If you have greeting card stock sitting in drawers beneath your fixtures, it is not working for your business. Stock in drawers is invisible to customers, it cannot sell. This practice, encouraged by some card companies, ties up your capital without generating a return.
The Strategy Behind Over-Supply
Some card companies persuade newsagents to hold extra stock as a buffer. They argue that this allows you to quickly replenish displays as pockets become empty. While this ensures the shelves look full, the primary beneficiary is often the card company.
Large corporations are driven by quarterly performance. Sales representatives are incentivised to meet targets, which can lead them to sell in more stock than a newsagency truly needs. They book the sale today and deal with any potential returns much later. If that stock sits in your drawers, it is “dead money.” You have been invoiced, you have paid the bill, but the product is providing zero commercial value.
Reclaiming Your Capital
My advice to Australian newsagents is simple: audit your storage. Go to your card fixtures and open the drawers. If you find stock that has been sitting there for months, it needs to be cleared. You should not be acting as a warehouse for your suppliers.
Modern supply chains are efficient enough that you do not need to hold massive reserves. Most newsagents can receive an order within two to four business days. Even in remote areas of Western Australia or North Queensland, a week is generally the maximum wait time. Relying on the supply chain to satisfy your needs is a far more efficient use of your cash flow than keeping surplus stock on-site.
Taking Action
There are major card companies currently dealing with Australian newsagents that actively engage in over-supply. They train their representatives to push more products into your store to bolster their own quarterly results.
Review your stock levels today. If your drawers are loaded with untouched cards, return them. While some suppliers may point to contract clauses requiring you to accept what they send, there are protections in place to prevent suppliers from over-supplying small businesses. Your cash is the lifeblood of your newsagency. Do not let it sit idle in a drawer where no one can see it.
Choose Your Card Company Carefully
There is a big difference in card companies in Australia. Too often I see newsagents sign with the company that is prepared to pay for their business. My advice is think for a moment about why a supplier is using cash to get you to take their product. The most valuable cards you can stock are those that sell. I have seen a cash offer used to distract from sales performance.
Take your time. Do your research. Choose a card company based on what you need in your business.