Michael Rakusin, Director of Tower Books replied to Charlie Rimmer‘s letter. I’ve emailed a request to reproduce Michael’s email here, but in the meantime you can read it at Susan Wyndhamâ€™s Undercover blog. That way the conversation can allow trackbacks around the blogosphere.
I look forward to watching the fall-out in the industry over this. When a major market player decides to flex their muscle, they should make sure they are a big enough player. I suspect that at a claimed 18% of the Australian book retail market Angus & Robertson will find it is not enough to succeed.
Bunnings on the other hand does have enough market share. But more on that later.
Update Michael Rakusin has granted permission to reproduce his letter below Continue reading A&R Scandal: Tower Books’ Michael Rakusin Replies
Angus & Robertson sent a letter to 40% of their suppliers demanding cash payments and rebates as a condition of continued business. The scandal broke at Susan Wyndham‘sÂ Undercover blog over at the Sydney Morning Herald, firstly in Bookshop chain puts bite on small publishers and then in more detail today A&R Dumps Books.
A friend describes it as “Bookselling, The MBA way”. This is bound to be one of the case studies I’ll use in my MBA.
Here is the text of the letter for the screen readers and the blind:
Angus & Robertson
30th July 2007
Unit 2 / 17 Rodborough Road
I am writing to inform you of some of the changes to the way we manage our business.
We have recently completed a piece of work to rank our suppliers in terms of the net profit they generate for our business. We have concluded that we have far too many suppliers, and over 40% of our supplier agreements fall below our requirements in terms of profit earned. At a time when the cost of doing business continues to rise, I’m sure you can understand that this is an unpalatable set of circumstances for us, and as such we have no option but to act quickly to remedy the situation.
Accordingly, we will be rationalising our supplier numbers and setting a minimum earnigs ration of income to trade purchases that we expect to achieve from our suppliers.
I am writing to you because TOWER BOOKS falls into this category of unacceptable profitability.
As a consequence we would invite you to pay the attached invoice by Aug 17th 2007. The payment represents the gap fro your your business, and moves it from an unacceptable level of profitability, to above our minimum threshold.
If we fail to receive your payment by this time we will have no option but to remove you from our list of authorised suppliers, and you will be unable to complete any further transactions with us until such time as the payment is made.
I have also attached a proforma for you to complete wand return to me, with your proposed terms of trade for our financial year commencing Sept 1st 2007. We have the following expectations:
All agreements contain a standard rebate, a growth rebate and a minimum co-op commitment to enable participation in our marketing activity.
Growth rebates activate as soon as our purchases with you increase by $1 on the previous year.
All rebates are paid quarterly for the previous quarter’s performance, you must make sure that your remittance, with calculations, is received by us by the 7th of the month following the preceding quarter. Any remittances not received by this date will attract a daily 5% interest charge.
I am also including a copy of our ratecard, and our marketing calendar, to enable you to begin planning your promotional participation now.
If you would like to discuss this with me in more detail, I am delighted to confirm an appointment with you at 1.00pm on Friday 17th August for 10 minutes at my offices at 379 Collins St, Melbourne.
ARW Group Commercial Manager
Enc: A&R Ratecard
A&R Marketing calendar
Trading Terms Proforma
I pride myself in being an internet power user. I think I can research most things on the net very well. I’ve had to draft an Affidavit for the succession wars and so I thought “surely this is something I can discover on the net”
I found definitions and some general (albeit useful) guidelines. But you’d think there would be an accessability site somewhere dedicated to enabling citizens to take control of their legal affairs. While I don’t think it is a conspiracy by the legal profession to protect their monopoly, the complexity and formality of the legal process is unjust and disenfranchises citizens.
Democracies should embrace accessability and root out practices and procedures that create obstacles to ordinary citizens participating in social, political and legal action.
Now that I’ve made such a high faluting statement, I don’t know how to simplify the process so typical high-school educated citizens can participate. I recall when selling books to prison libraries, the most requested subject was a criminal law textbook for a 4th grade reading age. Prisoners did not lack intelligence; they lacked education, vocabulary and articulation.
So back to writing affidavits, if it takes five years of university education, a law degree and two or three years experience in a legal practice to lay out evidence in a civil matter, something is broken.
Plain english law is the first step. What’s the next?