on January 27, 2005 with a tentative first post has evolved considerably over seven years, 10,000 blog posts and 27,180 comments.

I didn’t really have a plan when I started the blog other than to write occasionally about life in my newsagency.  Within the first few months that changed as I realised I could use the blog to write about issues beyond my own business,  issues affecting the newsagency channel more widely.

I have learnt plenty along the way – from the practical of writing for public consumption to learning to be more accepting of alternative views to mine.

I think that my voice has changed as a result of blogging. I think that my other writing, away from this place, has improved.

I am proud of the blog being a record of some of the challenges (and opportunities embedded in these challenges) faced by newsagents, those who work in our businesses and those who work with our businesses.

I am pleased to have been able to use the blog to document appalling treatment by some of newsagents.

For what it’s worth, I think the most important issues I have written about are:

  1. Australia Post and the economic harm the government owned post offices continue to wreak against newsagents. Both sides of politics are to blame for this.
  2. The failure of successive governments, the ACCC and suppliers to be fair in their treatment of newsagents through deregulation. Today’s print media distribution model disadvantages newsagents while giving commercial advantages to our competitors.
  3. The failure of magazine distributors to provide a model which is fair. They hold us accountable for the financial liability yet do not provide reasonable business levers with which to manage that liability.
  4. The disruption of print media and the impact this will have on the traditional newsagency business model … and the opportunity for financially rewarding change.
  5. The failure of many newsagents to manage their businesses for day to day profit. Too many newsagents expect their pay day when they sell and do not realise that their pay day is today, tomorrow and next week … and that this determines what they will receive when they sell.
  6. The failure of the leadership of the newsagency channel: in 1999 to lead through deregulation; and,  in the mid 2000s to put the needs of newsagents ahead of their own ego and interests.
  7. The day to day … sometimes mundane stuff about hiring and firing people, customer theft, employee theft, how we did things, why we did things.  These narrow focus topics often led to some wonderful comments which added tremendous value to what I wrote.

I smile when a supplier contacts me saying that they rarely read the blog but have been told about a post relating to them … yeah. I know that posts and comments are being noticed when people complain about the blog or me in an ill-informed or derogatory manner.

This is a place of conversation. Everyone is welcome to join in. If I am wrong, tell me.  If you want to apologise, do so.

In terms of actual achievements, that is for others to judge.

We go into 2012 with some good progress having been made in 2011.   Morrison Media, Universal Magazines, Express Media Group (EMG) and Pacific Magazines are closer to newsagents in part as a result of engagement here, showing that publishers follow posts and comments and respond in pursuit of a more valuable relationship.

I don’t have a plan for the future of the blog, never have. I’ll write about that which I want to write about … to reflect the newsagency narrative and to help and represent newsagents.

I care passionately about the channel and its place in Australian society. What we have is unique, important and valuable. It is also vulnerable. We all in this channel need to work hard to combat our vulnerabilities and to play to our strengths.

To the visitors, 1,100+ every day, and to the commenters, responsible for 27,000+ published comments, thank you for being part of this thing.

Let the blogging continue…

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