Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Is Optus about to cut newsagent income?

Mark Fletcher
January 30th, 2007 · 1 Comment

Following Vodafone late last year and Virgin Mobile (an Optus company) list month, Optus is rumored to be set to cut commission paid to newsagents for selling recharge product. The rumor is a cut of 33%, taking commission to 5%. Newsagents need to make 8% for recharge to be a viable transaction. At 5%, Vodafone and Virgin Mobile recharge are loss making. We know that when Vodafone cut newsagents to 5% it was paying Coles 16%.

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Category: Newsagency challenges

1 response so far ↓

  • 1 Derek // Jan 30, 2007 at 8:40 AM

    Mark

    So you make 5 cents for every dollar spent on a recharge which is about $1.50 per 30 dollar recharge. Take GST & other considerations into account and you wonder why one carries this service, if you have other sales around the 30 dollar mark I am sure the gross profit would be a lot higher.

    It does make it a little more bearable when customers buy a drink or an add on etc(By the way move the drinks fridge up the front with those energy drinks in it).

    It’s another rock & a hard place, do away with this recharge business unless you are doing a reasonable trade with it and risk losing more customers to cartels or somehow make it worth keeping this service. Once again its up to positiveness and good staff.

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