I received a letter a week ago offering Reflex delivered to my office free for $4.89 a ream. No newsagent can compete with that price since we don’t have the buying power of a federal government protected monopoly behind us. We also can’t compete on brand recognition. Australia Post has great brand recognition because of their protected mail services. As they say, they are part of every day. They are only part of every day because the government protects them.
Successive governments, Liberal and Labor, have permitted Australia Post to morph into a broad retail network with a key focus on stationery usually sold by retailers such as newsagents.
Every dollar they suck out of the economy for Reflex and similar excellent deals is a dollar less small business newsagents and other retailers can make for private enterprise.
I don’t blame Australia Post. Their bosses, successive governments, have allowed them to run loose.
This is a policy issue. Politicians need to decide how they feel about a government owned and protected retail network of 865 stores using their guarantees customer traffic (thanks to protection) competing with independent retailers like newsagents.
If I were a politician building an election year campaign on working families I would want to make sure that I actually supported working families, like newsagents.
Mark, I think your off here. Big W for the past 18 months have been hovering around the $5 price point for reflex. The add for Aussie post also states that to get free delivery you have to purchase $50 of goods. Yes they can offer free delivery and not really suffer any great pain.
It just shows yet again that our industries extremely poor unity and our ‘stationary’ providers lack of understanding on how to help us grab additional space within the copy paper market. I can’t beleive that GNS can’t get a buying price that would give us a sell price of around the $5 price point.
I wonder how many more pallets of reflex stock would they sell if we could sell at $5? I know last time I offered the punter reflex at $5 we sold over a pallet in 3 weeks.
Yes your point is Oz post using its network to gain more leverage, I see it as why can’t our national stationary provider provide a competitive advantage to us.
Brad,
They leverage their Australia Post customers connection to negotiate better deals and get customers into their stores for a lower axquisition cost.
In terms of our channel, while GNS negotiates, it has VANA and the ANF competing with them and this makes their task mroe difficult.
And so the stationery situation remains stationary.
Brad, I agree with your point of view. Office works were selling Bright White ‘lazer IT” 80 gsm for $19.90 FOR 5 REAMS that is LESS THAN $4 per ream.
Brand name or not they were walking out the door, after all this is a cost conscious society, so why can’t we have our own Brand at this price?
Let’s lead not follow.
Mark,
If it could be achieved and I see why not it would interesting to see whether the house brand would be Newspower, newsXpress or generically GNS or whether it should be a new name for newsagencies altogether thus uniting our industry under one banner. Who knows, it’s just a suggestion to get us moving forward instead of complaining about our opposition.
Graeme,
I think you;re on the wrong track just as the ANF is on the wrong track.
We should focus on brands and they have the money to support us.
Newsagents should start by supporting the wholesaler they own. Competing with them is nuts.
As for Australia Post, it is government policy which needs to change.
Mark,
Not discounting what you are say with oz post they have an advantage that can be veiwed as unfair or just competition. I am bringing forward the discussion that we have a way of combating that advantage. Yes VANA and ANF have a rival business but how many do they really service? GNS has a much larger share.
Graham I do agree that brands here are the key. Today BRW highlights that point. Reflex through GNS or whoever have the ability to offer a more competitive price based on potential bulk of sales. This once a year business of special price is insulting when you look at pricing around the majors including oz post. The inital question to ask with type of debate is that if we were to get a better buy price that gives us the ability to sell this product at $5 would we do it? I would even if was value add such as buy 2 for $10 or 1 for $5.95.
N Stock are no threat really because of their low consumer base.
What really concerns me is the loss they make admisinstering the scheme in the first place. Members funds out the window again and not utilised for strengthening our Industry.
Mark,
I agree that all newsagents should support group always did and I also agree that Group should support its shareholders-newsagents if they can’t compete with branded merchandise as in paper and it’s only paper for goodness sakes then the generic brand neds to be invented.
Get with it or get out is what they say.
mark,
Comparing my thoughts with the ANF is ridiculous and unfair My statement was/is objective. You have yours and I could say you are comparing them with newsXpress which would be more commercial than mine for I have no commercial interest whatsoever.
Can you say the same?
Graeme,
You are proposing a house brand. the ANF has created a house brand. You both seem to want the same thing.
My post has nothing whatsoever to do with newsXpress.
By comparing one aspect of your blog (the house brand aspect) you then go on to say “newsagents should start by supporting the wholesaler they own etc.”
You didn’t separate one comment from the other. I differ in that, I believe BECAUSE , newsagents own GNS the we should be more newsaget focused in product-if as I point out it were to happen what would GNS do would they do as they do in catelogues put one out for Newspower -and another for participating newsagents? I am talking problimaticaly which would bring in newsXpress. wOULD THEY WANT A “BRANDED” product for their stores as Newspower do? or would not be posssible.
Irrespectively of you constant denial that this blog or your comments have nothing to do with your commercial interests they do as you wouldn’t have formed them (your commercial interests) if you didn’t believe. I don’t see anything wrong with you representing that it is your sensitivety to the subject and continued denialthat raises any problem.
I I make a comment about Selling newagencies it is because of my everyday experience as a Broker at the coal face. It doesn’t mean I am prommoting Newstrade it is simply sharing my experience.
I take your comment to be the same so why deny the source of your vast experience or opinion.
In the in mention my observation is that generic indentity is growing, rightly or wrongly, it is growing and in my opinion wwe should be apart of it as an industry especially whenwe are losing identity and exclusivity of product. You proudly and rightly so, pound the brand newsXpress and in doing so I don’t lump you in with Nextra or Newspower for I believe it is for somebody else to decide the difference.
mY THOUGHTS AND OPINIONS SHOULD NOT BE LUMPED IN WITH WHAT the ANF IS DOING for they are dividing the industry is VANA GNS. is different is is owned and supported by newsagents and can UNITE the industry with ONE BRAND such as ANCOL did in the 50’s 60’s and 70’s and part there of the 80’s
For four decades school children bought ANCOL as a brand.
This is what mt post meant not anything to do with ANF quite the contrary.
Graeme I don’t know what your agenda is with these sorts of comments.
No agenda Mark just discussion and opinion after all it is a Blog and sorry if my contribution is not what you want to read.
Graeme,
I take on a broad variety of views yours included. I see in some of your a comments an agenda when at the same time you accuse others of the same.
Mark,
I shoot straight so say what you mean and mean what you say for I have no idea what you are talking about.
I cannot understand in your rambling comments Graeme. Mark has not written what you inferred at all.
On topic, the last thing we need is another newsagent house brand.
That’s your opinion and it’s good that you can air it without being accused of an hidden agenda.
I respect it as you should respect mine.
i would like to see GNS office paper and price rrp $4.50 , who cares about brand nowadays and there is no such thing called ‘loyal customers’.
249787
i have a customer that buys about 20 boxes at a time that know they can get it a lot cheaper from AUS post but prefer to buy it from a local business . I can’t see why gns cannot sell it cheaper to us when you look at the volume they would buy it in, maybe they should sell it as a lost leader like they expect us to do with a lot of there cataloge prices when back tyo school comes out .
Mark thank you for writing about the importance of brands. Newsagents need to understand the value we bring through advertising, sponsorships and other support of the newsagent channel. Starting another house brand when the ANF house brand is failing would be dumb.
Dear undentified supplier. Many well known brands are only too happy to produce a generic brand or label especially when it crates new markets Wwolies Coles and a lot of wine brands do tis all the . To bring credibility to gthe discussion would you please identify yourself or produsct and just waht sort of back up in advertising you give in support of the newsagency channel.
Just to add fuel to the fire. Eric Australians buy using brand as a comfort thing. Numerous reports even as early as yesterday were suggesting that during the GFC. Australian consumers brought brand before anything else. The brands also got smarter and marketed differently. Again check out BRW latest issue.
Our issue apart from more in fighting than Taiwanese parliment is that we have a ‘industry’ buyer that now reports to share holders and won’t or can’t get more competitve. I knwo of a dozen or more agents that buy pallets of paper off BIG W when they do cheap Reflex. No-one has really answered as to why this is the case.
Graham you have a point GNS promote newspower and then at your local newsagent. Most of the time my group has a promo running which differed from that one, as does newsXpress and nextra. So who does GNS really represent? They are great at taking a 2% building levi for the good of newsagents. They are great at offering no real incentive to sell more other than the times that have been set in stone since adam threw his first paper.
does anyone know if Newspower get a better deal on stationary than any other group being tied up with them ?I can’t see why we pay that 2% what is it for is it to bvuild newspower of to make better deals for newsagents and if so why are we not getting the deals . To me GNS are a bit to comfortable and should start showing some real deals and not just at back to school ….
Shaun,
My understanding is that all newsagents buying from GNS get the same price for day to day stationery.
The 2% provides GNS with capital necessary to create the warehouse infrastructure. That newsagents own GNS is good.
Gns is happy to hear from newsagents. I know from my own experience. make contact with them and let them know.
Shaun,
It has always astounded me that GNS do not offer deals throughout the year. In comparison, supermarkets buying from the IGA>D warehouse get access to deals on stationery every week of the year.
I would be questioning why the 2% is attached to the end of the invoice. It just makes dealing with the invoice more difficult on the retailers end. It also makes price comparison more difficult. Why not include the 2% in the cost of the goods?
Jarryd,
If the price were to be included in the invoice it would distort the margin on mark up as ithe leverage payment is not a Cost of Goods.
Group is invoicing in the correct manner.
Graeme,
Although not technically a cost of goods, many (most?) newsagents would still include it as such (much like they would incorperate freight costs into the COGS). It is still a cost that the retailer incurs – it would be silly to not take it into account when calculating the profit margin on a product.
If the 2% were incoperated into the COGs on the invoice, margin would not be distorted – it would simply be calculated in the same manner that is used for every other supplier.
Not so Jarryd. I have explained Australian Accounting practices at source If newsagents want to add the levy in the margin that is between them and the customer. The same can be said for any margin they wish Your question was regarding GNS and suggesting that they invoice newsagents to make it eaier for them at the expense of accounting practice.
If it is not technically a cost of goods then it isn’t a cost of goods sold (C.O.G.S.) then it doesn’t reflect the price of the stock for sale.
Check with the ATO or a decent Accountant.
Graham, How ever you dice it, it is still a charge that harks back to the dark days. They want to act like big business and report profits back to share holder then they shouldn’t hide behind these types of charges.
In that instance, and I am taking it to the boundaries here, I should charge a 2% shop fit levy for every sale in this business. Yes over the top but it works on the same premise. I am responsible for taking the right ratio of profit to pay for a shop fit. No different from GNS. I would accept this from GNS if we were getting regular price based incentives to sell more stock. Why can’t they run the core ranges at a competitive price to Big W and Office Works? Building levies and claims that they support newsagents need to be backed up by some real action. Good reagular deals on branded lines that we can take back market share from the majors.
Brad,
That’s a commercial solution to the problem I am only answering the Accounting practice.
It seems to me from what has been discussed here that a whole lot of commercial based initiatives could be addressed, not only generic branding. Good to read such healthy discussion. It’s fair to say that if this industry doesn’t do something to improve its perception out there it will go to the back room where the elephants go to die.
Only today two Banks down graded newsagency loand one to 50% on G.W. only and the other to 40% with one other bank not lending on the newsagency at all only on property or assets with margin then only 80% on valuation-tough times ahead for some eh?
Hi Graeme
can you tell us more on what the banks are saying with lending for new buyers.
Greame,
Im not disputing that from a purely accounting perspective it is not a COGS. Like freight, I would enter it seperatly into our accounting system, but when intering it into our POS system would include it in the cost of goods.
My question is why does GNS not simply increase all their prices by 2% and remove the levy. Unless there is an accounting, tax or legal reason why they add the 2% as a levy at the end of the invoice I don’t see why they need to seperate the charge. If there is no such reason it would be simpler for everyone to not have the levy at all.
One can only wonder what sort of organisation GNS would be today without that 2% levy which by the way is really only a loan to GNS. When you sell your shop you will get it back. It is a capital levy for GNS to improve it’s capital services to Newsagents, not a cost of goods. Those of you who complain about the structure of GNS and its services to newsagents should seek to know it’s history and how it was started by newsagents in the back of a newsagency and the those who used to give up a day a month to work in the warehouse. You may then have a different perspective of what GNS is today and the principals under which it operates.
The principle that Group operates under has never been in question to me.
I was there when group took on the newsagents cause for more competetive prices and pricing to compete with the chains. That was 40 years ago.
Adjusting to the future can and should hold Group in the same esteem as it was held then. Mind you I think Group really earned it then for they created markets that did not exist.
I would like to see the same spirit reinvent that today.
After all it was built for newsagents by newsagents. Thre was no challenge too big for them and they can do it again they have the power, the infrastructure and the outlets.
OOPS Did not say that I agree with the 2% levy it has been incredible how it’s help its growth.
My comment is only on the accounting side of biling that and I agree with Group on that standard,.
Jas,
Banks want bricks and mortar security. Whereas in the past they would loan against the business, this is now happening less. The amount and percentage is very much dependent on individual circumstances.
Jas,
If you contact me at gaday@newstrade.com.au I will only too pleased to discuss current banking arrangements with newsagencies. Which bank and what is a significant issue.
It is much more than just security even though security plays a most important part it is also about the ability to repay.
This sets the interst rate that makes the loan serviceable
Jas,
I’d encourage you to talk with a finance brokey who specialises in newsagencies.
This blog was about Aust post hurting newsagencies but has turned into a squabble over GNS. No wonder Aust post sees an opening to attack us, same garbage different topic.
Luke have you ever read a blog post on here that stays on track it just about always moves on to something else and thats the beauty of it , you can bring up one issue that covers a whole lot of things .
i also see it that it is more of a problem with our suppliers than AP being a threat to us . I ask the question why does the reflex company choose to do a better deal with AP than GNS that sell reflex paper all year round and not just when it is on sale .
Thank you Shaun s. That is what I said some 40 comments back. AP is not the problem. Yes Mark, they are using the free post as a means of getting further traction. But how can all these other players in the market have regular deals in play with this brand and we get once a year specials. Our stationary warehouse is either unable to neg terms or they are pocketing allot of money to fund newspower promos. Harsh maybe but in 41 posts no-one can answer the question.
Great work Shaun, no wonder the industry is getting hammered from all fronts, keep playing your fiddle while Rome burns.
Luke what are you on about ?? you make no sence , i didn’t knock your comment ?
Brad,
Australia Post has 865 corporate owned stores and thousands licenced outlets. Their retail network is disciplined – because of the monopoly on postage. This monopoly is used as a stick to keep everyone in line.
GNS does not have this luxury.
how many newsagents does GNS service ??
Mark, the thousands of licensed outlets that you mention don’t have to sell the reflex paper at the Corporate rate, it is their choice.
The contract that the Licensee signs is the only stick AP has.
I’m sure my local newsagent has had reflex on special in the last couple of years for $4.99 with Newspower.I look at as a loss leader.
Clem I should have been clearer, the Australia Post retail network is more disciplined thaan newsagents. This is a key difference.
Surely the argument is the market place and are we in it or not. I don’t believe for a minute we are. GNS has had plenty of lost leaders for years and the newsagent won’t pass on the special price they’d rather keep the margin.
New entrants buy from overseas -they don’t buy branded product (sorry Mark it’s true) they like the margin. There has to be a shift in thinking or we will be dinasours. Every day looking at newsagents figures year to date I see problems. Most of it is lack of education of what can be achieved by different methods of retailing.
Some retilers are more successful than others even if they do not have a buying group to feed off. Others are more successful BECAUSE they have a buying group backing them- howver none will be successful unless they create an image for the industry. That means passing the product on as a lost leader.
Now, this is where I beleive that generic branding suits our industry and ciontrary to what has been said here it does not affect the supplier one iota in fact tyhe supplier makes more money-with a purpose related named brand we create identity and value, something which we don’t have now. The public will after consistent promotions of good product from reliable service at a price that is competetive accept our brand.
Does anyone here know how many different brands that one supplier owns and distributes at different wholesale prices depending on the volume purchased? Do we know if Edwards Dunlop has two, three or four different wholesalers that it owns that sells te same product under different labels at different prices?
Come on Aust Post are there and the market is some place else. Let’s get into the market and perform.
No need to apologise Graeme. I see established national brands as differentiators and something to leverage. I support the brands which support me in my stores..
It’s no apology Mark don’t be trite, dullnesss does not suit you. my view is consistent as stated in earlier posts it remains the same, it does not have to be all for one and one for all metallity. The big guys (suppliers) have many different wholesale products at different prices to suit different markets Question is are we apart of it?
Mark, I agree that standards across our channel are very loose and somewhat a delight to our suppliers. What I still can’t get is we have a National buyer/distributor of stationary that props up against that claim that they support newsagents. Well having a once a year sale on this particular brand is crap and poor support at best. I will however conceed that they must have been listening as our GNS rep yesterday showed me a greater arrangement of monthly specials that they have secured off the major brands. A small step but if we are to take back market share from Nationals we need better buying from our stationary buyer. Yes groups can do it but why when we have a so called champion of newsagents interest there already.
Also Graham I understand that you are in the Sydney market and I would agree that you would see buying from OS but the majority of agents still would not and could not access these markets. Lowest hanging fruit for the likes of GNS are these agents that are already their customers and thus they need to stimulate them first. Easy marketing spend and they have the links with major branded suppliers. Simple message GNS start getting competitive and what the agent does with that price is up to them.
Graeme you have become boorish on this and other threads. People who disagree with you are ridiculed. What makes you such a god?
David I don’t see your contribution and I don’t see ridicule on my say just debate Please contribute to the debate.If you’re referring to my remarks re Mark being trite that is tongue in cheek for trite means dull and Mark is never dull Sorry David, it is called humour Mark was using it when he said I apologised.
Yes the subject has become booring because of lack of debate. It probably has run its race but that isn’t my decision it is up to the participants like yourself that make comments to thers such as me.
Hi, Mark, Graeme and others.
I guess the problem is related to logistic.
If supplier can deliver 4 containers of reflex paper to a post office deport, and post office use its own logitstic system to distribute the papers to all AP outlets.
Supplier is benifited for a delivery instead of thousands delivery, and can pass the saving to AP.
One of our weakness is that newsagent retail network does not have its own logestic system.
Some retired newsagents had told us that many years ago, newsagents tried to organise an own logestic system for magazine distribution, and failed.
Imagine that a newsagent distirbution system, get the newspaper, magazine and stationery, and gifts from thousands of large and small suppliers, and distribute them into thousands of newsagent outlets. That will provide a solid base for cost saving and price negotiation.
These retired newsagents told me that GNS is a successful story for stationery distribution, and these ex-newsagents always have a dream of an larger GNS operation to other fields.
Loss leaders are part of lower-end price-driven markets … not the quality, middle market that most succesful newsagencies operate in. No price promotion that GNS currently facilitates (BTS or mid year) is run as a loss leader.
Trying to take on the competition using the same strategies as they do is a recipie for disaster. Differentiation allows us to be in the same same space as our competitors while offering things that they don’t (just as they offer things that we don’t). We cannot embrace generic branding because its market postition revolves around price. Price is a war we can’t win.
As Graeme says, public acceptance of generic brands only comes with “consistent promotions”, “good product”, “reliable service” and “[competative pricing]”. None of these things can be achieved on an industry wide basis.
a good example is GNS brand tax invoice statement book
Thanks Eric we are getting there
I was trying to get lowest priced paper for the brands so I can compete with the big boys. However, one of the suppliers (a well know brand name) tell me that I can get the same price as GNS gets if I only get one pallet a month. Officeworks (and I am sure others big boys) can get much lower price than I can. The biggest concern is why can’t GNS get the same price as Officeworks because GNS should be able to get the much bigger volume than I would even if it can not get as much as Officeworks.
One of the main point that annoying me is, I can import paper from over (of the same brand) and taking account of all other costs, I can still pay far lesser than what GNS is charging. Therefore, what is the use of GNS?
Brands do matter but not always. I used to work for a company that switched paper (same quality) every few months – depending which paper saved them money. They buy a couple of pallets of paper per month.
Therefore, I believe we should not blame on the government or the big boys. We need to look at what we do and how we can do it better. Such as, some newsagency associations have their own “warehouse” or “brands” that compete with GNS. Basically, there is no unity within the industry for us to have a strong voice. I blame all the associations who suppose to be the voice of all the newsagents. No wonder many of the newsagents I know wouldn’t bother to become a member.
Robert, while I agree with your point, I do feel that the government lets Australia Post stary too far from being a postal service. The AP executives leverage this lack of attention into creating a retail giant which will creep further into what we do.