A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Social responsibility

When you choose a card company for your newsagency, choose for profit over friendship

Some card companies invest heavily in hiring people good at making prospective customers feel good. Often, they arm them with an expense account for lunches, dinners and coffees. They also give them some cash to splurge to buy your business, cash for fixtures and other things.

None of this matters if you end up with greeting card products that do not perform as well as products from another card company.

Be wary of card reps offering you lunch, dinner or cash to spend in your business.

Any company selling products that uses cash or ‘friendship’ to get you to buy from them should be viewed with skepticism in my opinion as these things take your focus form their products.

Historically, some of the big card companies in our channel built their retail network on ‘friendship’ and other ways of buying business. I know of retailers who subsequently switched card companies and benefited from double-digit sales growth.

Card sales are strong this year. Here is the topline summary data for one of my shops comparing the last month with the same period a year earlier.

Strong results: 16% up in unit sales and 10% up in revenue.

For everyday captions, the results are even better: up 31% in unit sales and up 27% in revenue. This growth achieved without a card company change – it’s the card company working with us to maximise the opportunity for both our businesses.

This is what matters, it is all that matters: growing revenue, and profitability, to make the business more valuable for all stakeholders. This matters more than a free lunch or some other glad-handing.

I know of a newsagency business that changed hands recently and within days a card company rep was in there greeting the new owners and inviting them out to dinner. The new owners, in their first ever business, felt loved and accepted the invitation. They didn’t think they might be schmoozed into a decision that may not have been in the best interests of their business. Thankfully for them they realised the game being played before they signed an agreement.

Prioritise suppliers who help you make more money in your business, they are more valuable to you than ‘friendship’ or a free meal.

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Newsagency management

Collins Debden pitches its diaries direct to consumers

It is challenging seeing a supplier you have supported for years go out with a direct to consumer pitch. I didn’t plan to write about Collins Debden today. An email from them this morning caught my attention.

This is a Collins Debden direct to consumer pitch.

They added me to their marketing database, without my permission. Their email includes a compelling offer:

They end with a offer of social media connection. If only they were this engaged with small business retailers of their products.

I am surprised that they are promoting direct to consumers when they are so far behind with shipping to retailers. Their fulfilment processes are strained and unable to get product to shops on time. Why would an individual feel they could fulfil a single order on time, unless Collins Debden is prioritising their direct to consumer orders. I have no idea whether that is the case tho.

I am tired of suppliers going direct after years and decades of support from retailers like us to drive brand awareness and engagement. They could not go direct as they have if we had not supported as we have.

A supplier going direct demonstrates disrespect for their retail partners. Them doing this while they are party to delays in supply to retailers is appalling. It is a failure of social responsibility on their part.

Thinking about this issue of a supplier going direct more generally …

There are ethical considerations to consider when a long-term supplier decides to go direct-to-consumer.

  • Fairness and Trust: The supplier’s decision may impact local retail businesses, potentially leading to lost sales or revenue. A good supplier will be on the front foot and engage in open communication on how to mitigate any negative effects. A bad supplier will make the move and not discuss it with retailers.
  • Customer Relationships: Customers may be confused or disappointed by the change. We need to be transparent and communicate clearly with them to maintain trust and loyalty to our business. We need to tell them what has been done to us.
  • Competition: The supplier is likely now a direct competitor, impacting your market position. Consider how you can differentiate your business and offer unique value to your customers. Look for alternative products that will serve your customers.

Ultimately, the ethical approach involves maintaining open communication, acting with integrity, and prioritising the needs of your customers.

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Diaries

Collins Debden 2025 diary supply challenges are hurting sales

We are missing out of revenue from the certain sale of Collins Debden diaries as a result of supply challenges within the Collins Debden business. I have heard from plenty of newsagents in the same situation.

Approaches to the company over the last two months have resulted in what I’d describe as spin. They have not resulted in any stock being delivered, which is frustrating since Amazon Australia appears unaffected by the supply challenges.

That Amazon has stock of what newsagents could be selling right now opens the question of whether the supply delay is part of a recalibration of the go-to-market strategy at Collins Debden. I this is a reasonable question to have when you see a major competitor of stock while yuou have no indication of when your stock will arrive.

While some newsagents have covered diary sales by accessing stock elsewhere, most cannot since the typical diary shopper is brand loyal. That brand loyalty will see them buy wherever they can find the Collins Debden diary they want. This is where Amazon having stock plays out negatively for newsagents. I first heard about Amazon being able to supply from a customer who was frustrated that we did not have stock.

With newsagents aware of cost to their business from the lack of supply by Collins Debden, I anticipate there will be claims against the company for lost sales as well as claims for financial support to move diaries when they do finally arrive. In my opinion, the company would do well to thoughtfully consider how it supports local small business retailers who have been without stock now for close to two months while a major competitor, Amazon, has had stock.

How Collins Debden handles the situation, outside of fixing the supply issues, will speak to the interest the company has in its local small business retailer network. I know plenty of retailers will be watching the situation. I wonder, too, whether there are any matters for regulators here. For example, if there is evidence of preferencing a big retailer (Amazon) over local small business retailers, could that be captured in regulations supporting small businesses.

Like all newsagents who regularly stock Collins Debden diaries, the best solution would have been on time supply and the second best solutions would have been diaries supplied a few weeks late. As of this morning, we are considerably beyond that, with the situation made worse by inadequate communication from the company.

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Diaries

What can you do if your marketing group contract auto-renews or you are bound by a long lock-out period?

Following my last post (Monday this week), Does your marketing group contract auto-renew? Does it include a lock-out period?, I outline below options you may consider if you find yourself in a marketing group contract you want to leave.

I am not a lawyer. This is not legal advice. In my opinion, a marketing group contract should be so simple straightforward and fair that it does hot need a lawyer to interpret or understand.

If your marketing group contract or agreement is complex and not easy to understand that’s a warning sign right there.

CONTRACT AUTO-RENEWAL.

If you have found your contract has auto-renewed, think about whether it was clear it would and whether the newsagency marketing group contracted you prior to the auto-renewal trigger advising you that auto-renewal was imminent. The ACCC is on record as saying that auto-renewal should be clear and that you should be contacted prior to auto-renewal with enough time for you to say no thanks.

Three newsagents in the last week have told me their newsagency marketing group contracts were auto-renewed without advance warning from the marketing group that it was going to happen. I think any independent party with authority considering this would say renewal action was unfair and that the newsagent could opt to leave the group now.

RESTRAINT OF TRADE – POST CONTRACT LOCK OUT PERIOD.

Some newsagency marketing agreements seek to deny the newsagent the right to join another marketing group for a period of time after the end of the agreement. I have heard marketing groups with such a restraining clause claim that it is to protect their intellectual property shared with the business while they were in the group. The question I have is what intellectual property?

In situations where I have seen newsagents threatened by the group they are leaving, or the lawyers for the group, I have not been able to discover any intellectual property worth protecting.

In a recent report, the ACCC highlighted that restraints which go beyond what is reasonably necessary to protect a franchisor’s legitimate interests are likely to be unfair. For the purposes of this discussion, a franchisor would be the newsagency marketing group.

NEW REGULATIONS.

In November 2023, reforms passed by parliament make unfair contract terms illegal, attracting substantial penalties under the Competition and Consumer Act 2010 and the ASIC Act 2001, with each unfair term forming a separate contravention.

I think it is possible that a newsagent with an agreement that auto-renews and / or with an end of contract lock-out restraint period barring them from joining any other group could challenge the validity of the contract.

While I am not a lawyer and this is not legal advice, if I found myself in this situation I would do several things, all at once:

  1. Write to the franchisor / marketing group explaining my opinion that the contract is unfair and seeking immediate termination of the contract without penalty and without any restraint period. And, if the letter I would request that all correspondence is in writing and only in writing.
  2. Contact my local state government level small business ombudsman seeking their help in resolving the matter.
  3. Seek assistance from Australian Small Business and Family Enterprise Ombudsman on the contract.
  4. Complain to the Australian Financial Complaints Authority (AFCA). They small businesses with a free and independent dispute resolution scheme to assist with resolving financial complaints.
  5. Engage with ASIC, lodge a report of misconduct online.
  6. Write to the ACCC complaining about what I consider to be an unfair contract.
  7. Contact my local small claims authority (VCAT, QCAT, NCAT, TASCAT, SAT etc) to see if they would accept a case seeking to declare the contract invalid and agreeing my my immediate exit from the group.

My point here is that there are options for you, actions you can take that do not require a lawyer, actions that could free you from a contract you no longer want for your business.

I have seen newsagents consider taking steps to get out of a contract only to give up, saying it is too hard. I have also seen newsagents take a couple of steps and be permitted to exit a group as long as they don’t tell anyone.

If you are in a marketing group for your newsagency and want to leave but have been told you cannot or been told that you have a lock-out restraint period, it is possible one or more of the steps listed above could help you out. Doing nothing achieves nothing for your business.

The difference between being in a group doing little for your business and a group doing plenty could be tens of thousands of dollars in net profit in a year.

A good newsagency marketing group is profitable for the newsagency. Belonging just to belong to something is not commercially astute.

I am not going to list marketing group contracts here that I consider to be unfair in part because I have seen some groups with different contracts for different people, which in itself is odd and somewhat concerning. One group has recently become more threatening against newsagents who want to leave, causing considerable distress for the newsagents impacted.

One final point: everything I have written here could relate to some card company contracts I have seen.

Before you sign any agreement, read it, be sure you understand it and ask someone you trust for their opinion.

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Ethics

Does your marketing group contract auto-renew? Does it include a lock-out period?

If you are in a newsagency marketing group, get out the contract you signed and read what it says about termination.

Be sure you understand the term of the contract, whether you have to give notice and if so what length of notice is required and whether there is a period after the end of the contract in which you are not permitted to join another group.

If you are not sure about these things, seek professional advice. Indeed, you should have sought advice prior to signing the contract. It is never too late to seek advice.

TERM.

Newsagency marketing group contracts vary from one year to six years from what I have seen. Personally, I think anything more than one year is too long. Aren’t you better off staying with a group because of the value gain from it rather than because they have legally bound you in a contract? Shouldn’t groups want you to stay because you want to stay.

If they really trust what they offer and the benefits they deliver for you, why lock you in?

Oh, and I do understand the need for an initial term when you first join, to learn from each other, to unlock value for each other.

NOTICE PERIOD.

Some contracts require you to give notice months ahead of the contract renewal period and your failure to do this locks you in for, sometimes, another long period. In my opinion, a notice period of two months is reasonable and anything more is unfair for the small business retailer.

AUTO RENEWAL.

I think auto renewals in a contract are a gotcha, especially if the auto renewal period is long, like a year or more as is the case for some newsagency marketing group contracts I have seen.

I suspect businesses put auto renewal and a long (like a year or more) lock in period in contracts because they know people will not realise they need to give notice to not renew. They are businesses. It’s all about their revenue.

LOCK OUT PERIOD.

Another thing I have seen in newsagency marketing group contracts is a post contract termination lock out period. I have seen them make this case to protect their intellectual property, which I think is a joke. What intellectual property? Okay in the first year maybe, but what after that time? None of the newsagency marketing groups has a system with training, regulation, branding requirements and more like you see in a McDonalds.

If you are happy with your newsagency marketing group contract, this post is not for you.

If you are unhappy, please dig out your contract and look at your options.

If you have been given a newsagency marketing group contract to sign, please read it carefully. Some have worse provisions than the few I have mentioned here, provisions that are very expensive – like demanding you access some products / services only from the supplier they dictate. I saw one newsagent recently pay thousands of dollars more for something than they would have paid had they not been in that group.

Buyer beware is the point here. Do your homework. be sure you fully understand the contract. Be sure you are happy with all terms prior to signing.

Not all newsagency marketing groups are the same.

I know of at least twenty newsagents currently in groups they want to leave but cannot. Some have received legal letters threatening against leaving and others have received less formal yet equally distressing communication. In most cases, that communication was the first time i a year their business received direct communication about their business from the group to which they belong. These newsagents would leave in a heartbeat if they did not feel trapped. None of them want a legal fight, and I suspect some in the marketing groups know this, and use it to their advantage, and the disadvantage of their members.

If you are in a newsagency marketing group, get out the contract you signed and read what it says about termination.

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Ethics

ALNA industry breakfast in Perth highlights the value of Lotterywest

I am grateful to ALNA and Lotterywest for the opportunity to attend the industry breakfast in Perth yesterday.

It was terrific hearing from the Minister for Small business as well as the new CEO of Lotterywest about the value they place on lottery retailers, who are predominantly newsagents in Western Australia. They spoke to the value of their local small business retail network and the connection with local communities through the grants made by Lotterywest.

The meeting was another reminder of the value of Lotterywest being a state owned enterprise. I bet premiers on the east coast wished they still owned lottery businesses given the financial value invested back into the WA community each year. It was also a reminder of excellent work done by ALNA for newsagents here.

The other aspect of government ownership is the relationship with retailers, it is very good. retailers feel listened to and valued, as opposed to the type of relationship lottery retailers experience outside of the state. Compensation is considerably higher too.

The other value of yesterday’s meeting was the opportunity to catch up with industry folks before and after the breakfast. Invaluable.

In case you are not familiar with the Lotterywest Community Grants Program, it provides significant funding to community organisations across the state. These grants support projects that benefit the community in a variety of ways, including:

  • Community development: Funding for projects that aim to improve the quality of life for residents, such as building new community facilities, providing training and education programs, and supporting social activities.
  • Arts and culture: Grants for arts and cultural initiatives, including exhibitions, performances, and festivals.
  • Sport and recreation: Funding for sporting clubs, recreation centres, and community events.
  • Health and wellbeing: Grants for health and wellbeing programs, such as mental health services, drug and alcohol programs, and disability support.
  • Education and training: Funding for education and training programs, including scholarships, vocational training, and adult education.
  • Environment and conservation: Grants for environmental and conservation projects, such as habitat restoration, wildlife conservation, and sustainable practices.

Local retailers often feature in grant presentations.

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Lotteries

2025 Australian Firefighters Calendar demands unreasonable on retailers

The supplier of the 2025 Australian Firefighters Calendars has made this demand of retailers, via a major wholesaler, GNS:

To move forward, I will need written guarantees by the directors of your company that all GNS customers will not sell my calendars online. I will not supply GNS unless I have directors’ guarantees that GNS customers will not sell my calendars below my listed price until January 1st, 2025. I have attached a supplier form for you to sign.

To their credit, GNS responded well:

At GNS, we believe in upholding the law and ensuring our customers’ freedom to conduct business as they see fit. As such, we are not willing to impose any restrictions on how you go to market with your products. Unfortunately, this means we will not be receiving any stock of the Firemen calendars.

What makes the move about the 2025 Australian Firefighters Calendars interesting is that these calendars are widely available online. A quick search shows them as available online in Australia via Amazon, Calendar Club, eBay, Just Calendars, Mega Office Supplies and more. It is even listed on the catch.com.au website.

I can’t figure out why the supplier would demand the directors of GNS to agree that retailers they supply will not sell the calendars online.

Of course, the directors of GNS can’t impose such a restriction on their retailers. Their response is good.

The move makes the 2025 Australian Firefighters Calendars less appealing in my view. No matter, there are plenty more Australian designed and made calendars supporting worthy causes available for newsagents and calendar retailers to stock. That’s what we are doing: focussing on calendars we can sell in-store and online, calendars where the supplier does not place restrictive requirements on how we run our business.

The 2025 Silo Art Calendar is a good example of a calendar well worth stocking. It raises money for a good cause, shines a light on Australian towns and, best of all, features Australian art. This is a calendar we sell plenty of in-store as well as online. People love posting it as a gift to friends overseas. We have offered this calendar for years. It’s been a huge hit.

If you are looking for calendars to stock for 2025, look at Bartel, Browntrout. Waterlyn and other local companies that have terrific calendars available.

It would be good to know if sales of the 2025 Australian Firefighters Calendars are impacted by the restrictive conditions.

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Calendars

News Corp and Nine Media seem to care little about print newspaper customers

Every week I hear another story of problems with newspaper delivery to retailers: late deliveries, missed deliveries and more.

The most recent issue relates to a regional Victorian town where the local retail newsagent no longer receives newspapers in time for when they open at 7am. The delivery contractor delivers papers to another retailer two minutes away from the newsagent, then does home deliveries and, finally, to the local newsagent.

Often, deliveries to the newsagent are short, sometimes less than half what they can sell.

Contact from the retail newsagent to News Corp and Nine Media has achieved no resolution. It appears they have either no interest in resolution or no ability to direct the delivery contractor to deliver the papers when they deliver to the cafe two minutes away.

The situation is ridiculous, petty.

Most newspaper delivery contractors I know of do a terrific job and provide excellent service to retail newsagents. Not this one though. Some decisions seem targeted.

I wonder if the disinterest of the publishers has anything to do with the retail newsagent handing their run back a year or so ago. If that is the case, it’s petty. It that is not the case, the newspaper publishers have a broken system that they appear unwilling or unable to fix. Either way, they appear uninterested in the issue and its resolution.

In the meantime, local newspaper readers miss out. Maybe that is what the publishers want. Who knows?

This specific situation does seem to have an easy resolution, if the newspaper publishers want the resolution. The delivery contractor could be directed to deliver to the two sub agents – a cafe and the retail newsagent – at the same time, as they are two minutes from each other.

Years ago, newspaper publishers were demanding of newsagents in terms of delivery times and accuracy. Threats were made. newsagents complied rather than risk losing their business. Today, it’s different. The newspaper contractor in this story has demonstrated no interest in resolving the delivery time, quantity and contact issues – it’s not possible to contact them during the day to resolve issues.

Again, newspaper customers are those that miss out. Newsagency staff are impacted too as they are the front line dealing with customer complaints.

If only News Cop and Nine Media cared about the mental health of newsagency staff and cared about their newspaper reader customers.

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Ethics

I don’t understand newsagents adding tobacco products to their businesses

There is a trend in the newsagency channel of retailers adding tobacco products to their newsagency businesses. This is more common when a new owner takes over.

I don’t get it.

  • The margin on tobacco products is slim.
  • The tobacco buying shopper pool in Australia is small, and getting smaller.
  • Plenty of crime is associated tobacco, with shops the target for arson and other attacks.
  • Tobacco does not sit well with other items like higher end gifts, toys and greeting cards.
  • The retail fixture requirements take valuable space and render it useless for better margin product.

I understand newsagents well established in tobacco who are making good money from this stay with the category. My question today is relates to people buying newsagencies that do not have tobacco products and then adding them to the business.

Newsagents started quitting tobacco products in the late 1990s, when supermarkets were ramping up the sale of tobacco products. I bought my first newsagency in February 1996. We quit tobacco in early 1997. we did that because we saw it as a family business and because we want to free the counter space for more meaningful products.

My guess would be that less than 20% of newsagency rooftops have tobacco. I’d also guess that the percentage of newsagents with tobacco has increased over the last year.

There is a newsagency that I drive past each day that changed hands in the last year. The new owner put in tobacco products, removing stationery and gifts. There are 4 tobacco outlets within a couple of minutes of this shop. The move does to make sense, there is no convenience benefit for them.

What retailers do in their businesses is up to them of course. In writing this I am putting the topic on the table for discussion. There may be a good reason that I am missing, or not.

There are other far more positive and enjoyably product categories through which we can pitch a point of difference, and attract new shoppers – categories that fit well with lucrative product categories like greeting cards.

Why are newsagents adding tobacco to their shops? I have no idea.

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Social responsibility

News Corp continues to fail newspaper home delivery subscribers with road-block customer service

Complaints about News Corp management of newspaper home deliver subscriptions to newsagents who stopped home delivery months and years ago continue. regulars here would have seen the comments by many subscribers.

From my own experience when I signed up for a subscription to The Australian and then sought to cancel after the initial period, the News Corp process is clearly structured to frustrate to a point that people give up. That is how it felt to me.

Subscribers ought be able to go to a website and cancel their subscription with one click. News Corp does not offer this service.

You have to call them. The first response after wanting to know why you want to cancel is to offer a deal. I’ve heard of people being offered an even better deal. The call process is layered with road blocks.

This is appalling customer service from News Corp in my opinion, and in my experience. For a company so invested in shouting at Australians and trying to tell us what to think, they appear disinterested in providing a good customer experience.

It’s as if the call centre mandate is to keep a subscriber at all costs – financial and emotional.

My advice for News Corp newspaper subscribers experiencing difficulties in cancelling their subscription because of road blocks by News Corp is to complain to your local office of consumer affairs and to email the ACCC. If you are owed a refund or the company has charged more than they should have in your opinion, and if you have the time, consider a claim to a small claims tribunal, like VCAT in Victoria. The more state and federal government agencies are made aware of what is happening here the better.

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Ethics

What’s the situation with selling vape products in Australia?

This is a question I was asked yesterday when I was talking with a retailer who has vape products for sale. I directed them to the Therapeutic Goods Administration website. The TGA is the federal government agency with regulatory authority for therapeutic goods. Vaping products fall within their remit. Here’s some of what the TGA website covers on vaping products:

From 1 January 2024, the importation of disposable vapes will be prohibited, subject to very limited exceptions. The ban will apply to disposable vapes irrespective of nicotine content or therapeutic claims. It means that it will be unlawful to import disposable vapes on or after 1 January 2024, even if those vapes were ordered before 1 January 2024 and have not yet arrived in Australia.

The ban also applies to individuals who have ordered disposable vapes from overseas for therapeutic use under the personal importation scheme. A limited exception will apply to international travellers arriving in Australia to carry a small quantity of vapes for their treatment or the treatment of someone travelling with them under their care.

Disposable vapes that have been imported into Australia before 1 January 2024 may continue to be lawfully supplied in Australia subject to the following requirements:

  • disposable vapes containing nicotine that meet TGA requirements may continue to be lawfully supplied in Australia in pharmacy settings to a patient with a prescription in accordance with state and territory laws for prescription medicines,
  • disposable vapes that do not contain nicotine, or any other medicine, and do not make therapeutic claims, may be supplied by retailers generally, including vape stores, subject to state or territory law.

This will allow legitimate retailers of disposable vapes to run down their stocks prior to the Government introducing legislation in early 2024 to prevent the domestic manufacture, advertisement, supply and commercial possession of disposable vapes, to ensure comprehensive controls across all levels of the supply chain.

…

From 1 March 2024, the importation of all non-therapeutic vapes will be prohibited. This means that it will be unlawful to import non-therapeutic vapes on or after 1 March 2024 even if those vapes were ordered before 1 March 2024 and have not yet arrived in Australia.

In addition, the importation of all vapes under the personal importation scheme will end on 1 March 2024. From this date, patients will no longer be able to order vapes directly from overseas, even if they have a prescription.

A limited exception will allow international travellers arriving in Australia to carry a small quantity of vapes for their treatment or the treatment of someone travelling with them under their care.

Subject to state or territory law, non-therapeutic vapes imported before 1 March 2024 may still be lawfully sold by retailers generally, including vape stores, provided the vape does not contain nicotine or any other medicine, and does not make therapeutic claims.

This will allow legitimate retailers of non-therapeutic vapes not containing nicotine to run down their stocks prior to the Government introducing legislation later in 2024 to prevent the domestic manufacture, advertisement, supply and commercial possession of non-therapeutic vapes to ensure comprehensive controls on vapes across all levels of the supply chain.

The website for the Minister for health also comments on this, making the government’s position on vape products clear:

During 2024, product standards for therapeutic vapes will also be strengthened, including to limit flavours, reduce permissible nicotine concentrations and require pharmaceutical packaging. A transition period will be allowed for businesses to comply with the new requirements.

The Government will introduce legislation in 2024 to prevent domestic manufacture, advertisement, supply and commercial possession of non-therapeutic and disposable single use vapes to ensure comprehensive controls on vapes across all levels of the supply chain.

It’s clear that there is no future for vape products in retail outside of pharmacies selling therapeutic products.

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Ethics

More suppliers are going direct to consumers competing with retailers they supply, and it’s breaking long term relationships

Imagine the shock of seeing a supplier offer products they wholesale to you being offered to consumers for not much more than your wholesale price.

The shock turns to anger when it continues months later, with the supplier competing with you for Google ad positioning. They can spend more since they have more margin with which to play.

Their words of no we are not trying to take business from you and we only want to grow the marketplace don’t land as you see customers you have nurtured for years switch to them.

As I told one supplier representative, what they have done in copying our business and chasing our customers disgusts me.

All of us in business have to put our needs ahead of everyone else and that is what this supplier is doing. The thing is though, they get childishly upset when we reduce our commitment to them having found a more valuable relationship elsewhere.

Maybe it is just meh but it feels like, in these early months of 2024, that we have more suppliers going direct to consumers.

Some suppliers are getting it right. One I spoke with this week who was pitching for our business said up front that they sold direct but at a price that was 10% higher than the suggested retail price they had on their items. What I liked even more was that their products, at their suggested retail price, gave us a gross profit of 62%.

This supplier is smart to structure their retailer relationships and their own online pitch such that it’s a genuine win win for supplier and retailer.

Not enough suppliers think through how to approach selling direct.

Some don’t announce it, they sneak around thinking retailers will not notice.

Some use spin from marketing to make it sound like retailers will benefit.

Some lazily copy what they see their retailers are doing and refuse to acknowledge they have done this.

Where the move has been made poorly, ignorantly and / or selfishly, it is understandable relationships break down. Trust is challenged and retailers who do not trust a supplier will not want to do business with them.

Each of us in business has to make decisions that serve our business and those who directly rely on it first. We need to be honest in our decision-making and respectful of long term relationships – if our decision means a change, we need to be upfront rather than secretive.

In my own case, I am more invested in seeking out direct supply relationships, from manufacturer direct to us rather than through a wholesaler who control a brand in the country. I am also happier working with suppliers who have no commitment to go direct to consumers.

Disruption is here to stay. Our role as business owners is to navigate this to our advantage.

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Ethics

Byline Times in the UK is gaining traction, demonstrating the value of genuinely independent journalism

The trust matters and if you want to support the truth, buy a real paper.

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Ethics

Are we seeing AI generated news stories in Toowoomba, Gold Coast, Townsville, Rockhampton and Mackay?

Tobi Lotus of the ABC posted an excellent thread to Twitter (X) sharing compelling evidence:

Be sure to read the entire thread on Twitter. I think use of AI in news coverage is problematic.

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Ethics

Well done to those behind the 50% discount off some magazines at Coles

There is a deal at Coles at the moment offering 50% off selected magazine titles, making Coles far more attractive for purchasing these titles than local newsagency businesses. Clearly, those behind the promotion preference the supermarket giant over local newsagency businesses.

While I am sure those behind the promotion will have their reasons, their justifications, this promotion is a boost for Coles and a slap in the face to our channel. Well done.

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magazines

Closing in 5 weeks: submissions to Senate Committee inquiry on on Bank closures in regional Australia

You have 5 weeks left to make a submission to the Senate inquiry into Bank closures in regional Australia.

While there are 500+ submissions already, more from those directly impacted won’t hurt. I know of plenty of newsagents impacted by bank branch closures.  The more the committee members hear from people directly affected the better.

Here is the submission I lodged last year on behalf of newsXpress members:

SUBMISSION TO THE RURAL AND REGIONAL AFFAIRS AND TRANSPORT REFERENCES COMMITTEE BANK CLOSURES IN REGIONAL AUSTRALIA INQUIRY

This submission is on behalf of independently owned retail newsagency businesses that belong to the newsXpress marketing group.

More than 75% of newsXpress businesses are in regional Australia and most of these have been negatively impacted by bank closures.

Some of these businesses were, themselves, agents for banks, and have had the agency business taken from them, closed. In these businesses the impact has been even more considerable.

Many of the remaining 25% of our members, in city and suburban areas have also been impacted by bank branch closures.

The banks have been poor at communicating their closure decisions and vague in explaining reasons for closures.

While there has been less cash pass through the business in favor of electronic transactions in recent years, cash remains the biggest method of payment for goods and services sold by local newsXpress businesses. This is because of the type of products sold.

Bank branches are important for not only banking takings for but also for accessing banknote and coin change. With the average transaction value in our local retail businesses under $15.00, having available change is an important need.

newsXpress businesses impacted by bank closures have a higher cost of doing business as a result due to:

  • The need to drive to another town to do the banking for the business. The drive time each way ranged from 30 minutes to close to 2 hours.
  • Carrying more cash, especially smaller denomination notes and all denominations of coins, so the business does not run out between banking days.
  • The need, for some, to switch banks because the usual bank for the business is now several hours away.
  • Covering the cost of growing EFTPOS payments due to the fixed price nature of much of what is sold in a typical newsXpress business.

Bank branch closures have added on average for those newsXpress businesses impacted, additional operating costs of between $250.00 and $500.00 a week.

With many newsXpress businesses selling lottery products, the call on cash for the payment of prizes varies, and often cannot be adequately predicted.

In addition to the actual additional cost is additional pressure on the business owners since going to the bank no longer can be done in a few minutes. It needs to be scheduled, rostered for.

There is an emotional cost to bank branch closures, too, as there is more pressure on managing cash since the safety net of the local bank branch has been removed. This extends to the drive to the further away bank branch with cash takings from several days and worry about the safety of this compared to banking at the local branch across the road.

POSSIBLE SOLUTIONS

  • A communal banking model. In a town where a branch is not viable, the banks could work together, maybe under a government overseen storefront, to offer banking services for all Australian banks.
  • Mobile banking. Require the banks to provide regular access to their services through a mobile banking service that visits each impacted town.
  • Easier agency access. If existing banking agencies could be enhanced to be agents for all banks this could open more local banking options.
  • Reduced fees. Where banks withdraw, or have withdrawn, local bank branch services, require them to compensate business customers with significant fee reduction, to help them feel the cost of their decisions.

The newsXpress retail businesses impacted by local bank branch closures feel ignored by their banks, not listened to and unable to rely on a reasonable resolution.

They feel left to figure out what to do themselves so that the banks can maximise shareholder value.

While maximising shareholder value is the most important requirement for the board of any public company, banks often pitch themselves as being more community engaged and socially aware.

The closure of bank branches in regional Australia does not reflect care or concern for the regional Australian community.

Sincerely and on behalf of all local newsXpress member retail businesses,

Mark Fletcher
Managing Director
Mobile: 0418 321 338.
Email: mark@newsxpress.com.au

6 likes
Social responsibility

Hey Peter Dutton, here are the real reasons few Australian retailers sell Australia Day merchandise

In response to Opposition Leader Peter Dutton’s call yesterday for a boycott of Woolworths over its decision to stop stocking Australia Day merchandise, here is why we no longer stock Australia Day merchandise in my own shops.

As a retailer, I need to offer merchandise that is profitable and fits the narrative of my local business. Australia Day merchandise does not sell like it used to. Given what deep discount stores have done in this space, the margin we can achieve is small, insufficient to cover retail space and labour costs.

The last time we sold it a few years ago our gross profit from all Australia Day products sold was under $100 with the space alone costing double that and the labour involved costing $100 meaning we lost over $200 on the ‘season’.

For any of our customers wanting to celebrate the day by sending a card, we have an a big and awesome range of cards designed and printed in Australia that are perfect for this, including:

Most Australia Day merchandise is made overseas, usually China, which contradicts our shop local narrative – we preference Australian made wherever we can.

Imagine how Peter Dutton may feel when he discovered that we are not opening on Australia Day. We haven’t done for years. Sales revenue is typically low on the day and labour rates are up as it’s a public holiday. Years ago we decided to close and are grateful for the day off.

If Peter Dutton wants Aussies to boycott Woolworths because it no longer stocks low margin overseas made Australia Day merchandise that does not pay its way, he should call for a boycott of plenty of other Aussie retailers like me who made the same decision as Woolworths management.

Maybe Peter Dutton should have done his research on Australia Day merchandise prior to shooting his most off.

I know I am not alone in no longer stocking Australia Day merchandise in my newsagencies.

  • Sales of Australia Day merchandise have been in decline for 10+ years.
  • It is challenging to find Australian made Australia Day merchandise that can compete with the cheap China stock deep discount stores carry.
  • The interest in Australia Day merchandise among shoppers has waned. It’s not a profitable ‘season’.
  • The current day itself, January 26, is problematic.

Now before people jump on that, consider that it was not long ago that the day itself was on a different date, as SBS (and many other outlets) reports:

January 26 is problematic because it celebrates the date of the landing of the first fleet. As the Australian Museum notes, Captain Cook was told to gain the consent of the ‘Natives’ when making his claim of possession. He failed to do this, he failed to obtain permission from any Aboriginal people as required by the instructions he was given. While plenty of Australians dispute this, the evidence readily available tells us otherwise. Read the evidence at the Australian Museum website.

I think Peter Dutton is chasing this issue because his mates at some media outlets will amplify his shouting and pouting when we would all be better off celebrating all things Australian while being respectful of the messy road that got us to where we are today.

29 likes
Social responsibility

Newsagents handing back their newspaper home delivery runs need a service contract for dealing with poor newspaper publisher service

The two main newspaper publishers in Australia, News Corp. and Nine Media (Fairfax) have a poor track record managing newspaper home delivery they take over from local newsagents, regardless of whether it is a forced takeover or a voluntary hand back.

They replace what has been for 100+ years a local personal service with corporate impersonal processes.

Whereas newspaper home delivery customers could speak to someone locally with direct knowledge of the delivery situation, in the publisher driven model customers have to navigate impersonal and broken processes that pay little regard to the local delivery situation.

I think newsagents deserve a service contract to cover the first year of post home delivery option. This contract could include the following fees payable by the publisher to the newsagent:

  • $5.00 for each email contact by a home delivery customer to the newsagent asking about home delivery such as where is my paper.
  • $5.00 for each in-store contact by a home delivery customer to the newsagent asking about home delivery.
  • $10.00 for each phone contact by a home delivery customer to the newsagent asking about home delivery.
  • $25.00 additional fee for each engagement where the customer is angry.
  • $25.00 for each call or email contact with the publisher for matters not covered by the above.
  • $25.00 for each call that has to be made or email that has to be sent to the distributor asking where the papers are for the shop.
  • $50.00 per title for each day a newspaper is not delivered to the shop by 8am (or any other time as stipulated by the newsagent based on their early morning trading). The amount could vary based on the usual number of papers sold where the penalty should be double the usual GP$ for the day.
  • $100.00 per title for each day a newspaper title is not delivered to the shop. The amount could vary based on the usual number of papers sold where the penalty should be double the usual GP$ for the day.
  • 250% GP penalty for each newspaper given to a home delivery customer who missed a paper, the publisher cannot rectify and a replacement paper is given from the shop.
  • A flat insert or giveaway fee for each time the newsagent is asked to give something away with the newspaper where the fee is at least 10% of the cover price of the accompanying newspaper and is paid weekly as an automated credit to the account.
  • A fee of $50.00 per 15 minutes for any in-store visit by a newspaper pub lister representative.

I’d make reporting simple with no opportunity for dispute by the publisher for such claim and with payment monthly by direct debit initiated by the newsagent entering contact details (date, time, customer name) into a web portal setup, maintained and paid for by the publisher.

Of course, these fees will seem over the top to most reading them. I have suggested the figures I have so they act as an incentive to newspaper publishers to do better. I reckon can predict some of the reactions people will have reading this.

No publisher will agree to this.

Newsagents have to be kidding themselves if we’d agree to this.

This list is nonsense.

Who do they think they are.

I’m just happy to have given up home delivery, I don’t want to rock the boat.

I’ve moved on.

The response by publishers will be silence. They will ignore the suggestion. They’ll read it here and mutter about it to each other, but we will hear nothing because any request like this from newsagents has been treated this way, with silence.

I started thinking about the list when I saw a query from a long-term home delivery customer to the newsagent who used to deliver their paper to a nursing home. The newspaper publisher had not actioned a change request and the customer was becoming distressed after 4 attempts at contact. They reached out to the newsagent who ultimately organised for the issue to be fixed. They did this in service of a long-standing customer and because they understand personal local service. The newspaper publisher had let the customer down because of the corporate processes put in place to manage home deliveries.

Recently, we did not get the Australian Financial Review in one of my shops that ended home delivery a couple of years back. Two phone calls produced no result. Then, a couple of hours later, the distributor called a number not on the registered contacts list to say it would not be supplied at all. The person with that number had to call the shop. Next, the shop staff had to deal with customer queries and agitation. There were several unpleasant exchanges.

All of this costs money.

The newspaper publishers control the production and distribution of their product, yet they continue to expect local small business newsagents to provide free customer service to cover for their failures.

39 likes
Newspaper distribution

Opportunity for small business retailers in the IR reforms

The IR reforms passed by federal parliament give small business owners an opportunity overlooked in much of the commentary in the media. They impose requirements on big business that take away advantages they have leveraged for years. The reduce competitive advantages of big businesses in some areas.

While we in small business, especially in retail, have had the award as our guide, plenty of big business competitors have negotiated agreements that lower their labour operating costs.

The reforms passed, as I read them, reduce the opportunity for this. Click here to see the comprehensive explanatory memorandum.

Also, since many small business retailers have fewer than 15 employees, they are not obligated under some of the changes.

Too much of the media coverage has regurgitated talking points from lobby groups, like the Australian Industry Group, Australian Retailers Association, Australian Energy Producers, Master Builders Australia, Minerals Council and some others representing big business. I don’t feel any affinity with these organisations.

If you go to the source materials on the Parliament website you can read the specifics and form your own opinion.

While there will be concern around changes relating to casuals, I think the changes are ok, fair.

COSBOA, an organisation that claims to support small business, was party to a statement Friday that included:

In addition, the changes to labour hire, also rushed through, will increase costs and complexity for business.

This will hit many small businesses and drive up prices, risk jobs and comes at a time when there are already many pressures on the economy.

I am not aware of any small business retailers who use a labour hire firm.

I can’t see anything in the changes that will drive up prices in small business retail.

I can’t see anything in the reforms that will put jobs at risk.

The changes were not rushed through. They have been on the books for months.

I get that representative organisations need to reflect the wishes of their members and be seen to be doing something. The joint statement from COSBOA and others on Friday reads to me a shouty and lacking detail, being worried for the sake of being worried.

How big businesses have used labour hire arrangements to circumvent awards is problematic I think. It has provided labour at a lower cost, disadvantaging small business competitors who did not enter into such arrangements.

Some media reports and commentators and others have complained that there was no consultation. A quick search online shows that the changes were forecast months ago. Submissions were sought and consultation opportunities were available.

From a small business perspective, if you have less than 15 employees, you’re unlikely to be impacted. If you pay according to the award, you’re unlikely to be impacted. The most contentious issue will be if a casual wants to transition to a more permanent arrangement. It you appreciate them, it’s a good think I think.

But let’s go back to the topic of labour hire arrangements by big businesses. This is about containing the cost of labour to maximise business profit. I’d rather employees have more money in their pockets than the big businesses they work for as the employees are more likely to spend their money in ways that local small business retailers benefit.

My advice to anyone who may think they have an opinion about the IR reforms, read the source material and form your own views on that rather than taking what you read from a news outlet.

16 likes
Social responsibility

Newsagents ripped-off by News Corp Taylor Swift magazine terms

Newsagents selling the Taylor magazine from News Corp from this Saturday, December 9, for $9.95 make just 10% out of which we have to cover labour, retail space, EFTPOS and theft costs.

Depending on the payment method, newsagents can lose between 1% and 6% of a purchase price in fees. At the high end it would leave 39.8 cents, 4%, from which to cover labour and theft.

Labour on circulation products sits, on average, at 12% of overall revenue and theft sits at somewhere between 3% and 5%.

The Taylor magazine will be loss making for plenty of newsagents. Thanks News Corp.

What News Corp. is doing here setting a 10% commission / gross profit percentage is disrespectful of local small business newsagents. It does not allow newsagents to even make a living wage from selling this title.

All of this from a company heavily invested in shouting (yelling) at the federal government about cost of living. Yet, here they are financially harming newsagents in terms of cost of living.

I wonder how Taylor Swift and her organisation feels about the financial arrangements imposed by News Corp on local small business newsagents and their use of her name and brand to do so.

I am confident the News Corp. has it within its business capacity to treat local small newsagents more fairly with this Taylor Swift title. For a company so opinionated about others and their masthead commitment of we’re for you, their actions speak other words: selfish, uncaring and certainly not for local small business newsagents.

Their pitch to newsagents is gushing:

Taylor Swift fever has swept the globe during her epic Eras Tour, and now it is nearly time for Australia to bask in her glittering glory.

Celebrate the iconic singer with this special 100-page souvenir edition magazine with bonus poster inside.

Ahead of her concert dates in Melbourne and Sydney in February 2024, the Taylor magazine is packed with 100 glossy pages of details about the Eras Tour, the evolution of the singer from sweet country star to global sensation and a deep dive into her music.

Also in the souvenir edition magazine Taylor:

  • Discover how big a Swiftie you are with our Taylor-made pop quiz
  • The men (ahem, Travis Kelce, Harry Styles and Joe Alwyn please step forward) who have played a starring role in her life
  • Her jaw-dropping red carpet fashion moments
  • Plus, the records she has smashed as one of the world’s top entertainers

Taylor magazine is on sale from Saturday, December 9, for $9.95 at participating newsagents, Coles and Woolworths.

I wonder what the terms are for supermarkets Coles and Woolworths. While their margin may be the same, is News Corp. paying their a ranging or stocking fee, a promotion fee or offering some break in ad rates to compensate as I doubt that these supermarket giants would sell this for 10% only without any other financial benefit for them.

Taylor Swift has a track record of doing good where she travels and performs, helping local charities. her generosity has been well documented. If only News Corp. seeking to profit from Taylor’s fame was even modestly generous to local small business newsagents when it comes to the sale of this special Taylor magazine.

News. Corp is treating newsagents as if it is the 1950s. It is disrespectful. It demonstrates a lack of care for our channel.

If News Corp did care about newsagents they would offer this product at a considerably better margin.

49 likes
Social responsibility

Scandal at Sports Illustrated magazine over AI content and fake reporters

Futurism has this most incredible story. Here’s part of it:

Sports Illustrated Published Articles by Fake, AI-Generated Writers

We asked them about it — and they deleted everything.

There was nothing in Drew Ortiz’s author biography at Sports Illustrated to suggest that he was anything other than human.

“Drew has spent much of his life outdoors, and is excited to guide you through his never-ending list of the best products to keep you from falling to the perils of nature,” it read. “Nowadays, there is rarely a weekend that goes by where Drew isn’t out camping, hiking, or just back on his parents’ farm.”

The only problem? Outside of Sports Illustrated, Drew Ortiz doesn’t seem to exist. He has no social media presence and no publishing history. And even more strangely, his profile photo on Sports Illustrated is for sale on a website that sells AI-generated headshots, where he’s described as “neutral white young-adult male with short brown hair and blue eyes.”

Ortiz isn’t the only AI-generated author published by Sports Illustrated, according to a person involved with the creation of the content who asked to be kept anonymous to protect them from professional repercussions.

Read the rest of the article if you’re interested in magazines, AI, journalism and business ethics.

This is brazen stuff being reported from making up fake AI journalists / writers, claiming they are real and then deleting them when asked and offering no comment, editorial note, or other response.

All publishers should follow this story.

9 likes
Ethics
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