Barack Obama was elected the President of the United Sates by a surge of hope for change on the back of a simple catch cry: Yes we can.
While his effectiveness in leading change and achieving goals from the wave of hope will be determined in the election in November this year, his campaign was effective in getting many Americans to believe in themselves again. I am certain that the campaign in itself led to individuals and groups embracing and leveraging change.
While some of us have spoken with and to newsagents about change for many years, the detail of the announcement from News Limited this year has made embracing change an imperative for all newsagents. I see it as a catalyst for better business planning, faster business decisions and better quality newsagency management.
I have spoken to many newsagents this week who feel that they can’t step from a business delivering 500 or so newspapers a day into being part of a business delivering 10,000 or more newspapers a day. While it does seem like a big leap, there are newsagents who have made the transition and many of these operators are happy to share their experiences with their colleagues.
There are newsagents who have merged runs to form a larger business. There are others who have acquired the runs of others to create their bigger business.
The core skills are business planning, operational process management and a focus on excellent customer service.
These are newsagents who have lived the transition already by chasing it for themselves. While there have been challenges, each of these have previous experience which can be tapped into by those yet to make a move.
This is a time for newsagents to talk with each other … to explore possible partnerships or to learn from experiences of others.
Newsagents large and small have demonstrated an extraordinary capacity for hard work and working through change. The changes ahead in newspaper distribution can be embraced by the channel. I am sure of that.
Newsagents outside the three regions in Queensland that are part of the next phase should be talking with colleagues (including those who have consolidated ahead of the change) and considering business plans of their own. This should be happening now so that when their time comes to actually make a one they have considered all available scenarios.
Our channel has its deniers and procrastinators. Look at those who were shocked by the News announcement this week. The reality is that it had been forecast long ago and discussed many times publicly following first being forecast.
Most of all right now, newsagents need to believe in themselves … that they can navigate the changes ahead and take on larger distribution businesses if that is what they want.
I can be reached on 0418 321 338 for any who want to discuss the changes.
I really don’t get what these paper companys want . i am looking at it like this some in the industry say papers are on there last legs many are saying print is dead yet these companys are expecting newsagents to invest more into an industry that is slowly dieing . As someone else mentiond you would need a shed , at least 5 cars wrapping machines more staff,the list goes on , unless you already have this in place i do not see the value .
They are using newsagents and wanting us to invest to prop up their crumbling empires
Gregg talk to them. The News pitch and the Fairfax pitch on the restructure are compelling.
The difference here is the five year model. You have to get your return in the five years. Like newsagents in shopping centres.
geez guys stop crying over spilt milk, its gunna happen, look for the positives. its simple, get in or get out of distribution. very few small runs have any economic value to the business anyway and most have been whinging about that for years, so now is the time to give up on distribution for those. if the loss of 12.5% comm on papers is going to break you, then you have bigger issues i would think.
stop expecting News to look after your business, why should they, its your business. For me its a wait and see what the new distribution maps look like, until then its a guessing game, i have more important thing to work on in the business. Either way will have positives, no distribution means i can drop off a driver, get rid of a marginal part of the business, trade the van in on a ute that can tow the boat, or if i grow the distribution i can make it a profitable part of the busness that pays its way. All the complaining in the world is not going to change the decision by News, we need to work with news to get the best result we can.
Mark it is a 5 year model with a 6 months notice to say thats it . . A lot of money to be invested in a model that according to a a few people in the industry has a very short life
Shaun I disagree. The investment in a shopping centre newsagency is greater and you have to make that work in five years or you lose out or at the very least risk losing out.
See how the numbers fall come December. I think you will hear from participating newsagents that they are happy.
Could someone explain how selling a product at a 12.5% margin is a good deal.
News just seems like they want to try and do a Coles on us and stuff the newsagents on price as they wont increase it, that’s too easy. I just hope the associations stay out of this it’s just madness.
Maybe, in order to save costs and increase profits delivery newsagents should cut subagents rates to say 5%
(instead of the 50/50 split that is now). This would dry up a large section of hanger on retailers and drive customers back to the newsagents.
I am a retail only newsagent but as news has shown delivery agents should be looking after themselves first. If you don’t like 5% then do not sell papers, as others have stated here they are basically loss leaders any way once you factor in labor and real estate costs.
Luke,
I have one servo demanding it must sell Newspapers. On a big day it will sell 6 between 2 titles. I gave them the Offer of full Cover Price (no commission with limited returns) to me or else I would not supply them. They accepted. They see selling Newspapers to their customers (with no commission on their part) as an essential service they have to offer, keeping the customer happy. However I do not agree with that as the small sales says there is no real demand there rather cannibalising sales from my subagents or myself.
Still they do more in Sales than Woolies Petrol who is a News Limited Sub Agent I am forced to serve.
I have also found in the past when I have tried to resist these micro would be subagents all they have to do is contact the DT Area Manager and I was pressured to comply though in recent times the DT Area Manager has now indicated that sales of 10 DTs a day is the level at which the DT will now push a subagent on to me.
rick, it is not just 12.5% you lose!
If you don’t continue as the distributing Newsagent, you lose 25% margin on all of the delivery papers in your former area, plus 12.5% on your shop sales!!
If Fairfax also follows the same process, some Newsagents stand to lose big junks of their business income.
That’s OK if you can save more in expenses (wages/cars/petrol) than you lose in revenue, but for many smaller local newsagents who can (and are happy to) still do their own deliveries, that income is reward for effort. So the extra time off/sleep might be nice, but it won’t pay bills.
What isnt being discussed much is the flow on effect to sale price of businesses.
How will goodwill be calculated on these new combined/merged territories where there may be 20 agents bidding for one territory?
Bruce H
you also no longer keep an account for each delivery customer and for my business a considerable benefit in other sales.
Mark
what are these 3 regions “Newsagents outside the three regions in Queensland that are part of the next phase” a
Regarding selling your business. If you lose 12.5% of your counter sales which can easily equate to 20K, it will come of your net profit as there is no reduction in costs. If you do not tender or fail to be successful you lose sales figures and if the run was profitable, you lose more off the net profit. Selling then becomes an issue as the price of the business goes on the net profit.
All agents in these new territories need to get together talk about it, work out costs, submit a tender and start being positive about it. Everyone should have the vehicles staff and machinery in place so no rocket science is needed to work it out. One distribution point within the territory and the drivers may need to spend an extra 30 minutes a day picking up the papers. These are the costs everyone need to talk about. Start talking and thinking now.
Peter they are in the south side of Brisbane. What I do know is that News executives have met face to face with all newsagents involved.
Natalie, I think that has been a factor in sale prices for a couple of years now.
Not me
With all due respects Mark, no it hasnt.
I currently have my business on the market and industry accountants are scrambling to understand how to reprice it.
Given that this may take 18 months to roll out in NSW – how on earth would you be able to sell in the interim? You cant!
more overhead payments,no profit,ending newsagencies and news limited.it is difficult for news limited to deliver small amount of news papers on time,What make the newsagencies to believe they going to receive 10.000 papers on time and deliver it before the traffic and and before customers leave to works. i think news limited have to consider how to solve the problem they had from the begin of the process not from the end before destroy them self and whole the industry
Wouldn’t it make sense for everyone involved if one of the associations or Mark yourself interviewed the Newsagents involved in the trial in South East QLD?
Some transparency regarding what News has offered them, what procedures and practices have been employed, what issues or concerns have arisen, what positives can be built on.
Transperancy should be encouraged so distributors in other states have some idea what to expect, and so the industry is aware of the positives and negatives the trial area produces.
Maybe then, other distributors will have the information to confidently move ahead in making INFORMED decisions.
Some of us involved in the first change over are already on here Amanda.
For me at least, as I’ve said before, it’s not a big issue. I own the run currently but have it contracted out. It’s basically a cost neutral function I’ve kept soley as a customer service while it didn’t cost me money and I made a little bit of money off of the sole direct supply supermarket as there are no other subs in my territory.
I’m happy to take the extra bit of time not spent reconciling QNP invoices, fixing customer issues with deliveries (bill seems high this month…Oh it’s a 5 week month instead of a 4 week month… etc) or inserting BAMS on a Saturday morning for the papers I take to Coles and put it into more profitable parts of my business.
So far News seems to have been reasonably transparent. I don’t particularly agree with the retail commission drop and I do hope they realise this may well mean that I may well chose to not open public holidays or Sundays (though then again I may for other reasons, customer service etc) and their news stand won’t be in the prime position it is now.
The only issue I have currently is what calculation they use to put a value on the hand over figure if you comply with their requirements. They’ve stated it would cover the costs associated with them having to do the run in the mean time but have put no hard figures out there. They need to put this figure and the calculation they base it on out there now so current agents can decide whether to terminate existing contracts now if that figure isn’t worth continuing rather than get strung along for the next 9 months which is what I’m a little bit afraid they may try and do.
Amanda has raised some very good points here. Transparency is the key, as this is something News and Fairfax have failed to do throughout the industries history. It is always an “our way or the highway” approach.
Let’s face it, News and Fairfax have used and abused the industry since deregulation. This is not changing, this is continuing. Paul’s fear is that agents “will be strung along for the next 9months”. He is a little naive to think this won’t happen.
As for the 12.5% commission at a retail level, this is rubbish. I have removed The Financial Review and Australian
newspapers from display in my stores. The Sydney Morning Herald will be next. I will choose to be a subagent, and I WILL choose what is displayed in my store. At 12.5% there will only be room for one newspaper probably situated on a bottom shelf at the rear of the store.
Paul’s response is interesting also. From the comments he has made, it appears his run is cost neutral, retained to keep a level of customer service. Forgive me if i have misunderstood your statement. But if this is correct, then surely the alarms bells need to start ringing. Newsagents MUST make money on this part of their business to be able to present it to banks in a professional business plan. Cost neutral is NOT an option for distributors taking on such big territories.
On the flip-side the decision by the Publisher’s to make these territorial changes should mean agents who want to hand back their territories NOW should not be punished and should not have to give twelve months notice as is currently the case. In a fair trading environment this should be the case. But this is Fairfax and News.
I know of TWO neighbouring agents who opted to hand back territories. They have been through hell and back in trying to get supplies ever since. Fairfax has actively threatened other newsagents who had willingly said they would take them on as a subagent. We all know this is wrong and unlawful, yet nothing is done to stop it as our associations are weak.
I am not proclaiming doom and gloom results for all current distributors. Some WILL be able to make this work. For some it may be a lifeline.
What I am saying is that these two companies have a LONG history of deceit, and only have there shareholders interest at stake. I simply emplore the industry heads to keep a watchful eye and ensure that newsagent do not continue to be abused.
In the end, the new distributors should be encouraged to deliver these products by being rewarded through REAL commission structures. From what I am seeing, this is NOT going to be the case.
Kyle,
While I am no apologist for the publishers, since they started communicating on this issue directly and not through the state associations they have demonstrated good transparency and clarity.
News has setup a dedicated information line and email address.
Now we can jump at shadows or engage in the process – those in the trial at least.
Natalie,
Anyone scrambling to reprice now has not paid attention to what is happening in the channel.
If you read all the detail released by News so far it is clearer than the communication from the state associations as they have spun their way through this issue.
Mark we do now know were we are going .buyers will i think reapear in a short time as we have it in front of us ,We gave our round away some time back prices now reflect all ready the new world