Here is evidence of the power of the Australia Post monopoly. I took the photograph below at 12:20 on yesterday (Saturday) at the Government owned Post Office opposite my newsagency. Most people are prepared to wait in this line which snakes through the Post Shop because of the monopoly Australia Post has on a range of products and services. This monopoly lands these poor folk into the Post Shop for a fraction of the cost of landing people in my newsagency. This comparison is relevant because Australia Post, now more than even, is chasing traditional newsagency lines of stationery and greeting cards. If they had to land customers for these items without using the protection of the Government monopoly they they would not be chasing small business newsagents as they are.
A government concerned about small business would not allow the monopoly it grants to be abused by taking business from small businesses like mine.
Having spent a considerable amount of time reciently in line at the Post Office, I’ve had some time to think about this.
AP have been retail smart about it, a considerable amount of the product they sell is in quantities that allow people to make an impulse purchase while in line waiting to do their business. A big contributor to this is that AP tend not to have queues for people doing mail only and people paying bills meaning that the queues are longer as the processing of bill payments is longer then posting or picking up mail (especially when people are paying multiple bills as you often see at the Post Office).
Why should your industry be protected from Australia Post encroaching your space? What about the large retail chains that severely undercut many Newsagents offerings in price? Australia Post is there to deliver a dividend back to the Government – its little wonder why your complaints fall on deaf governmental ears.
But in saying that, in some locations Australia Post are convenient both in location and in their product offering (especially in regional areas).
Thomas,
I am not calling for protection of newsagents. Rather, I am calling for the Government to stop abusing its monopoly to deliver an unfair advantage to Australia Post. A level playing field is all I seek.
mark
Now I could be mistaken but aren’t the very stores you are unhappy about Agents for Australia Post not Australia Post itself therefore small business owners like you are??
That being the case could you not have diversified into that franchise yourself? Argument could be made that a model of offering Line of Business software with hardware & support unfairly excludes small Local IT shops access to 1400 Newsagencies
David, you are mistaken.
My beef is clearly articulated here as being with the Government owned Australia Post retail network, not the Licenced Post Offices to which you refer.
I tried to buy the government outlet which competes with my newsagency but they advised it was not for sale.
I am not sure about your oblique reference to my software company in your comment. Tower is happy to sell just software. Maybe your beef with us is misplaced.
mark
The Photo you show could easily be the Post Office down the road from my house, which shares a common wall with a Newsagency. This one IS owned by a Husband and Wife small business, so the photo lead me to consider what open competition looks like and this is a possible afront to folk who have bought business like these people did.
Now to ask about the software part of your business is to discover how you feel about support of SMALL IT companies that have a limited number potential clients (Mine does not fit that category) I read this blog to understand the issues of clients I have who are Newsagents, not Tower customers so I will try to keep my jaded experience with your compeditors from clouding the conversation.
So then lets look at the small one man IT company, I want to deploy systems using Windows Deployment Services and have light touch rebuilds for registers and all other PCs this ensures time to repair SLAs can be met. This is hard when you walk into a site that has been built by the LOB vendor especially if they are hopeless, even if they are not the client is paying for LOB application support meaning 99% of the time the IT Pro has to prove the issue is not theirs before the customer will call the ISV making it an expensive triage process, not good if the IT Pro is offering a fixed price manged service.
Long story short when you offer Software with Hardware and Support you are doing the same thing to the people in your Software Queue, stopping them from looking elsewhere for potential better support for the Infrastructure. Happy to talk further off Blog if you wish.
So my analogy is Australia Post is using leverage that you don’t like, and Billy Bobs IT and Bait shop may well think the same of you.
David,
Again, I am always clear here to write specifically about the Government owned retail network. If LPO owners read my words they should not be afronted.
Your analogy of Australia Post being like Tower Systems is grossly flawed. Tower offers newsagents a complete solution. We also willingly sell just the software – as long as the hardware supplied is to our spec and setup exactly as we require. We are strict on this since it is our team who take the call at 4 am and not the locak hardware supplier.
Mark
I’m out of the office for the next few weeks but I might take this further with you. When I get back in Private.
I see some convergence in attitude to local support organizations between your organization and the sub par one I am forced to detail with often.
I understand that your service organisation may be unique in your niche but you are mistaken in thinking you should not be seen in similar light to Australia Post for Network Support Companies you did appear strongly in a Threat Risk Assessment as to continuing in Retail support of all descriptions as did your main compeditor in Pharmacy. It is difficult to compete with even a poor solution that budles with it’s LOB Application.
I will revisit with you privately.
Before People think this is a Pick on Tower thing… Let me clarify…..
I Read this Blog because I have customers who are Newsagents and Mark seems to have the best content for that Industry. I have surveyed a number of Newsagencies and those who have Tower LOVE IT..
I have a greater understanding of the Newsagency Industry and the issues with Distribution and Supply not to mention issues that have impact on my customers cashflow etc which makes it very clear where I can help these customers succeed.
Where Mark and I need to come closer is the persecution he feels newsagents are under from Australia Post, what I am saying is every business has an Australia Post in their circle for Small IT Support companies with a retail focus Tower and some others would be seen like that.
I just think this blog adds heaps of value when Mark focuses on how he does things and why. When he says this bully is taking my customers I think there needs to be a contrast. Everyone has to compete with others offering similar goods and services.
Great Blog Mark I am continuing to read with interest.
David,
I don’t know what you mean by LOB.
Tower Systems does not sell to pharmacies and never has.
mark
Line of Business Application
You have News, Cycle, and Jewelers….
Your Biggest compeditor does News and Pharmacy
You both seem to see the Local IT Pro as a Hardware Dealer a big under estimation of what a partner ecosystem brings.
Let me think about this while I`m at TechEd and I`ll link here from my blog
David,
Our business must focus on our customers. This means being a hardware and software supplier in many instances.
The problem with local IT people is they are not all the same. We have been badly burnt as have many of our customers.
By the way, we don’t see POS Solutions as a competitor anymore. They have faded.
mark
You may have justification for this view Mark but from here it sounds just plain arrogant.
Which view do you claim sound arrogant Ted?
Your last comment…perhaps it may be true but…..
Ted,
For years I saw POS Solutions as a competitor but since they do not have software which meets all current standards set by suppliers it would b wrong to see them in the same space. POS can fix this but they have not for years. So, I see them as yesterday’s company. They can fix this – and many of their customers wish they would.
I don’t see my view as arrogant but I’ll leave you and others to judge that.
mark
Hi Mark,
I respect you view on this matter however I tend to disagree with you about the monopoly that Australia Post holds, to my knowledge only standard letters and the sale of stamps are protected under the act. Standard letters is not a profitable market and as for stamps I think they have the right to protect their services as they offer an community service. (Being a stamp collector, stamp fraud is also a big problem that most don’t realise)
As for their bill paying newsagents have Bill Express and Bpay offers a great online channel.
P.S: One thing I have noticed is that Australia Post is actually moving away from its stationery and greeting card range at my local South Melbourne outlet, it looks more like Medicare branch that provide a professional service.
Cheers
Rich
Rich,
Licenced Post Offices do vary their offering. My concern is about the government outlets. I don’t know who owns the outlet to which you refer.
the monopoly extends to the brand and it is the brand, plus exclusive postal services which delivers customers for less than competitors in the area of stationery and the like.
Yes, newsagents have Bill express. Australia Post aggression on that front stifled competition to a point that AP is massive by comparison.
Mark
Rich,
Yes your are right when you state only matters relating to standard letters and postage stamps are protected by the act. But, Australia post has used this basic protection, and leverage that comes from it, to build a near monopoly in the instore bill payment market. They also use this basic protection as leverage to negotiate lease arrangements unavailable to other businesses.
Although legal protection may only be extended to letters and stamps, it is this protection that allows them to build their monopolies.
As for Bill Express, well we all know that story. They still cant get the two major billers on board. I am of the strong opinion that Bill Express is currently unviable in the vast majority of newsagnecies.
It is interesting that we are all discussing the AP monopoly from a retail only prespective but I think we need to look at the depth of that.
Example : Yesterday I received in my letterbox an AP flyer titled High Tech, Low Prices.
I received this despite having a very clear and legible notice on my letterbox requesting no junk, unsolicited or unaddressed mail – please.
So whilst we’re thinking about the retail aspect, also understand that AP effectively disregards the requirements that ALL other businesses have to adhere to under the Direct Marketing Code.
They are getting where other retailers, both big and small aren’t allowed to. Now don’t think for a minute that isn’t a great marketing advantage.
And I guess that we pay for the cost of delivery via high postal prices in the same manner you pay huge rent and are required to be open for business Saturday afternoon and Sunday whilst the Post Office opposite is closed.
Yes, a level playing field is what Telstra are complaining about because the government is forcing one on them but AP are silent as they look down on us from up at the protected end of the retail paddock.
I took over a LPO and Newagency combined business a few months ago and from what I have learned so far”
1. The only monopoly Post enjoys is standard letters, postage stamps, and a few ID check services (passports etc). Letters sevice are loss making for australia post. It is protected because of the community service value. the area where Post makes money are bulk business customers, especially in parcel delivery areas, where competition is fierce but very lucrative.Postbillpay has peaked as more customers are moving on line.
2. The price of stationery products are not very competitive from Australia Post.Customers have better prices and choices shopping at newsagencies and other retailers like officeworks.
I wonder what is your practical suggestion regarding the monopoly? Restricting Post to only postal services?
As a career retailer and a sub postmaster for around 4 years I have followed this blog and the series of comments with interest. There is clearly great passion here.
In the UK the Post Office network is currently undergoing another readjustment because it is losing around £4 million per week! The UK network is made up by 3 elements, the ‘Crown Offices’ that are directly managed by PO Ltd and MUST be brought to a profitable situation by 2011, around 4,000 privately managed office that are profitable to POL and then the 10,000 or so that are supported by a government ‘Social Payment’ grant of £150 million per year.
Royal Mail that runs the postal service has lost it monopoly and several other carriers have setup and taken large parts of the profitable business market and are currently in an industrial dispute with the Communication Workers Union. So things are not that well in the UK currently.
This blog raises one or two questions for an outsider,
1. Does Australia Post receive any subsidy from government to support any of its activities?
2. Do their ‘customers’ really think about buying their products when queuing for extended periods or are they just glad to get the task done and to get out of there? Your photo suggested that they do not employ any sort of successful queue management if they allow the line to get out of their premises.
Han: Here are the options as I see them:
The Government sells its retail outlets to individuals.
The Government makes stamps and postal products available to other reatilers on equitable terms.
The Government gets its government owned stores out of the retail of other products – as is the case in Europe. See my earlier blog posts on this.
Mark
Steve,
More complete answers to your questions can only come from the shareholder – the Government. Australia Post is less than open.
1. The benefit is in the form of having access to one of the most trusted brands in Australia and monopoly services around which they sell stationery, greeting cards and plenty of non postage items. In my view, they breach the act.
2. I;m not sure what Australia Post customers think. However, they sell plenty of stationery which wold otherwise be sold by private enterprise. That the Government owned stores take this from private enterprise is what I do not like.
Mark
I guess Governments can never be trusted, anywhere. You may have got the impression that I do not the UK one in pretty low esteem.