Newsagents need to get serious about newspaper home delivery

The current newspaper distribution model in Australia was created and remains ‘owned’ by newspaper publishers. Publishers control the cover price of newspapers as well as the fees which can be charged for home delivery, who can own a distribution territory, whether territories can be amalgamated and (most) efficiencies newsagents can implement to cut costs out of the operation.

Until newsagents create a distribution system they own they will remain the working poor.

There is anecdotal evidence to suggest that around 80% of newsagents lose money from their home delivery operations. Few newsagents make even a basic wage for their effort, believing that the distribution side of their business is crucial to retail sales – a point I disagree with.

Publishers must be brought to the negotiating table by newsagents. They must allow newsagents to amalgamate territories. They must allow variable delivery fees based on real costs. They must free newsagents to be entrepreneurial in cutting costs and leveraging the delivery service. They must provide commercial incentives for newsagents to pursue home delivery growth – this means that newsagents must be given control over marketing in their territory.

The current home delivery system can see neighbours receive the same newspaper on very different pricing models. There is one suburban street where each of the five home delivery customers is on a different pricing model, meaning that the newsagent gross profit from home delivery services ranges from 12% to 25%. That newsagents have no control over pricing and marketing means they have little control over the profitability of their businesses.

If newsagents do not create a newspaper distribution system they own and present this to the publishers in the next two months they run the risk of being presented with a new model developed by publishers to serve publisher needs.