Which magazine distributor was busy calling newsagents yesterday, three working days after their August statement arrived, reminding them that the bill had to be settled on the 20th of the month? For most newsagents the first they know about the amount owing is the arrival of the statement. In some cases, the amount owing is more than the value of magazines sold in the shop from that distributor in the last month. It is this cash-flow negative scenario which is causing some newsagents to bail out of the industry. You can only overload the channel with average to poor product, tighten payment requirements and push your best product to competitors so much.
Many newsagents are at breaking point. The current Federal Government “looked after newsagents” through deregulation in 1999. The ACCC oversaw this process. All stakeholders ought to reconvene and assess then impact of their efforts. Either that or read about more closures and bankruptcies. The same federal Government has presided over a reinvention of Australian Post with their 865 corporate stores taking millions of dollars in business from newsagents.
Many newsagents are thriving and new stores are opening. My concern is for those in areas of tougher competition and where magazine distributors have not adjusted supply of titles outside the top 200 to reflect falling traffic. Such is the impact of deregulation.
A better call from the distributor yesterday would have been a discussion about how they could scale out more equitably so the newsagent has a chance to become cash-flow positive from their supply. Such an arrangement would include payment for labour and real-estate for titles with a sell through rate of 50% or less or a shelf life beyond 30 days.