From the Network Services website:

www.magshop.com.au is the online retail shop for Australia’s leading magazine publishers. It offers a diverse range of innovative and stylish titles from many publishers throughout Australia in one convenient location.

Magshop is currently attracting 225,000 visitors a month and generating 7,000+ orders, with a conversion of over 3% every month.

The benefits and guaranteed placements are endless with representation on all major Australian search engines and top five portals. Extensive work is currently being carried out to ensure effective listings on all search engines.

With over 200 titles and 2700 items of merchandise, each publisher is able to add as many publications or products as they like. With no upfront costs, the Magshop team will effectively manage all subscription offers, including magazine covers, promotional images and any information changes.

All orders processed through Magshop will safely and securely be stored on our administration server for collection by publishers. All sales are validated by ANZ egate ensuring all revenue from sales are guaranteed.

Affiliate marketing is an essential part of any eBusiness and provides significant competitive advantage. Publishers can now utilise magshop to increase their online subscription sales.

Network Services is part of the PBL group as in ACP Magazines.

While I do not begrudge ACP Magazines selling subscriptions online in this way, I am disappointed in the size of discounts offered in the face of just 25% commission for newsagents who work hard to support their brands in close to 5,000 retail outlets nationally

Some newsagents find it hard to get enough stock of the top selling ACP titles. On the other hand, many newsagents complain that Network Services supplies too much of non ACP stock, especially titles in the bottom 1,000 performing magazine titles. In today’s disruptive circulation market I’d expect newsagents to both situations more frequently.

Newsagents urgently need more equitable magazine supply arrangements. Less stock titles outside the top 200 and, in some cases, more stock for titles inside the top 200. I’d like to see Network and their colleague magazine distributors to work better together to provide newsagents with a fairer deal than the current magazine supply model. This would then enable newsagents to be more competitive against operations like magshop.

I heard of a major landlord yesterday demanding traders open on a Sunday for the full day. In the same centre the government owned Australia Post outlet is permitted to close even though around 90% of the floor space of this government retail business sells stationery, greeting cards, phones, books, office supplies and travel goods. Their competitors are forced to pay upwards of $25 per hour per employee to staff their businesses while Australia Post can close. This is another example of Australia Post exploiting their government ownership for an unfair advantage.

The Advertiser reports:

THE Independent Gambling Authority wants to ban newsagents and other retail outlets from selling Keno tickets.

It has proposed a five-year phase-out, after which South Australians would only be able to play Keno at licensed gaming venues.

The move would affect hundreds of small businesses, who claim they stand to lose more than $65 million a year in turnover.

Newsagents are trusted to sell pornographic material, tobacco products, scratch tickets and regular lottery products under strict age based rules so why not keno. I suspect that newsagents and other small businesses have been outgunned by the richer clubs and small lobby groups.

Business for newsagents is finely balanced. They need keno traffic to support newspaper, magazine, card and stationery sales just as they need newspaper sales to support lottery, magazine and card sales … and so on. This proposed move to strip keno from newsagents who have a significant knock on effect as The Advertiser rightly points out.

My question would be: newsagents in South Australia have had keno for years, what harm has come from that which requires it to be taken from the and if there is harm has it cost hundreds of millions of dollars in a year?

Newsagents arrived at their businesses in the early hours of this morning to, in some cases, two and three times the usual Friday magazine delivery. Like fuel goes up on the weekend and on holidays, the quantity of magazines supplied to newsagents increases on the last Friday of the month. Magazines delivered today have to be paid for in full in three weeks. Any which do not sell (usually between 50% and 80% of what is supplied) are returned four weeks later and a credit provided (often) a month after that.

Today’s oversupply is seen by many newsagents as a grab for cash. Magazine distributors will say they have no control over when publishers release titles. It does not matter who is right about the reasons, the fact is that the last Friday of the month sucks a ton of cash out of newsagencies and newsagents are the losers.

The titles of concern are those well out of the top 200 sellers. They are titles supermarkets, convenience stores and petrol outlets refuse to sell, titles which newsagents are forced to carry because of the out of date magazine supply model which the government did not fix when it deregulated newspaper and magazine distribution in 1999.

The oversupply today drains cash and resources from small businesses newsagents. It makes it harder for newsagents to actively promote magazines in the top 200. Publishers like ACP, Pacific, Time, FPC and Emap suffer because of the junk newsagents have been overloaded with.

A barcode. The issues of the Barbie magazine (published by Emap and distributed by Gordon and Gotch) and Windows XP magazine (published by Derwent Howard and distributed by Network) which were released Wednesday have the same barcode.

On June 7 I wrote to the Communications Minister, Small Business Minister complaining about the increasing competition aimed at newsagents by Government owned Australia Post stores. A copy of the letter can be found here. The Small Business Minister has responded with a brief letter handballing the matter to the Communications Minister and reminding me that Australia Post must act commercially. My complaint was specific and legitimate, drawing attention of the reader to three key clauses in the Act under which Australia Post operates:

I refer to my previous correspondence on the matter of Australia Post operating outside the provisions of Sections 14, 15 and 16 of the Australian Postal Corporation Act 1989.

I draw your attention to the June Relax…at Tax time with Australia Post catalogue published by Australia Post and ask the government to consider whether the sale of these items promoted within that catalogue is within the provisions of the ACT

In the letter I list sixteen items I consider fall outside the provisions of the Act.

Government owned retail outlets are taking revenue from small businesses like mine. They have given over 80% of their retail space to carrying stationery and other items which newsagents have sold for more than 140 years. Australia Post has been in this space for ten or so years and they have leveraged their government protected Post brand into excellent retail sales.

Newsagents are losing revenue and the government is not taking any notice. Their ownership of Australia Post and permission of it to compete with newsagents in this way makes a mockery of their small business policy.

The government line that Australia Post needs to operate to ensure its commercial viability really says that the government puts its ownership of these retail businesses ahead of the needs of small business taxpayers.

That they do not even have the guts to discuss and or debate policy with the channel their Australia Post business targets every day demonstrates a profound lack of interest in mum and dad businesses in Australia.

We were offered some product from China, really cheap stuff. Some items a little off the usual newsagency range. and others a good fit. After months of saying no we took the plunge. In just two weeks we have all but sold out. With a GP of 80% and a sell out in two weeks it makes one wonder about whether worrying whether products fit my view of a newsagency matters. Of course, the temptation is to take the China product drug again and again after that. But where does one stop? I suspect when it is too late. My feeling is that I will resist the temptation to turn my newsagency in to a $2 shop and use this imported product at selected times in the year to lure new customers and reward regulars with a good deal.

Many newsagents would not agree with me. They are pursuing more and more cheap product from China. This dilutes what newsagencies are and devalues the network.

If too many front their shops with cheap product from China we will nose interest to suppliers as the premium channel we are today for greeting cards, magazines, newspapers and lotteries. Suppliers like us for our focus and an addiction to cheap imported product puts that at risk.

When asked, Tattersalls says that pursuing online lotteries sales is not a key focus. They tell their Accredited Representatives that their bricks and mortar network is their key focus. This email from Tattersalls last week to registered online players suggests otherwise. It illustrates their preference for promoting online purchase over the local Tattersall’s Outlet.

I accept that Tattersalls needs to promote the purchase model which best suits their share price. I would prefer more open disclosure to their outlets so that they, too, may plan their business development accordingly.

Consider this for a business practice. A magazine title is distributed to newsagents and copies not sold are returned for a credit. Some weeks or months later, the same copies which were returned (or new copies printed) are reissued, even if the sales of the original issue were low. This happens regularly to newsagents. Occasionally sales are such that a reissue is warranted. Usually this is not the case. Reissue titles cost newsagents cash, real-estate and time. They are another barrier to newsagents spending time on the growth titles in their businesses. I saw an example of a reissue today where the newsagents initially received 20 of a title and returned 15. Now, a few months later, the same issue is back with 25 copies. Where is the logic in that?

Our online classified start up, Find It, has been attracting strong interest from newsagents with many already agreements in advance of our launch later this year. Many more have booked for launch events commencing next week. Newsagents are important to our business model as we see an opportunity to leverage their footprint to extend the reach of an online business.

Two or three of the 100+ calls from newsagents have concerned me. They say that every supplier is out to rip them off at some point so we must be no different. Our pitch is that they can become a Find It newsagent for no cost and they can opt out at any time. They see this easy approach as demanding a catch. While this response is in the minority, I had not expected it at all. One person I spoke with today says they prefer the sale or return over supply under supply tough trading terms approach of a magazine distributor because it’s what they have grown up with. They worry about Find It because “you want me to take initiative, at least with magazines I just put them there and if they sell they sell”.

While I am confident that Find It will deliver to newsagents new traffic and new revenue from a unique online classifieds model, the launch process is uncovering some newsagents who have lost the enthusiasm for building a business.