Hubbed

A newsagent advised me of delays in getting the $250 a month rebate from Hubbed. Despite contact many times the issue was unresolved, until yesterday. The time the newsagent had to spend chasing Hubbed was considerable. I agreed to raise the issue here to see if anyone else is challenged with Hubbed.

The ANF promoted Hubbed parcel service claims 680 newsagent locations on their website.

Our marketplace of some 680 newsagents Australia-wide, coupled with great partners, delivers the best parcel, retail and lifestyle shopping experiences for the consumer.

Using the Find My Newsagent facility on their website you are taken to a map showing locations with Hubbed. Counting the locations listed gets to 238 locations: QLD: 65; NSW: 72; VIC: 17; TAS 21; NT 2; SA 19; WA 40; ACT 2. Even allowing for a miscount based on the map, the claim of 680 newsagent locations does not appear to be matched by the data published by Hubbed.

This matters as newsagents are promoted to get on board with Hubbed in part because of the ‘size’ of their network.

On 17 March last year The Newsagency Blog posted a release from Matt Handbury and his exit from any involvement with Hubbed and confirming his resignation as a director as Hubbed. He also said that he was yet to be repaid the funds he had extended to Hubbed for a consideration of a 51 per cent shareholding in Hubbed which was never forthcoming.

Handbury has made the following comment to The Newsagency Blog:

As newsagents have been informed over the past week, my new company blueshyft is launching a software and hardware platform through Nparcel to facilitate the introduction of new suppliers in the parcel delivery and cash payments businesses to newsagents.

blueshyft is the product of a deep investigation of the most effective and profitable execution of this new revenue stream for newsagents.  My abortive experience with Hubbed may have left me out of pocket, but my involvement with that venture and the analysis and development subsequently undertaken by my team at blueshyft has only strengthened my conviction about the unrealised potential of the Australian newsagency network.

Given that legal proceedings have been commenced by the Deputy Commissioner of Taxation, I do not wish to comment on Hubbed, other than to record that since January 2014 I have not had confidence in the management of the company. My involvement with the board and management of the company came to end in January 2014.

I have continued to be deeply dismayed by the serious overlooking by publishers, in particular, of  the value of newsagents as a critical part of adaptation to the digital economy.

I believe blueshyft is the first fully researched platform to address this issue.  Hence our adoption by Nparcel and partnership with XchangeIT.

It would cause me great sadness to find that my deep commitment to the newsagency industry – particularly on the back of the history of our wonderful business relationship established during my ownership of Murdoch Magazines – is misinterpreted in the light of my costly and frustrating involvement with Hubbed.

I am convinced that the Australian newsagency industry will regard blueshyft as a true pioneer and a valuable partner for all newsagents, helping take their rightful place at the centre of retail business in the evolving on-line retail space and the digital economy. See www.blueshyft.com.au for details on my new business and its offering to newsagents

I was asked by a newsagent recently to help them exit Hubbed as they were encountering challenges in achieving this for themselves. For those not aware of Hubbed, it is a parcel service promoted to newsagents by Hubbed in partnership with and endorsement from the ANF.

Resolving any issue starts with the paperwork from the start of the relationship. I can see the newsagent has a relationship with Hubbed Pty Limited, ACN 159 190 833 and ABN 28 159 190 833.

A check of the ASIC (Australian Securities and Investment Commission) website shows that a series of changes in 2014 including: October 10, 2014, Hubbed Pty Limited changes its name to A.C.N. 159 190 833 Pty Limited.

The next ASIC entry is: June 2, 2015. The ATO commences winding-up proceedings against the company that was Hubbed {Pty Limited lodging a Form 519. The ASIC website shows that matter is still pending.

This is important for newsagents wanting to exit Hubbed as it goes to the status of the entity with which you contracted and whether any interest Hubbed or related entities had in your business has been transferred or sold to any other entity. There is another entity, Hubbed Pty Limited, which was called A.C.N. 600 398 178 PTY LTD until October 8, 2014. The last activity on ASIC registers for that company are on October 17, 2014.

I am posting this here to seek help from others who may have more information that could help newsagents in relation to their Hubbed relationship.

In the article on Australia Post in The Australian yesterday they called out three parcel services competing with the government business – Mailman from Officeworks, Senile backed by NRMA and Parcel Point . Their call out listed Parcel Point as competitors. This call out is kudos for those services and a reminder for newsagents that the provision of parcel services is attracting plenty of interest. Certainly the coverage in The Australian yesterday was considerable.

In the same article they singled our Parcel Point for additional mention with its network of 1,500 locations in Australia. Many of those locations are newsagents.

While I am a Parcel Point outlet in one of my newsagencies that is the extent of my involvement.

The ANF endorsed and promoted Hubbed is being promoted to newsagents today via a six page note sent under the name of Hubbed and POS Solutions.  It reads like a joint promotion, with bold claims to try and drive interest.

For those not familiar I declare I own Tower Systems, the newsagency software company with 1,900+ newsagents as customers. POS is my competitor in that business.  They had around 600 newsagent customers last time I checked. I mention the numbers to provide context, not disparage.  But this post is not about competing with POS, this blog is not about my business.

This post is about questions newsagents should have after reading the Hubbed marketing material.

I do not want to see newsagents lose money on something that is not based on sound research. I am not saying that applies to Hubbed as I have not seen anything approaching research. If they have good research then they should share the facts.

On page one there is this claim: The ConnectPOS system is designed exclusively for newsagents top offer a new range of products and services to customers.  Newsagents already have access to parcel service and prepaid visa cards. Okay, bill payment is new but there is no commercial upside in that from what I can see.  They then say ConnectPOS provides growth with new products, services and increased revenue.  Why don’t they quote the growth achieved by the newsagents who have been running this for six months and more? The rumour is it’s not generating worthwhile commercial results. Only data we can verify can counter such rumours. I’d happily publish the data to counter the rumours.

When quoting newsagent results they need to indicate the terms on which those newsagents accessed Hubbed. It is important everyone can be certain all are on the same playing field.

The flyer on page 1 claims Hubbed also offer high commission to the newsagent with the cheapest prices to the customers.  maybe there is a reason others charge more and have a more modest commission structure.  I’ve been told by someone I’d expect to have good knowledge that Hubbed people met with representatives of a major logistics company who refused to deal with Hubbed because they model was flawed. I’d like to know if there is truth in this report.

On page two of the fax they say newsagents with Connect are selling between 10 and 30 parcels a day. They should publish the details of all Connect newsagents so this claim can be verified.

On page three is the claim that POS Solutions has worked exclusively with Hubbed to create ConnectPOS.  It is exclusive. Hubbed did not approach any other company I am told.  I am told the exclusivity arrangement is for no more than six months.  I’ve seen the integration. I think it’s pretty lame. But for a couple of keystrokes you could do this on any computer running any newsagency software.

Page three ends with – join the growing list of newsagents that are embracing POSBrowser with integrated ConnectPOS! Newsagents should ask for this growing list so they can verify the claim. Otherwise, it remains a sales pitch without evidentiary support.

Page five says: Over the years Newsagents have watched staple product sets that belonged to them in large part become commoditised with other retailers now taking the significant share.  While this is true, none of the Hubbed products are in this space so I am not sure why they would make the statement other than to sell through fear.

Fear is a massive factor here. Newsagents who are not great retailers want someone to fix their businesses for them. Hubbed is being pitched as this. But it will not fix a troubled business.  The only way for a newsagent to fix a troubled newsagency is for them to take control of their business, embrace change and plan in the budget, on the shop floor and through buying for a brighter future.  In my own newsagency my sales are up double digits year on year. I don’t have Hubbed or anything like it. I’m doing this on the back of flat traffic in the centre and extraordinary competition from small and large businesses.

Newsagency growth comes from future focused products.  Hubbed products and services are rooted in the past.

On page five they go on: other retailers are good at seeing what is in demand and taking advantage of it.  How does that connect to Hubbed? Other than the parcel offering that we can get through others too, what products and services are in high demand where demand is growing? Here is their fear pitch again.

Back to the issue of what newsagents have lost over the years and are losing today: lotteries, magazines and stationery. These are the key products lost. Where is Hubbed in any of these? Nowhere from what I can see. I make this point to underscore the fear they are using to encourage newsagents to go with them yet they are not offering anything to address the items in their fear mongering.

On the last page is a claim of a special offer from Hubbed and POS Solutions.  My own experience is that something that is exclusive is not as keenly priced as something that has competition.  If Hubbed really wanted to save newsagents money they would have made their platform more available than with only one company, they would have, from the outset, demonstrated an understanding of the commercial reality they write so much about in their marketing material.

Even on the best assessment, Hubbed will not generate the kind of return a newsagent can get from being a good retailer.

Between Jan. 1 and Mar. 13 this year in one of my newsagencies we have increased our plush sales $4,743.18 (ex GST). We are projecting an increase for the whole year of in excess of $35,000.00 in plush sales (ex GST). This will add $19,250.00 gross profit to our P&L from this category alone. There is a correlation between plush sales and gift sales and card sales.  The plush increase will, in fact, translate into close to $48,000.00 additional gross profit from the three categories.

Once you add in 18% year on year greeting case sale growth you have a wonderful business story despite the doom and gloom talk being used in this unfortunate flyer.

My newsagency is in a shopping centre with 300 other shops, several majors, many gift shops that sell plush and several specialist large card shops. Yes, it is a very competitive environment. With flat foot traffic in the centre.

The future of the channel for good retailer newsagents is bright because we can make it so. We can create strong, growing and profitable newsagencies by being good retailers where we have control through what we stock and how we merchandise it. It starts with us choosing to be a retailer and not an agent. Next is you taking a realistic view of your business and building from there.

I acknowledge that some newsagents will like the Hubbed approach and will benefit from it. If you think this is you, I urge you to do your homework and be 100% satisfied with all you are promised. If, once you have done this you like what you see, go for it.

Several newsagents have mentioned to be deals they have reportedly been offered by Hubbed that vary from the deals more generally known about. If I understand it correctly, one was offered preferential pricing and another a promise on returning equipment if sales don’t meet expectations.

If true, the ANF appears directly involved in making offers different to those promoted more widely. If I was a newsagent on a less favourable deal and heard about a better deal now I’d be wanting compensation.

I’m told that Matt Handbury is no longer involved in Hubbed – the bill payment and parcel business he actively promoted as the future of newsagency businesses for more than a year.  I am also told that the ANF no longer has its 5% stake in Hubbed but that Hubbed moved into the ANF offices in early January this year.

I am not aware of any formal announcement being made about any of these or other reported moves.  A check of the Hubbed website and blog indicates that Handbury is no longer involved.

Given that newsagents have been asked to sign long-term finance contracts to ‘finance’ equipment and or software, one could argue that they are stakeholders in the Hubbed business since these finance contracts, in turn, release funds, working capital, to the Hubbed business. Has any of this money been used to buy out Matt Handbury and if so what is the impact on the financials of the Hubbed business.

Handbury was quoted in a range of media stories in 2013 about how Hubbed would save newsagents, that it was the future. His connections and history were used to gain traction with newsagents, newsagents respect him. Now that he is gone I wonder of some who signed up will have second thoughts.

Hubbed is pushing its parcel operation more than bill payment. Anyone considering Hubbed for its parcel operation need to talk to the people at the newsagent owned N Parcel and the privately owned Parcel Point – do your due diligence comparing Hubbed to those other free offerings. I say this because several logistics people I have spoken with say the Hubbed parcel model is not sustainable in the long term.

Given what appears to be its continuing investment in the Hubbed business, the ANF ought to make a full statement to newsagents so that they are better informed prior to signing any contract in relation to Hubbed. My understanding is that VANA and NANA are yet to endorse or support Hubbed in any way.

Anyone with more information on Hubbed, please share your comments here.

There have been rumours circulating for some time about the structure of the Hubbed business being promoted to newsagents by the ANF. I have not written about them here as I waited to see if the situation would clarify. It is taking longer than expected.

A lack of disclosure is leaving newsagents considering Hubbed vulnerable.

At the heart of the situation as I understand it is the ownership of Hubbed. It could be that some of the key people newsagents ultimately deal with at Hubbed are different to those they thought were behind Hubbed.

Since the rumours started circulating here has been plenty of miscommunication about the issues. The ANF has been a party to this, as they have been with Hubbed all along. They have invested considerably in Hubbed and have, indeed, tied their success as an association to the success of Hubbed.

Newsagent uptake of Hubbed has not been what the business expected. Their roll out is not where they needed it to be. If they don’t get the numbers they need the model does not work. if it does not work and ultimately closes, newsagents could be left with financial lease agreements for equipment  they took on specifically for Hubbed – like what happened with Bill Express.

Anyone facing signing a Hubbed contract should undertake thorough due diligence including getting documented clarity from a Director of the company as it where it is at right now in relation to their business plan projections.

Given what the ANF knows and given their active promotion of Hubbed, they owe newsagents a statement. Anyone signing with Hubbed based on the current ANF pitch is doing so without all the information the ANF could / should share.

For more on Hubbed click here.

I have heard from several people in the channel that the take up of the Hubbed bill payment agency has been slow and that people in and supporting Hubbed are wondering why this could be the case.

While I have had no discussions with Hubbed, from what I have seen of their documentation I can see two reasons why take up among newsagents would be slow:

1. Agency versus retailer. More and more newsagents prefer top be retailers, controlling more of their business, the traffic generators and the gross profit they make. The success of Hubbed depends on Hubbed to generate interest and to provide a time and space efficient platform. Retailers comparing Hubbed to the Australia Post offering will see, as I have seen, that the Australia Post kiosk offering is next generation efficient while the Hubbed technology is out of date.
2. Overall financial risk. Given the need to take a lease for computer equipment for the Hubbed premium offering and that the cost of the hardware included in the lease appears to be higher than one could buy equivalent gear on the street and that the finance agreement is separate to the Hubbed agreement, newsagents are naturally wary.

A newsagent turning over $50,000 in cards could invest the amount Hubbed is asking for into a carefully selected new retail product category and turn the (approx.) $2,500 or $6,200 a year into $10,000 or $30,000 in gross profit respectively. This goes to the heart of the retailer versus agent question.

My personal view is that retail newsagents have a brighter future focussing on being retailers than they have focussing on being agents.

No supplier will make us successful. Our success comes from our own decisions and actions as retailers.

A month ago I wrote here abut correspondence with the ANF about Hubbed. I published my email to the ANF, their response and my follow up. The ANF has not responded since. My questions about Hubbed remain. The ANF  demonstrated a lack of interest in collectively communicating with and representing newsagents by not communicating collectively on Hubbed.