With several newsagents successfully building distribution businesses of a scale equal to that foreshadowed by News Limited’s T2020 plans, there is good knowledge out in the marketplace to help newsagents.
My newsagency software company Tower Systems has been directly involved many of these amalgamations. I have asked the Tower team to prepare advice on the practicalities of amalgamating newspaper distribution territories, particularly the management of the data involved and how this is done to serve the needs of News and the needs of the new distribution business.
I hope to publish something in the next few days to quell the in some quarters that what News is asking of newsagents is not technically possible. It is possible. Others have done it already and I’ll explain how.
Is anyone in a position to guarantee these distribution agents that they will get the contract because they meet the scale or will it still go out to tender?
If agents spend the time and money building up distribution surely they need some kind of guarantee of contracts more then what is being offered or whats in it for them, no point having all the systems in place but no contract?
Luke,
No-one has a guarantee regardless of their size.
We have about 4,000 Sun’s and 1,000 Age’s per day and are about to increase by 1,000 papers per day.
I can see easily how we could grow our business to be able to service an additional 10,000-15,000 papers per day.
Luke, the News position is clear re the tender process. It’s about a sustainable model covering an agreed section of the map proposing a price News finds acceptable. Tick those boxes and you can get a contract for a fixed period. Not unlike a shopping centre lease.
Reckon there will be some who will bid to win by offering unrealistically low prices, in the process destroying others’ business, before they destroy their own. Not unlike a shopping centre lease, where a new operator will accept a higher rent to get in.
So Dean, if you increase your deliveries to the magic 10,000 and then say Aust post tenders for the delivery at a cost you cannot match, you again lose your money? We are in a position of retail only but a few have got together to look at merging a delivery business but before I throw good money at it i would want a guarantee on investment BEFORE I invest, why would anyone grow a business on the hope of getting a contract for a few yrs at a time but with no future if the tender fails. I agree ebo that shopping center leases are the same way, invest a huge amount for no security at all and a lot of operators are getting out of centers around here and are few are going belly up.
This is why you need an every day if your pay day philosophy and shorter return on investment times. These are the keys to this new world.
Hell we are already looking at T2020x2, each day (except Sun) we deliver twice as many local papers (APN) as we do News Limited etc, could we see 2 x distribution contracts offered…have asked APN for a comment but nil reply….maybe in shock.