Favourable terms on newspapers for start-up community shops
It is worth approaching the newspaper wholesalers for favourable terms when starting up a community shop. Smiths News, for example, will impose six months' firm-sale conditions normally - however, they will waive this for community shops, and offer sale-or-return from the start (they impose a bond, however).
Helen,
We opened Eardisland Community Shop on 31 March 2010 and began selling newspapers on 15th April through Smiths News. I did an online application, we paid a 'deposit' equal to an estimated 3 weeks sales which is refundable after 6 months if you have paid on time.
My experience of Smiths News is not good. After they had estimated our weekly sales, I asked if the projected figure was at cost or retail and what was the profit margin on papers, nobody in Customer Services could tell me!
The supply of papers is based on their 'knowledge and experience' so for more than 4 weeks we got all the papers we didn't want and insufficient of the ones we did. After numerous phone calls I managed to get agreement that the computer was wrong and place our own order, but they still seem to change it at will.
For the first 4 weeks we did not receive any 'Recall Notes' so used a 'Daily Pack Sheet' for returns. We didn't receive an invoice until 8th May, though they were debiting our account from the first delivery. The invoices did not credit any returns. Fortunately I had kept records and eventually we secured the credit, but it took me days of work,phone calls and letters.The credit was for just under £200.
As well as the Weekly Service Charge an item appeared on an invoice for £55 'Sales and Marketing Review Fee", I was told this was the cost of setting up the account and is non refundable. This remember is an account I set up on line!
After the first 4 weeks we began to get daily the Recall Notes and invoices so I checked daily the invoice amount and credits, which are 2 days in arrears, if you do not indicate an error within 2 days they can refuse to correct it.
All was going well until August 14th when they closed Gloucester depot and transferred us into Newport, and yes all the same initial problems, lack of paperwork, no invoices, no credits in short a shambles again. Oh and Newport change our daily order for us without discussion.
We sell newspapers for very little return believing that they bring customers into the shop and they spend on other more profitable items, I am not sure this is the case.
I worked for 35 years in Sales and Marketing fast moving consumer goods to retailers and distributors in the UK and around the world, Smiths News has to be one of the most incompetent,inept companies I've come across.
I am sorry if this is a rant but be prepared for all this to happen, I hope it doesn't but you need to be 'on their case' from day one.
Albert Sheffield
This is a bit of a horror story! It would be interesting to hear other people's experience, especially with regard to signing up with Smiths online rather than through a Smiths rep. My own experience hasn't been anything like as bad, but I do agree that in the first few weeks you really have to be on their case, to get the paper and mag selection right for your area. IYou appear to have been able to go onto sale-or-return (though bungled) from the start, but you don't seem to have been asked for a substantial bond - I know one community shop had to cough up £1300 as a year's bond. Three weeks' takings sounds very light by comparison.
Once the system is working properly you should really be getting a reasonable return and yes, newspapers bring in customers. It would be good to continue this discussion as it is important that community shops get a chance to offer this vital service, without punitive time/money terms.
Hi Helen,
The key to a good return is how many papers you sell, not rocket science I know but being a very small shop we average sales of £170 per week, we do not do magazines. The service charge, at just under £30 per week, really hits the profit, but we are making a profit albeit a small one. We were on sale or return from day one, without it we would have lost a lot of money. Being in a rural area there are no sub-distributors which may be a better option in urban areas.
We have been receiving newspapers from Menzies for about 3 years. As a concession to being a community shop the minimum order quantity was waived and we were put onto Sale or Return from day 1. We had to place a bond of £1,000 which was returned after 12 months. We have occasional problems with non- or late delivery of certain titles but in general our experience with Menzies has been very positive. Our retail sales value is about £250 per week and we pay about £30 per week delivery charge so it is a reasonable earner as well as being an excellent service to our customers.
Arthur Grosset
Monks Eleigh Community Shop