In Launceston yesterday I discovered from newsagents that Fairfax charges a Remote area publishing fee for The Age, the Melbourne newspaper, which is printed locally, in Launceston, for Tasmanian customers.
This seems like an odd charge to me. Fair enough if freight was involved but it’s not. It’s a fee for using a local printing facility. I would have thought that this benefited Fairfax.
My understanding is that the fee is one reason sales of The Age in Tasmania are down.
I’d like newsagents to share other charges they see from publishers for local printing of interstate papers or freight applied for shipping such papers in.
While not the same as is happening in Port Lincoln about which I wrote last week, it’s similar in that publishers are recouping more costs now their products are not as popular.
Mark, are you aware that distribution newsagents receive less commission for the News Ltd products than subagents do? With each price rise, subagents are still getting their 12.5% commission, while distribution agents get nothing from the price rise. No wonder distribution agents are actively looking to diversify their businesses so they can one day tell News Ltd where to go.
If I can just pick up on the issue of freight charges applied to certain remote areas by publishers.
I will explain why in a bit, but I think it’s a really dumb and poor business decision. Probably by the new breed of executives, some of whom seem to make decisions based upon academia, rather than knowledge of the business and learning from outcomes.
The user pays ideology being applied within the bounds of a company such as a Publisher is obviously still in favour amongst certain new kids on the block. I say this because I can’t quite imagine anyone with any longevity or savvy in the industry thinking it a good business idea.
Is it really good business sense to ‘punish’ a particular area by only applying a big increase to that area just because they are remote and thinking there is no other alternative on offer.
The outcome has been to show that sales plummet and a whole bunch of people are adversely affected, so why the hell would you keep doing it!
A smaller increase applied across a wider area has more chance of being accepted by consumers, mitigating the impact on isolated areas, some of which had previous good sales numbers. Good for the Publisher as well if sales don’t fall through the floor.
I also think that executives higher up the food-chain should be holding these decision-makers to account over the impact of their decisions on the Publishers business, sales in particular.
I realise I am taking a bit of a punt in having an opinion that the poor decisions of late are to do with un-initiated executives. It’s my gut feel, because nothing else makes any sense.
There seems to be a significant amount of on-going change at reasonably high levels. A couple of decades ago we called it churn or ‘seagull’ executives. You know, fly in – squawk like hell to get their own way – crap all over everyone – fly out and leave someone else to clean up the carnage.
Dennis, I agree with your points. Poor ill-considered decisions. FMGC people are ruining publishers.
Dean
Adjust the percentage to reflect the real numbers.
When I took over my news agency the previous owners were paying sub agents 12.5 commission on the paper that included freight charges. I now pay my subs around 6 percent commission based on the full retail price.
Mark,
Maybe we need a new charging system in towers that allows a set fee not a 12.5 commission rate. Unless there is and I have not found it.
Jason, it’s Tower, not Towers. Sorry I am a pedant about that. There is flexibility in charging. Talk to the help desk team and they can guide you.
Dean I see a day when distribution agents will be paid a fee based on freight only with no connection to cover price. It’s inevitable and a consequence of deregulation for which newsagents were never compensated. Note: I’m not happy about it.
Mark, that is the case now. That is why we no longer get 12.5%.
Jason, I would suggest you are possibly in breach of your contract. You are not required to pay any commission on the freight charge, and this can easily be done in Tower. You should however pay the full commission on the non-freight portion.
But dean I am suggesting it will become even more so in the future.