Australian Newsagency Blog

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

How are newsagents handing the Epay fees?

Mark Fletcher
January 8th, 2020 · 5 Comments

The cost for newsagents and other retailers of offering access to agency products from Epay has increased. I stopped offering Pay products in my stores years ago. I don’t like hot the company does business.

I mention it here today in response to a message I received from a retailer. I share their message and query here in full:

I’m a long time reader of your newsagency blog. I was wondering if you’ve noticed the new fees that epay have introduced to retailers? As an Opal retailer it’s come as a blow to receive $11 monthly “communication fees”, as well as $50 annual “service fees”, and $50 monthly “terminal fees” for not reaching a $2500 monthly target. I rang epay up for an answer as to why all these fees exist, and I was left with “epay is charging these fees to make more money for epay”. On top of rising rent, labour and utilities costs, is the only solution to this to simply not offer Opal services anymore? I wonder if you could address this on your blog or offer an opinion on the matter. It seems newsagents are getting blow after blow with the privatisation of lotto, decline of print media, and decline in sales commission across the board. Can a newsagency on a train station survive without offering transport top up services? We’ve stopped home deliveries, there aren’t anymore magazines in our store, we don’t sell lotteries, we are now making almost nothing or losing money providing Opal. I sometimes wonder if we even qualify as a “newsagency” anymore, perhaps we need to chip off and replace our “newsagency” letters with “convenience” instead.

In terms of the question Can a newsagency on a train station survive without offering transport top up services? I think the answer is yes as long as you are offering products / services that people in transit want / need / will buy. What works in transit retail has evolved considerably. Products / services used to be ready to eat / ready to use while in transit. Now, I see plenty of transit retail situations that are about convenience for use / giving / consuming later, more diverse in their offer.

Please retailers, share your comments…

11 likes

Category: Ethics · Newsagency management

5 responses so far ↓

  • 1 SUNNY // Jan 10, 2020 at 8:29 AM

    Can a newsagency on a train station survive without offering transport top up services?

    For us, transport top up services has sale-alone rate of 71% in last December, 75% in Xmas and New Year holidays. For the 29% customers who come buy other things along with top up service, they buy cigarette (5%), lotto (4%), drink (3%) water (4%), confectionery (4%), Greeting Cards (2%), many others (less than 1%).

    On dollar value, these 29% customers who spend every $10 spent on transport ticket, spend $5 on other products in the same transaction.

    0 likes

  • 2 Peter // Jan 10, 2020 at 10:46 AM

    Sunny,
    On those figures I would not consider you a Newsagency rather a Convenience store mainly selling NSW Opal top ups, and related products all based around Public Transport. The Railway in this case has closed its ticket sales office and allowed you to pick up its sales. This would be a big saving to the NSW Government and a great challenge to you to make a profit on what is an extremely thin commission.

    It was because of this thin commission that I refused to sell these products in my town.

    By the way I no longer sell Epay (I am influenced by what my POS Supplier provides) selling Afterpay. I dropped Blueshifyt for lack of decent commission. I only keep Afterpay for a few older customers who have always brought Phone Credits (and other goods) from me. These Sales usually time intensive and complicated as 90 % of the time we update mobiles for the customer. In short this is done as service to the customer and not as profit earning product.

    Afterpay does also have add on cost and it is possible the commission will disappear and become a negative figure. You pay more than you took over the counter.

    Peter

    0 likes

  • 3 Sunny // Jan 10, 2020 at 11:20 AM

    Peter.

    The sale alone rate is from Tower System, and analysis on the customers who purchase one specified department (Category, or SKU) with other department (category or SKUs).

    There are 2 types of customers are in the analysis. One is the customers who only buy the targeted products, another type is the customer who buy both targeted products and other products.

    There are 3rd type of the customers, who didn’t buy the targeted products, but buy other products, which is not in the analysis.

    Transport tickets only account of 7% of our overall turnover, the profit from books alone are more than that of transport tickets.

    0 likes

  • 4 Peter // Jan 10, 2020 at 11:41 AM

    Sunny,

    now I understand. Still 71% rate of transport top ups with nothing else to me makes transport sales as very unattractive.

    0 likes

  • 5 Sunny // Jan 11, 2020 at 6:41 PM

    Peter.

    We both agree that the transport tickets sales are very unattractive (if only based on numerical analysis).

    There are several theories and thinking which encourage us to provide the service.

    1) Positing theory: Transit customers are in a hurry, they need one-stop store in short period of time. Be their first choice in their minds.

    2) Big fish in small pond theory: Take all necessary revenues to protect and grow our business

    3) Loss leader Theory: They will buy something later. Customers will buy more seasonal products, special products, or more tailor made products, if we profile the customers.

    1 likes

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