We don’t sell transport tickets in two of my current newsagencies. I have done for many years but in the businesses I have today I am not so sure about signing up for the two stores without them.
Sure, transport tickets (Myki in Victoria) attract traffic. Basket data I have seen from many newsagencies indicates that in only 15% of situations do transport ticket sales include other items.
I question the value of transport tickets.
The risk of such an analysis is that we lose sight of what someone who purchased a transport ticket today might buy tomorrow on a separate visit. Even where I can see this, the data is not showing value for newsagencies form selling transport tickets.
State governments around Australia has disrespected our channel and cost us significant margin dollars by cutting our margin on transport tickets. This makes them loss-making for many newsagents. Factor in the labour, counter-space and opportunity cost of how we might spend the time released I question the value of transport tickets in our channel.
I think we need to move away from looking at ourselves as agents. This makes some of us think of ourselves differently to being professional and accountable retailers. gents are at the end of the food chain and do what they are told for a few cents. Professional retailers are accountable for their situation and build value-based businesses.
I’d be interested in what others think.
I suspect there are a number of items we are offered because “they generate traffic enabling you to increase your basket”. Stamps, FREE community newspapers, phone topups at 4% and so on. Many of these companies are getting a free ride on newsagents footprint. There are other products with better margins that also don’t pay their way such as bridal magazine/books. After keeping them for 3mths and having paid for them and requiring a full return. Where is the profit?
Located in a country town we recently have been getting maybe one or two requests each week. I send them to another newsagent in the next town, 5 mins away, who has sold them for a while now.
We have no plans to sell any more items that give a low margin. The staff here are flat out with home delivery customers, lotteries and magazine management.
If we keep taking on more services to keep a few customers happy we risk alienating other customers – our quality of customer service will suffer.
I did not buy a newsagency with the intention of becoming a corner store, selling lots of items for a small profit, but this is what has been happening over the years.
Newsagents as a group need to say no and force suppliers to offer better margin.
We have invested a lot of money into our business and I agree that we need to think of ourselves as ”professional and accountable retailers”.
im with you jenny, time we started to say we want a bigger slice of the cake or find some other way to market. we have a footprint in every town in australia. i imagine thats why chemists dont do a lot of this low margin stuff, they ask for more.
Rick, I’ve met with several state ministers (all sides) over the years about this and my feeling is that they have no appetite for delivering fair compensation to retailers.
I have Myki in one of my three newsagencies and that is how it will stay.
Go Cards (Qld) may well be a loss maker for us. We hold stock and take all the risk on holding them (theft etc). Last year we made about $400 gp on them. 5% margin.
A joke. And yes I think about 80 to 85% of gocard buyers buy nothing else at that time. But they get really upset if we run out of the particular gocard they need!
I have written to Translink asking to be paid a higher rate but no joy there. So why do we carry them at all. because we are suckers I think. We want to be a community hub for our local customers. Is that wrong? (We are in a suburban community. If I was in a mall I would not bother.
I’ve stated on this blog for a number of years that I refuse to stock stamps etc simply to provide an unprifitable service. Transport tickets are no different due to their low margin. If we did everything requested of us to provide these “services” we would work for nothing
We’ve not been in the business for that long. But we’re appalled at the amount of suppliers / principals who want us to do things as loss leaders, apparently to generate traffic. Well we have the trafffic because of what we are, the silly loss leaders don’t generate it. What we have to do is put attractive and profitable product in front of our customers. Thats how we make money. Selling transport tickets doesn’t justify the risk you are taking by accepting responsibility for someones elses money. You know what I mean.
What % are you making on stamps and postal product? We get 5% on stamps and 10% on express post envelopes and satchels.
Well worth it I think for the turnover it produces with people not wanting to wait in line at the post office.
Make nothing on stamps. Where do get stamps at 5% discount? We keep a supply here for convenience but will now be out of stock until after xmas as it causes too much stress for the staff when customers demand 10 stamps and we say we have a limit. If I could get 5% they could buy as many as they want!
Too many newsagents are scared of losing traffic. It is a challenging question since today’s transport ticket customer could be tomorrow’s card shopper. But do they know you sell cards? I think it all depends on why they buy tickets from you.
Jenny, by rights you can only buy stamps from Australia Post as a licensed stamp vendor to get a discount. Some LPO’s sell discounted stamps to newsagents but this is frowned upon by AP. My preference is to not sell stamps as all it achieves is to reduce the queue at the post office so that they can better compete with me on other products that ARE profitable. This is only my opinion but I stand by it, why make it easier for a customer to buy an ink cartridge from AP when they will come to us to avoid the queues? For that matter, why create queues in our store for low profit transactions and put of customers who will buy the items we REALLY want to sell?
Brendan, we only sell 1 or 2 to regular customers, people buying cards etc. It’s just one of those long standing services that I don’t want to cut out. We are about 1k from PO and did apply to sell stamps but told we were to close. However we will not be taking on anything new that makes us little money.
Mark, we do worry about losing traffic but you have to draw the line somewhere. When a customer throw tantrums because you don’t have their brand of cigarette you do wonder if you need those customers taking up your time for little or no return.
Brendan,
I buy my stamps from a Government owned Australia Post store and receive the discount.
We also supply local offices with stamps and express envelopes in quite large quantities and make great money for very little effort.
Brendan, can anyone get a discount on stamps or is there certain criteria we need to meet. The only discount we have ever achieved from local government owned post office was discount on bulk posting.
Jenny, we owned an LPO over 10 years ago so some things may have changed but you had to be an LPO or otherwise a Post Point to get a legitimate discount from AP through an account set up with AP. This may have changed but I doubt it. James would have to have an account with them to get a discount with them but some LPO’s are former corporate outlets and are difficult to distinguish.