What does it mean if a Newsagent business has Home Delivery or Distribution ?

A small percentage of newsagencies hold both Home Delivery and Distribution contracts with agents, on average, delivering 300 newspapers to homes in their allocated territory each morning.

Some agents perform the delivery themselves; others employ delivery drivers as staff or engage a Contractor; or a combination of all these options to provide backup on backup.

There are more companies in the market offering Delivery Contractor services, so if you find a great business with a run and you personally do not want to perform it, there are always options. Discuss this with your Specialist Broker.

The most desirable position is a Contracted delivery run, because if the Contract company driver is sick, the Contractor has to find their own replacement, taking the obligation off the newsagent owner to do the run.

News Ltd require (where possible) that home delivered papers are dropped by 6.30am each day, requiring an early start to sort, wrap (if needed), pack and deliver to homes and sub-agents. Starting times vary subject to the run size and initial drop time by News Ltd.

Home delivery can engender a customer and community loyalty, and can be a very useful database source for general marketing of the business for product other than Newspapers, and seasonal promotions.

Newsagents who hold a Home Delivery and/or a Distribution Contract with News Ltd; are given a defined Territory. The Territory clearly states a Starting Point, noting street to street compass settings that return to the Starting Point, to Map out an area that the contracted newsagent controls.

Any News Ltd product (eg: Courier Mail, Gold Coast or Townsville Bulletin, Cairns Post, Sunday Mail, Daily Telegraph etc) sold in that Territory, will go through the Territory newsagent. That includes any & all minor or major supermarkets, service stations and other potential outlets. Accordingly, the Territory newsagent gets a commission on all sales of these newspapers delivered by them in their Territory. For minor outlets, the newsagent also commonly provides the Magazines; however larger outlets usually have their own direct supply of magazines.

Non-Territory newsagents are known as Sub-agents, generally earning only half of the suppliers provided commission rate.

Accordingly, a territory provides a degree of protection from competition, reducing the likelihood of another newsagent opening next door to a Territory holder.

IMPORTANT UPDATES

2012. News Ltd made an announcement in July 2012 that they intended to start a Trial consolidation of delivery territories on the Southside of Brisbane. The initiative was named T2020. After implementation proved delayed & complicated, on 7^th March 2013, they announced they have discontinued the T2020 trial.

2019. News Ltd have since introduced “The Project” in Sydney (FY2019), assigning 2 distribution agents for east & west, and 2 agents for the CBD. One can only speculate the ongoing actions of News Ltd & Fairfax.

2020. News Ltd announced end of Oct 2020 that all South East Qld delivery agents would cease their runs between approx May to October 2021. A single contractor won a tender to take over the Sunshine Coast to the Gold Coast including greater Brisbane

News Ltd contracts have only ever had a 6 month guarantee, where News Ltd can provide 6 months notice to resume any delivery territory. This condition has been around for many years.

IMPACT TO TRADE & PROFIT

Where a delivery agent ceases to perform that delivery, expected future earnings will be effected.

Many agents however, were not aware that their delivery run made a net loss, which gave rise to many agents handing back their runs, until News Corp had to make the above announced changes.

So ceasing a delivery run may in fact improve an agents bottom line; the trouble was, determining the net profit or loss of a delivery run is/was very complex.

News Ltd provide a weekly statement, which includes all supplies, credited returns, sub-agent supplies & returns, and direct credits to the agent for some direct-billed sub-agents and home delivery pre-paid subscription customers. All lumped into one statement.

Even the best agents find it very difficult to calculate the overall revenue & costs to have performed a delivery run, before factoring the owners doing on average, 10 to 15hrs weekly in processing a delivery run (statements, banking, stops/starts, phone calls, run sheets, maintenance etc etc). Losing the run may also have meant savings in retail staff support who covered hours the owners were distracted to run attendance.

Whilst it is a reasonable expectation for a buyer to know what the $ impact will be if an agent is losing their run, there is often little certainty that can be provided, no matter how insistent the buyer may be.