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Newspaper home delivery summit

Given the number of newsagents who have handed back their home delivery runs this past year, newsagents and publishers ought to get together for a summit to discuss the situation.  Since the giving back is occurring more in regional NSW and QLD, the summit ought to be located in either area.

Publishers and representative newsagents ought to talk frankly about the problem, listening to each other and pursuing any idea, no matter how crazy, to chase an economically fair home delivery model.

Unless such newsagent / publisher  dialogue is engaged, more home delivery runs will be handed back without a plan.

My understanding is that for newsagents this is about money.  I was talking with several last week who handed back their runs because they were losing hundreds of dollars a week.  They had the financial data to support their claim.  They had approached the publisher in question to discuss operational costs and were ignored.  No one wins from a head in the sand approach to what is a real problem for regional newsagents.

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  1. Luke

    The issues about deliveries are far beyond money, we handed our runs back after the publishers actively targeted our existing customers and turned them into direct subscription without talking to us first, also direct supplying some of our bigger subagents. Money is one issue but the lack of respect shown by publishers for our hard work was the tipping point for us. Slaving away 7 days a week while at the mercy of late delivery and bad service as well as being kicked in the guts once too often had to result in a mass handback. Did they think that newsagents would cop it as well as a low commissions, bad mistake uncle Rupert and uncle Packer.

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  2. Darryl

    We had 2 paper delivery runs operating in regional Victoria. We delivered 15 newspapers each weekday on one of the runs, none on the weekends. The return trip for this run was 43kms per day. We did not see many of the customers at all, cheques were left in the box when they felt like paying, (some were 7-8 weeks).

    There were a few problems with stolen newspapers, leading to abusive phone calls and a demand for a replacement newspaper. The profit from the newspapers per day was $3.88c, the cost of delivery was $14.95 per day. After a lengthly communication with the customers, the service was terminated.

    The customers were not happy

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  3. Jim

    Luke – when you handed your runs back did the publishers make alternative arrangements or did they force you to do so.
    I lose in the order of $200 per week on deliveries and have sent supporting data to the publishers but despite follow-up phone calls and emails have heard nothing back.
    On past occasions when talking to the area manager about the issues, his standard excuse has been “Well you knew all this when you joined the industry”.

    Perhaps they think I’ll just go away and keep losing $10,000 per year until I exit the industry.

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  4. Shayne

    Jim, we certainly didn’t “know all this” when we joined the industry. When we went to Sydney for the publisher interviews at no time we were told that delivery fees were fixed at a ridiculously low level, and do not change no matter how much the cost of the deliveries increases through rising wages and petrol.

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  5. Brett

    I told them to take it back.

    Never felt better!

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  6. Luke

    Jim, When you tell the publishers you wish to hand the runs back, they demand a 6 months notice and no matter how much we protested they would not budge.
    We ended up helping another local newsagent to take it off our hands by providing run lists and customer details, this allowed us to get out early. We were not prepared to legally fight over the contracts, because to tell you the truth they are a load of BS all in the publishers favour.
    Also by helping out the newsagent that we now a sub agent for, it kept them on good terms. All I can say is if you have the power and no other newsagent wants the runs then you can apply the pressure.
    And remember magazine and newspaper contracts are separate, if you want to still deliver mags to subbies you can.

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  7. scott

    Luke, how many sub-agents would want to deal with two different people for their papers and magazines. If my current newsagent said to me that i need to get my papers elsewhere then i would be getting my magazines from them as well

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  8. scott

    Luke, may i also add that a newsagent should not have to lose direct supplie of papers just for making a sound business decission and removing home delivery from their business, I wonder what the ACCC has to say about this.

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  9. Brett

    Scott,

    My subbies are more than happy to continue their relationship with my shop for magazine supply. They know and trust me, thats more important perhaps than the number of suppliers.

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  10. scott

    Brett, do you make your subbies pick up their magazines or do you deliver

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  11. Brett

    I deliver

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  12. Mark

    We sold our run around this time two years ago. We were lucky to get what we did. I don;t think we would do as well today. Home Delivery takes specialist skills which in my view are incompatible with retail. mark

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  13. sa_paperboy

    The publishers don’t pay enough for the services they demand, and home delivery customers value the service more than they are (seemingly) willing to pay.

    The publishers of course have every interest in the world to think us greedy and flat out refuse to believe the data we present. They have their own cost pressures and distribution is just another number for them to try to cut as low as possible.

    That other distribution agents seem happy to work in conditions which are poor and unsafe, with a very low hourly rate when calculated realistically in a manner damaging to the industry as a whole reinforces the idea to the publishers that all people should work that cheaply.

    Adding the gross undercutting that most publishers do with their subscription rates I’m not surprised most retailers want out of the whole deal. The publishers devalue their own products and make it even harder for distributors to charge realistic amounts.

    I can’t even begin to imagine how a rural agency without the sort of density of delivery we have in our metro areas would be able to make any money at all from home delivery without additional delivery charges.

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  14. Brett

    A fair point actually, the longer we continue to deliver as we are, the less the perceived value and therefore the less consideration we will get. Therefore we should all stop. QED

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  15. Shane

    SA Paperboy

    Rural agencies lose heavily with each paper delivered, for us about 30c for each one that goes out the window. Others in our region are the same.

    Publishers refuse to give a subsidy using the excuse if they do it for one then all the others will want one too.

    The threat of no supply keeps everyone on the straight and narrow as far as the publishers are concerned. The Trade Practices Act has provisions to counter this kind of bullying but how does a diverse group of small businesses get meaningful action?

    Has anyone tried adding an extra 20c to each delivery to help make up the shortfall? What would the publisher do?

    What is the ANF doing about this?

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  16. SHAUN

    Iam in a small town and yes i do charge more for my deliverys and no one complains .There are 4 newsagencys in town and we all charge more than what the cities do . If i had to charge out what i am supposed to it just would not happen even with charging the extra amount you still run at a loss . I look at my delivery run as a way to get the customers into the shop as they often buy more things when they come in to pay there account .so if i didn’t have the run these customers would have no need to come to my shop and would go else where .

    and by the way our prices have been like this for years and the publishers have not said anything .

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  17. Shayne

    Shaun, it is very interesting that you can get away with charging more. Most of our home deliveries are on subscription so it isn’t possible for us to charge them extra anyway. Besides that, I guarantee that all hell would break loose if we charged anybody even 10c extra per delivery. I am still shocked at the amount of times someone will ring up and complain that their paper landed 3 feet away from where they want it to land – and these are customers that are getting 7 day a week papers for $2.70 including delivery.

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  18. SHAUN

    Shayne ,we only have a few people that are on subscriptions at the moment (they are chasing more of our customers though)those that are on subscription do get the cheap deal . We increased our delivery rate a month ago by 5 cents and we didn’t get any complaints and only one stopped and now they have it on a put away so they come in twice a week and pick them up . I think it can be easily justifed with the customer when they do complain that you explain the cost and what the cost would be if they came in every day at 3 am to pick it up .

    Yeah i get these complaints all the time about where the paper lands all you can do is say sorry i will see what i can do to fix it .I just wish that they could see what good us agents actually do ,like i have a few elderly customers that i take the paper to there door and if they are at the door i normally have a bit of a chat with them and you can tell they appreciate it .

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  19. Luke

    Scott, Brett is spot on, if you are upfront wth your subbies and have provided them with excellent service then they will stick with you. If push came to shove the magazine contract with the subagent does not allow another newsagent to deliver mags while you still hold the original contract. You are within your rights to seek compensation if another newsagent delivered mags to your subbies, magazine and newspaper contracts are separate, just because you dumped one it has no bearing on the other.

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  20. Jarryd Moore

    Luke,

    There is no right to seek compensation is another newsagent deliveres magazines to ‘your’ subagent. There is no teritorial contract with magazines, nor with the subagent.

    The subagent is free to choose who they get their magazines from.

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  21. sa_paperboy

    Jarryd

    There are territorial contracts with magazines. Network et al quite vigourously defend the territories. Not all contracts are territorial ones though with rights to supply sub-agents.

    They are a ‘first rights’ agreement though. If the existing territory holder refuses supply for reasons other than payment then the sub-agent site has the right to look elsewhere and yes there is no compensation to the contract holder.

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  22. Luke

    Hi Jarrod, as long as newsagents are run as independent businesses and not as an industry then it is a dog eat dog world. The reason the publishers can offload unwanted runs onto other newsagents is because some newsagents still try and send another out of business to secure more runs. This is an outdated practice but it is how people still think it is a case of ” he with the biggest run is the best”. In our town of 30000 people we have 8 newsagents, if this number was culled it would be an advantage to those left.

    We gave up all our runs including mags to concentrate on the retail side so it is mute point now but our original contracts with the mag publishers still included a territorial subagent clause, this may have changed but our contracts are pre deregulation and have not been updated by the publishers.

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