Submissions to the ACCC on the proposed magazine supply trial
Click here to see responses to the magazine supply trial the ACCC proposes to authorise. The list is not quite up to date.
Click here for the newsXpress submission. Click here for the Tower Systems submission. Others are welcome to publish their submissions here too.
Newsagents given the ability to compete on magazines
Australian small business newsagents will rejoice today on the news of a new magazine supply model to start immediately.
- Newsagents control the titles they receive.
- Newsagents control the volume of each issue they receive.
- Magazine distributors to suggest range and volume which newsagents can accept or reject.
- Newsagents, publishers and distributors agree on a benchmark returns percentage.
- All returns will be tops (covers) only.
- No early returns.
- All magazines to be 30-day on-sale unless agreed otherwise.
- Publishers will, at their discretion, offer a per pocket stocking fee they want newsagents to carry but for which there is lower than needed update or for titles with a longer than 30 day on-sale.
- All supplier funded awards and rewards to be same store year on year sales related criteria and nothing else.
- Publishers to contribute to a newsagency channel marketing fund (estimated to be $2,000,000 a year) to be run by advertising experts and overseen by a panel of newsagents elected by newsagents.
What a wonderful day.
An identity check can protect your business
A newsagent yesterday gave away confidential information about their business lease to someone on the phone without verifying who they were. The caller said they were from an organisation associated with the business. It turns out the caller was from an organisation seeking to compete with them.
If you are not certain of who is on the phone seeking confidential business information, have some questions ask to be sure of their identity. Without certainty, don’t answer the questions. The last thing you want to do is to help a potential competitor cause your business harm.
Yes, unfortunately, there are some unscrupulous people associated with the newsagency channel.
Ethics in business
As I write this (Tuesday 4:05pm), I am sitting in a regional airport lounge listening to a car dealer on the phone tell his staff how to fudge sales figures so they continue to be in the running to win an award from the respected car brand they sell. They are booking ten sales by the close of this month, reach target and then push them through another business at a discount. The sales are not real sales. He’s now into his fourth call. His advice to one person was: I don’t care, I don’t care just get her to sign the fu&*%!g contract. To another his advice was: so fudge the figures then. Crazy.
Now, twenty minutes later, he’s on the phone to someone else gloating that he hit target and the business gets a bonus of thousands as a result. He’s making out that his business and his team are the best – when they had to fake it for this.
There is no point in business people kidding themselves to win awards or the back-slaps of their peers. The truths the truth and you can’t change that.
Be thoughtful in discounting
This flyer has been circulated by anew cafe near my office. I think they are making a mistake with their pitch as the different discounts are not time based or targeting different categories. If I was them I’d offer 50% for use within 48 hours, 30% for use within 7 days and 15% for use within 30 days. This approach would separate the discounts and offer relevance for the different percentages. As it is without any difference it looks a bit odd to me.
Here’s why the MPA magazine trial fails
I took this photo yesterday in a regional town at the entrance to a national brand convenience store. They can fit close to 70 titles in their magazine fixture. If you look at the top 70 titles in Australia they would account for probably more than half of all magazine sales. This c-store could, with current arrangements and a direct account, control what they get. The newsagent a few doors away with more magazines available, cannot. The newsagent is disadvantaged – now and in the MPA trial world. This is one of many unfair differences in the supply model. It is something the ANF should have considered before supporting the MPA trial. It is something the MPA ought to have more thoroughly considered prior to investing so much time in their trial.
Newsagents responding to the ACCC trial
Click here to see responses from newsagents to the magazine supply trial the ACCC proposes to authorise.
Make it easy for people to complain about your newsagency
In this era of social media it is easy for customers to amplify their complaints about a business. Here is a complaint shared with me a few weeks ago about a newsagency with which I have no connection. They contacted me because of this blog and because they felt they had nowhere else to take their concerns..
I hope you can help me. I want to tell the owner of [REMOVED] newsagent that the lady they have who opens the shop in the mornings is rude. She would rather talk to her kids on the phone than serve customers. The young girl they have after school spends too much time flirting with boys. The owner doesn’t work in the business any more and I have no way of contacting them. The staff tell me to give them the message. I have stopped shopping there.
Make it easy for your customers to complain about you. Otherwise reports like this can spread you having the opportunity to fix the problem.
The easier we make it for people to complain the greater our commitment to good customer service.
Price based marketing is a difficult habit to break
In the main window of a Target stop on the weekend was a large sign promoting that they guarantee the best Easter egg prices in Australia.
Attracting shoppers on price only works if this is your thing, if your prices will always be lower and if you keep promoting your low prices.
I think promoting a retail business on price for most items is a mugs game as shoppers who purchase on price are fickle. They will chase the best price and anyone can promote that they will beat you on price.
Price is a point of difference which can be easily topped. At a K-Mart in the same centre as this Target, they were beating Target on a couple of Easter items I checked. But the items were not exactly the same and this is how retailers can get around we will not be beaten on price claims. Chemist Warehouse promoted lower prescription costs as a traffic driver. Now, there are many pharmacy groups and pharmacists matching them.
This is why I suggest to retailers that their point of difference ought not be price.
Newsagents can’t compete with the majors on price so I suggest we don’t. Promote other features of the business.
Sure, some people will shop at Target because they believe the claim and it plays into the relentless claim by Target about price. However, I doubt many will be loyal to Target because of it.
Will the Collingwood drug story drive newspaper sales?
Melbourne is abuzz with reports two Collingwood players have tested positive to a performance-enhancing drug. While we’re hoping it will drive newspaper sales tomorrow, it’s providing plenty of opportunities for cheap fun across the counter today.
ACCC submission in relation to newsagency magazine supply trial
The ACCC has proposed to authorise Magazine Publishers Australia to conduct a trial of an alternative magazine supply model.
As I wrote here in November, I think the proposed code of conduct changes are ill conceived and will not address the unfairness for newsagents compared to others with whom we compete. Earlier this month I encouraged newsagents to respond. Here is the first response I have submitted:
I make this submission on behalf of newsXpress Knox City in Wantirna South Victoria.
The ACCC proposes to authorise a trial which does nothing to address the anti competitive behaviour enshrined in the rules, processes and systems for distributing magazines to newsagents. The trial does nothing to get newsagents to closer to fair supply, to the controls over supply that supermarkets, petrol outlets and convenience outlets have in relation to magazine supply.
In proposing to authorise the trial, the ACCC is tacitly approving a continuation of behaviour which blocks newsagents from stocking magazines on terms which are fair.
The ACCC ought to hold piublic hearings into the proposed trial.
These are not new complaints for the ACCC. Newsagents have complained for years, providing examples of gross over spply in terms of volume and titles.
Unless newsagents are given control over the magazine titles they stock they will remain at a commercial disadvantage. This, in turhn would place our customers at a disadvantage.
In 1999 the ACCC oversaw the deregulation of the distribution of newspapers and magazines in Australia. At no time since has there been a review of the impact of deregulation. I call on the ACCC to consider such a review. While the ACCC could argue that such a review is outside its remit, I say it is within its remit given its direct involvement in deregulation which left newsagents competitively worse off.
Good to see Cairns Post promoting its print newspaper
In Cairns last night I was thrilled to see News Corp’s Cairns Post proudly promoting that they have sold 6 million copies of the newspaper in the last year. This promotion speaks to locals and tourists about the position of the title in the community. I see plenty of publishers use their offices to promote websites and Apps – I’m pleased to be able to recognise good promotion of a print product.
Sunday newsagency marketing tip: make a brochure
Take an blank piece of A4 paper and sketch out a flyer to promote your business. It’s important you start with blank paper so you really do have to start from scratch. The goal of the flyer has to be to get people into your business who are not regular shoppers with you.
I am serious, make a flyer. Single sided or double sided.
It does not have to be a work of art. Think about more as your ideas you;d have a designer turn into something professional.
The keys are: what messages to you pitch, what products to you feature and what is your call to action.
Once you have your draft flyer, think about this and your business. Are they aligned or is there a disconnect between you have on your flyer and the business being promoted?
If there is a disconnect, think about what you need to change in your business to connect with the business in the flyer.
If there is no disconnect and if the message is enticing, consider having the flyer professional designed and distributed.
Rely less on marketing others do for you and more on marketing you do for yourself.
Sunday newsagency management tip: 30% is the max. you should allow for a category
Does your newsagency rely on too much traffic, GP or revenue for a single product category? By too much I mean more than 30%?
30% is a figure I have come up with, based on years of working with newsagents affected by categories which dominate their business falling into decline.
Tobacco, magazines and lotteries are three categories which can account for more than 30% of revenue, GP or traffic.
Any category accounting for more than 30% of revenue, GP or traffic presents you with a risk as it is a big hole to fill if something happens to the category – such as a store nearby getting lotteries or tobacco sales crashing following tighter regulation. While it is easy to blame these external factors, I blame any retailer for allowing too much of their revenue to be dominated by a single product category.
Take a look at your data – any computer system should provide you with the percentage breakdowns for basket penetration, revenue and traffic. Look at your data and act on any category accounting for 30% or more. No, don’t cut the category – work on other areas of your business to dilute the impact of the above 30% categories.
Act now, own the situation and your actions.
Easter sales strong in the newsagency
Easter is in full swing with excellent sales over the last week. Displays are thinning at the right end of the season. We’re not discounting and don’t plan to until next weekend – if at all. Cards, plush and gifts are all doing well. If I had to tag a hero category it would be plush. $2,000 for the season is excellent – and there will be flow on sales having introduced shoppers to new lines.
Easter is a season our channel could do considerably more with, beyond the traditional. Families are out shopping together. Yesterday was crazy around shopping centres in Melbourne. Centres were full of people spending. It was terrific.
What is the best thing you can do in your newsagency today to show that newsagencies are good businesses to buy?
Newsagents want people to be interested in purchasing their businesses. You cannot make people be interested by telling them to do be. The best way to make people interested in newsagencies is to make them appealing. The best way to make your newsagency appealing is make every day your pay day. The appeal of businesses in our channel to possible purchasers comes down to how we run our businesses. If you want to eventually sell, what are you doing today to make your business appealing?
Fairfax duds newsagents with Financial Review price rise
Fairfax has announced the cover price of the Australian Financial Review increases 8.5% from Tuesday April 7 yet the gross profit increase permitted by Fairfax to retail newsagents is only 2.5%.
Fairfax is double dipping. They are increasing the cover price and reducing the margin permitted.
This is an appalling move by Fairfax against small business newsagents. It’s unethical and socially irresponsible. Shame on you Fairfax.
A newsagent selling the Australian Financial Review for $3.80 will make only $0.3636 from the sale. My AFR pocket costs me $2.50 a day. The retail space cost increases 5% a year. Sliding backwards as I am with the AFR while Fairfax improves their situation leaves me wondering whether stocking the title is worth it. The good news is this is a decision I can make.
Packaging to make a product more appealing
Passionfruit on a shelf sells on the basis we think it will taste like. The passionfruit in the photo sells on the basis of how it looks. The retailer i this instance has taken us into the product, appealing to passionfruit lovers. I went to the supermarket to purchase something else and stopped to notice the passionfruit because it was sliced open, looking delicious.
The photo to me is reminder to look at what we sell and to consider how differently we can present products so they are noticed by people who are not in the newsagency to purchase those products. The same principle can work with window displays.
Everyday we make choices which affect traffic through our front doors and shopper engagement once inside. If we act in the usual, average, way, our results will be average. Take a fresh approach and you risk a fresh (good) result.
Sweet magazine supports newsagents!
The folks at Sweet magazine promoted newsagents on Twitter with a terrific tweet promoting their magazine as available it local newsagencies.
I love their call: Support two small Australian businesses. This is a message we can identify with.
We need to support magazine publishers who actively support our channel as their support shines a light on a point of difference for us.