Australian Newsagency Blog

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Why not beat Officeworks at their own game?

Mark Fletcher
February 12th, 2014 · 23 Comments

officeworks-pricecheckAt an Officeworks in Sydney’s CBD Monday I noticed this Check our prices noticeboard near the entrance. This is another strategy they use for pitching their prices and their price guarantee.  If I was a newsagent nearby with lower prices in, say, ink, and if my lease permitted I promote in my window a comparison of my prices and theirs. I’d take it to them. But I’d use a twist: my promotion would be for last week’s prices and I’d note that we’re doing this comparison to show that our customers were the winners.

Officeworks spends a considerable sum of money promoting that their prices are lower and their LOWEST PRICE GUARANTEE. I would not be surprised to discover that the amount they spend on this price pitch compared to other businesses is inverse to where they actually sit in a price comparison.

Newsagents are often cheaper than Officeworks yet we do not tell the world about this. In some cases our leases do not permit in-store comparative promotion. But for the rest, why not? Some newsagents do but not enough. I suspect it is too hard.  This is something a switched on industry association could do.

Several suppliers have conducted research over the years that indicates shoppers consider newsagencies to be expensive when price research indicates we are not. I was at a newsagency conference ten years ago where this was presented. Given the perception, why not a national campaign that helps newsagents promote their price position, a campaign showing the small business fighting back and competing with Officeworks and others. This would be good work for an industry association like the ANF to undertake – there’s no money in it for them but members would like it.

The Officeworks noticeboard reeks of ignorance but the average person entering their store would not know that. Newsagents nearby who do offer better prices need to engage. Yes, a fight with Officeworks could be challenging but, hey, what’s the alternative?

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Category: Newsagency challenges · Newsagency management · newsagency of the future · Opportunistic retail

23 responses so far ↓

  • 1 Cameron // Feb 12, 2014 at 7:28 AM

    Much better to do it at store level than to try and get the associations involved. Our flyers which compare our ink and toner prices to Officeworks are twice as effective as regular ink flyers. Very quick to produce – just do a price comparison on the web. Add an asterisk here and there.
    Some agents also put a price comparison on an A-frame out the front of their stores. Add a bit of colour with “ABC Newsagency smashes Officeworks on ink and toner pricing” or “shop local and save” or “little guy wins again”

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  • 2 Mark Fletcher // Feb 12, 2014 at 7:38 AM

    Cameron I agree about the local store pitch. The ANF could provide collateral that newsagents use for local comparison. It could show they are connected with real issues.

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  • 3 allan wickham // Feb 12, 2014 at 7:38 AM

    An insider at the local Office works here told me that our newsXpress “Hot Ink” flyer gets put straight in the shredder and does not see the light of day. We are a hell of a lot cheaper than office works but have to try and educate people of this. A great example was yesterday I got in some Oki toner for a customer, my price was $84.95, office works price was $119.00……$34.00 difference and he bought 2 of them. I am always speaking to anyone who will listen about our prices and am (I think) making some inroads. I even stopped a lady outside the post office the other day who had just purchased some ink from them and told her I could have saved her $8.00 a cartridge, she was horrified and asked me for a business card and told me that I would definately be seeing her from now on. We are really pushing the latest Hot Ink campaign and my staff have a list of things to tell “new” customers. Just got to keep fighting. If any newsagent has a smart phone download the office works app and use it as a business tool, you can price compare for the customer there on the spot.

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  • 4 Jenny // Feb 12, 2014 at 8:02 AM

    We are struggling with our ink sales, to the point that I don’t think we will bother with it for much longer.
    The problem for us is big w, office works and the supermarket, no they are not cheaper, our prices are much lower even without promotions, but the customer doesn’t give us a thought.
    They are brainwashed by these other companies and yes it’s very difficult to turn around their thinking.
    I told a customer in the supermarket the other day to check out the newsagency as they are much cheaper but she just looked at me like I was a looney!

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  • 5 Mark Fletcher // Feb 12, 2014 at 8:43 AM

    I am using LinkedIn (488 connections) and Twitter (521 followers) to promote local newsagencies as the go-to retailers for ink. here is what I posted:

    If you buy ink for your business, try your local small business newsagency & SAVE: http://lnkd.in/b_zqMUA #retail #smallbusiness

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  • 6 Mark Fletcher // Feb 12, 2014 at 8:46 AM

    Someone with 16,200 Twitter followers just favourited my tweet. We can use social media more effectively to make our pitch on price.

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  • 7 Jarryd Moore // Feb 12, 2014 at 9:05 AM

    It’s a new direct marketing strategy Allan – send team members into competitor stores and get them to loiter around the ink, announcing loudly “this is outrageous” … “newsXpress is much cheaper”.

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  • 8 Jack // Feb 12, 2014 at 9:38 AM

    I think the main reason people don’t think of newsagencies when they think of ink is because of the inconsistencies throughout the channel. If I walked into Allan’s store I bet I would find what I need but if I walked into a different store I may not. I know if I go to officeworks I have a much better chance of getting what I need and their ranged will be more consistent across locations. This means I will waste less time shopping around.

    I guess this is where a good marketing group comes to the fore.

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  • 9 Megan // Feb 12, 2014 at 10:03 AM

    I think Jack is right – when consistent availability is important, there’s less risk in heading to a place like Officeworks. But, as a consumer, I would find a promotion by my local newsagency of their prices compared to Officeworks compelling. Once I’ve found a local, reliable supplier of what I need who also offers a good price, they’ve got my business.

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  • 10 Carol // Feb 12, 2014 at 12:14 PM

    I find it hard to know what ink cartridges is the top sellers at the time and have been left with a lot that will never sell. Due to the lower margin it is sometime before you make up the loss. I limited space so have to use it well but how do you get that advice? GNS do have a list of their top selling cartridges but it is from using this that I have ended up with useless stock. What cartridges we do sell are mostly cheaper or same price as advertised products because I have gone on line and worked out a reasonable mark up to be competitive. It doesn’t matter what we sell we always seem to be an after thought ” I’ve ran out and forgot to get one in Cairns and I need to print something today. Oh yours is cheaper too” I don’t know how we change that attitude . This morning I had someone in from the local council wanting CD Sleeves and I am out of them and would only keep one or two packs but they want them today because they have run out. Yesterday it was an employment group who wanted a box of a particular 5Tab divider. I had 20 in stock but they wanted a box of 50.

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  • 11 Mark Fletcher // Feb 12, 2014 at 12:16 PM

    Carol, work with Dynamic Supplies on ink. They can guide you on top sellers and help you if items are not moving.

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  • 12 James // Feb 12, 2014 at 1:19 PM

    Since we are trying to compete with officeworks on price, I assume we are competitive with them on supply cost, otherwise surely this is short term self defeating strategy.

    Its the cigarette argument. We can compete with majors on tobacco price if we are prepared to take a 6 to 7% GP and stock a whole lot of low turn product.

    I admit I dont know what the right answer is. Im sure someone wiser than me can advise.

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  • 13 Mark Fletcher // Feb 12, 2014 at 1:25 PM

    James I’ve been competitive consistently for more than three years and my GP on ink ranges between 32% and 40%.

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  • 14 David @ Angle Vale Newsagency // Feb 12, 2014 at 10:20 PM

    Always price check my inks against Officeworks. I had a customer today for a cartridge Officeworks sell @ $79.90, I priced mine @ 69.95 and still have a 32% margin. Customer said BigW had for $56.00, checked their website and matched price as she is a regular customer. Still got a 18% on an in today/out today sale.

    The majority of my ink sales are compatibles where margin ranges from 150% to 300% and more, yet still lower cost than refills.

    When I bought the business it was an agency for Cartridge World getting 25% on refills and 15% on OEM. Ink sales are now up and margin way better.

    Back to topic, as my customers are only 10 minutes away from an Officeworks I must compare and compete and the locals are starting to see we have a good range at very competitive prices. The main thing they can beat me on is trading hours. :-)

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  • 15 Sean Cooney // Feb 17, 2014 at 9:33 PM

    When I owned a Commercial Stationers and my customers challenged me on Officeworks Specials, I said to them, “I’ll tell you what I’ll do, from now on I will charge your company everything you buy, at Officeworks prices”. Not one of them ever took me up on the challenge!

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  • 16 Wally // Feb 17, 2014 at 11:53 PM

    We are a convenience store and they come to us when they runout. Statinery is the same. We have however managed to increase our sales by putting flyers in the newspapers we sell to at least make our regulars aware we have them. I also have handed flyers out at the entrance to the shopping centre. We always say we may not be the cheapest but are in the park with only a few cents difference and sometimes even cheaper than the majors. We always pushing the “Support the little guy” . Most people dont want the cheapest they just dont want to be ripped off. Those that only want the cheapest you probably dont want as a customer anyway because they can be PITA’s.

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  • 17 June // Feb 18, 2014 at 9:58 AM

    Wally, don’t put your surname on here or the newspaper companies will be down on you like a ton of bricks. It is a definite
    No No to put anything in their publications
    and the penalty used to be losing your agency.
    ps. they probably don’t care much about it anymore as they are all disappearing
    anyway but be very careful.

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  • 18 Jenny // Feb 18, 2014 at 11:06 AM

    June are you serious?
    Is that in our contracts?

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  • 19 June // Feb 18, 2014 at 11:25 AM

    Jenny, I am deadly serious – don’t know how they police it (unless some customer who works for the paper dobs us in) but we were told in no uncertain terms that we would be in breach if ANYTHING went into the paper and in fact, when we sold the distribution round we had letters made up advising our customers and I requested permission to put the letters into the delivery papers and I was told NO you will have to either post them or hand deliver them.
    I always had a good relationship with the paper company so it wasn’t as though I was being victimized by them – it was just their rules.

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  • 20 Gregg // Feb 18, 2014 at 11:49 AM

    Jenny,
    June is correct you can not put your own inserts into the papers you deliver, but as my News Ltd rep pointed out if they are your subscribers and not News or Fairfax you may be ok. But is it worth the risk?

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  • 21 Jenny // Feb 18, 2014 at 5:45 PM

    June and Gregg, I would think both newspaper publishers would have a lot more important issues to worry about than newsagents putting an insert in the newspapers.
    All the reps I have ever dealt with are extremely supportive of our business and are only interested in helping us increase our paper sales and subscriptions.

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  • 22 subaru // Feb 19, 2014 at 8:58 AM

    yep, not allowed to INSERT, but when we used to deliver newspapers we used to wrap our brochure AROUND the newspaper – between the newspaper and the tenospin plastic.
    Beat them on a technicality. Advertising not “inserted”, but the customer still used to get it anyway.

    1 likes

  • 23 Allan Wickham // Feb 19, 2014 at 9:46 AM

    It’s a real pity that some of our suppliers/partners aren’t being more proactive in helping our businesses grow. They should be looking at ways in which we can use their products to help support and grow our businesses. A great example of this is the Pacific magazines “Nexus” program. They provide tools with which we can use to promote other goods not just magazines. They are also on the lookout to add further value to this program and are really thinking outside the square. They want to grow their business by helping us grow ours….win/win really.

    2 likes

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