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Newsagent representation

What is the ANF connection to Crimvid?

anf-commercialSeveral newsagents forwarded to me an email from the ANF yesterday promoting a security product called Crimvid. They were surprised that the ANF is promoting this product.

If I was an ANF member and had received the email my first response would be why is the ANF promoting this product? What is in it for them? There is no disclosure of s commercial relationship between the ANF and the promoters of Crimvid. Given the endorsement of Crimvid by the ANF the organisation needs to be clear about why – otherwise members could distrust the endorsement.

As an association serving its members, the ANF would / should have done due diligence into Crimvid before endorsing it. The ANF communication offers no disclosure as to due diligence.

Some involved with the ANF will say that this blog post is an attack on them. It is not. It is pointing out that their communication endorsing and promoting Crimvid is incomplete: tell your members why you are endorsing it, share with them your due diligence insights as to why this is good for newsagents.

The ANF communication includes:

We often talk about a reason  for customers to step into a newsagency, our point of difference and our unique selling proposition.

If the ANF is suggesting that a single product is a USP then they are mistaken. A USP is something deep within the business, something long term around which to build a business plan. It is not a single product.

Instead of mis-using catchphrases of others, the ANF communication should have clearly demonstrated the relevance of this product to a retail newsagency business so that newsagents could continuer it in the context of their businesses and what they do today.

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Newsagency challenges

Are magazine distributors cutting small newsagency accounts?

Several moves in recent weeks suggest that magazine distributors Gordon & Gotch and Network services are reviewing small accounts with a view to cutting accounts that to not meet minimum sales criteria. While they have had thresholds for new accounts and in the past have review performance, I anticipate the review this year will be felt more widely.

Call it a conspiracy theory but I wonder if any such review and plan to reduce the number of smaller accounts related to the withdrawal of support and requirement for the previously mandated five day training course for new newsagents.

While there is active discussion among newsagents and their suppliers about the closure of newsagency businesses and what this means for the future of the channel, there has been little discussion about the support for the channel by core suppliers such as magazine distributors.

Magazine distributors continue to treat newsagents unfairly. They supply us using rules and processes established in the days of regulation yet our competitors are treated differently, in a de-regulated way. This creates an unfair playing field that newsagents have failed to have addressed.

While the ANF invests in a struggling bill payment platform, its member newsagents are facing more challenges from an old magazine distribution model that leaves their businesses uncompetitive in this slim-margin product category. And while on the ANF – any distribution account review should see newsagents treated the same as another direct drop account.

I’d encourage newsagents to share here if their account is being reviewed or has been cut.

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Hubbed

The five day training course for newsagents quietly slips away

Ten years ago the then federal Minister for Small Business Joe Hockey launched the magazine distributor and newspaper publisher mandated new newsagency training program at the offices of the ANF in Sydney. I was at the launch and supported the introduction of the training.

The goal of the five-day training program was to ensure that all new newsagents had a consistent base level of training in the operation of a newsagency, especially newsagency-specific aspects of the business.

Over time, with course materials not keeping up with real-world changes, tough training requirements from the various lottery businesses and other obligations on new newsagents, the ANF course faded in relevance.

A few months ago, the five day training requirement for new newsagents was dropped. Neither the magazine distributors or newspaper publishers require that such training be undertaken.

While it is good that this barrier to entry has been removed and that training that had become irrelevant was no longer forced on new newsagents, it’s appropriate to take a moment to think about this move and consider what it could mean, if anything. For example, does the removal of the requirement of training mean our channel is not as important as it once was? 

My understanding is that those behind the decision say the training requirement was eliminated because it was not making any difference. If that was the case they could have driven changes to the training since they had exerted control over training course content in the past.

It’s is interesting to think this through. On the one hand we want to be treated the same as other magazine and newspaper retailers but then we could worry when special treatment or attention is removed.

While I doubt we would get a completely honest answer, I’d like to know from magazine publishers and distributors whether they see us as relevant today as they did ten years ago. I think we need to ask this question. If we look at the regulation and monitoring imposed on newsagents via XchangeIT we could say that nothing has changed. But if we consider the elimination of the requirement for consistent basic training for new entrants to the channel I am not so sure.

While many newsagents are angry at the treatment of the channel by some magazine publishers and the two major magazine distributors and may not care about the training, I think we need to consider it a reflection on bigger issues, bigger challenges for us.

What do our businesses look like without magazines? I for one would not like to see this. However, I want fair and equitable supply. Unfair and inequitable supply makes me think about life without magazines – but on my terms. The removal of the training requirement leaves me wondering if the decision about the future of magazines in the channel is being made elsewhere.

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magazine distribution

Promoting magazines anywhere and the new retail paradigm of shopping 24/7

appstoremagsI was on Apple’s AppStore last night and noticed this ad: Magazines for Him. Clicking on the ad and I was offered what at first appeared to be free access to apps for Rolling Stone, Money, T3 and other titles. With many magazine apps, however, the content is not free, just the app for accessing the content. But that’s not what I wanted to write about this morning.

Seeing the ad for magazines reminded me of a fundamental change impacting retailers, including newsagents, today. We – retailers, wholesalers and product manufacturers – are in a race to get to the consumer first. The days of the shop being the place where things are bought are over. The shop is but one location. Today people are shopping in every location possible, they are shopping 24/7. That is how large online and bricks and mortar retailers see it. They are investing in strategies to be first to the consumer, anticipating their needs if possible so they can decrease the time between desire and fulfilment.

Retailers who focus only on their shop have an incomplete business strategy. Growth today more than ever required a multi-layered multi-channel strategy.

The question we newsagents need to ask ourselves individually is what are we doing to tap into the shop anytime shop anywhere mindset of today’s mobile consumer?

To get a feeling for how retail is changing: there was a story a couple of days ago about Amazon patenting an anticipatory shipping system that predicts orders.  Their algorithm predicts what you may purchase based on previous purchases and it will ship those items to the warehouse closest to you – to reduce the time it takes to fulfil your order. This is pretty amazing stuff.

While in the US a couple of weeks ago I met with a company and was shown technology that retailers like newsagents can integrate with that enables us to capture a shopper interested in a product or category before they are near our shop.

These are just two of the moves that we need to factor into our business plans. On first glance they may feel too complex for us to engage with. the reality is that these and other moves are do or die for retailers. This is the world we are in today – the rules have been set by others, we have to engage for our businesses to have value.

It may sound trite but we newsagents can do this, we can embrace the new shopping model and be relevant as a small independent retailer. It starts with becoming aware and that is, in part, what this blog post is about.

Engagement with customers is key to our future. Connecting them with us so they remember us and come back to us is key. There are various ways newsagents can do this today. Those who are not, and that’s the majority of the channel, risk the commercial consequences of a disconnect from our customers.

I’m optimistic about retail and newsagencies. Yes I see plenty of change, but this is not new. We have to face it and walk with it, changing our businesses appropriately.

On the small issue of magazine apps being available through the Apple AppStore: this is what publishers need to do – and, yes, they need to do it directly and not through newsagents. We are not entitled. repeat: we are not entitled.

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Media disruption

Is the supply of Christmas cards by magazine distributor Gordon and Gotch outside the terms of their contract with newsagents?

The contract between Gordon and Gotch and each individual newsagency business covers the supply of publications. On the second page of the agreement is a definition:

publications means:

  • The publications distributed by Gordon and Gotch on behalf of Australian and overseas publishers.

  • Any other kinds of publications or products distributed by Gordon and Gotch to you or newsagents generally on or before commencement date

  • Any other kinds of products agreed by you and Gordon and Gotch, in each case as nominated to by Gordon and Gotch from time to time.

While I expect that Gotch management would argue that supply constitutes nomination, I suspect others would disagree. Indeed, I would argue that the entire contract is built around the supply of publications and that publications are magazines. The processes outlined, the obligations documented all relate to magazines as the publications.

This is not a contract contemplating supply of products other than magazines. For example, while the definition above contemplates non publication products, the Magazine Ranging and Supply Policy does not. Indeed, there is no documentation in the contract on how Gotch will range non publication product to newsagents.

So: Is the supply of Christmas cards by magazine distributor Gordon and Gotch outside the terms of their contract with newsagents?  I would say yes.  This is a question better put to a legal forum where a determination could result in rewriting the contract. A VCAT, QCAT or CTTT could be an appropriate forum.

The contract we have with Gordon and Gotch is where newsagents need to start if they want to resolve what they could consider to be unfair behaviour against their business by Gotch.

This is a matter that the associations could take up on behalf of newsagents. Not by meeting with Gotch but by organising and managing test cases in state jurisdictions. That they have not done this is a poor reflection on their commitment to resolve the issue of most importance to newsagents.

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magazine distribution

How NANA uses newsagent association funds

NANA recently commenced a CTTT claim on behalf of a newsagent against Tower Systems. NANA prepared the claim, paid to lodge it and provided resources to manage the matter.

This began when Chiang Lim, NANA CEO, called me a couple of weeks prior to lodging the CTTT claim to ask about a then recently installed Tower Systems newsagency site. I explained that after the first day of the installation, after all hardware had been installed and use commenced, and following an argument between husband and wife, the husband advised they could not proceed with the computer system. The story as to why they didn’t want to proceed changed several times that day and in the time since. At no time did they say they had not received what the ordered or that the software was not appropriate to their needs.

I explained to Chiang that the newsagent signed a contract to purchase the system after two meetings to look at and discuss the software and that there was no pressure on them to proceed. I also explained that since they did not honour the COD terms and had not done so for weeks,  Tower had commenced recovery action.I also advised Chiang about the argument between the owners about the system. Chiang said he would look into it and get back to me.

The next I heard was the CTTT notice to appear at a hearing.

I’ve not heard from Chiang since. He didn’t show at the CTTT hearing – where the matter was dismissed because lo lack of appearance. Tower had challenged CTTT jurisdiction since legal action had reluctantly been commenced for payment prior.

In Chiang’s letter accompanying the CTTT application he claimed there was a language barrier. What Chiang did not research was whether Tower offered training in Mandarin and Cantonese. Both offers were made an the newsagent advised they were not necessary. The language Chiang indicated the newsagent preferred is not the language they actually preferred. Chiang also said a trial period of the software was not adequately offered yet he took no steps to determine if that was the case.

I expect there would be NANA members who would be disappointed that NANA has spent newsagent funds on this. While the association should support members wronged by suppliers, it should thoroughly investigate any claim to ensure that wrongdoing has actually occurred.

It appears that NANA rushed to take legal action and then let the matter drop once they realised they had acted in haste. They were quick to call with an allegation and then went missing once the evidence stacked up against them.

As for the newsagency, the matter has been resolved by agreement, system has been paid for and installation is proceeding.

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Newsagent representation

Why newsagent suppliers should trust newsagents

Newsagent suppliers who want a healthy and valuable relationship with newsagents need to read this, all of it … especially if you want to grow the revenue your company achieves through newsagency businesses.

Our channel started with us as agents, being told what to do by everyone dealing with us. While that has changed, key traffic-generating suppliers  – newspaper publishers, magazine publishers and distributors, transport operators, telcos and Tatts – continue to treat newsagents as agents. But worse than that, some of them don’t trust newsagents.

Tatts, newspaper publishers and magazine publishers and distributors have the worst track record of trust in and of newsagents – or should I say lack of trust. They all have stories to tell to justify their lack of trust. Here’s a story of trust in newsagents that’s worked for me.

My newsagency software company serves now close to 1,900 newsagents as active customers. That’s a pretty big pool in the channel so my experiences are more than those of a small group, they are genuinely representative.

In March 2009, after reading Jeff Jarvis’ excellent book, What Would Google Do?, I decided to make the process of selecting software update changes more transparent and user-engaged. Fast forward to today, more than four years on, and I am thrilled to share that newsagents actively suggest changes and vote on changes. I gave them far more control than usual for a software company and it’s worked.

Newsagents have benefited from software enhancements they want based on their business experience. The changes have helped drive efficiency.  In the last four years the Tower market share in the newsagency channel has grown tremendously – so I have benefited too. Suppliers have benefited too with ideas being passed back, for example, for XchangeIT.

So when a newspaper publisher or magazine distributor or publisher says they can’t trust newsagents to set their own supply I say nonsense, I’d trust them.

The key I have found from my own experience is to create an interface newsagents can use, an interface that is transparent and engenders mutual trust. Provide this and they will use it and deliver more value for your businesses.

My team created Software Ideas at the Tower website and opened this for newsagents to use. Newsagents set the agenda. So much for them not having time or not engaging about business management matters.

By engaging in old-world processes that magazine distributors use today they are forcing the channel to be inefficient, they are forcing us to deliver an outcome that allows them to say we can’t be trusted to serve the needs of the publishers the distributors serve.

My experience has been that if you give newsagents the right tools and freedom and show trust, it will work for newsagents and for you. What I have experienced over the last four years is proof of that.

So I have to ask myself, those who do not engage in a more trust-centred relationship with newsagents – WHY? Maybe to do so would not serve their commercial needs.

If you are a magazine publisher who wants newsagents to set supply, DEMAND IT! You can trust newsagents to do right by your title because their need is aligned with yours. However, ensure that the process is right, transparent and, of itself, trustworthy.

I feel like the newsagency channel in on a merry-go-round sometimes given the regularity with which common problems are reported here and elsewhere. This will continue, sales will fall and old-school suppliers will be less important to us – unless they demonstrate trust in newsagents. We have to break the merry-go-round.

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Newsagency challenges

ANF survey results rank achieving equitable magazine supply as the most important newsagency channel issue

144 people participated in my Newsagents and the ANF survey. Equitable magazine supply is what people want the ANF engaged in the most while A bill payment platform is what people want the least. These responses are not unexpected.

I am not surprised that the majority want the ANF engaged in Lobbying politicians – something the organisation has done consistently and effectively for years now.

I am surprised by the disinterest in Western Union, A parcel pickup/drop off service and in the ANF Running newsagent industry awards.

Anyone representing newsagents in any role, be it in an newsagent association or some other service organisation, ought to consider these results when planning their activity.

Note: the graph shows the average ranking achieved. The higher the ranking the less interested the responders are in the ANF engaging in this activity.

Anyone wanting a file of all survey responses should email me. The data does not identify individuals so there is no break of privacy. I make this data offer because too often headline results of surveys are used with little transparency of all voting. I will share all voting with anyone who wants it.

Click on the image for a larger version.

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Newsagency challenges

ANF responds to questions on Hubbed

Adam Joy, COO of the ANF, has responded to an email I sent him about correspondence relating to Hubbed he sent to a newsagent re Hubbed. In that correspondence Adam inferred that I was on the ANF board when to chose to go with Bill Express. I was not on the board then. I emailed Adam inviting him to revise what he had written. I also asked some questions about Hubbed.

Click here to see a response from the ANF to questions and my complaint about their letter to a newsagent.  I’ll post my original email to Adam as a comment to this post.

Here is the response I sent yesterday to Adam’s letter. This response needs to be read in-conjunction with Adam’s letter.

Adam,

Thanks for responding to my email.

You have inferred that I was on the ANF Board when the Bill Express decision was made. I was not. In fact, I joined months later. You need to advise who you have put about this mis-representation to.

In your letter you refer very selectively to the minutes of several ANF Board Meetings where Bill Express was discussed and use to build a narrative supporting your apparent claim that I supported Bill Express. The minutes in my year on the board were an inadequate representation of three days of meetings. Also, these minutes do not cover Executive Meeting discussions and other discussions. My position on Bill Express then and now is on the public record – a record which is counter to the narrative you have sought to pitch. You need to withdraw what you have written.

Now I will turn to the questions I raised and your response. For ease of comparison I will use the same numbering but not repeat my question or your response.

  1. I see no evidence of what I would call reasonable due diligence in your answer. You should have financial models at the core of this so newsagents can see the full costs and full opportunities. Your response does not indicate a rigorous process.
  2. The only business plan that matters to newsagents is their business plan. I would have expected the ANF to create business plans for each Hubbed offer so newsagents can see how it can play out.
  3. You say you have conducted retailed research on bill payment yet you have not published this. It would be useful to the ANF case that you publish this along with details of the newsagents you have worked with over the last six months on this issue. If your process is sound then the evidence will boost newsagent confidence.
  4. The ANF should have this information. You suggest its similar to a Point of Sale provider. No, it is not similar. Here, the ANF is a promoter. The obligation on the ANF is considerable yet to fails so far to step up. In terms of Point of Sale, each item in a package – which can be leased through any bank, finance company or other party – can be priced back to the individual item. With Hubbed this is not the case for some of the items. This is core due diligence the ANF ought to have undertaken for newsagents.
  5. I am told that newsagents querying what happens to Hubbed Premium hardware if they decide to not continue then Hubbed will find another location. I would have expected the ANF to require this to be covered in the contract and further that the lease for the equipment and the Hubbed business itself are one in the same.
  6. Yes there appear to be three different agreements. My view is that there should be one agreement so as to avoid a core issue with the Bill Express model. Further, I would have expected that thorough due diligence would have required that this be the case.
  7. Thanks for the response but I would have liked to see more detail.
  8. I am not challenging the integrity of anyone, just asking a question that needs to be asked. Attacking the question is unhelpful as it detracts from your answer.
  9. I would gave expected the ANF to be paid for the considerable amount of marketing support provided in your various media platforms and the time invested by your staff in promoting Hubbed to newsagents. I am not involved in any company operating in the space occupied by Hubbed.
  10. I have seen no information provided to demonstrate experience from the people behind Hubbed in the launch and running of a start up business in the consumer-facing services business at the core of the Hubbed offer.

I am happy to discuss Hubbed face to face. A public forum would be appropriate to demonstrate transparency. If the Hubbed model is good as you say it is newsagents will see that and embrace it. Your responses to my questions do not provide the detail and comfort I was seeking.

The ANF and Hubbed appear to not like being asked questions or challenged. If the offer is genuinely good and if the ANF has undertaken thorough due diligence on behalf of its members thorough scrutiny ought to be welcomed and result of good member up-take.

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Hubbed

What issues do newsagents think the ANF should work on?

I have created a single-question survey providing newsagents an opportunity to rank what they think the ANF should work on. I’ll leave the survey open for a few days. To participate in the survey please click here. FYI the survey software allows one response per computer. Also, the survey software randomises the 17 options for each respondent – your survey questions will be in a different sequence to others.

Note – the ranking is dynamic. Each time you make a selection next to a number the list changes. Click DONE when you are done.

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Newsagency management

Newsagents – tell your bank about the News Limited announcement

I was talking with a newsagent yesterday who is in the middle of a challenging finance review with their bank. The bank had a bunch of reasons to reduce the funding line to the business and the newsagent had not countered with anything. They are a distribution business and advised the bank abut the News Limited announcement. having now done their their relationship manager feels they can make a case in favour of the business.

Every newsagent should advise their bank about the News announcement at the appropriate time.

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Newsagency management

VANA advises newsagents to not sign the Hubbed contract at this time

VANA yesterday advised Victorian newsagents that they should not sign the Hubbed contract at this time.  here is their announcement in full:

VANA’s position on Hubbed
By VANA News | September 13, 2013 | Nparcel Leave a comment

There has been much talk within the industry lately about the ANF’s endorsed company ‘Hubbed”. VANA also understands that the Hubbed team are visiting Victorian Newsagents to introduce the platform to them. As expected, VANA is receiving enquires from members as to our position and recommendation.

The VANA Board was given a presentation by Hubbed CEO David Mclean at our May Board meeting, and has also had many conversations with ANF CEO, Alf Maccioni in relation to the platform.

VANA received a copy of a Hubbed contract and VANA’s solicitors have given us a list of issues and concerns involving this. On Thursday 29th August, VANA met with the ANF to enquire about these issues and on Friday 30th, a list of issues was submitted to Hubbed CEO, David McLean. These questions have been answered and after further discussions, Hubbed has released another version of their contract.

VANA’s advice to Newsagents today is to not sign a Hubbed contract until the final version of the contract is available for all to see, understand and evaluate. Newsagents MUST seek their own professional advice on this contract if they wish to participate as the platform does commit newsagents to a contract term and at a monetary cost, amongst many other things.

VANA also has concerns over the ANF 5% shareholding in Hubbed and the ANF’s ability to have an influence in making sure newsagents are protected.

This issue will be discussed further at our next Board meeting. VANA will continue to update members if any more information comes to hand. If you have any questions in relation to this announcement, please contact The VANA team.

I have expressed some of these concerns here on August 20 and here on August 26. It is good to see newsagent associations doing what associations should do when a new business opportunity enters their marketplace. This is what members expect.

If the Hubbed offer is as good as Hubbed and the ANF say it is they will welcome the scrutiny.

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Hubbed

NANA suggests newsagents delay signing with Hubbed

Here’s an announcement from NANA published  yesterday in relation to Hubbed:

NANA suggests delay in signing
Hubbed contracts/agreements for now

The Newsagents Association of NSW & ACT (NANA) has received legal advice expressing concerns about the Hubbed contracts/agreements that NANA has received.

As NANA is legally not able to instruct NANA Members what to do, NANA is suggesting to NANA Members that they delay signing Hubbed’s contracts/agreements until Hubbed has made appropriate amendments.

Some of the key concerns that NANA has learned are:

their requirement to use insurer(s) approved by Hubbed for public and product liability insurance for Hubbed’s equipment at the Newsagent’s premises;
their exclusivity clause; and
their rental and service agreement that is independent of Hubbed.
Naturally, NANA urges NANA Members to use their own commercial judgement when considering Hubbed’s Connect Premium or Connect Lite.

From the outset, NANA remains very supportive of Hubbed’s offerings as it can significantly propel Newsagents into the lucrative parcel shipments business, bill payments, gift cards, and many other current and future products and service offerings.

Notwithstanding, NANA is firstly committed to ensuring that NANA Members’ business/commercial interests are protected. NANA will continue to update NANA Members of its progress with Hubbed in the coming days and weeks.

For any further information, NANA Members are welcome to contact the NANA office on (02) 9744 0400 or by e-mail at nana@nana.com.au.

Regulars here would know these topics are among the questions I raised here.

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Hubbed

ANF conflict on Hubbed extended

An email today from the ANF to members was solely about Hubbed, the agency business in which the ANF has a 5% share. The email underscores a conflict for the ANF as the national association representing newsagents. The email, essentially a promotional letter from Hubbed, indicates that Hubbed is relying on ANF staff:

We are taking on additional staff as we speak and also leaning heavily on our friends at the ANF to provide support in the roll out process so that we can effectively manage document receipt, installation, training and marketing.

There are other suppliers who provide the ANF with real dollars funding for conferences and award sponsorships who could want to lean on the ANF for staff support. Why is the ANF providing this to Hubbed and is such a tight relationship healthy for newsagent members and the channel more widely?

Just by asking these questions some will say, as they have done recently, that I am talking Hubbed down. I am not. rather I am seeking transparency for newsagents.

The ANF love affair with Hubbed must be challenged since the ANF is not doing this on behalf of members.  While there have been some answers to some of the questions I have raised, I am yet to see any evidence of reasonable due diligence on the Hubbed business model for newsagents.

As I have noted previously, I’d like to see a public debate to test the business model and the newsagent contractual arrangements at the core of the model. If Hubbed is as good as the ANF Hubbed partnership says it is then it would emerge from the debate in a stronger position.

As for the rest of the email – which was thin on specific detail, I am surprised they are rolling out Hubbed given the challenges some tell me of getting a consistent contract.

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Hubbed

News Corp. changes to newspaper distribution remuneration should help drive value of newsagency businesses

News Corp. Australia has this morning released the long-awaited results of the national newsagent remuneration review.  I see the changes announced as a reinforcement of commitment to newsagents from News.  The headlines as I see them are:

Three year contract. This gives newsagents certainty, something they can sell. It will help newsagency sellers and buyers. But most important, the three year contract term will help banks better understand and price the value of a newsagency business. This should make borrowing to purchase a newsagency easier. The three year term also encourages newsagents to consider capital investment within the context of such a term.

Consistent fee structure. Under Kim Williams leadership News transitioned from a  state and regional business with many silos each with its own approach to management and each with its own newspaper delivery fee structure to a more centrally run company.  The new fee structure of essentially two fixed fee-per-copy fees – category 1 (20 cents a paper) and category 2 (25 cents a paper) – quits close to fifty fee structures.  Gone is a fee that reflects a percentage of cover price.  I see this as focusing attention on the distribution business as a freight business.

Fixed fee-per-copy replaces sliding scale delivery fee. Gone is the discount for second and third newspapers delivered to one address. The new approach treats each delivery as a delivery.  This move to a fixed fee-per-copy approach is sensible from what I can see. This change should increase the income earned by many newsagents.

They remuneration decision shows that News is committed to the newsagency channel. Beyond the increase in fees, the more valuable changes are contract tenure and the fixed fee-per-copy.  My understanding is that these moves will increase the income earned by distribution newsagents.

While newsagents will be frustrated that they have to wait for six months for the remuneration changes to take effect, the time is necessary for News deliver changes to its internal systems. The delivery pricing model is quite different to what some News systems have been used to.

I see the remuneration and contract changes as part of a broader process being undertaken at News.  The company has work to do with retail newsagents to drive single copy sales. As a retail only newsagent this issue is important to me if I’m to continue to sell newspapers.

News also is yet to fully address the issues of consolidation following the suspension of the T2020 project in Queensland earlier this year. That said, the FAQ document accompanying the announcement indicates the company is supportive of voluntary territory consolidation. I’d be keen to see it go beyond this and actively encourage newsagent-driven distribution territory consolidation.

News has a website with some details. All affected newsagents will start receiving letters from today.

While these are my views, what really matters is what other newsagents think. Over to you…

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Newsagency management

NSW State Government shows lack of support for small business

Many years ago the Labor government of NSW hurt small business newsagents by cutting commission on transport tickets. The Liberal government is showing they are no different by crowing that 75% of OPAL card users top up their accounts online, thereby cutting out retailers like newsagents. Their website guides users on this.

While top-up online is to be expected, the promotion is another example of governments selfishly chasing their revenue needs at the expense of small business. These same politicians find money to pork-barrel electorates they want to win and to prop-up industries they want to suck up to. What’s happened here is another reason my call for politicians to do work experience in small business is vital.

The biggest sector to suffer from changes in transport ticketing arrangements over the last decade is newsagents.

While I not a fan of agency business I understand that to many newsagents agency related traffic and revenue is very important.

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Ethics

Unfortunate QNF communication on insurance

In a communication to members yesterday, Ann Nugent QLD CEO of the ANF provided advice on insurance. My understanding is that Ann is not licenced to provide this advice. If Ann was licenced to provide the advice the licence number ought to appear on the advice. Ann could have sent the information saying as advised by the QNF brokers but she has not done this.

Ann’s advice refers to the risk of underinsurance. There is evidence circulating in Queensland of underinsurance being offered by providers to the newsagency channel. One can only guess that this is being done to achieve a lower premium. Such a goal does not make good business sense. As with any such business decision, be cautious and be satisfied that you know what you’ve got.  Seek the advice of a professional.

The QNF is an industry association purporting to represent newsagents. Their communication needs to declare any commercial arrangement on the matter being communicated.

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Newsagent representation

State and federal politicians should be required to undertake a week of genuine paid work experience in a small business every year

Despite small businesses employing more Australians than any other business block we receive less attention from our politicians. This is in part our own fault driven by disconnected representation and a lack of unity on issues.

One way to redress the disconnect between small business and politicians would be to require every politician, federal and state, to spend a week a year working in a  small business in their electorate – paid real work.

The business should be chosen by random ballot – to remove the opportunity for mates looking after mates.

Besides the practical work experience, the politicians would gain a better understanding of the life and challenges of everyday Australians.

I am confident that after a couple of years we would see this small business work experience program drive a more practical narrative from politicians of all sides- and not just a small business focused narrative but one also more connected with real life.

We can’t compete with the lobbyists who are paid a fortune to guide our politicians to outcomes they want. Hence my call for a legislated week of small business work every year for every politician.

Imagine what discussions about paid parental leave, GST changes, assistance for the car industry or workplace relations changes would be like in the cabinet room if everyone at the table had done a week of real work in a small business beforehand. They would have reference points relevant not only to our small businesses but also to our employee colleagues, their constituents.

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Newsagency management

Is Hubbed good for newsagents?

More and more newsagents are asking what I think about Hubbed. My answer is the same to all: do your homework, make sure you understand how it works, be certain it is right for your business before you sign anything and get every promise and commitment in writing.

I don’t know if Hubbed is good for newsagents because key information has not yet been made available. What I do know i that I will not, at this stage, be signing my newsagencies to Hubbed. I can put the $7 a day or $17 a day to more profitable use. Also, I see myself as a retailer and not an agent.

Hubbed is for agents who want others to generate traffic for them and who are happy to make a tiny amount from transactions.

Newsagents can’t rely on their industry association for guidance as it became conflicted when it accepted a 5% share in the Hubbed business. This is a mistake on the part of the ANF in my view.

At the Sydney GNS Market Fair the Hubbed people told newsagents to go to the Tower Systems stand and ask if the company will support Hubbed because POS Solutions is. (I own Tower Systems). Hubbed has never approached Tower. If they wanted to integrate to any newsagency software then they should approach this in the same way any supplier does and follow well established industry standards and not engage in juvenile trade show antics.

Ashley McGrath and David McLean from Hubbed reached out to me in January to talk about Hubbed before the launch. They sought my thoughts: We are shortly moving to pilot and, as an industry leader, I felt it would be worthwhile touching base and getting your thoughts on what we’re doing. Before engaging I wanted to know if they had a commercial relationship with the ANF. They refused to answer so I declined to meet. I wanted to understand whether newsagents were being represented by their association.

So, I’ve had no meeting with them and they have not approached me since. Yet here they are playing games talking about newsagency software integration when back in january they were adamant that such integration was not part of their plan.

All I have to go off is the contract offered by Hubbed to newsagents. Read my questions on the Hubbed contract for newsagents.

In terms of the business areas being pursued by Hubbed, I see bill payment as dead, especially the apparent approach being taken by Hubbed – the Australia Post offer seems far superior and more shopper friendly.  The Visa card offer exists already thanks to Touch and ePay. Parcel handling is available for no up front cost thanks to N Parcel (ANF owned) and Parcel Point. Subscriptions are available through Touch. Gift cards are available through several suppliers.

I don’t see enough traffic generating value for $7 or $17 a day. But to assess the cost one needs to add in the retail space (costing between $5.00 and $10.00 a day in a shopping centre) and the labour cost.

I am raising these questions here because the ANF has abandoned its responsibility to its members and all newsagents. It is not able to objectively ask questions that need to be asked so that newsagents are more informed.

Hubbed may be good. Right now there is not enough information. If they have something so good and so valuable maybe we should setup a debate which newsagents can attend for the issues I have raised here can be explored.

All I want is for newsagents to be fully informed before signing any contract.

So, is Hubbed good for newsagents? I don’t know and I don’t see how anyone can know based on the incomplete information out there right now.

Footnote: my questioning of Hubbed here is leading to some attacking me behind my back. Anyone doing this is more suspicious in my mind. Every question I have raised could have a reasonable answer. Attacking me and not answering the questions should raise alarm bells. I’ve been open about my questions. I wish answers we being provided in a similar open way.

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Hubbed

Questions in relation to the Hubbed contract offered to newsagents

Several newsagents have sent me the Preferred Agent Terms and Conditions for Hubbed for comment. It appears to be their contract.  In each case they asked me to look at the contract because of concerns about what happened years ago with the ANF endorsed and promoted Bill Express.

While I have business questions about the Hubbed offer are questions I have about the contract:

  1. Hubbed Competitor. The definition in the contract is broad and could change over time as Hubbed changes. Today, Touch Networks, N-Parcel, Parcel Point and even facilities in some newsagency software products could be considered competitors of Hubbed.
  2. Territory. The newsagent is restricted as to where they can offer the service. Hubbed has no restrictions on who they can sign to offer the service.
  3. Equipment. Newsagents must obtain the equipment Hubbed requires from Hubbed and this must be financed by a finance company approved by Hubbed.
  4. Financial Services. Newsagents taking on Hubbed are directed to use Moneytech Services to be able to use Hubbed.  The finance agreement appears to be separate to the Hubbed agreement. I have not been given a copy of a finance agreement.  If I remember correctly this was the case with Bill Express too.
  5. Sales target. Newsagents need to understand their target and the implications.
  6. Insurance. Newsagents neet to take out insurance for parcels and equipment.
  7. Responsibilities of the agent. Newsagents have to erect signs if required by Hubbed – there does not appear to be an opportunity to negotiate on this. The price you charge is set by Hubbed and you cannot vary it. You must get written approval from Hubbed to sell, promote or accept business from any competitor service. You have to notify the sale of your business 60 days in advance. You have to give 60 days notice if you plan to move your shop.
  8. Access. You have to notify your landlord that you’re taking on Hubbed.
  9. Fees. Hubbed may set off amounts payable.
  10. Access – termination. Newsagents agree that Hubbed can enter the premises without notice and remove equipment.
  11. Money. Hubbed and their agents get access to your bank account and you must authorise their direct withdrawal.
  12. Subcontracting. You authorise Hubbed subcontractors to have the same rights as Hubbed.  You can’t subcontract your own writes without written permission from Hubbed.
  13. Termination. While Hubbed or the agent can terminate the agreement at 90 days notice this would need to be considered in association with the finance agreement.  Termination fees apply and they are in schedule 5 – none of the agreement I have been given have a schedule 5.
  14. Financial guarantee. Part of the Hubbed agreement requires newsagents to provide a financial guarantee to the Hubbed Financial Partner.
  15. XchangeIT. In Schedule 4 newsagents are required to use something called the XchangeIT inventory management and payment system. Is this a new service or a mis-naming of XchangeIT?

While I am no expert, it seems to me that newsagents signing up for Hubbed will need to seek written permission to continue to offer Touch or ePay products as well as to offer Parcel Point or N Parcel. I would also be concerned about the future business opportunities that Hubbed may deny me from taking on given the tight no compete obligations in the contract.

More complete assessment of the Hubbed offer can only be undertaken in-conjunction with reading the finance agreement which I have not seen nor have newsagents I have spoken with.

It is not my intention to attack Hubbed. Rather, I have sought to document the concerns I would have with the Preferred Agent Terms and Conditions for Hubbed if they were presented to me for consideration. I’d like to think the ANF has read the contract with the same intent as me.

Hubbed may have answers that satisfy newsagents on these and other points. As with any contract newsagents are presented to sign, read it all carefully and ask questions about anything which concerns you or you do not understand. Get the answers in writing.

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Hubbed

Who’s next to have a crack at sorting out News Corp’s Australian newspapers?

Change agent Kim Williams ‘resigned’ from running News Corp. in Australia yesterday. He’s been replaced by the former Chairman of the Herald & Weekly Times Julian Clarke in a move many commentators label seat warming for a longer term leader – some are speculating about Lachlan Murdoch for the role.

Williams’ resignation is evidence of  company infighting at News. He was a change-agent recruited to focus on the digital platform. In this role he inherited T2020 – the name of the strategy to overhaul newspaper distribution.  Williams oversaw tweaking T2020 and then presided over its death or stalling at least.

Now it looks like print people are back in charge. News insider Mark Day said as much on ABC Radio yesterday.  This could mean T2020 or the goals of T2020 – cost savings for the company – are pursued again. But this is only speculation.

My expectation is that News will refocus on its print products and the costs associated with distribution of these products. They’ll do this because subscriptions and advertising revenue from digital come nowhere near what the company needs to serve its cost base or support its share price, nowhere near advertising revenue from print today.

I expect we will quite quickly see moves by the company on print given the saving some in the business expect they can achieve by focusing on the distribution costs. While I could be wrong as to the outcome, I am certain there are senior people in the company keen to ‘fix’ what they see as an expensive and inefficient distribution model – especially in capital cities.

The recent leaking of internal News correspondence, a reported by Crikey, showed discontent within the company and disputes between old and new guard factions.

It was put to me recently that some News execs see newsagents as a union they have to break in order to fix what needs to be fixed. The company will disagree, saying there is no one in the business who holds that view – just as they denied my comments a while back that News was in crisis in terms of newspaper home delivery.

While T2020 is what will matter most to newsagents flowing from the coup at Holt Street, the bigger picture is the future of the company itself. Challenges abound:

  • Print versus digital.
  • The financial model of free versus paid.
  • Subscriptions versus single copy sales.
  • The processes and costs of landing subscription copies on front lawns. That last mile is the killer for them.

These are matters of serious interest to newsagents and to News executives. They go to the core of the change in leadership I think.

We’ll read from industry associations that they are seeking meetings with the company and that they will advise newsagents once these meetings have happened. The reality is that News will advise newsagents about its plans when it is ready and not because someone demands answers.

The changes to the distribution of newspapers are far from over. Newsagents can be on the front foot by themselves consolidating to deliver News greater efficiency. I’m certain News will welcome more proposals from newsagents that reduce drops and the number of newsagent accounts they have to manage.

My advice to distribution newsagents is – do not wait for action from News, get on the front foot now, develop a business plan and pitch it to the company.

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Newsagency challenges

Newsagent survey: what do you think about sales reps?

I’ve put together a quest survey for newsagents about in-store sales reps – how you engage with them and their value. You can participate in the survey by clicking this link.

I have put together this survey because of a change by some suppliers in their sales rep strategy. I’ll publish the full results here for newsagents and suppliers to see sometime next week.

6 likes
Newsagency management
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