News Limited has emailed newsagents in NSW, asking them to promote the Valentine’s Day edition of The Daily Telegraph to other retailers on terms not available to retail newsagents.
This move disadvantages retail newsagents. It is a disrespectful move by News because of the trading terms advantage given to these other retailers and by chasing sales outside the well-established and loyal newsagency channel.
In this year of extraordinary change driven by News and their T2020 project, they should be more sensitive toward newsagents than ever. This move goes against the spirit of support for newsagents the company has been espousing when promoting T2020.
Here is the email from News:
VALENTINE’S DAY DAILY TELEGRAPH OFFER
Attached is a Valentine’s Day Daily Telegraph offer to help you increase sales on the day.
Valentine’s Day falls on a Thursday this year.
Please approach all florists, restaurants or any small businesses in your area that would be interested in taking up the offer:
50-99 x The Daily Telegraph @ $0.75 per unit (cost saving 37%)
100-199 x The Daily Telegraph @ $0.65 per unit (cost saving 46%)
200+ x The Daily Telegraph @ $0.50 per unit (cost saving 58%)
If you would like me to print off any flyers for you, just let me know. All orders need to sent back before Feb 6th.
Several newsagents who have contacted me have expressed their disgust at this move.
It’s an issue newsagents might consider taking to the ACCC. While the ACCC will question the consumer impact, newsagents could explain that it is moves like this that make newsagencies less profitable and could add to the closure of businesses. It would also be reasonable to question why a florist should get up to 58% GP when a retail newsagent will get anything from 12.5% to 25%. We could also argue that this is an abuse of market power by News.
If News Limited wants retail newsagents to support its products it ought to urgently reconsider this Valentine’s Day promotion. Either it gives retail newsagents the same terms or it withdraws the offer to florists and others.
News Limited needs to prove to us that its words of support for newsagents in 2012, through its T2020 presentations, were real and that we can trust the company.
Check the price of the DT
iI emailed my Area Manager and asked if this applied to Sub Agents and got told Yes
Why would you want to deliver newspapers?
As a retail only agent I will order 201 on the day and demand my 50% discount.
Good article Mark, but personally I would have liked you to go one step further.
Perhaps gauge the interest of a “class-action” against News Limited for offering such deals and declaring ALL current contracts nul and void.
Gone are the days of ANF and NANA negotiating contracts.
Perhaps a newly created “Newsagency Union” or “Newsagency Guild” would be better positioned to force publishers to sit up and take notice?? Turn the tables even! Create NEW contracts favouring newsagents.
Anything under 50% commission in today’s retail environment no longer cuts it. The commission IS possible. But the people getting the higher commission are iSubscribe, consumers and new retail markets who don’t sell any newspapers or magazines. It is a carrot to grow sales beyond the newsagency channel.
T2020 is simply about Newspaper publishers. It has nothing to do with newsagents.
Newsagents subsidise the publishing and distribution of both newspapers and magazines.
Somebody in a prominent position needs to just come out and say it and to say it is no longer going to happen.
Well said Amanda. There is only one way to discribe News attitude, bloody discraceful. Why not good old Tracey Grimshaw and ACA pick up on this and report this ripoff instead of blowing up on a subscription error by a newsagent. Why not because they would not want to upset another media friend and advertiser.
Agreed Amanda.
I’ve said before and I’ll say it again.
Please show me another business where a supplier asks a retailer to source other businesses that the supplier can sell their product to for greater commission than what the retailer will receive.
It just goes against logic no matter which way I look at it.
The other side (please don’t lynch me!) – we have had these offers in the past – two florists over 3 towns chose to take it up for Mothers Day. One did it one year only, the other the following year. Other florists we approached did not want the hassle of it. It came out of their pockets, no returns.
Neither florist that took it up were located near a newsagency (would not have offered it to them if they were).
These papers were given away by the florist with a purchase of flowers, a nice gesture for those customers.
We do not believe our shop or subagents sales were affected by it, and we hoped it might have encouraged some to purchase the Sunday Tele in the future.
These promotions done occaisonally and under the right circumstances can only help keep print alive, and they probably could be done at times in retail newsagencies.
Jenny your comment is mature and prudent. And it is fair to say that comments that are contrary to yours, aren’t.
From a distributor perspective as long as they get their usual margin for distributing the papers to the Florists etc there is no harm done to them. Maybe there is even a benefit in terms of the increased volume.
Retailers probably should be compensated for a drop in volume on the day of the promotion. This should not be too hard to factor into the promotional budget.
Is that a hoax ?
Surely that’s something that could/should be put forward to ACCC as a ‘Restriction of Trade’ or some such thing.
Damn arrogant, rude and totally disrespectful of those who support them everyday of the year.
I’m not in this field any more, but you people really do need to get together and act on this sort of behaviour while you still have a business to protect.
Think about it overnight, and do something tomorrow before it’s too late.
Azeem, I am a retail only newsagent and I earn 10% from newspaper sales…..how is this promotion fair?????
AW: I never did say that 10% is fair. In fact it’s not. It’s blatantly unfair. You need to renegotiate or find another distributor, if thats the way you’re being handled.
I am only pointing out that measuring this offer as % GP of the retail price of the paper is a single dimensional approach. Actually the florist is being offered a discount to buy something that is intended to be given away.
Light bulb moment! If you’re close enough enough to one of these florists that they’ll affect you why don’t you just buy some papers from them at their price.You can then put it on your shelf at a higher margin or mix them in with your returns and still have a benefit.
A bit of anarchic activisim here and there never goes astray (eg Whitehaven scenario )
Azeem that’s interesting. However, the Whitehaven guy looks like he’s in a bit of bother.
Azeem the possibilities are fairly obvious. Say I get a subagent to buy X amount of papers (to cover all needs retail and distribution) then buy them back and cancel my SCI and HD supplies for the day.
Azeem, nobody is saying that this is not a good promotion, in fact I encourage my local florist to participate in this promotion, from memory there is one for Mother’s Day also and the same for pubs and clubs for Melbourne Cup day the point is why is News able to offer this to non newsagents when sub agents and retail only agents are only given 10%?
Obviously agents are paying for News to give papers away and to offer such marked down subscriptions.
OK, how about this……
Offer the same deal as above to ALL newsagents but with over the avearge figures. In other words say 20% above the stores average sale figures and on a firm sale basis. Publishers automatically gain a 20% sales increase and eliminate the returns process (surely a huge saving on it`s own). I would certainly take firm sale at the above comissions……wouldnt you?
Is it just me or does this seem too easy….?
Azeem, I am not allowed to find another distributor.
Allan why do you only get 10%? Shouldn’t all subs get 12.5.
Jenny
Since all (to the best of my Knowledge) newspaper commissions were changed to a set figure from a % commission last year ever price rise has lead to a drop in commission % wise. Here in the west the commission has fallen to 11% on The West Australian newspaper. I don’t know the figure for other publications in other states but I’d bet if you’ve had a price rise your commission as a % of cover price has fallen.
Correction the % commission on the West is actually 11.33%. Still a fair way short of 12.5%.
Steve, we (NSW) get 25/12.5% for Telegraph and Australian but less for Fairfax publications since they changed the commission structure last year.
I heard that Fairfax put up the price 4 weeks after the changed the commission.
It is no longer based on cover price I believe?
Jenny, my bad, I do get 12.5% on QNP but only get 10% on local paper.
Al
My tweet to Rupert Murdoch about this did not get a response.
I suspect Rupert’s move into the twitter sphere is about the person with the biggest voice in the world having another forum to pontificate from. I doubt he cares much for anyone else’s comments or opinions unfortunately Mark.
I think we can miss the biggest point of all, ie News Limited IS prepared to discount their cover prices in order to increase sales.
Which means if newsagents came up with their own local sales campaigns which require discounting of the cover price to increase sales, and newsagents still get paid as normal, News Limited would support.
There are 4-5000 newsagents. But I wonder how many of us propose any sales campaigns? I suspect very few. I know of a number of Sydney based newsagents who do, including myself, and we’ve increased sales through many channels including subs. Most don’t hear such news because of competition.
Everyone should also take note that despite a soft retail environment, the Australian Bureau of Statistics just announced that the newsagents were one of the only economic bright spots, along with cafes, restaurants, takeaways, florists and chemists. Maybe that’s why florists were chosen! So let’s do business!
Ed Howard
Sans Souci Newsagency
Ed I have pitched many promotional ideas and campaigns to News for retail only newsagents over the years without success.
If the company can come up with the idea for florists they can come up with ideas for retail newsagents.
There are only 3,500 newsagents BTW.
We’ll support this campaign and approach florists with this offer but to be honest I don’t think many will take it up.
Are florists going to any get more sales of flowers buy giving away a midweek newspaper that they have to pay for?
Maybe in a busy area where there is a lot of close florists competing they could do well.
We sell most of our cards on the day, often the later part of the day, are guys really going to buy at a particular florist to get a free paper or are they going to just buy flowers where it’s convenient.
Could this deal be offered to retail newsagents on the day to give away with card purchase?
I think the simple intention is to target retail areas that are expected to have much higher than average custom for the day and for there to be papers to be noticed and sold. The retailer is being offered a discount to make it somewhat attractive (if you could call it that) whilst we help make it happen with the added bonus that florists or whomever this is offered to takes it up and may become another subagent.
The above applies to wherever large groups are expected on the occasion.
I get the intention. I just don’t appreciate the fact that we are aren’t given similar incentives to increase sales.
What would happen if newsagents decided to “give away” the newspaper with any other purchase, say for a month. The paper is probably the cheapest, lowest margin thing in the place. Might cost four or five thousand, but if you could sell a bunch of $2 plus items at a 40 to 50% gp, you would more than make that up. Not all paper buyers would do it, they would still just buy the paper. I havent really thought it through. It is an initiative that agents could promote through associations and the media to get a bit of traction in the “down down” marketing stakes and generate a bit if buzz and foot traffic. Stupid or interesting??
I’d like to see papers given away in the publisher promotions.
Instead of purchase item (cook book DVD hat) for $2 with the purchase of newspaper, sell cook book / hat whatever for $3 then give customer a free newspaer.
So many customers complain they want item but ‘why do I have to buy newspaper?’ or ”other newsagent doesn’t make me buy paper and lets me buy more than 1′. This causes stress for staff and has newsagents competing with each other.
Same result just different way of selling it.
Jenny
What a good idea would save a lot of problens.
Only poblem, would anyone take the paper.
Also it is good to see Mon to Fri Telegraph going up in price at long last.
act newsagency
when and by how much is the tele going up? thanks
Check the discount price of the valentines special.
I worked out $1.20 must before 14 Feb
I could be wrong
jenny
good idea….. would solve a bunch of incidents with customers