I am concerned about reports of newsagent requests to hand back newspaper home delivery runs being blocked by a publisher. How can a publisher force a newsagent to continue offering a loss making service?
Publishers control most business levers in the newspaper home delivery service: cover price, the delivery fee charged by newsagents, additional revenue opportunities with the newspaper home delivery and cash flow. Publishers, on the other hand, make most of their money from advertising revenue.
I am aware of newsagents with runs which lose in excess of $200 a week. This is not a new problem. Indeed, publishers have been talking about this with newsagent associations for most of this decade. To date, there has been little real progress from a newsagent perspective.
I am guessing that publishers block the handing back of some runs because they do not want to carry the loss. Yes, let’s rely on the contract we have with these families and force them carry the loss. They did sign the contract after all.
For the health of newspaper home delivery, something must give – especially in regional areas where merging home delivery runs is not practical. One solutions which I put to publishers years ago is to ensure fair compensation for the service offered. Newspaper subscribers have shown that they are prepared to pay a higher price for the newspaper on their doorstep yet publishers refuse to permit newsagents to do this.
Blocking newsagents from charging a fair price for an excellent service is a factor in some good newsagents exiting our channel.
Unless the issue of fair compensation for newspaper home delivery is resolved in the next few months, the world’s best newspaper home delivery model will break up.
Politicians played a role in creating the current situation, maybe they could play a role in helping thousands of families across the country achieve an equitable outcome.
Unless you are the only newsagency in town and have no chance of becoming a subagent, then all the contract requires you to do is that you give 6 months notice in writing and there is nothing the publisher can do to stop you other then blow hot air and throw threats around.
However if there is no other place in town that will take you on as a sub then you have a decision to make whether or not you continue to stock papers. I do not see this as a negative becuase if you are the only newsagent in town this gives you heaps of leverage to get the best deal for yourself. Publishers do not want to go looking for other channels and are more likely to try and please you.
But be warned they will try anything to get you to continue delivering including all the threats under the sun, when we gave up our runs we took the contract to a solicitor and for a few hundred $$ he told us that all we needed was 6 mths in writing, this may have changed in the last few yrs but we found another newsagent that was more then happy to have us on as a sub and even offered me money for my machinery. For the 12.5% drop in commission we saved a packet in losses.
The service we provide is to cheap work it out it is cheaper than a stamp to have a paper delivered.Coming from a small country town with other newsagents in town we fear back lash if we were to stop delivering papers.
we are a small counrty town and cover a large delivery area we send our papers out with the mail courier and pay him the delivery fee as the area is quite scattered between houses, our problem is subagents, we supply 1 which is 35 km away, his papers were going with the mail as well but the shop sold and the new owners 1 of which is ex newsagent decided they were getting there to late so we had to make other arrangements so now we have to take them ourselves 70 km round trip, for 8 newspapers a few mags which he doesn’t always sell but this area is in our contract so the newspapers have told us so we need to do it. how unrealalistic are these people.
mistake in previous blog meant to be newspaper people. Fairfax and nationwide which have told us we need to do this
We have mail contractors delivering our papers and they charge 55c delivery fee (cost of a stamp). Every single customer is happy to pay this delivery fee. This reinforces what Mark stated. Home delivery customers would be happy to pay for this premium service that delivery agents provide.
When we were in the business of getting rid of our run we had customers tell us that they would be happy to pay $5.00 a week just to have their papers delivered.
The sooner newspaper publishers understand that consumers are happy to pay a fair price for a premkium service the better. Their vice-like control on what newsagents can charge is killing some businesses and making a good family life for delivery newsagents difficult to attain.
Mark
how do we bring this to a head?
Mark,
I believe that their view is they’ll only pay what they have to “not a penny more and certainly a penny less”.
This I believe will the case until such time as they can manouvre the change to what is best for them. I’ll bet the new contracts willenhance what I have just written. It’s about time we developed a better strategy than reaction to what they deliver. the “take or leave it” partnership has always been a tough “marrage”
May be better to live “de facto” or by mutual consent.
I Should add also that we charge 50c for delivery of our local paper without a single whisper of complaint. And it doesn’t break your arm every Saturday and Sunday either!
Andy,
The best way to bring it to a head is to develop a legal fund and get appropriate legal advice on the best way to resolve this in a way which is equitable for the affected newsagents.
Whgile I am no lawyer, I would have thought that there may be a case to be made around the contract binding you to a business operation over which you have little or no control and which the master party would have known from the outset would be loss making.
I need a answer of how to get to get rid of this run !!!!!!!!!!!!!!!!!
how do they know what we charge anyway 🙂
Brunemeister,
Call your association, I know that the QNF would be able to give you some advice if you live up here in God’s Country.
What I do not understand is why the Publishers will not allow us to charge more for delivery, when clearly, the public is willing to pay. This does not affect their product at all. If we were allowed to make a buck then there may be more support for home delivery. Contracts forcing us to lose money, will in the long run, disadvantage the public, moreover the disabled and the elderly. Wonder what the ACCC would think of that.
And Baz this is where I thin k delivery newsagents have an opportunity. How can a supplier dictate the price you charge, most of your costs and your customer credit terms without accepting any obligation for your costs?
I believe Mark, that the Publishers are digging their own grave by penalising Newsagents to deliver product. Sooner or later………..
Brunemeister,
Just handed back my newspaper delivery run this week and doesn’t it feel GREAT!
It wasn’t without it’s dramas, but eventually worked out well.
Please feel free to call me about this.
0447 765 050
P.S. I won’t answer at 2.00am – not there until 5.00am (Sleep -in!!)
I’m pretty sure that if newsagents refused to sign new contracts en masse, and publishers had to organise their own delivery runs, the fees would skyrocket.
bangers, what is it like to sleep in now?
i dream of sleeping in till 5am.
p
Y&G, my view is that we don’t need contracts.
We do need contracts mainly cause the “bar” is low and we are governed by the weakest link.
What we need is class action to right the wrongs perceived.
These newsagency issues seem to come back to newsagents needing a united front. Like if the state bodies and the ANF spent time dealing with these issues not competiting against each other.
When the ANF agreed to one on one contracts with the ACCC it sealed our fate. The ANF in all fairness then was not the same body as it is now. It was then an amalgam of the States yet to be formalised.Thereforeno intended slant on the current ANF.
I agree that you need the best of advice to understand what you can do legally to get a more equitable deal. You need it BEFORE you make decisions not after.
Contracts go with deliveries until the publishers find a better way of distribution. Kendle comes to mind. Time is on their side.
Peter, I don’t think that a united assocaition can resolve this. Historically they have shown themselves to be weak in dealing with national suppliers aandunable to deliver consistency. I include the year I was on the ANF Board in this comment.
Newsagents need to do their homework. If runs are inequitable and a publisher refuses you quitting the run, complain to the ACCC. Enough complaints from individual newsagents will attract attention.
on a positive spin about being an ANF member; if you provide a letter of proof of membership you are entitled to a fleet owners discount on the next new vehicle you purchase
newsXpress offers Golf fleet discount as well. I;d expect other groups to have this too.
im a mail contractor delivering papers our newsagent has just asked us to sign a contract what do you suggest i do its almost as confronting as our australia post contract
has this contract came about from this newsagents vs newspaper people debarkle