The collapse of a newsagency business can have a far reaching impact

I heard yesterday morning that a business operating two large retail newsagencies in Victoria has gone into voluntary administration. Later in the day I heard from several suppliers who are owed money. As you’d expect they are frustrated.

Often when we hear of businesses in trouble and or closing we hear about the impact on employees and the owners. Little is said about money owing to suppliers to the business, many of which are small businesses themselves.

The impact can flow on to other newsagents.

I expect several suppliers owed money by the two newsagencies now under administration in Victoria will think about whether they should alter accounts processes with newsagents. Trading terms could be shortened, settlement discounts reduced or other changes brought in as a result of another experience.

Newsagents may end up paying a price without knowing it.

As a newsagent and a supplier I look at this from multiple sides. Many retail product suppliers, in a highly competitive marketplace, have cut margins to get business. This leaves them with little room to weather storms – like customers going broke owing money. There is little fat in business in 2015 the collapse of any customer can be most challenging.

The most frustrating situations are those where newsagents aggressively pursue the lowest possible price from a supplier. A loud newsagent committing to sizeable purchases is often given better terms. Suppliers left holding debt if such a business goes broke will feel particularly angry.

Suppliers ought to reward newsagents who pay up front or on time ahead of those who are loud and late at paying.

I feel for the newsagency channel suppliers in pain as a result of the latest collapse.