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

Advice on signing agreements with suppliers

A newsagent told me recently that a supplier deceptively changed the terms of their agreement by modifying text on one page relating to the term of the agreement. They found out when they asked for a copy of the signed agreement to be sent to them.

While they are certain of the term, the agreement sent to them had a different term, a longer term with penalty for earlier termination.

Situations like this can be avoided if simple processes are followed.

For every agreement you sign in business:

  1. Only sign an agreement with which you are completely happy.
  2. Initial every page of the agreement.
  3. Take a copy of every page and store this in a safe place.
  4. Return the agreement to the supplier for countersigning and ask, in writing, for a copy of the countersigned agreement to be sent to you.
  5. Check the copy of the agreement the supplier returns to you with your own copy. If there is a discrepancy, point it out in writing immediately.

Because of the lack of evidence it could be hard for the newsagent to make a case against the supplier. It would come down to recollection.

I am aware of this happening previously, of a supplier changing an agreement. In one instance, the newsagent did have a copy of what they signed. In that matter, the supplier quickly retreated.

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Ethics

Real newspaper home delivery challenges

Not satisfied with getting the daily newspaper delivered to their property for a few cents each day, some customers demand a lever of service for which they do not pay.

Here are several examples of customer service requests I have seen customers make in the last few weeks of home delivery newsagents (not my businesses as as I am retail only):

  1. Hi can you please make sure the newspaper is thrown to land within two metres of the front door? When you throw it on the driveway I have to walk too far across and I am usually in my underwear.
  2. I am happy for the weekday papers to be put on the driveway but for the weekend papers can you throw them over the side fence so I can get them out the back door. Thank you.
  3. Please place the newspaper on the front door mat. I refuse to pay if you do not do this.
  4. When it raise can you please put the paper in the waterproof box I have next to the letter box. It opens with a latch. Please open this put the paper in and close it and double check it is closed. I know you put the paper in plastic. I prefer it in the waterproof box on the wet days.
  5. I am very pleased with the paper delivery service. I would appreciate it however if the weekend papers could be thrown on the concrete drive or before it.
  6. I think the girl who used to deliver er our paper did a better job that the boy we have now.
  7. I keep the plastic you put the newspaper in. l can you come and collect and re use it. If you give me a discount that would be good.
  8. I was away from the shack last weekend and only found out now you missed the Saturday paper. Please credit me for it. Today’s paper came on time.
  9. I am away next week can you deliver my paper to [xxx] at [xxx] it is only four streets away. I told her she could have my paper while I am on holidays. Thank you.

Newspaper home delivery is a thankless task in many areas. Newspaper publishers and many home delivery customers do not realise what the service providers have to put up with.

The list above, from multiple home delivery businesses reflects first world problems.

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newspaper home delivery

NSW government extends lottery protection for newsagents

Here is a press release from ALNA on today’s announcement:

Lottery protections extended by NSW Government

Protections that prevent lotteries from being sold in large supermarket chains have been extended to 2021 by the NSW Government, to protect consumers and small business.

FOR IMMEDIATE RELEASE

Australia, 9 July 2018: The Australian Lottery and Newsagents Association (ALNA), is pleased that today Deputy Premier and Minister for Small Business John Barilaro has announced a three-year extension to an agreement with Tabcorp to not open up lottery sales to large supermarket chains.

Adam Joy, CEO of the Australian Lottery and Newsagents Association (ALNA) said, “This is a win for small business and a victory of common sense. Securing the extension of these protections for our members has been an important priority area ALNA has been working diligently on with Deputy Premier and Minister for Small Business John Barilaro.

“Minister Barilaro has been a long-time supporter of our industry, and ALNA continues to maintain a productive working relationship with the NSW Government on lotteries and other important legislation and regulatory matters that support our channel. We greatly appreciate his efforts and leadership to deliver what is a really positive extension period, which makes sure newsagents will continue as the primary outlets for the sale of lottery products.

“Lotteries don’t operate in a free market because gambling products aren’t like other products, which is why governments regulate their access to consumers. This is a good thing for consumers and provides safeguards to them and the 1,400 lottery agents who sell lottery tickets in NSW.

“By the NSW Government signing a renewed Memorandum of Understanding with Tabcorp, newsagents can be assured that they will not be competing with large supermarket chains to sell lottery products. This extension follows on from positive news of last month’s amendment to the Interactive Gambling Bill, which will make lotto betting prohibited in Australia by early 2019. We are pleased to have helped bring these assurances to our members.”

Ibram Kamil, General Manager of ALNA NSW, and also a newsagent, commented, “This outcome for newsagents and lottery agents allows us to continue growing and evolving our businesses with certainty and strong support from the NSW Government. I know they are going to really appreciate this.”

On behalf of our NSW members and their staff, the ALNA thanks the NSW Government for its efforts to extend the agreement with Tabcorp to not make lottery sales available to large supermarket chains, to protect NSW consumers and to champion these small businesses. And we encourage them to continue important support for our member small business news and lottery agents.

“The Australian Lottery and Newsagents Association will continue to provide strong advocacy for our members, including to help newsagents receive better deals on the lottery products that they are legally permitted to sell,” concluded Mr Joy.

While there will be some who say what about online or what about commissions, in my view this is a good win for newsagents by ALNA, something to celebrate and appreciate by small business lottery retailers.

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Competition

Interest on trade shows falling?

Based on the deals being put about to full trade show hall booth space over the next couple of months it appears as if trade shows are not as popular with suppliers as they used to be. Discounts as high as 75% are being offered.

Fom a retailer perspective, the local Australian trade shows are not as popular as they used to be because of the sameness across suppliers.  Online is a factor too with buying direct from overseas easier and faster than ever.

The other factor is local competition. Retailers who want unique products can feel they are less likely to find this at a trade show attended by any retailer.

I think we are at a point in time when trade shows can be reinvented, to match the needs of retailers today: easier ordering, shorter lead times, more efficient for suppliers, smarter geographic quarantining and integrated supply from a data perspective. We also need fewer trade shows, to reduce the costs for suppliers as these costs end up being met by retailers.

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Newsagency management

Christmas in July drives newsagency shopper traffic in school holidays

We are running a Christmas in July promotion for three weeks to attract new shoppers through different approach to a regular sale approach. While this is an optional national newsXpress promotion, each store selects its own products for promotion. In our case we have brought in some products to pitch, to bring a genuine Christmas theme to the opportunity.

Running across the front of the store on the lease line, it is attracting shoppers from the mall. People are telling us they like the 10 x $500 cash prizes on offer.

We figured a Christmas in July retail store pitch was better than a Mid Year Sale pitch as plenty of other retailers, especially in shopping malls, are doing this time of the year. So far, a week in, it is working a treat. We are clearing some slow moving lines and moving at good margin items bough in especially for this promotion.

The traffic boost we are already seeing also plays well for other parts of the business as people drawn by the promotion do shop the shop to see what else we sell. It is a thrill to see this.

In addition to the in-store pitch with posters and displays, we are promoting Christmas in July on social media. This is being done with collateral that matches the in-store collateral. There are also price tickets and other collateral that leverage a single consistent message re the 10 x $500 cash prizes on offer nationally. Here is the main A1 double sided collateral we are using:

By running this as Christmas in July we leverage a growing mini-season in Australia and do so in a way the we can build on over the years if we wish – through a structured approach that does lend itself to consistent execution in-store.

Filling these months between Mother’s Day and Father’s Day with traffic-driving events is important to smoothing traffic and revenue flow in newsagency business. While peaks from seasons and terrific, the troughs can be challenging. It is our job as retailers to fill the troughs with businesses. That is what I am on about here.

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marketing

News Corp continues with the masthead discount

Earlier this week it was the turn of the Gold Coast Bulletin to pitch the $1.00 a day home delivery offer on to the masthead of the newspaper they have retailers selling in-store for $1.70. They take a product they claim is worth $1.70, add expensive personal home delivery and discount it by 41%.  The discount is at a level that sounds too good to be true.

Desperate times I guess…

I get that subscriptions play a vital role in the newspaper revenue  model. However, why they are not 100% focussed on digital only subscriptions is the surprise, as that is the future for news delivery. I think they could do that pitch without this apparent trashing of the over the counter newspaper purchase.

News Corp. will do what it sees as appropriate for its business. Their intensifying of home delivery discounting should get retail newsagents thinking carefully about the role of newspapers in their businesses. I know of newsagents who have quit the category without detriment.

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Newspaper distribution

Will Tatts compensate retailers for the major network outage?

The Tatts network outage today will have a considerable cost to retailers. Being a $12M Powerball day, there is labour to consider along with other lost sales due to a drop in foot traffic given the public news of the network outage.

The National Retailers Association last month provided guidance on how to handle a claim re a NAB EFTPOS outage. I share it here for those considering whether they wish to seek compensation from Tatts:

On 26 May 2018, the online transaction network of the National Australia Bank (NAB) suffered an outage which caused NAB EFTPOS and HICAPS terminals to be inoperative.

As a result of this, businesses may have suffered losses due to the inability of customers to purchase goods or services.

NAB undertaking with respect to business losses

NAB has undertaken to compensate those businesses who suffered losses because of this outage.

Businesses affected by this outage are invited to contact NAB on the following numbers:

  • For NAB Transact and/or EFTPOS services – 1300 369 852
  • For HICAPS services – 1300 650 852
  • For other business compensation inquiries – 13 10 12

What to prepare

When seeking compensation, NAB will likely require some form of evidence to substantiate your claim for compensation.

Evidence of:

  • changes in sales patterns due to the outage (eg. a sudden drop in sales after the outage occurred); and/or
  • differences in sales between 26 May 2018 and the previous and subsequent Saturday; are likely to be of assistance.

Newsagents with software that records previous sales and other data points could easily quantify the commercial impact of the Tatts outage. While school holidays will be a factor along with some other aspects such weather, one ought be able to make a case. This is especially true for businesses with larger Tatts sales, with dedicated labour costs.

Tatts implied commercial impact in their announcement of a delay to the draw. This notice issued by them could be part of a claim by retailers as it acknowledges the problem.

Hopefully, Tatts management will advise retailers, if they have not done so already, the process for determining compensation. In the meantime, lottery retailers should undertake their own enquiries into this, to understand their rights and actions open to them.

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Lotteries

Disrespectful obsession with newspaper home delivery discounting

Plugging the heavily discounted $1.00 a day newspaper home delivery across the masthead of The Daily Telegraph does not make sense to me.

Home delivery is not cost effective for publishers without good advertiser support and we are told advertising revenue is in decline for daily newspapers.

Newspaper home delivery is expensive yet the fees paid often do not cover the real actual cost to the distribution newsagent.

Newspapers are not bought for news today like they were years ago. The news they carry is old, out of date. While the analysis may be interesting, it is rare anyone gets a breaking stock from a print newspaper.

Retail only newsagents are disrespected by the publisher pitching this $1.00 offer on a product they sell in-store for $1.70.

While I get that publishers need subscribers in their mix, to be able to pitch to advertisers, it frustrates me that they do this through disrespect for their retailers.

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Newspaper distribution

Do you hand out the Chemist Warehouse Wellness ‘magazine’?

Do you hand out the Wellness catalogue promoting Chemist Warehouse and circulated in at least some cities with News Corp. newspapers?  I ask today because a newsagent mentioned to me recently they trash Wellness rather than push it on newspaper customers. They found little interest in what is essentially an ad catalogue. That and lack of fair compensation got them refusing to hand out the title.

So, do you hand out Wellness? 

Thinking about this issue more broadly, it is time advertisers and publishers respected retail newsagents more. Every action has a cost. Publishers reflect this in their pricing of advertising. Sadly, they do not respect newsagents in the same way.

The decades-long expectation that newsagents will go the extra mile for free for publishers because of the broader relationship, usually through distribution services, is not relevant today with so many of us retail agent and accessing newspapers as sub agents and thus earning very little from newspapers.

Every extra service has a cost. We need to be compensated fairly. Otherwise, we should not provide the service.

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magazines

Why I am not embracing the reduction in penalty rates

Penalty rates under the award that applies to newsagency businesses were cut further from July 1. This means we could pay people less to work on a Sunday. In March last year I wrote about why I was not embracing the first cut in penalty rates introduced by the Liberal/National government. I have reviewed what I wrote then and share it today to reinforce the decision I have made to not apply the second penalty rate cut…

Here are my reasons for deciding to not embrace the Sunday penalty rates decision in my retail businesses:

  1. I value my employees. To pay them less as a result of the decision could suggest to them they are worth less. I have hated it when suppliers reduced margin or commission and argued then that they value me and my business less.
  2. I want to be competitive for good labour. Paying a competitive rate is key to this.
  3. The business reward. It is open to employees who are now told their pay will not be cut to return the favour to the business.
  4. Competition. A range of competitor businesses have made a similar announcement.
  5. While of economy fairness. While I agree with the decision in penalty, it should only be taken as a whole of economy review that fairly adjusts economic touch-points for all and not only casual PAYG  workers.
  6. Weighing everything up, not applying the pay cut it is the right thing to do.

This is not a permanent decision. It is possible I will modify my position as the marketplace situation evolves. If I did and thereby embraced a saving in labour costs, I anticipate savings would be invested in more hours.

All business owners need to reach their own conclusions on this matter. Unfortunately, as a country we are bereft of leadership on broader issues that should be confronted in any economic setting adjustment as has been done with Sunday penalty rates.

There will be some here who will say I own multiple businesses and subsidise my newsagencies. This is not the case.

My hope is the decision to not cut penalty rates is met with a commitment by team members to drive revenue and thereby help the business afford the higher labour cost.

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Newsagency management

Lottoland not letting up

While what they sell has been outlawed from early 2019, that has not slowed Lottoland’s advertising. Their relentless pitch of online lottery related purchases is not good for over the counter lottery retailers.

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Ethics

Being completely free of plastic bags

We made the decision to not use plastic bags of any sort for customers and, so far, the reaction has been good. I think this is due to several major retailers investing in educating shoppers about their similar moves.

Our pitch is in-store at the counter, on the front window and in our social media feeds. The only challenge has been with some newspaper shoppers and for them it is usually about newsprint more so that carrying convenience.

By eliminating the plastic bags, even those that are degradable, altogether, we eliminate the frustration for people who would complain if we say no to a bag for a newspaper. It proved an easier to implement and explain mode, one that is good for the environment too.

By explaining our reasoning and doing so without being too preachy it has gone okay for us.

I think we are a moment in time opportunity eight not to make such a move. If you think you might reach the point of offering  NO plastic bags sometime in the next year, I suggest doing it now, right when the two major supermarkets are making the same move. It could be easier to fo this now than to do it later this year.

We continue to offer paper bags and a range of bags with handles for gifts and other items bigger than cards or magazines.

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Social responsibility

Call for newsagency sales benchmark data

Here is the email I sent to newsagents yesterday calling for sales data for the next benchmark study:

Q2 2018 NEWSAGENCY SALES BENCHMARK STUDY.
I am preparing a new benchmark study for the newsagency channel to look at the latest sales trends overall and in key product categories for the second quarter of 2018. This quarterly newsagency sales performance study will help newsagents see the future based on the data trends. Click here for my last report.

How to participate.

  1. Please run a Monthly Sales Comparison Report for 01/04/2018 – 30/06/2018 compared to 01/04/2017 – 30/06/2017.
  2. Tick the category box. IMPORTANT.
  3. Tick to exclude home delivery and sub agent data.
  4. DO NOT tick the supplier box.
  5. Preview the report on the screen. Save as a PDF and email this to me at mark@towersystems.com.au.
  6. Read the report yourself and see what it shows you about your business.

I will email the results to all participating newsagents and publish the results on theAustralian Newsagency Blog as a service for all newsagents.

My work with this channel goes back to 1981 when I wrote newsagency software to manage newspaper home deliveries. That software evolved into Point of Sale software and has been rewritten as software technology has changed. 

I own and run three newsagencies. Over the years I have had three others. I am a 50% shareholder in and CEO of newsXpress, the newsagency marketing group.

Tower Systems serves 1,750+ newsagents with best practice newsagency software, 60% of all newsagency businesses with newsagency software. Overall, Tower Systems serves in excess of 3,500 small business retailers.

Mark Fletcher
M | 0418 321 338

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Newsagency benchmark

Educating on the damage done by plastic bags

We are promoting the latest issue of National Geographic magazine to leverage the cover story on the damage being done by plastic. This is timely with moves by state governments on plastic bags as well as moves by our two major supermarket chains. The topic is timely. Also, it fits with our own moves on plastic and the elimination of bags for newspapers, the most wasteful use of bags in the business.

We are featuring the title with a horizontal run close to its usual location in-store. Here is that placement. It is the only area in our magazine department where we currently run a single magazine issue in this way.

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Environment

Excellent Better Homes and Gardens deal

The three free Lindt chocolate bars with the latest issue, the 40th birthday issue, of Better Homes and Gardens will help us sell out of this issue. The cover looks terrific and tasty. The chocolate adds to the temptation.

We are making the most of the Better Homes and Gardens promotion opportunity with the magazine featured next to our weeklies as well as at the front of the store for passers-by to be tempted and on our social media pages.

This offer is a good example of how we can attract traffic with a magazine. At Knox we have two Coles. They don’t have the chocolate with their copies of BHG. So, we are pitching it for all it is worth.

The BHG shopper is attractive to us for other items they will be more open to purchasing. There is no doubt shoppers for some titles are more valuable for us than shoppers for other titles. BHG shoppers are consists neatly valuable for basket depth.

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magazines

ALNA on the banning of lottery betting in Australia

A press release from ALNA yesterday:

Turnbull Government banishes lotto betting from Australia – delivering for small business and consumers

Australia’s national industry body for newsagents welcomes the passing of the Interactive Gambling Amendment (Lottery Betting) Bill, to protect consumers and assist small businesses that sell lottery products

FOR IMMEDIATE RELEASE

Australia, 28 June 2018: Australia’s national industry body for newsagents and lottery agents, the Australian Lottery and Newsagents Association (ALNA), is pleased that the Turnbull government has successfully legislated an amendment to the Interactive Gambling Bill, which will make lotto betting prohibited in Australia by early 2019.

Adam Joy, CEO of the Australian Lottery and Newsagents Association said, “The Interactive Gambling Amendment (Lottery Betting) Bill 2018 was recently unanimousy passed by the House of Representatives, and today it has been passed with an overwhelming majority in the Senate. This will protect Australia from synthetic lotteries and will bring important new consumer protections by closing the loophole that lotto betting sites have been operating out of.

“I want to acknowledge the government and particularly the Minister for Communications Mitch Fifield who has had carriage of this important Bill and whose leadership has seen this loophole closed. I would also like to thank Labor’s Shadow Minister for Communications, Michelle Rowland MP, for supporting this bill and listening to local newsagents and consulting widely. Lastly and importantly, we want to acknowledge and thank One Nation Senator Pauline Hanson, who put this issue on the agenda and who has supported enabling legislation to amend the Interactive Gambling Act to banish lotto betting from Australia.

“ALNA has been very firm in our stance against lotto betting for a long time. That’s because it confuses Australian consumers, it damages newsagents’ businesses, and it is an irresponsible and harmful model. The lotto betting model encourages highly repetitive bets that may risk problem gambling, promote higher risk spending, and may be misleading regarding the winnings available. This increases risk and it comes at a significant cost to state taxes, and to local family-run small businesses – that employ locally, pay Australian taxes and support the local community.

“Given the dishonest and divisive campaign run to try and prevent the passing of this Bill, we are pleased to know that there will be an end to misleading businesses trying to

denigrate and use newsagents for their own advantage. We represent over 2,000 small business members and have continually received overwhelming feedback from them that they are concerned about the tactics of these online bookmakers. And the Australian Lottery and Newsagents Association is pleased that their voices have been heard. We now call on all synthetic lottery operators to do the right thing by Australians and cease offering these products immediately.

“Lotteries don’t operate in a free market – most gambling products haven’t existed in a free market for decades. Arguing about monopolies is very convenient for online bookmakers who don’t want to have to follow the usual rules, but gambling products aren’t like other products, which is why governments regulate their access to consumers. Lotto betting bookmakers currently operate only because of a loophole that exists in current regulations.

“The Federal Interactive Gambling Act already made it illegal to sell a scratchy online and play a poker machine online, and the federal government moved last year to further strengthen the act with an amendment to ban online in-play betting on sports and banning credit betting, as well as making it illegal for unlicensed operators to offer online poker. And today, we welcome the passing of an amendment that closes a further loophole in the Act by banning online betting on all lottery outcomes.

“The Australian Lottery and Newsagents Association will continue to provide strong advocacy for our members, including to help newsagents receive better deals on the products that they are legally permitted to sell,” concluded Mr Joy.

The Australian Lottery and Newsagents Association is the only national association representing newsagents and lottery agents in every state and territory of Australia, and are the only newsagents’ association with a national ACCC collective bargaining authorisation. As such, it is the only association that is negotiating nationally with Tatts/Tabcorp for further improvements.

ALNA represents over 2,000 small businesses, mostly family owned, who rely on the sale of official government regulated lottery products.

On behalf of those businesses and their staff, the ALNA thanks the government for its efforts to bring forward this important reform to protect Australian consumers and to support these Australian small businesses.

Footnote: I’ve not been asked to publish this. I am not an ALNA member and have no commercial relationship with ALNA. I say this because of some who love ill-informed gossip in our channel.

10 likes
Lotteries

Crikey: Warren Buffet ‘abandons’ newspapers

Newspaper supporters have, over recent years, pointed to Warren Buffet and his investment in newspapers to support their view that newspapers have a future. This, yesterday, from Crikey:

How Warren Buffett abandoned newspapers. Rather than sell or close his 70 or so weakening newspapers now clustered in BH Media, CEO Warren Buffett has decided to outsource the management of 30 daily papers to a rival print group in middle America. The deal shows he’s all but abandoned newspapers. Under the deal, Lee Enterprises, an Iowa-based regional newspaper group, will manage BH Media’s 30 dailies for the next five years for a fee of US$50 million. Lee owns 46 dailies and more than 300 other publications. BH Media’s print circulation has dropped about 15% since 2015. It has struggled to build digital subscriptions and advertising as audiences have shifted from print to online.

Buffett told CNBC earlier this year that be believes only two newspapers, The New York Times and the Wall Street Journal, are assured to survive the current climate, because people will pay for them online.

The 15% circulation decline mentioned in this piece is less than the decline achieved by many Australian capital city newspapers in the same period.

We need to run our businesses to not rely on newspaper traffic whatsoever.

While I do not want newspaper sales to decline or daily newspapers to close, the former continues apace and thew latter will happen. The only reasonable topic of discussion is when. This is why every newsagent needs to fortify their business to ensure it can withstand the decline in shopper traffic following the closure of a daily newspaper or more.

The way we do this is by attracting new traffic. This can be done anywhere. While it is hard work, it can be done.

5 likes
Media disruption
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