Small Business newsagents in Western Australia are being forced to carry the cost of marketing campaigns run by The West Australian newspaper. They have established a fighting fund and have engaged lawyers to fight on their behalf following refusal of management at The West Australian to give back what they have taken away.
The current 26 week home delivery deal for requires newsagents to deliver The West for no delivery fee, leaving the newsagent to rely on cover price commission to cover distribution costs and provide a profit margin to the business. The problem in WA is that commission for newsagents is lower than elsewhere in Australia. I have heard of newsagents receiving as little as 16% commission – rarely is it above 20%. Back home on the eastern seaboard newspaper commission for newsagents is 25%.
By not paying delivery fees to newsagents for this subscription offer, the publisher of The West is taking around 60 cents away from the newsagency for each new customer. While that may not sound much, to a small business relying on this fee to cover labour, fuel and management costs it is significant. Newsagents can’t afford to lose this fee.
Newsagents were not told of their loss of a delivery fee until after the promotion commenced.
The West, on its pages, champions small business issues yet behind the pages they are ripping small business newsagents off. They are making newsagents carry the cost of their marketing strategy. The West ought to carry the cost of their marketing and not small business newsagents.
In Perth today I have talked with several newsagents about this issue. The financial and emotional cost to newsagents is significant. Some are at breaking point. It is a catalyst for at least one newsagent having their territory back to The West after decades of service.