Further to my post on June 5 about restructuring newspaper distribution and whether I should sell my home delivery business and concentrate on retail, I have reached a decision. It will be sold, publishers willing. (Newsagents need permission from publishers to sell.) This will remove the conflict for time and capital between the distribution and retail sides of the business. Ever since the government forced deregulation of 1999 it was inevitable that newsagents would have to choose to specialise in one area of the other.
Deregulation has meant that my newsagency has many more competitors. While I agree with this, the deregulation driven by the government and overseen by the ACCC has left newsagents disadvantaged. We have less control over our costs than our competitors and this is killing the traditional newsagency.
The inability to recover the real costs associated with newspaper home delivery in a limited size delivery area made the decision clear. Every year in the ten years I have owned my newsagency the return from the home delivery side has fallen. Without any ability to control the prices I charge or the discounts offered for home delivery, the situation is not going to improve. Each special offer from publishers cuts the margin make if it turns a retail customer to a delivery customer.
The increasing price in fuel and the refusal by publishes for us to be ‘allowed’ to pass this on is also a key factor in this decision.
Some newsagents will say I am giving up by selling my run. On the contrary, this decision acknowledges where my skills and the skills of the team at by business at Forest Hill in Victoria lie. It frees us to leverage those skills to a much better return. It also enables another newsagent, more skilled and scaled for distribution, to take our small area and add value to their business.