A newsagent in rural Australia reached agreement with a newspaper publisher around six months ago to hand back their newspaper home delivery run. The publisher was unable to find anyone prepared to take on the run and has demanded the newsagent continue with the financially unviable run. The newsagent feels helpless in the face of legal threats by the publisher.
The newsagent does not control the margin on products sold nor the delivery charges to customers for the service. They also have little control over the costs of the business – labour, fuel and other costs. The only part of the business they can influence is the number of customers to which they deliver. However, the geography of the area means that additional customers would increase their losses.
I am sure this newsagent I have spoken with is not the only one in this situation. The problem lies in the contracts where the publisher controls both sides of the transaction and does not provide the small business newsagent with the ability to operate in a business like way. This is why my post from yesterday is important for newsagents.
How can you reach an agreement then turn around with legal threats after you, yourself (publisher) has now found out how unviable the run is???
The answer is : because you can, at the moment…..
I hope the Newsagent doesn’t sign anything.
When will the newspaper publishers work with newsagents and let the newsagent charge a fee that makes delivery rounds viable.
The publisher concerned must understand that the newsagent has to make money to keep going.
My guess is the publisher has found out that the delivery run is unviable and a total waste of time as they will never make a profit out of it.
I do have a sollution…………….
Charge a fee of 50c per item delivered. Here in rural Gympie it costs $3.00 to get a pizza delivered. That’s 1 delivery, 1 pizza, 1 driver, 1 car.
It’s called – USER PAYS
* Please note that my delivery round for newspapers went by the wayside 3 years ago, but I still delivery magazines to home customers and subbies.
I turned a $30,000.00 loss into a $12,000.00 profit after expenses.
Anyway, I’m going fishing for the weekend.
See Ya
The newspaper distribution model is broken. Newsagents carry considerable risk without the ability to control any business levers to mitigate the risk. This has been brought into focus over the last two years and is the reason so many are walking away.
There must be something else going on here. When we handed our runs back we were forced to give 6 months notice as stated clearly in the contract, as we know because they used it to force us to deliver for the enire term but it did not state 6 months unless we chose otherwise. So the publisher has nothing to legally threaten them with unless something else is going on?
Michael you are right. We must get rid of the publisher mentality “because they can”
It is absolutely bull da dust that this is happening, enforcing newsagents to perform a service that is unviable needs to go to the top of the list for rectification now.
In the meantime Warwick is right, in this instance user must pay to cover costs and this particular Newsagent must be supported by our representatives with the knowledge that they will be protected and represented all all costs.
Who is not hearing these mighty concerns the channel is experiencing, how come these types of examples are still occuring.
I don’t know the full situation, but if the agent was being pressured, they could reply with using the award wage for a truck driver, as a condition of the pressured contract, the publisher would then have to reassess.
It is because those that represent us have too much to contend with and don’t seem to have a clear plan. There is too much buck passing and bandaids.
No-one has submitted, as far as I can see, a priority list. I don’t want to see popular calls or feel good policies I want to see an organisation pick 2 or 3 topics and do them well and within a timeframe. The associations can’t take on all comers but they certainly should be picking the big items and sorting them out.
I am sure there are those who would agree that if an organisation could fix this situation blogged above we would all see some light and more importantly leadership. We have numerous challanges coming up but I for one am lost as to who can sort these issues out.
A newsagent in rural Australia? I don’t understand why you’re being so vague Mark. Surely you can say what state.
Great post
I agree our representatives have to much to contend with.
Your post Brett is spot on and to confirm it again, your post is spot on.
Derek
Brad,
What would you pick as the big items to deal with and what would you leave behind?
In my mind we have many issues that are extremely important to some but not all and other issues that are or should be extremely important to all.
(in no particular order):-
1. Modern Awards
2. News Ltd contracts
3. Golden Casket compulsory prize payout increase
4. Sunday trading in Rockhampton
5. Unfair dispute process with a certain supplier.
6. Newspaper Subscriptions targeted to existing loyal customers.
7. Oversupply
8. Suppliers/newsagents partnerships (?)
9. Current Cash Flows impeded by unfair contracts
10. Unfair contracts
11. Landlords/ leasing……….
12. Late supply
13. Promotions
14. Direct supply to sub-agents
15. Teachers subscriptions
16. call centres
17. etc. etc.
All of these issues QNF are addressing at the moment.
Day to day problems as well as future issues.
In the positive QNF currently have 3 member opportunities we are almost ready to announce to Qld newsagents. Opportunities to increase $spend per customer, opportunities to draw customers from outside your delivery area into your store and opportunities to gain back loyal customers from your competitors.
We are currently going through the due diligence process and will not introduce any of these opportunities unless we can be sure that what we are presenting is both good for the industry and that during the entire contract period QNF can be both accountable and transparent. They won’t be ‘one size fits all’ but they will be ‘horse for courses’ and you will be able to pick what best suits your business.
As far as the newsagent above, unfortunately he is a result of previous bad contract negotiation. State associations have the opportunity to fix this now. We are strangely enough, in a strong position to be negotiating. QNF have submitted our preliminary submission to Qld Newspapers back in March n – dealing with delivery fees and recompense. We are now ready to hand in a submission suggesting the direction our industries future should take.
With QNF/NANA/VANA being granted authorisation to collectively negotiate on a State by State basis suppliers cannot be seen to negotiate nationally.
With respect to this blog and the importance it plays in this industry. If newsagents feel that they have a suggestion/solution/idea as to how their association should be moving forward cc your thoughts to your State association.
If you have issues that you think may also be affecting other newsagencies reply and let us know.
Some affect some, some affect most, some affect all – which would you pick as the issues we should deal with as opposed with the ones we shouldn’t.
If this newsagent is in Queensland please contact me to help sort this out.
Ann Nugent
07 3862 7100
Ted, The state and other details are not important to the issue at the heart of the blog post.
Ann, Thanks for publishing the QNF view. Clearly, there is a difference between associations. One you demonstrate here is a preparedness to speak with newsagents where they are.
Ann
Thanks for the insight. Thanks for speaking outside your comfort zone.
As you have shared Brad was right our representatives have to much to contend with. With respect how did it get so big?
Ann,
You have listed 17 items. I include the etc etc becuase you have. 17 items is far too many to have a certainty on having these things completed. Yes the QNF have been fighting but on all issues above where is the timeframe to completion, where is the plan drop and move on if the issue has become out of reach. One point is the Golden Casket payout. They have flicked the switch here, is it now priority, has it got had d day or is it still to come?
Ann my post was to highlight that ALL orgainisations have taken on far too much and can’t deliver on completed tasks. And I stated I would like to see a smaller list that can be finished or move on with.
“What would I start with?” Attack issues that have larger interests at heart eg newspapers. I am no a delivery agent but I can see that if we can get resolution for the delivery agent we may all benefit. I do note that you have some points of interest to deliver, fine. I would like to see consistant leadership for the industry and yes I will raise these issues with you at an upcoming meeting.
Brad 07 55 377 606
I’m another newsagent in rural Australia loosing over $100 per week on home delivery. Speaking to the publisher, asking for assistance advise or help to rectify the loss only to be told (1) that if they could find someone else to take over the round they would not guarantee that I would be automatically be given a sub agency. (2) That I have signed a contract & it is my obligation to meet their terms & conditions. So looks like I’m stuck with it until 31/1/2010. Then the so called partnership will cease.