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

Pricing newsagent retail real-estate

mags_counter.JPGACP and Pacific have released new titles which leverage existing successful mastheads. Each has been provided to newsagents in a counter display unit. ACP’s Woman’s Day branded ABC of Cooking and Pacific’s Total Girl Party Book should work well at the counter. I would like to see publishers offer a premium commission for counter space allocation as 25% does not cut it.

To compare to the return from other counter offers we need to achieve a minimum GP of 40%, ideally more.

I see these titles as being different to the counter offers I talk about here. The publishers have packed these two titles as if they expect counter space. The displays I and people at my newsagencies do at the counter we do because we choose to.

0 likes
magazines

Bill Express buys time

Bill Express announced to the ASX today an extension to its suspension to August 22.  The waiting game continues.  The company says it has received a recapitalisation proposal from a subsidiary of Al Othman Group.  While Al Othman houses several businesses which could provide synergy with the Bill Express model, I am surprised that the company has had to go so far from home and current partners for a financial lifeline.

0 likes
Bill Express

Vic newsagents prefer action to another meeting

There was little interest among Victorian newsagents in a meeting by the ANF which was to include a discussion about Bill Express.  The meeting was canceled.  This and poor numbers elsewhere must cast doubt on the legal action proposed by the ANF.

Given the advanced state of the Class Action already on foot and the considerable grassroots support, I would expect this to emerge as the only court action backed by newsagents. 

With so many newsagents behind the Federal Court action, newsagents will be looking to leaders in their channel to take a position supporting a single action, they will want to know that their leaders support the most unified legal move ever undertaken by newsagents.

0 likes
Bill Express

Bill Express activity ‘noise’ intensifies

A flurry of of emails and communication overnight about the status of Bill Express. The reports range from KPMG being called in to conduct a forensic audit through to police involvement to a story that the CEO will not return from overseas. Mark Hawthorne writing at The Age has some details.

Some of what I have been told cannot be confirmed. Interesting movement I have verified surrounds activity connected with developments in Vietnam as announced by OnQ. This relates to BOPO in Vietnam, another joint venture of the business. While the announcement is a year old, it points to a relationship which, it has been suggested to me, is now key to how the Bill Express situation may play out. The Vietnamese venture is not owned by the company. Similarly, the Singapore BOPO operation.

I’d expect greater interest in BOPO as investigators look more into the Bill Express business.

0 likes
Bill Express

David Beckham promoting Sharpie pens

We’re promoting the David Beckham Sharpie promotion in space we have reclaimed in front of our photocopier. With a trip to meet David Beckham up for grabs I expect this to be very popular.
sharp2.JPG

What the photo does not show is the inflated Sharpie above the display and other features drawing attention to the offer.

0 likes
retail

If receivers are appointed to Bill Express

If receivers are appointed to Bill Express, newsagents would be well served to make urgent representations to the receiver on the relationship between Bill Express and Technology Business International (TBI). This will matter because newsagents entered into agreements with TBI to fund $25,000 worth of Bill Express equipment on the basis of rebates promised and even “guaranteed” by Bill Express. The viability of the newsagent commitment to TBI was determined by the rebate commitment by Bill Express.

This is on my mind today because some newsagents think that Bill Express collapsing will end their liability over the lease of Bill express equipment.

0 likes
Bill Express

Newsagent market fair

nx_marketfair.JPGnewsXpress held a Market Fair in Melbourne yesterday for members. Close to thirty suppliers were there with new products on display and some excellent newsXpress specific deals. This is what marketing groups are about, adding value to member’s businesses through exclusive access and or exclusive pricing.

Such offers cannot be put at the general industry trade shows such as the GNS Market Fairs which we also look forward to attending.

The difference between newsagencies is increasing – partially because of marketing groups but more so because of entrepreneurial newsagents versus people who have bought themselves a wage. Things like the market fair yesterday highlight this difference. There was talk about basket depth, margin and new money – all related to how newsagents can break away from the old newsagent model and use the current traffic to drive better, more commercially valuable, outcomes.

0 likes
Newsagency challenges

QLD newsagents support class action on Bill Express

Representatives from seventy newsagencies in Queensland met in Brisbane yesterday and endorsed the Federal Court class action commenced against Bill Express, Technology Business International and the Australian Newsagents’ Federation.

This class action, commenced by a group of newsagents in NSW and facilitated through the state association now has strong eastern seaboard support. Newsagents are unifying behind this action as a result of the withdrawal of rebates by Bill Express which were the difference between newsagents breaking even and losing money on the service.

0 likes
Bill Express

ABC radio covers Tattersalls / Intralot issue

I was interviewed by Jon Faine on ABC local radio in Melbourne this morning about the breach notice issued by Tattersalls against us. I know from calls I have received in the two hours since that this is a hot topic among newsagents. Hopefully, the coverage by the ABC will encourage Tattersalls to look at this issue pragmatically rather than the baseball-bat enforcer approach they are currently taking against small businesses.

The space I have allocated to Intralot has never been used for selling or promoting Tattersalls product. Locating Intralot here helps our team better pitch Tattersalls product as an add on to Intralot sales. There is a win here for Tattersalls if they work with their retail network.

The person missing in action continues to be Tony Robinson, the Minister for Gaming. Three letters and no response. So much for small business support.

0 likes
Lotteries

Gloss for That’s Life

tl_june25.JPGHaving sold out of Healthy Food from our counter display in two days, we are promoting That’s Life and the free lip gloss which comes with the issue out today.  The photo shows the display in the space we have between our two busiest serving points.

This will be a good test of our premium counter position since our That’s Life sales are already strong. I am especially interested to see what happens today and tomorrow given that 90% of our That’s Life sales are on Wednesday and Thursday.

0 likes
magazines

Bill Express / ANZ waiting game

It is good to see Mark Hawthorne continue coverage of the Bill Express saga in the Full Disclosure column in The Age today. There is plenty more yet to surface on the Bill Express story. I would like to see some digging into the companies associated with Bill Express / OnQ. Here is what I wrote last month about one such company, Loyalty Direct:

I have been told that a company called Loyalty Direct Pty Ltd terminated the services of 35 employees on Friday of last week without redundancy or accrued benefits paid. I have also been told that another group of Loyalty Direct employees were terminated and immediately offered contracts with a business called Payroll Express which provides the same services as Loyalty Direct.

Loyalty Direct is registered at the Eaglemont address of Bill Express’ Head Office. An ASIC search shows that Loyalty Direct is under “external administration and/or controller appointed. My understanding is that Loyalty Direct is a private company delivering some services to On Q and or Bill Express. I am not able to verify the location and ownership of Payroll Express.

I note the irony of the Loyalty Direct name.

Since writing this I’ve been told that Payroll Express is not the name of the phoenix company, it is Express Payroll Solutions Pty Ltd (ABN 12 113 484 432). The terminated employees have not, as I understand it, been paid their entitlements.

The ANZ has more at stake than the Bill Express indebtedness. It has merchant terminals across the Bill Express retail network. These generate excellent fees for the bank on every transaction processed. I’d expect that this is a key consideration in its efforts to find a resolution to the Bill Express mess.

0 likes
Bill Express

More on Irish newsagents losing newspaper home delivery

Roy Greenslade makes sense in his blog post at The Guardian about the decision by the publisher of the Belfast Telegraph to take home delivery away from newsagents in response to a dramatic sales fall. Newsagents aren’t the cause of the problem. The publisher is responsible on a range of fronts.

It is great to see someone of Greenslade’s stature get behind the story and defend newsagents.

Are we really to believe that newsagents in Ireland’s northern six counties are solely, or even mainly, responsible for this dramatic decline in the fortunes of a paper that was selling more than 100,000 copies on weekdays five years ago?

Beyond this Irish issue, however, is Grenslkade’s veiw of UK newsagents. It is something Australian newsagents ought to read. Sure we take comfort from the fact that the UK market is different to ours. The reality is not that different that we can ignore what has happened to independent newsagents in the UK. Check out Greenslade’s opening paragraph:

Newsagents across Britain have been closing week by week for years, succumbing to a long-term trend that has seen the gradual disappearance of the economically unsustainable corner shop. Meanwhile, supermarkets have been supplanting them as the major retailers of newspapers.

Gulp. Did he really write that? Isn’t is heresy to put this view in front of newsagents. Don’t we want to believe that none of this will affect us? Yes, yes and yes.

Read the whole piece – you’ll understand why I bang on about the Newsagency of the Future and why I have been so interested in the demise of Kleins and other business models which have not been refreshed.

Roy Greenslade is someone I would have on a panel here in Australia to debate the future of our channel. His perspective on the future of our core products of newspapers and magazines could wake us from our slumber.

My original blog post on the Irish issue can be hound here.

0 likes
Newsagency challenges

Refreshing ink and toner

ink_fhn.JPGWe refreshed our Hot Ink ink and toner offer at Forest Hill last week, taking every product down and rebuilding the display and allocating position based on sales by brand. Nothing new in this, it’s smart retail. The latest Hot Ink flyer we have sent to thousands houses around our centre is driving excellent sales. Ink sales are growing well and, as I have noted here several times, are very efficient and profitabel.

This two metres of slat wall is the most profitable space in our broader stationery offer. Ink sales are up yet our stock investment is down – this is achieved thanks to good use of smart technology.

0 likes
retail

The Bill Express UAE connection

For information on Bill Express’ UAE connections, check out the iPay website.  Navigate to strategic partners and read about Bill Express:

Through our Bill EXPRESS® and DialTime® operation, the company owns and operates one of Australia’s largest electronic retail distribution networks.

Over the past 6 years Bill Express has established a robust and proven electronic network of nearly 14,000 terminals throughout Australia generating a revenue exceeding $1 billion.

I am not sure that newsagents would say the Bill Express network is robust, certainly not since late last year.

The iPay website also lists the troubled OnQ as a strategic partner.   OnQ is a substantial shareholder in Bill Express and the holder of the “technology” on which Bill Express is based.

Click here to read the press release announcing the iPay joint venture developed out of Vodatel.

My speculation is that parties associated with iPay are the parties who acquired shares in Bill Express within the last year.  If the reports of Bill Express CEO Ian Christiansen traveling to the UAE are accurate, I would expect him to be seeking more funds from his shareholders there.

0 likes
Bill Express

Memo tattersalls: I give up

Tattersalls has hand delivered a letter today breaching me for pormoting Intralot in space I have used for eight years to sell magazines and confectionery.  They have given me two days to remove the Intralot terminal.  They have also advised that my comments here are a breach of mny Tattersalls.  It seems the company is scared of my having an opinion and being public with it.

I give up.  The Tattersalls gorilla wins.  The Brumby State Government has been no help.  The office of the Small Business Commissioner has been no help.

0 likes
Lotteries

Bill Express in The Age again today

Mark Hawthorne nearly brings together the current situation regarding Bill Express in a good report The Age today. His report includes a reference to the meeting we held in Melbourne Thursday last week where attendees representing 70 newsagencies voted to add their support to the class action already on foot. At least 100 more newsagents who could not make the meeting have agreed to support this class action. There is a meeting of newsagents in Queensland to discuss the where they lodge their support.

Outside of the newsagent class action, anyone looking at the Bill Express business needs to carefully research the current revenues from all parts of the business.

  • My information is that at least 30% of mobile recharge business is now being conducted by providers other than the Bill Express Dialtime operation.  While margin on mobile recharge is slim for the company, every retail location lost is a significant bottom line hit when annualised.
  • Liabilities are growing at a concerning rate.  Take Bill payment revenues – newsagents had their commission of $1.00 unilaterally cut in February by 30%.  They were promised that this 30% would be spent on advertising.  So far, we have not seen any spend on advertising.  Five months on and the liability is significant.

Given the reports of Bill Express Director Ian Christiansen flying our to the United Arab Emirates I wonder is this is to meet with parties associated with an existing shareholder in the business and licencee of the Bill Express “technology” for that region. I’d be surprised as being caught once ought to be enough.

The coverage by The Age these past two days is excellent.  They are drawing public attention to a problem which has been concerning newsagents for years.

0 likes
Bill Express

Kleins and the brand makeover

Newsagents ought to read page 58 of the Australian Financial Review today.  The article by James Stewart is relevant to the retail newsagency offer.  This topic is close to my heart as it relates to the content of my Newsagency of the Future workshop I presented at the recent ANF Convention.  The need for reinvention of our retail offer is urgent and ought to be pursued by us individually and collectively.  Look at what happened to Kleins.

0 likes
Newsagency challenges

Educating customers

ilot_scren.JPGIntralot has started its TV campaign based around the theme of the luck factory. In-store, they are using the LCD screens to educate customers about their new games they launch July 1. I am pleased to see such good use of the LCD screen – they add to the theatre of retail. All of this activity is exciting and will refresh interest in lotteries as a result

0 likes
Lotteries

Healthy Food promotion

healthy_food.JPGHealthy Food magazine is our counter offer this week – despite receiving no marketing collateral.

With sample bag packed with more than $10 worth of products, promoting Healthy Food at the counter makes sense. I’d expect us to sell out by the end of the week.

I can’t stress enough the economic value to our business of this small counter space allocation for promoting magazines with good giveaways.

0 likes
magazines

Filling the AWW space

aww_sell_out.JPGWhile selling out of the Australian Women’s Weekly is welcome, we have scrambled to find appropriate titles to fill the space.  AWW is usually in the column next to Woman’s Day.  We have called on Oprah, Woman & Home, SHE, Good Housekeeping and Women’s Health to do the honours – we feel they best suit the demographic.

0 likes
magazines

Cut and run by Brumby Government

fh_counter_june08.JPGThe Victorian State Government continues its cut and run strategy on its changes to over the counter lottery products. Their lack of genuine engagement in navigating the resulting changes is disappointing. I have written to the Minister for Gaming twice about unreasonable demands by Tattersalls regarding space allocation. The Minister has ignored my letters yet he has sent another form letter to all lottery outlets pointing us to the office of the Small Business Commissioner.  I have written again this morning.

A better approach would be to demand Tattersalls stop sending threatening letters to its retail network, require a moratorium of, say, six months and establish a commercial approach to resolving counter and other in-store space allocation issues.

If my moratorium approach is adopted, I could promote and sell Intralot and Tattersalls products as I choose – see the photo – and then be judged by resulting sales. If my Tattersalls sales are down compared to other outlets then I’d need to to what Tattersalls says. If, on the other hand, they are on par or up, I am left alone to run my business.

I have written to the Minister again this morning as well as Tattersalls and then SBC. With seven days to go and a legal threat from Tattersalls someone needs to step in and help my and others in my situation.

0 likes
Lotteries