Proving once again I am not my customer, these back scratchers are selling very well. We’ve had this box out for less than two weeks. While managing impulse lines is hard detailed work, the reward is excellent with good products selling out well in advance of when the bill falls due. This, a 50%+ gross profit and that the range attracts its own traffic makes the work worthwhile.
Magazine distributors IPS and Speedimpex have today announced they have formed an alliance that will see IPS manage distribution of titles from both companies. This move adds 1,000 titles to the IPS stable.
Newsagents will have access to Speedimpex titles at the IPS commission of 27% plus they will have online control over supply.
This is a welcome move.
I am often asked for my thoughts on stock turn benchmarks for a newsagency. The list below is what I use as a guide when assessing a business. While there are some differences between city and country as well as between high street and shopping centre, these numbers are a good guide as to the minimum turn.
Stock turn (or inventory turnover as it is known in some places) is a good measure in retail. I find it useful when assessing a business restructure. It guides space and stock investment allocation targeting an overall business goal. It’s a measure that an draw attention to an inefficient department or category of inventory.
The faster you turn stock the better.
It is easy to blame your supplier of under-performing stock or the stock itself. Retailers need to take responsibility in my view and work stock hard with ideal placement, appropriate product adjacencies, good staff training and excellent in-store and external promotion.
Most newsagency businesses I see that are not performing well have a low stock turn. One of the best ways to address this is to order stock using your computer system, based on accurate sales data. Too many newsagents complain that this is too hard. While hard work may be involved initially, this will cost the business less than the poor decisions of not ordering based in reliable business data.
Dead stock costs more than the money spent on the stock. There are space, labour and opportunity costs to consider.
Newsagents can compare their performance through reporting in their newsagency software or they can do a rough manual calculation.
I early returned our supply of 2014 Phantom diaries because of poor margin, poor payment terms, high cover price (high cost to us of theft), that Phantom sales are low for us and our diary offer is full with high margin product we selected for ourselves.
We should have been invited to order what we wanted.
We did not top the product as we could have – we sent back full copies.
We’ve been promoting the Great Bakes partwork on the lease line, facing into the mall and it’s been selling very well. Given the mess that is partworks supply in Australia we go out hard with the first issue – using the dump bin approach in the photo. This works, delivering a good return on the space allocated for the launch and deeper in the shop for subsequent issues.
We’re promoting the AFL Grand Final Record at the front of the newsagency next to our Hallmark AFL cards and our AFL licenced beanie Kids. This front of store placement is to attract traffic from the mall. The placement of the record next to newspapers is to attract impulse purchases from our newspaper customers. Early indications are good.
Until the Reject Shop next to us put in the same range of low-cost Bartel calendars as us we were selling them at the suggested price. As soon as they got their calendars, we had no choice but to price match. We discovered the considerable price difference between our price and the Reject Shop’s price when a customer pointed it out.
Had we known that Bartel was going to supply the reject Shop we would not have taken on this range.
Suppliers need to be transparent with us – otherwise we are not able to make fully informed decisions.
Once bitten twice shy as they say.
We have been grossly oversupplied with Wheels magazine this month, an increase of 30% on the back of a low sell-thorugh. I noticed it Saturday and was going to call them today. But talking with newsagents yesterday at the ANCOL trade show in Adelaide many complained about gross oversupply of Bauer titles – Motor, Top Gear, AWW and Gourmet Traveller.
Different newsagents reported oversupply of different Bauer titles. Five or six newsagents expressed concern. Their experiences coupled with my own make me wonder if there has been a change made in the Bauer allocations process. Something is broken and newsagents appear to be carrying the cost of this.
Given that Bauer owned Network Services takes a zero tolerance approach to returns credits and given that their accounts office acts quickly to cut supply to newsagents even though the company may have a security deposit, it does not apply the same discipline to its own dealing with newsagents when it comes to oversupply.
The sooner individual newsagents test this in a forum of authority the better.
The free SK ii facial treatment essence gift was missing from a copy of marie claire in a newsagency yesterday so I checked other copies. None of the three copies of the magazine had the free gift.
It amazes me what gets stolen sometimes. The SK ii product is a premium gift, at the high end of magazine gifts with purchase. It would be interesting to track this type of theft.
It frustrates me the number of newsagents I speak with who say their staff have trouble balancing at the end of shift yet they take no action to rectify the situation. I am usually met with a shrug of the shoulders and what can I do? question.
What you can do is provide leadership for your newsagency by respecting cash for what it is, the lifeblood of the business.
If your end of shift is not balancing here is what I suggest you do:
Balancing at your end of shift is a serious matter. Ignore it and the cost to your business could be considerably more than the few dollars you appear to be out every day or so.
I was working with a newsagency recently where one employee offered up different excuses a couple of times a week for the cash being out. Over time the pattern showed they were either stupid or stealing. Either way, the only option for the business was to cut their hours.
This is serious.
With winter sports finals in full swing at local and state levels, now is an ideal time for newsagents to show their colours to both support local teams and to show customers and passers-by how we can help them show their support for local teams.
From crepe paper to cardboard to balloons, newsagencies are the go to places for showing team support. But we need to promote this more. The key to making this work for your business is to show off your engagement – in supporting a team and in showing what you have to sell and maybe the services you provide.
The newsagency channel can promote sports team support far better than the major retailers. This is an opportunity for the newsagency channel to shine. Show people your local credentials and why they should shop with you.
Harmony Bracelets have not worked for us. While we have sold 35% of our stock, the rest has sat for close to two months. This morning I made the decision to get out of the remaining stock this weekend and put the $9.95 bracelets on sale at $1.00. Now, less than three hours in they’re selling very well. We should be done by the end of tomorrow. This frees floorspace for us, giving us an opportunity for a new product story.
Too often I see newsagents hold onto product for the sake of hoped-for margin in the future rather than discounting and taking the cash today. Okay so we have lost money on the bracelets. The loss I am realising today is less, I suspect, than the loss because of non-performing product taking up floorspace.
You can’t bank margin from products that don’t sell.
So, when I decide to quit an item I set pricing for it ti actually sell out. The usual starting point is between 33% and 50% off. next is 75% and finally we move to a $$ price point. In the case of the Harmony Bracelets, their recent performance was such that I felt I needed to go straight to the $$ price point. hence the $1.00 price. It is also helping that school holidays have just started.
One customer bought 14 bracelets.
I’ll be joining South Australian newsagents at the annual ANCOL trade show tomorrow to talk about future opportunities for the channel.
Here is magazine returns packaging advice I published here in July 2012 in a post called How to avoid being fined by Network Services. I wrote the post after hearing from several newsagents about claims against them by Network Services about magazines not being returned to the Network warehouse.
This advice remains best-practice advice today:
How to avoid being fined by Network Services
Magazine distributor Network Services operates as victim, prosecutor, judge and jury in the handling of disputes arising from magazine returns. While they will say that statement is unfair, it is how it is. It is how newsagents who have experienced a dispute often feel.
While I have seen Network act fairly in some situations, I have also seen them act unfairly in others. The frustration felt toward their handling of disputes is magnified since they relate to products over which newsagents have very little control thanks to the push model of magazine distribution in Australia.
Here are my suggestions for newsagents to be better able to deal with a magazine returns credit dispute:
- Make sure that you understand and carefully follow the current Network process for packaging and shipping returns and returns forms. Do not ask another newsagent what the current process is, ask only Network. Get it in writing.
- Keep a copy of all forms, emails and other documents relating to returns in a separate date-sequenced file for Network.
- Create a log of returns shipping activity noting the date you sent returns, the courier used, number of packages and the name or the person who completed the returns at your end.
- Photograph each Network returns package – clearly showing the label.
- Get a receipt from the courier you use to deliver your returns to Network.
- If you deliver the returns yourself, take a photo of your packages before you leave the distribution depot.
- Make notes about any phone call relating to returns. Include the full name of the person you spoke with plus the date and time.
The better you are able to prove what you did and when in the event of a dispute the faster the dispute will be resolved.
The process outlined above will also show some newsagents mistakes which led to credits being denied.
I urge newsagents to print this advice and train their employees to follow it for Gotch and Network returns.
It’s been good to see the ANF listed as one of the industry associations supporting the Australian Retailers Association campaign against the fuel discount programs of the Coles and Woolworths supermarket duopoly. It’s good they are holding the new federal government to account for their election promise about the supermarkets.
I’m pleased we took the floor display unit of 2014 Astro Diaries from Universal Magazines that I blogged about recently. We have the unit on the shop floor between the magazines and newspapers and the sales counter. We also have stock placed with our other diaries. I like the product because it feels worth the $19.95 price, is a newsagency channel exclusive and should sell for us.
International magazine publishers using airfreight magazine distributor Speedimpex ought to check where they are placing their promotional stickler on magazine covers. Six different magazines I checked in a newsagency yesterday each had the stickers placed such that it was hard to tell the cover subject – devaluating the cover as a sales tool. Nuts!
Angelina Jolie is in Australia for the next few months directing a film. This is a good reason to give the current issue of Mindfood some time in the spotlight as she is on the cover. Placement with weekly magazines would be good or with newspapers. It’s important the full cover is shown.
Newsagents wanting to use the QR code generating and content hosting site QRki, my newsagency software company has launched can do so for free using BLOG as a voucher code. This will be give you free access until December 31, 2013.
You can use QRki to create a QR code to access your Facebook page, Twitter feed, LinkedIN profile, website or some other web link. This type of use will always be free.
You can also use QRki to access a video you load – like a product demo – or a competition entry page or a brochure document or other copntent. This type of use will cost $1.00 for a month from Jan 1 next year.
The idea behind QRki is to give small business retailers QR code accessible content publishing facilities like those now widely used by major retailers in the US, Europe and Asia. QR code use in these countries is huge but small businesses often get left behind because they don’t have the web infrastructure. This is where QRki comes in.
You can tell from it being free now and the $1 for a month pricing that it’s not a commercial activity for me. Small business retailers are important to Australia and I’ll do everything I can to help provide tools that help them more effectively compete.
Since I first wrote about this yesterday plenty opf newsagents have created QR codes to promote their Facebook pages and to access other things.
Pacific Magazines yesterday announced a sales competition for K-Zone, Total Girl and Girlfriend for newsagents who are part of their Nexus marketing program. $3,000 in cash is up for grabs.
I like that sales growth is the determining factor. I also like that there are prizes per title and for all three combined. Indeed, the combined prize is a smart move by Pacific as it gets us looking at the three titles as offering a common opportunity.
Smart newsagents will jump on the opportunity and use it to refresh their approach to these three titles while we have a different mix of customers walking past and into our newsagencies.
I was in Coolangatta yesterday and called a taxi to get back to the airport. Just before the taxi arrived I received a text message telling me it was close by and giving me the taxi number. I had the same experience a couple of weeks ago when on the Gold Coast. The image shows both texts I received.
This is excellent customer service from the taxi companies. In each case they didn’t even ask for my number. It shows them as being attentive. Oh, and they have not sent texts after the trip, no spam.
These text messages are an excellent use of technology. We do a similar thing with magazine putaways and have done for many years – customers love it. We also do it with special orders. In fact, I’d jump at any chance to provide feedback or an update to a customer by text or email or some other tech based service.
The taxi experience is particularly wonderful given that they can be notoriously late or not even show. The text message gives you certainty. I love it.
The experience yesterday was a reminder of the importance of connecting with our customers.
Our focus on impulse items is delivering a deeper and more valuable shopping basket. One customer earlier this week brought a $5.99 greeting card to the counter and added items on impulse valued at more than $36.00. Yes on impulse.
Our customers are older yet these funky items sell well – because they’re buying for younger people.
Our gift strategy includes traditional gifts, gifts based on themes and impulse items among other things. The more broad our gift base the more valuable it is and the more we are insulated against trend changes.
One recent break out impulse line for us is these spike laughing balls. They light up and laugh when you play with them. At more than 50% GP and a very fast turn, they’ve been a valuable addition to the impulse item mix.
From Mediaweek yesterday morning I was pointed to a report published at gannett Blog in the US about anticipated sales declines for USA Today as a result of a hefty cover price increase for the newspaper.
As its restructuring enters a second year, USA Today is bracing for a 35% drop in newsstand sales when it doubles the single-copy price to $2 on Sept. 30, according to internal company documents.
While the newspaper cover price increases in Australia have not been double, they have been of such a magnitude that newsagents say price is not hurting sales. It’s a fine line for publishers. Personally, I prefer a price that more accurately respects the production and distribution costs.
The team-lead in one of my newsagencies is promoting the business Facebook page with this QR code on the bottom of customer receipts. It’s another way of reaching out to customers – to create a stronger connection.
QR code use is massive in the US and Asia. It’s growing here. It’s an easy way to get customers connecting with your business.
My newsagency software company has launched QRki, a QR code generator and content hosting platform for small business. Some QR codes are free while others for accessing hosted content cost $1.00 a month. Any newsagent who wants to try the whole thing for free can email me for a voucher that will give free access for the rest of 2013.
I funded the creation of QRki to provide small and independent retailers like newsagents with another big-business like tool with which they can compete.
I was reading at The Telegraph online about the Official Starships Collection, a new partwork in the UK from Eaglemoss. The information in the report coupled with local magazine sales data and the success of non-circulation science fiction products provides us with enough information to set our expectations about sales of this new series – months or even a year before it reaches Australia.
It’s frustrating newsagents are not part of the conversation. I’d love to talk with Eaglemoss about what we could do with partworks if the scale out and distribution were better handled. So many missed opportunities.
Here’s some of the report from The Telegraph online that I found interesting:
The launch of The Official Starships Collection has been long awaited by some, Eaglemoss began test marketing the collection in May 2012 and was due to officially launch in the UK and Ireland in February of this year but due to extraordinary demand for the publication as well as other manufacturing issues, they were forced to delay the official launch until August 21st 2013. Retailer WHSmith sold almost 7000 copies nationwide within the first 2 days of the first issue being available.
Eaglemoss has not officially announced how many issues will be included in the collection, however the first 30 have been confirmed and include a number of Federation vessels, from all series in the franchise, as well as a Borg Sphere and several of the more common Romulan and Klingon ships. Those hoping for a Borg Cube will have to subscribe to the publication, which is at this time rumoured to be running to a total of 70 issues (R.R.P. £9.99), which could set the most avid collector back almost £700.