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Ethics

Is it unethical to send more stock of a title a newsagent without justification?

Imagine the surprise of a newsagent this week when they received additional stock of Modern Wedding Styling magazine when they still had stock on the shelves from the August allocation. There is no sales history to indicate they will get through the initial allocation. So, the newsagent topped the supply this week and early returned it.

The newsagent has lost time and money on unwarranted allocation. The publisher has copped the cost of shipping out the stock that was topped this week. They will probably cop a return fee and maybe a topping fee.

The distributor could have saved the publisher and newsagent costs had they used the data they have from this newsagent and not sent the extra stock in the first case.

What happened in this situation could be considered to be a poor allocations, poor management or deliberately actions to generate fees for the magazine distributor.

It’s say it’s not a poor system as that’s an excuse Network has used for decades.

It’s say it’s not poor management because network has had plenty of time to address that.

I think the supply reflects a commercial decision to apply and this is what I’d label unethical. Whoever participated in or facilitated this situation ought to be ashamed of themselves.

This is another example that makes a mockery of the pressure newsagents are put under by XchangeIT for data accuracy. There is no evidence of magazine distributors being put under similar pressure.

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Environment

Evidence Bauer Media sales based replenishment of magazines to newsagents is not based on sales data

Thank you for sending your sales data.

Based on the information you have provided, we have raised an extra order on your behalf.

This order will be delivered to you on the next available delivery day.

Outlined below is a list of what the order will contain.

This is the opening of an email this week from Bauer to a newsagent. The Sales Based Replenishment (SBR) system / experts at Bauer advised he was getting two additional copies of Top Gear. The problem is, he has only sold two copies and has four copies of the initial supply in-store. The sales data sent to Bauer was for the two copies. This is not evidence to support the Bauer claim to supply more. Their email is wrong, it makes this newsagent trust them even less.

It’s not the first time Bauer has said the sales data made them do it to justify sending extra stock. Nor is this newsagency the only one in Australia to receive such an email from Bauer where there is no evidence in the sales data to support the claim.

This action makes Bauer’s systems look broken and their allocations people stupid or deliberately abusing newsagents to serve the company.

My suspicion is that the Bauer SBR system, if it is a system, is broken and raising new allocations without any evidence – causing newsagents to incur more costs over which they have no control and for which they are 100% liable.

This is unfair. It disadvantages our channel. It makes us less competitive against supermarkets.

Looking at Top Gear sales for this newsagency for 2014, I see no evidence in the data for the newsagent to be suppliers more than three copies each month yet the initial Bauer allocation is six copies. Then, weeks into the month, they allocate two more.

No wonder this newsagent does not trust Bauer. The data informs his position on this.

This is another example that makes a mockery of the pressure newsagents are put under by XchangeIT for data accuracy. There is no evidence of magazine distributors being put under similar pressure.

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Competition

Magazine publishers who make supermarkets more appealing than newsagents risk the future of our channel

For years there have been differences between how suppliers who supply newsagents and supermarkets with the same products treat these competing retail channels. While newsagents have complained, they have done nothing about it. I think we are approaching a time when we will need to act.

The challenges now are about much more than better gifts with purchase for supermarket shoppers.

The supply model used today disadvantages newsagents as it encumbers our businesses with financial,. labour and space costs that our competitors do not have. But even that is not why I say we are approaching a tipping point.

Price is the issue. More and more I am seeing different pricing in supermarkets for titles we sell in newsagencies.  News Life Media and Bauer Media are the main publishers engaged in this. They must be doing it to drive traffic to supermarkets and away from newsagents for their products. Why else would they make their products so much cheaper in our competitors?

Why price Inside Out $2.00 less in Coles than the newsagency 50 metres away?

Why bundle weekly Bauer titles in supermarkets at a discount to nearby newsagents?

The only reason can be to drive supermarket sales.

Think abut the long-term implications – either newsagencies close or they reduce their reliance on magazines. What that may not hurt many of the titles sold by Bauer and News Life Media, it will hurt them and it will hurt many other publishers.

Today, the Australian newsagency channel is the largest single magazine retail channel in the country. But for how much longer? Those publishers who appear hell-bent on directing shoppers away from us need to consider the bigger picture for all publishers as well as for small business newsagents and the vital and quintessentially Australian role they play in there communities. Thankfully, not all publishers are so inclined to kill our channel.

Publishers: every action you take against us makes magazines less profitable for us and informs our own actions. Every time you facilitate supermarkets presenting your product as better value from them you harm our businesses.  You’ll blame us when we are less interested in your products or quit as you have blamed us in the past, not thinking for a moment about the role you played in us deciding as we have done.

Every benefit you give supermarkets, every time you make them more appealing than newsagents is another decision against the future of the Australian newsagency channel. Shame on you as we have served you well. It is newsagents who have been key to your success and newsagents off of whom you make more money.

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Competition

Our card vandal is back

rippedcardWe found these cards torn in our Spirit Humour stand on Saturday. Our prude shopper who judges what we sell by damaging our stock is back.

What an arrogant yet weak act. Arrogant in that they clearly want a world reflecting only what they approve. Weak in that they don’t have the guts to speak to us.

People are entitled to their views and interests as long as they are legal. What they are not entitled to is to deny others of their views and interests. What a horrible world this prejudiced shopper wants.

We will identify them and when we do let’s see if they stand up for their convictions.

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confectionary

Unnecessary increase in supply of Yours

magsyoursoversuppThere is no evidence in our sales data going back three months for Bauer Media increasing supply of Yours magazine by 5%. IIt is increases like this that demonstrate sending data back through XchangeIT is a waste of time. For all their bluster against newsagents and data, XchangeIT should look closer to home for misbehaviour with data.

FFS Bauer why can’t you get your allocations right?!

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Ethics

Thinking about our children in our businesses

Do your kids work in your newsagency? I know many newsagencies where this is the case. Some are even into third generation family employee situations.

It can be a blessing and a curse – all in a day in some businesses. In others it is a delight every day. While in others it can lead to hurtful breakdowns in family relationships.

I know of some family newsagencies where one or more of the kids have resigned or been sacked several times over the years.

It can be tough for your child working in your newsagency – at any age including as an adult. In some cases colleagues will feel that your child has not earned their place – regardless of how well they may be contributing to the business. Your child may feel this too. Often these feelings are not discussed openly, making a situation worse.

I have seen situations where kids of the owner have had it much tougher than other employees – tougher without due acknowledgement.

Some suppliers and or their reps, too, may feel your child has not earned their place. This could play out in how they treat your child and your business. Shame on suppliers and or reps who do this.

I appreciate none of this is new, nor is it unique to the newsagency channel. My goal with this post is to acknowledge a situation in which many newsagents and their kids find themselves and through this to offer some support.

It’s important that there is respect between kids and parents working in the same business and that the family ties are not abused. We need to make sure there are appropriate skills development opportunities. Plus we need to provide opportunities for leadership as skills are developed. Parents and kids need to be appreciative of each other for the additional emotional and practical support family members often provide each other.

If you have kids working in your business, take a moment to think about their role, how you treat them and what it means to have the with you. Talk with them.

If you’re a kid working in your parent’s business, open the topic for discussion.

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Ethics

Careful, our ignorance is showing

I noticed comments posted here recently drawing differences between distribution and retail newsagents, indicating that the distribution newsagent had it tougher and were more real. I think such a view reflects an unhelpful prejudice.

We each have unique business and personal circumstances that determine the difficulty we face daily in our businesses and lives. To label one more real than another because of the type of newsagency they run is something I don’t agree with Our situation is real to us.

Today, newsagency businesses are more diverse than ever and the world in which we operate more competitive than ever. These factors and the overlay of personal circumstance make it unreasonable for us to judge another based on the type of newsagency they have.

Thinking about this from an overall newsagency channel perspective, all newsagents deserve our respect and support. While we don’t all have to agree, we ought to at least have respect for each other and accept that the challenges of one type of business could be more than what we know.

I read the comments over the last couple of days on the post which prompted my comments here and was not planning on saying anything until a taxi ride last night in Sydney.

I hailed a taxi in Redfern and asked the driver to take me to the Hilton in the city. He asked where the Hilton was. He really didn’t know. I ended up navigating him with the map my iPhone. In the city, stuck in traffic I asked how long he had been driving. He’d been driving two years but only regionally out in Parramatta. He came to Australia as a refugee and while he had an engineering degree, driving a taxi was the only work he could get. He was in Redfern because of a rare fare close into the city. He did me a favour by stopping.

While maybe he should have learnt the roads in Sydney better, I found myself thinking about his circumstances and that I’d been too quick to judge without all the information. Realising this, the next thought I had was about the post talking abut the differences between the types of newsagencies.

While this is a somewhat personal reflection, it represents part of the reason I started the blog. I hope it makes sense.

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Ethics

Officeworks price gouging on tape?

officeworks-expensiveOfficeworks sells this Sellotape roll for $7.86.  We have it in our newsagency, near two Officeworks locations, for $5.99. We use a convenience pricing model for stationery.  Our buy price is $1.99 ex GST. I’d expect Officeworks to pay less.

I think this is a rip-off by Officeworks. The company spends heavily promoting that their prices are low and they won’t be beaten on price – yet they fail to ensure this is the case.

$7.86 for this roll of tape is a rip-off. It shows why people should not shop at Officeworks.

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Competition

How newsagents can act on calendar supply by magazine distributors

As promised a few days ago, here are my thoughts on how newsagents can act on the supply of calendars by magazine distributors where we have little or no control on supply and where margins are considerably lower than what we can achieve ourselves through direct relationships.

If you have been supplied calendars that you do not want and are facing costs associated with storage and return, you could consider bringing the matter before an appropriate authority for review. However, before you start, think about what outcome you want – what is your core issue.

It is one thing to think a situation is unfair and another entirely to have proof to support your complaint. If you do not have proof that will stand up to scrutiny there is no point is pursuing the matter.

Read the contract you signed with the magazine distributor you are contemplating acting against – read what you agreed to.

PREPARE YOUR CASE.  Have you been oversupplied? Have you been supplied stock when you previously said no?  What do you want? What outcome are you seeking?  A registrar, mediator or judge will want you to be clear in articulating what you want. So, if you are being oversupplied, what do you want?

I can imaging a complain being that the supply model makes your business uncompetitive as it forces on you costs that detract from the more efficient and profitable running of your business.

MOUNTING YOUR CASE. Where you make your complaint will differ from state and territory to state and territory. My suggestion is to start with an entry level forum like a Small Business Commissioner. In Victoria I have used the office of the SBC to resolve a several issues. It’s inexpensive and informal. It also shows the other side that you are serious about resolving the dispute. Also, it can be a reasonable precursor to more formal action of the matter is not resolved.

Here are the entry point places where I’d mount an initial complaint for mediation / resolution by state:

Don’t rush to make the complaint. Make sure you have your evidence, that you know what you want as an outcome and what you will do if mediation fails.

I’d be glad to help any newsagent through this process. Mounting an ill prepared, undocumented and emotion-charged case will not help those involved nor the channel more widely.

Each case will be unique. It needs to be from you, in your own words, speaking to your situation. Merely lodging a complaint will pressure the magazine distributor involved to be present for a mediation in your state. In some jurisdictions the numbers of complaints against companies are noted in reported to parliament.

SO, WHAT DO YOU WANT? You never go into any legal or quasi-legal fight without knowing for certain what you want. When it comes to calendar supply, I suggest that newsagents want one or more of:

  1. Absolute control over what calendars they are sent.
  2. Trading terms that are competitive with other calendar suppliers.
  3. No cost of returning unsold stock.
  4. Mutual respect in supply and return management.

REMEMBER. You will need to be prepared to sit across the table from people better resourced and probably more articulate than you. You will need to have a thick hide and be prepared for them to play the person and not the issue. You will need to be prepared to be public about your fight so that other newsagents can support you.

Here are some questions and answers:

Why should individual newsagents mount their case? My experience in business is that authorities are more likely to listen to complaints from individuals.

The distributors are bigger? For decades newsagents have felt and acted helpless. One day someone will act and show the way forward.

Will government care? The organisations I suggest in this post have been established by governments to provide low cost and structured places where disputes like these can be resolved.

What if publishers hate me? Who cares? They are part of the magazine distribution process and play a role in oversupply.

I am too small why should I do this? If you do suffer from calendar oversupply and complain about it, you need to have the guts to act on your complaint or stop complaining.

How can the magazine distributors Gotch and Network avoid this? Stop calendar oversupplying. It’s a behaviour they knowingly engage in. This is my preferred outcome – that they voluntarily supply based on what I ask for.

Why have the associations not done this? You’d need to ask them. Magazine / calendar oversupply is the issue newsagents rate as the most important they currently face.

FOOTNOTE: I will help any newsagent as much as I can to deal with magazine oversupply. Call me on 0418 321 338 or email me.

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Calendars

Finance Minister makes case for selling government owned Australia Post retail outlets

At his press conference on Sunday announcing the privatisation of Medicare, Finance Minister Mathias Cormann made the case for privatising the government owned and protected Australia Post retail outlets.

There is absolutely no good reason for the Federal Government to own a private health insurance business today. Medibank Private is a commercial business, operating in a well-functioning, well-regulated competitive market with 34 private health funds. There is no reason as to why the Government should be involved in that commercial, competitive market. Furthermore, by selling Medibank Private we will remove the current conflict which the Federal Government has by being both the regulator and the largest market participant.

The justification used for privatising Medicare applies 100% to the Australia Post corporate store network: these are commercial businesses operating in a well-functioning, well-regulated competitive market. The government is the regulator and the operator.

The only difference between the Medicare situation and Australia Post corporate store situation is the size of the competitors. Medicare’s competitors are big businesses whereas Australia Post’s competitors are small businesses, like newsagents.

If this government was fair dinkum about competition, government ownership of businesses and small business it would sell off Australia Post owned retail stores. Further, it would sell them to small business operators as part of a strengthening of the franchised network trading under the Australia Post name. This would end government owned retail outlets from competing with small businesses.

Further on in the press conference the Finance Minister is clear about the privatisation case:

REPORTER: What do you say to policyholders, particularly older Australians, who specifically joined Medibank Private because it was Government-owned. I spoke to one this morning and he was pretty annoyed, he did join because it was Government-owned and he was pretty upset.

MATHIAS CORMANN: The Government has made a judgement that in 2014 it was no longer appropriate for the Government to run a private health insurance business.  Private health insurance is a very well functioning competitive market which is well regulated. There is no public policy reason for the Government to continue to be involved in this market. We believe that on behalf of taxpayers that the capital that is currently tied up in Medibank Private can be used better. Furthermore, I would say to the member of Medibank that you spoke to, that he or she will be able to have access to at least the same level of services into the future if not better because in our view without public ownership, without the restrictions that public ownership brings with it, Medibank Private will be able to go to another level.

Australians would be better served with locals awning and operating Australia Post shops and these being on a fairer competitive footing than the government owned outlets today.

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Australia Post

How violent can Halloween products be before they offend?

stabbingmanThe name of the product screams: STABBING MAN WITH BLOOD CLOTH. A few weeks ago I thought this was pretty cool. Today, with the higher terror alert and the recent tragedy in Endeavour Hills I wonder about the name of the product and whether it has a meaning that does not work today as it might have a few weeks ago.

No offence is meant by the product name but the news of the day could impact that and invite offence and this concerns me.

I’m not taking it off the shelves or hiding it from display. In fact, right now it is a feature in the Halloween display. I guess I am raising it here to see what others think about the product name. Personally, I have no issue whatsoever but I would not want to unreasonably offend someone touched by recent events.

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Ethics

How should The Age have handled their front page mistake yesterday?

The moment people at The Age discovered they had incorrectly identified a teenage boy in a photo on the front page of yesterday’s newspaper as a terror suspect they should have immediately recalled every copy from sale.

It is appalling the publisher allowed this dangerous and mistaken identification to circulate a moment longer.

The coverage of the story in The Age today is inadequate.

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Ethics

Shame on Philip Morris

cigsI am appalled by the advertising I saw being used by Philip Morris in the Philippines earlier this week promoting Marlboro cigarettes.

DON’T BE A MAYBE BE> Marlboro reads to me like a pushy message, a demand almost. Like if you don’t smoke Marlboro you will be a maybe and who wants to be a maybe? Not Filipinos who fight to break of subsistence living and dream of being more than a maybe.

This ad is a taunt that I think is designed to play into the unique psyche of Filipinos.

This type of advertising for products that cause cancer and many other health problems is appalling. Smoke these things and maybe you’ll get cancer. Hmm, I don’t think that’s what the MAYBE in the ad means though.

Shame on Philip Morris.

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Ethics

Ros Reines fails to backup sledge of newsagents

rostwitRos Reines from Sydney Confidential in The Daily Telegraph recently claimed to 17,500 Twitter followers that some newsagents don’t put out magazines each day. I responded and found out it was two newsagents in Bondi. Reins has not responded to other questions I’ve put.

A professional journalist would check the facts before publishing. I want to know if Reines checked the facts. What was the title being sought out? Were staff in the businesses asked? Was the title some place else and not in the usual location? Was the comment based on unopened bundles? If so, these could have been extra stock.

If the newsagents in question did not have titles out that should have been out, shame on them for their treatment of the products and for their damaging of our reputation.

Right now, however, we don’t have the facts and Ros Reines is not responding.

This is not a gossip piece like you find in Sydney Confidential. This is a sledge against a small business channel, a sledge that needs to be responded to.

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Ethics

Beware of scammers using the e-pay name

Scammers are chive in contracting newsagents saying they need to access your computer system to install an e-pay update. This is a scam. Do not them them touch your computer system. this happened today to a newsagent in Queensland who just contacted me.

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Ethics

Fairfax plays hardball with small business newsagents on Trader Tag

Further my post last week, Fairfax owned IPS has confirmed it will play hard ball with newsagents in clawing back commission incorrectly credited to newsagents.

It’s a bit rich of the company to force a mistake two years in the making to expect newsagents to resolve it and pay Fairfax in one hit.

Attempts by newsagents to engage with the company on the matter are ignored. This is appalling service from the company.

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Ethics

Newsagents need to be wary on e-cigarettes

E-cigraettes are being regularly pitched to newsagents so I thought I check in with the current situation regarding the regulation and sale of the products. The sale of nicotine containing e-cigarettes is banned in Australia which is kind of odd since nicotine contained cigarettes are still legal.

While the sale of all e-cigarettes, including non-nicotine containing product, is banned in Western Australia, it’s not the case elsewhere from what I can see.

This is a category of product to approach with caution given that it’s possible you might not know what you are stocking. I was approached yesterday by a start up importer and they were not sure about the nicotine content of their product. Ignorance is no defence.

Quit South Australia has published a useful fact sheet. The Therapeutic Goods Administration of the federal government also has useful information available online. The Conversation last month published a report worth reading on this topic.

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Ethics

Fairfax prefers 7-Eleven over newsagents

goodfoodFurther to my post about not being able to get The Age Good Food Guide to sell in my newsagency, Fairfax has been promoting that it’s in 7-Eleven outlets and newsagents. Thanks Fairfax. They go negotiate to get it into 7-Eleven but don’t even try and get it into better service focussed retail newsagents.

This is dumb.

And they wonder why newsagents retreat from newspapers.

Our channel is the best opportunity Fairfax has to increase, yes increase, single copy sales yet they continue to ignore retail newsagents.

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Ethics

Melbourne Airport is a rip off when it comes to parking

melbourne-airportPlease excuse this off-topic rant. I parked at Melbourne Airport for 24 hours and five minutes and was charged for two days. Yes, that’s what the published fee schedule says and yes I knew it. That does’t make it fair.

Their long term car park was full. It took ten minutes to find a park in the short term so technically I was parked and using the facility for less than twenty four hours.

A fairer fee structure would be to charge by the hour for all part days. But, hey, Melbourne Airport is not run on fairness.

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Ethics

Fairfax mistake costs newsagents

Newsagents have received advice from Fairfax owned IPS that they have been incorrectly billing for Trader Tag magazine since August 2012, giving newsagents considerable more commission than should have been the case.

Without consultation or consideration Fairfax clawed back the commission.

The Fairfax handling of the matter has frustrated many newsagents and created difficulties for some. The company’s poor management of the situation and the lack of reasonable consideration has damaged their reputation.

While there is a case for Fairfax recovering some monies, given the timeframe involved I think some middle ground approach would have been appropriate. That the company acted and then explained is poor service. It gives newsagents another reason to consider closing their IPS account.

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Ethics

Tomorrow’s news today at Coles Express Goondiwindi

colesgoonHere is the display of magazines at Coles Express in Goondiwindi. The photo was taken yesterday morning. Some of the titles in the photo were due to go on sale today.

The local newsagent received their stock early but did not put it out, respecting the contract. Coles, apparently, lives by a different set of rules.

Despite engagement by Network, Gotch, the ANF and me here and on Twitter (to which Coles responded), the magazines were still up at 4:15pm. Shame on you Coles.

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Ethics

If you rip cash out of your newsagency…

The ATO is targeting small businesses in a clamp down on the cash economy according to media reports over the weekend and today.

Using a range of tools and benchmarks, the ATO plans to make the point that those ripping cash out undetected will be detected.

In the 1990s newsagents were in target of the ATO because of a reported systematic approach to under reporting tax. There was a meeting at the ATO office in Box Hill where AFP, SRO, ATO and other government departments were represented in an investigation of the systematic approach. While nothing public came of that meeting, the activity engaged in appeared to disappear for a time. That’s what happens when there is public awareness around an investigation.

I was not a target of the 1990s investigation. My involvement was to bring people to the room who could explain how other software could be used to commit tax fraud.

If you take cash out of your business be aware that the ATO has a range of means through which to detect this. The likelihood of being caught is greater today than in the 1990s.

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Ethics

Beware of paying for likes, friends and links

With more newsagents relying on Google, Facebook, Twitter and other search engine and social media platforms to drive traffic, there his a temptation to get attention, numbers and followers by paying a service to achieve this for you. My advice – don’t! Paid for eyeballs are of no benefit to your business.

Paid for links to drive traffic to your blog or business website will be seen what what they are. Google and others will mark you down and your competitors will see how desperate you are to get attention.

The most important likes, friends, visits and links you can get are those achieved naturally and because of the good content you provide.

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Ethics
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