The media section of The Australian this morning carries a report about a drive within News Limited to cut costs by 5%. While this is a story abour News Limited and its costs, there are two levels on which newsagents could consider this story:
- Newspaper distribution is a considerable cost for the company. How much will there be an expectation that they can find cost savings in the distribution model? Based on their research of the distribution model I’d expect them to be targeting significant savings through the forthcoming distribution changes.
- The second issue is one about our own costs. When was the last time you reviewed your operating costs? When was the last time you acted on reducing your costs? For many newsagents the answers would be never and never. From insurance to rent to labour we need to look at our costs and operate as lean as practical. Don’t make excuses.
Imagine the impact on your bottom line if you were successful at cutting costs by 5%. Every cent saved would hit your bottom line and benefit you this year and when you come to sell.
Our sums worked out at about $4 per hour for distribution. For a single deliverer, to buy the stock, to process it (wrap material, admin, bank charges, running costs), and not least the over-controlled, thankless and grossly devalued time and labour. Add to that the grief copped from customers who aren’t even ours, and who seldom do anything to support our business. Thus we are grateful for someone even willing to take our territory on. We’re hopeful that our small one can in some way augment our supplying agent’s existing territory. For us, it’s well worth the lousy mandated 10% commission we earn as a newspaper subbie.
QNP stopped air freighting in our papers so they now arrive at midday. They have saved freight cost but our sales halved. We have lost those customers coming through our doors and the chance to sell other products to them. Customes were not worried by paying freight but want there paper in the morning. How is this saving anyone. I wonder if their other cost savings will be as effective in driving customers away from newsagents.
While many newsagents that live on the breadline derive their income from home deliveries, the best thing the industry as a whole could do is walk away from them. The most efficient way to distribute products is through retail outlets. Publishers are addicted to home deliveries purely because they are counted as 4 copies in circulation numbers. The association should ask Australia Post or Salmat for a ballpark price on delivering papers (Australia Post OH&S would not allow it). the result would be very interesting.