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supplier arogance

News Corp. should improve its accounting systems for small business newsagents

Screen Shot 2016-05-30 at 6.32.24 PMFor a company intent on telling governments how to govern and Australians how to vote, News Corp. should, in my opinion, get its own house in order when it comes to billing small business newsagents for promotions. The image on the left is the description used by News Corp. when billing newsagents for the recent ANZAC coins. Yes, the company billed the coins as The Courier Mail, a newspaper. The charge is a net charge.

News is not providing newsagents with any means of validating the charge. This is inadequate in my view. Newsagents deserve an accurate accounting of what they were supplied line by line and what they were charged for each line item. The accounting also needs to detail the returns for each line item.

The single line on the statement from News is inadequate, so inadequate that an auditor would probably want more information.

The News Corp iServices portal is no help for newsagents either, adding to the frustration.

I am posting this here at the request of several newsagents who have approached News Corp. without success in having the matter even considered by the company.

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Newsagency challenges

Paywave / tap and go payments under the spotlight

I am pleased to see discussion among law enforcement and government about pay wave / tap and go technology with police calling for it to be optional. Customers need to have the option to disable Paywave / tap and go facilities on their cards.

The banks are awful when it comes to card fraud. I have experienced this myself – with the ANZ bank.

While my own experience related to card fraud through a website, the area of the ANZ Bank that manages it is the same as handles Paywave fraud claims.

In my own case, a customer used a website run by one of my businesses to make a purchase of $3,000. Payment was via credit card. The site itself does not handle payment – instead, it links to ANZ E-Gate, which processes and verifies payment. It is only when ANZ E-Gate returns ANZ approval that the transaction can proceed.

The good were shopped. We were paid.

A couple of weeks later the ANZ took the funds out of our account and advised the card had been stolen. Today, more than a year on, we are in a losing argument with the ANZ Bank. They say it is my responsibility even though they completely handled and managed the payment including verifying the card and advising us it was approved.

The experience fuels my distrust for the banks, the ANZ especially.

I have been with the ANZ for more than thirty years. I am now looking to move all my business elsewhere as a result of their poor handling of this matter.

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Ethics

It’s a mystery

mysteryNetwork Services sent us a new product: Bungees. Mystery Pack it says.  Well, it’s a mystery to us why they would send us this item. No thanks. 25% if an offensively low GP for a toy item. It makes us less competitive when suppliers send us unrequested product that it not appropriate to our business model.

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magazine distribution

A Christmas Eve slap from ACP Magazines

Just a few minutes ago, out the front of my newsXpress Watergardens newsagency, an ACP Magazines magshop representative was calling out at the top of their lungs:

Last minute Christmas gift ideas, Magshop, we are here to help

This was easily heard by shoppers in my newsagency and those in the mall in front of my newsagency. The ACP Magshop representative is promoting the ACP Magshop outpost in the centre, like the ACP Magshop outpost Knox City.

Thanks ACP.  Merry Christmas.

As out store manager said who called to let me know – after all the support we provide for magazines, all the work we do, they come to us to steal our customers.

The team at the newsagency has every right to be upset and despondent about this.

I cherish supplier relationships which are mutually respectful.  Actions speak louder than words.

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magazine distribution

Bullying and threats no way to win newsagents over

Any newsagent who is threatened with do business with us or we will come and compete directly with you ought to report this activity to the police as well as their state association. Write down the specific threat, who said it and when so that you can be certain when reporting it.

Fear and intimidation have no place in business let alone the Australian newsagency channel.

I recall when threats were made by one company to some newsagents a few years ago that if they did not sign up for their service they would put it into another business nearby. Newsagents outlasted the service.

If a business cannot win your business on the merits of its products or services then it does not deserve your business.  Remember, you are the customer, not the servant.

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Ethics

Leveraging falling stationery sales

AAP reports that sales at Office Depot dropped 17% in North America in the fourth quarter – 18% when looking just at same store sales.  This fall demonstrates how challenged the office supplies business is in the United States and, most likely, worldwide.  Given the closure of OFIS by Harvey Norman and anecdotal evidence around, I’d expect significant sales falls in the large format stationery businesses here.

Newsagents have an opportunity here.  Shoppers who usually go to an Officeworks for a big stationery buy up or to purchase furniture or technology will put thoses purchases off and therefore not pick up general office suppliers yet they will still need general office supplies.

Newsagents ought to refocus attention on stationery, make sure every customer visiting your shop knows that you aren in this space with quality product at keen prices and backed by excellent customer service.

Newsagents are well poised to pick up stationery business in the current economic climate.  Whether we do that is up to us and the attention we bring to the category in our businesses.

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Newsagency opportunities

4 Ingredients 2 costs us too much

4ing.JPGMagazine distributor NDD sent us 18 copies of 4 Ingredients 2 cookbook on Christmas Eve.  There is no justification for this – especially since 4 Ingredients 2 is available from book retailers for between $15.00 and $17.95.  The newsagent price is set at $19.99.  Our margin is a magazine margin and not a book margin so we have no room to move on price.  NDD has abused us by sending this stock.  It has arrived too late to be a Christmas offer, the price makes us look expensive and too much stock has been sent.  

The behaviour by NDD in my own situation with 4 Ingredients 2 represents, in my view, unconscionable conduct as defined by the Trade Practices Act. 

We will send all copies of 4 Ingredients 2 back.  We may even rip off the covers and return just those since this is a gross oversupply.  We may even rip off the covers and return just those since this is a gross oversupply. By topping the book and returning just the cover we make a statement.  Newsagents have to stop NDD abusing us as has been done in this instance.

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magazine distribution

Tattersalls claims Quick Pick

Tattersalls has claimed that it owns the term Quick Pick meaning that Intralot has had to ditch tonnes of printed material and come up with a new name.  While we will work hard to pitch their Lucky Pick to customers, customers will call it what they will.  If it catches on, customers wanting a Tattersalls product could ask for a lucky pick, now that would make me smile.

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Lotteries

Dead counter space

tatts_counter.JPGTattersalls withdrew all remaining instant scratch ticket stock in Victorian Monday, leaving 40% of the counter space allocated in our Forest Hill store empty with no prospects of new product.  A threatening letter from their Senior Corporate Solicitor Monday indicates that they intend to fight to retain “their” space.   Dead counter space is commercial suicide.   I hope that commonsense prevails.  In the meantime, Tony Robinson, the Minister for Gaming continues to sit on his hands.

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Lotteries

The art supplier competing with newsagents

art_bar2.JPGFor a couple of years we did well with the Mont Marte artist supplies range.  Things went off the rails when they could not supply some items to us while continuing to supply their own retail store in Melbourne as well as customers who ordered the same products direct through their company’s e-commerce website.  Their actions made it clear that they preferred a direct to consumer relationship over their newsagent relationship.  We ditched Mont Marte and replaced them with the Canson rang, an art supplier committed to the retail channel and not seeking to compete with us.  Sales are great and customers are happy that we can more easily get the stock they want.  Mont marte going direct to consumers is not how newsagent suppliers ought to operate.  It will be interesting to see if they have learned their lesson.

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art supplies

Who is celebrating Darrell Lea?

dlea.JPGThe photo shows a closer look at the ad stuck over the masthead of today’s Age newspaper. It offers a 300g bag of Darrell Lea liquorice for 80 cents.

It’s a good deal, but there is a catch. You have to go to the website to find the participating stores – as if people with the coupon in their hand have time for that. No, they will think of their closest Darrell Lea location.

My newsagency at Forest Hill is not listed as a participating store. In fact, I can’t see any newsagency listed as a participating store. From what I can tell the list is corporate stores only.

Maybe the marketing people at Darrell Lea are smarter than me because I would have thought that tying in this promotion with a newspaper and through outlets which sell newspapers and the Darrell Lea product would have been smart.,

I know we will get customers asking about the deal. Should I tell them to go to a Darrell Lea store? Of course not! Given the floorspace, labour and stock investment I have made in Darrell Lea for the last five years or so, I am not about to tell my customers to go elsewhere. Now, we’ll come up with a response which hopefully does not direct them elsewhere.

This is a disappointing offer from Darrell Lea which, on the surface, appears to disrespect its non corporate stores.

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confectionary

Cultish reps need a cool down

I’ve been told about a rep who visited our Forest Hill store Friday who wanted us to carry some new magazine which is to be given away free. It will change your business forever, he said. It will change your customer’s lives, he said. I think we need to get a water pistol at the counter to cool down some of the cultish reps who claim they will change our lives. We should give then 15 seconds to leave otherwise we squirt them. They will soon learn. If I want my life changed I’ll go to Mecca, Vatican City, Lourdes or Lumbini.

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supplier arogance

Inside the magazine supply changes

Where I am, the current sub contractor picked up Australia Post contracts not long after they got the magazine contract.Of course, the Aust Post contracts require they be given priority, so delivery times have slipped from a consistent 2am to anywhere from 4am to 7am, with all the obvious problems as a result.Does anyone with authority in the freight company or the distributors care? Of course not!

This is a comment posted to this blog earlier today by someone purporting to be a contractor. I am trying to make contact to check the facts. If true, the comment explains why newsagents in Victoria are frustrated with the changes these past two weeks in magazine supply arrangements. Newsagents lose out. Customers lose out. All in the name of magazine distributors cutting costs out of the supply chain.

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magazine distribution

The magazine model fails again

get_up_go.JPGOur sales of Get Up & Go magazine have been consistent at under 5 copies a month. There was no justification in increasing our supply from eight to ten – certainly not in the sales data. The only reason I can see for increasing our supply would be that the distributor has excess product and it saves their cash if they shift that product to newsagents regardless of whether it will sell.

There has been talk this year of magazine distributors and publishers signing up to performance guidelines. This 20% increase in our supply of Get Up & Go should breach any such rules. It is not the only title where supply is increased despite sales data suggesting there should be a reduction.

Magazine distributors are critical of newsagents and lack of compliance on IT matters. Why should a newsagent comply if such compliance counts for naught when it comes to determining supply allocation as appears to be the case with this title.

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magazines

Newsagent locked out by software company

A newsagent having a dispute with the software provider found themselves locked out of their system when they opened for business one day recently. Help from an expert showed that overnight their system had been ‘updated’ and access blocked. While the legalities of such action by a newsagent software company can be tested elsewhere, my warning to newsagents is to check who has access to your computer system and why.

No software company ought to have access to your computer system without your permission and knowledge. The story recounted in this blog post is the fourth such incident I have seen this year. It demonstrates the risk to newsagents who may find themselves in a disputer with their software providor.

I urge newsagent to bar access by outside parties. I also urge newsagents to refuse licence agreements which require annual licence fees – separate from software support – as it is through such licence agreements that access such as this is often managed.

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supplier arogance

AstroLog magazine oversupplied to newsagents

astrolog.JPGLast issue, we sold two copies of AstroLog magazine. This time, they sent us 10. There is no justification in our sales history for this level of supply – it is an abuse of our cashflow. I suspect I am not along.

The only redeeming feature is the display box. As the photo shows we have placed the title between Woman’s Day and Australian Women’s Weekly. We would not have done this had the display box not been supplied. If it does not perform within two weeks we will return all stock.

AstroLog is an example of how magazine distributors and publishers abuse the generosity of newsagents.

I am happy to take ten copies of AstroLog even though I usually sell two if they want to fund the stock for the entire on sale period. That the oversupply is coupled with a poor margin and long shelf life is an abuse of newsagent generosity.

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magazines

Darrell Lea misses sales opportunity

I love Darrell Lea product. Top sellers like liquorice allsorts, plain liquorice and rocky road sell well. Where they miss sales is in not letting selected stores carry just the top sellers. By having to carry a minimum range some good potential outlets pass on the opportunity. I understand Darrel Lea will say they need the minimum range to pitch their brand appropriately. I suspect a trial in a group of stores would prove that with as few as, say, ten products the brand could be well represented and strong sales achieved.

A B-grade shopping centre newsagency needs to achieve sales of at least $8,000 per square metre of floorspace annually to cover costs. The more expensive the centre the higher this benchmark. Brands which want retailers to take a broader range drive down the per square meter return.

This is why I’d like to cherry pick by Darrell Lea product – so I can maximise my return rather than just serve the Darrell Lea needs.

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confectionary

Keytek goes direct and undercuts newsagents it supplies

Keytek, the high profile compatible ink and toner supplier to newsagents and which, as I understand it, supplies Officeworks, competes with those it supplies through its PrintXpress website. PrintXpress is very price competitive – undercutting many retailers it supplies through its Keytek parent. It’s disappointing that Keytek is harming its business partners in this way.

UPDATE: 30/8/07. Chris Watts, Marketing Manager from Keytek called me today and explained that PrintXpress was a test site and was never meant to go live, that it was his initiative and not Keytek’s as such, and, that they were not out to compete with newsagents and other retail customers. On the evidence, the site was live and it was competing against Keytek customers.

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Stationery

APEC Summit too much for Sydney Morning Herald

APEC is affecting more than the streets of Sydney when the circus rolls into town. Check out the note the newspaper experts at Fairfax have just sent to NSW Newsagents:

Fairfax will produce a Bumper Weekend Edition of The Sydney Morning Herald over the APEC long weekend which will retail for the normal Saturday price of $2.20 (incl. GST) for the entire on sale period.

DISTRIBUTION (NSW/ACT):

“SPECTRUM” SECTION
• Sydney Metropolitan newsagents will receive the “Spectrum” section on Thursday, September 6, one day earlier than normal.
• Country NSW/ACT newsagents will receive the “Spectrum” section on, Friday, September 7.

“THE FORM”
• The Form will be distributed to newsagents on Friday, September 7 as normal.

FRIDAY (Public Holiday) – September 7, 2007
• You will receive a supply of the early edition of the Weekend Bumper based on your past sales of Bumper Editions.

SATURDAY – September 8, 2007
• You will receive a supply of an updated edition based on your past sales of Bumper Editions. The updated edition will have the latest news and sports content.

KEY OPERATIONAL POINTS:

SHOP SALES & GENERAL RETAILERS

• On both Friday, September 7, and Saturday, September 8, the APEC Bumper Weekend Edition of The Sydney Morning Herald is to be sold complete at $2.20 (incl. GST).

• Please ensure that The Form is available as normal to retail customers on Friday, September 7.

HOME DELIVERY CUSTOMERS & FAIRFAX SUBSCRIBERS

• 5 day (Mon-Fri) customers should only receive a delivery of the Bumper Weekend Edition of The

Sydney Morning Herald on Friday, September 7.

• The Form customers should receive their delivery as normal on Friday, September 7.

• Daily customers should receive a delivery of the Bumper Weekend Edition of The Sydney Morning Herald on Friday, September 7, AND should receive a delivery of the updated edition with the latest news and sports content on Saturday, September 8.

• Weekend only customers should only receive a delivery of the Bumper Weekend Edition of The Sydney Morning Herald on Saturday, September 8.

We appreciate your ongoing support and professional approach to the Herald Bumper Editions and are sure their success will continue.

Just when one would have thought the city’s newspaper of record would want to show off, it goes for the Aussie long weekend.

These distribution plans considerably increase the workload on small business newsagents without any compensation. They demonstrate a lack of respect from Fairfax.

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Newsagency challenges

Publishers discuss OH&S

Publishers discussed occupational health and safety issues at the PANPA conference in Melbourne last week – especially during a presentation by Bruce Treharne of Rural press. This is timely given the newsagent funded study into the OH&S issues of overweight newspapers, a study which, as I understand it, publishers are yet to respond to.

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Newspapers

The newspaper home delivery subscription rip off

Newspaper home delivery in Australia is an addiction newspaper publishers cannot shake. They appear prepared to give away anything to get a customer on board. Then, once a customer has fallen off at the end of an offer, they go back with the same heavily discounted offer to win them back. With deals of 50% and more off cover price it is no wonder the home delivery deals are popular.

The problem is that small business newsagents are funding a disproportionate part of the subscription deals. Following my post a couple of weeks ago about newsagent concerns about the Home Delivery of the West Australian, I received several emails from newsagents in South Australia documenting the falling return achieved from home delivery of the Adelaide Advertiser.

Some Advertiser home delivery deals result in South Australian newsagents receiving 11 cents for the delivery. Out of this they have to fund delivery drivers, plastic wrap and other business overheads such as fuel, management time and collection expenses.

Years ago, the same newsagents would have received 25 cents plus a delivery fee of around 7 cents a day – 32 cents in total.

It is only since deregulation of the newspaper distribution arrangements, as instigated by the current Federal Government, that News Ltd has driven newsagent newspaper home delivery revenue down by, as the South Australian example shows, up to 65.6%. Newsagents cannot afford this. While News Ltd has been cutting newsagent revenue, wages, fuel and overheads paid by newsagents have risen.

Below is a table prepared by a newsagent showing the annual cost to South Australian newsagents of the News Ltd cuts in home delivery revenue. If the data feeding into this table is accurate, South Australian newsagents are $500,000 down annually. This is off the bottom line. Some have suggested to me that this analysis is conservative and that the numbers are worse.

news_ltd_homedeliv.JPG

What is happening in the newspaper home delivery space and to newsagents in particular demands a Government inquiry. In 2004 I called for a Productivity Commission inquiry to follow up the impact of deregulation on the newsagency channel. This latest data out of South Australia and the evidence that newsagents are 65.6% worse off today than prior to the Government driven changes suggests an inquiry is warranted.

While some will say that the reduction in revenue is a result of competition I would observe that there is no competition for home delivery of newspapers. I’d also note that while News Ltd has been charging less and less for home delivery of newspapers, advertising rates charged by News Ltd have increased annually. News Ltd is covered – newsagents, who have no control over their revenue are not.

Small business newsagents have been disempowered by government deregulation and one has to ask whether that is good competition policy at work.

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Newsagency challenges

It wasn’t me, sir

I was interested to see GNS (Group Newsagency Supplies – the major newsagent stationery wholesaler) use page one of their latest newsletter to comment on my blog post about them supplying stationery outside the newsagent channel. A newsagent brought the matter to my attention having been unable to get the attention of GNS management on the matter. I blogged about it and now GNS has responded. GNS, of which I am a shareholder, could consider a more transparent and open relationship with newsagents. Maybe a blog so people could comment on the views published by GNS management. It would be more democratic than the one way communication from the organisation today.

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supplier arogance

Inspector Morse partworks stuff up

morse.JPGGordon and Gotch, in their wisdom, decided to not allocate us any copies of the new Inspector Morse partworks released this week by Bissett Magazines. We discovered that we had been left out of this opportunity when the Gotch merchandiser visited us yesterday to put up a display. Our enquiries revealed that this was not a missed delivery by Gotch – they had not allocated any of this new partwork series to us.

We escalated the issue through Gotch and were asked later in the day by Gotch representative if we would like to be put on their list of newsagents who support partworks and therefore want good quantities of new releases. We were surprised to discover that such a list exists. Our partworks interest has been well established, or so we thought. Consider this:

I have blogged here before and spoken at newsagent conferences about the importance of partworks to newsagents – urging newsagents to take up partworks.

I have shared sales data with Gotch management about the efficiency of partworks customers – baskets with partwork product are more efficient than almost any other category we carry.

Ben Kay, Manager of my newsagency, and I have met with Peter Bissett, owner of Bissett Magazines, and discussed partworks at length and out commitment.

Ben and I have had discussions up and down Gotch chasing more and more partworks product , impressing on them the sales we can achieve with the right stock. These discussions have been from the GM down.

Through my software company, Tower Systems, we created some exclusive partworks specifics enhancements and advised the folk at Gotch and Bissett about these – enhancements which help newsagents better manage partworks with a view to better customer service and lower time cost management. The enhancements were delivered to Tower Newsagents free.

I launched the newsagency industry’s first ever magazine loyalty card in 2004 in part as a result of our partworks success and to drive even greater success. Gotch was made aware of this at the time.

Peter Bissett recently brought a UK executive to our store (and others) to show best practice.

Our commitment to partworks is absolute. We only wish we had more new releases to promote.

This time around like others Gotch will blame others, Bissett will blame others. In the meantime TV hits, customers come to us looking for the product, we look like hopeless retailers and we lose them to someone else. These are sales worth fighting for.
Obviously someone at Gordon and Gotch is not across any of this so they cut us out of the Inspector Morse game.

And magazine distributors wonder why newsagents complain about them. Sure we will get Inspector Morse. The ‘system’ which took us off the list is flawed and no one cares enough to fix it.

Footnote: I wrote this blog entry last night but did not click PUBLISH. Just as well as today I’ve been able to edit out some of the more colourful passages. The facts are colourful enough without me needing use more robust language to make my point here. Maybe I should have slept on the email I sent to Gotch but then maybe they will understand how upset people like me get when we are denied an opportunity to do what our newsagencies have been created to do.

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magazines

How many airline magazines is too many?

air-mags.JPGHere are eight of the seventeen aviation, flying titles I receive at my newsagency. The average supply quantity is 2 copies. The titles are suppliers by each of the three magazine distributors.

While there is no doubt that I am overloaded in this category, the magazine distributors would not see that. They only look at what they supply. In fact, no one looks at the whole category, all titles supplied, when determining supply and this is where newsagents are significantly disadvantaged.

Magazine distributors will look at their sales data in this category for my store and say it’s gong okay. To them, selling one copy where they have supplied two or three is a success. One copy of each of the titles supplied is not a success for me. If I ask to cancel a title some will initially refuse because of this one copy sold.

The reality is that the category could be far more efficient for my business by cutting at least one third and maybe more of the titles. For example, I don’t need three titles about modern airliners. I suspect that consumer interest would be satisfied by one title. This is the kind of category management which is crucial if my newsagency is to achieve a reasonable return on retail space.

This discussion could be about almost any other category in my newsagency – or any newsagency for that matter. Magazine distributors know about the problem yet they do nothing to help newsagents resolve it.

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magazines

Understanding Vodafone

Last year Vodafone slashed commission it pays to 3,500+ newsagent retail partners by 37%. Today I read a GigaOM that they have paid US$11 billion for Hutch Essar, the third largest mobile company in India. Okay, I agree I am drawing a long bow. However, Om Malik says

Vodafone historically has been one of the worst telecom operators when it comes to mergers and acquisitions – bad deals, ill-timed exits and overpaying are part of company’s legacy. By putting a valuation of close to $19 billion for Hutch Essar, the third largest mobile company in India, with about 24 million mobile subscribers, the British giant has ensured that legacy remains unchanged.

Maybe if Vodafone focused on its existing customers and service network more it would improve the return from what it has rather than cost cutting against weak small businesses and overpaying in acquisitions.

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supplier arogance
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