How much do newsagents make on lotto? is another popular question people put to Google through a search. Indeed, there are at least 50 searches every day in Australia for this.
The short answer to How much do newsagents make on lotto? is … not much.
The actual percentage varies by type of product and location. That said, it is less than 10% out of which the newsagent has to pay for:
- Retail space. With lottery counter space and related requirements taking 15% – 30% of retail space and leases costing $50,000 in high street and $250,000+ in shopping centre situations, the cost can be high.
- Labour. The average hourly cost is $24 Monday to Friday and around $45 an hour on Sundays.
- Some technology.
- Insurance. This can cost several thousand dollars a year.
- Operating overheads like power.
- Ancillary costs such as cash holding for prize payouts.
For many newsagents, having lotto is good as it provides a base core traffic to the business. Smart retailers leverage this traffic for other purchases. However, this is challenging as there are strict rules newsagents have to follow as to what products they can put where. They are not allowed to create a barrier to lottery product purchases.
The real drivers for what newsagents make from lotto are labour cost and rent cost. Newsagents who can control these to minimise costs of both while maximising sales are in the better position. There are plenty able to do this.
In many newsagencies with lotteries, they have staff dedicated to this service. This means they are not able to maximise the labour cost by selling more expensive and better margin products. Lottery customers want to be served quickly. hence, the need for the lottery counter to be staffed at all times. Customer service is a key reason people purchase lottery products in a shop.
So, in answer to the question How much do newsagents make on lotto? I am not saying it is nothing or bad. Rather, I am sharing that there are real business costs that eat into what newsagents make from lotto and that it takes astute and attentive business management to maximise the opportunity while providing the level of service key to growing revenue.
Not all newsagents have lotto in their business and lotto is often available in retail businesses other than newsagencies.
The best customer experience with lotto is over the counter, being served by a human, someone knowledgeable about the games and able to have a chat with you. This is personal customer service newsagents are known for.
Note: I own Tower Systems, newsagency software company.