A colleague newsagent from Ireland emailed me yesterday about a significant change in trading terms by their managing and newspaper wholesaler. Here is their story, which I have edited slightly to remove identifying information:
I am the guy who gets up early in the morning, every morning, to haul the bundles of magazines and papers into my store where I carefully and proudly display title after title, many full facing to entice the reader, your customer…to buy. I am the store they love to go to, to browse the hundreds of titles on display.
My store and many more like mine is where your products reach their buyer.
Menzies Distribute your product in Ireland and recently bought out Easons from the EM News Distribution in Ireland. It would seem that they are deploying new tactics too.
We have been newsagents for decades. We have always paid our suppliers on time and the same applies to Menzies. For the record we do not owe any outstanding invoices over 30 days to Menzies.
However I recently received an email from Joanna Nizynska, who represent the accounts department in Menzies in Edinburgh, informing me that our payment terms are now changed to the following:
“all invoices within a calendar month due on the 1st of the next month.” So we are invoiced every Saturday for the current week and all invoices then in August, must be paid on September 1st.
This is effectively a reducing credit term with the last invoice of the month possibly having only days credit?
Without access to the standard terms of 30 days credit most retailers would close.
I am asking for your help where possible to make representation on this issue.
It has been implied by Menzies representatives that If i don’t meet these new demands that i may suffer disruption to the supply of papers and magazines to my store. In other words they suspend or close my account. Bullying me into accepting new terms and conditions or face no supply as they have a monopoly in Ireland.
Is this how we want the industry to go, is this what you the publishers want? is this what you the trade representatives want? We all know the stats in terms of print media but a bigger issue in my opinion and a factor in the whole story is how Newsagents all over the World are being treated by the industry.
Encourage us instead of badgering us, incentivize us instead of penalizing us, help us to help you grow!
Is this the end of the road for Newsagents in Ireland?
How would Australian newsagents feel if any of their suppliers introduced such a change to trading terms?
My opinion is this move by Menzies in the UK is bad. I agree with the newsagent who originally wrote about it. Eliminating usual business trading terms will hurt small business retailers for sure.
If costs have increased, suppliers need to have their customers, the magazine publishers, pay. It is unreasonable to force small business owners, those located at the bottom of the food chain, to pay.
We see this in Australia with uneconomic terms of magazines causing newsagents to react by reducing their space commitment to the category.
At some point publishers and distributors will wonder what happened. Them being disrespectful of small business retailers is what happened. That is what I think is happening here in this story from the UK.
The Irish distributors have merged to no doubt mitigate decline, obtain maximum efficiency and extra increased revenues to keep operating in a failing market. Same situation here with Network & GG.
At some point the magazine distribution edifice will collapse. We have all seen the warnings signs. When the day arrives, we should be prepared for every scenario. We cannot say we have not been warned.
Colin, the time for preparation began around five years ago. Those who are well advanced are in good shape with new traffic growing, better GP% sales growing and the business overall advanced in transition from all agency business to higher value retail sales.
Interesting read Mark – Thanks.
Magazines in Newsagents in Australia will stop – one day. When? Who knows, but I suspect it will be sooner than most of us expect.
Under the distribution regime we have suffered for decades, the non-commercial terms, inadequate commissions and the disrespect for retailers businesses coupled with declining sales and increasing overheads means they cannot stay long term.
What amazes me even more is that this is blindingly obvious and yet publishers and distributors fail to effectively address the issues. We get a little bit here and a little bit there, but not enough to make a difference.
We should all have been planning our exit from the magazine category for some time, because that day is getting closer.
Glenn while we are not seeing a slamming of the door, we are seeing some retreats here and there: magazine closures, some newspaper closures.
I think it is only a matter of months now to the closure of one or more capital city daily newspapers. I think it is a matter of pride more than money that is keeping some titles going. News refuses to be first, the same with Fairfax. However, Fairfax management appears to be more pragmatic on this issue.
While newsagents don’t make enough from magazines and papers, they stick with them. Newsagents need to understand that their sticking with them reflects an acceptance of the terms. So, the better approach is to ensure they work for you.
Exit plans should have been decided a year or two ago now.