Why can’t you put newspapers right at the front of the show?
They can’t afford that prime space?
Really, at $3.50 you’d be making good money.
This conversation got me thinking about how I could show what I make from each newspaper sold.
It is a common sight in any Australian suburb: a customer walks in, grabs a daily paper, and walks out. To many, it looks like steady, reliable business. The reality is a tougher story of paper-thin margins and rising costs.
While many believe newsagents make good money every newspaper sold, the gross profit (GP) is generally fixed at 12.5% (or less) of the cover price. On a $3.50 newspaper, that leaves just 43.75 cents in the till.
The Real Cost of a 43.75-Cent Margin
That 12.5% is the “gross” figure, but it quickly evaporates when the operational realities of running a local business are applied.
- Labour Costs: Every paper has to be counter, checked off, displayed, and, if unsold, processed for returns. In a high-labour-cost environment like Australia, the time spent managing these low-margin units often exceeds the profit they generate.
- Rent and Floor Space: Newspapers take up physical space. When you calculate the rent per square metre, allocating that space to a 12.5% margin product is often a loss-making exercise compared to high-margin gifts or stationery.
- Operational Overheads: Lighting, power, and insurance don’t get a discount just because you are selling a low-margin product. These fixed costs bite hard into the cents remaining from each sale.
- Shrinkage and Damage: A single stolen paper or a copy damaged by rain or coffee can wipe out the profit of the next ten sales.
This “margin squeeze” is precisely why the most successful newsagents are actively decoupling from the traditional newsagency model. Relying on a product where you have no control over the price or the margin is a precarious strategy.
The future for independent retailers lies in categories where the business owner has the power to set prices, manage margins, and build a unique local brand. Whether it is high-end gifts, specialist stationery, or niche collectibles, the move is away from being a low-margin distributor and toward being a high-value destination.
The next time a customer mentions the “big money” in newspapers, it might be worth a gentle reminder: in modern retail, it is the quality of the margin, not just the volume of the foot traffic, that keeps the lights on.
This infographic represents real numbers. I used AI to date the data and a copy of Friday’s Herald Sun to create it.
You’re welcome to use this image.
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Mark Fletcher founded newsagency software company Tower Systems and is the CEO of newsXpress, a marketing group serving innovative independent retailers who continuously evolve their businesses to be enjoyable, relevant and successful. You can reach him on mark@newsxpress.com.au or 0418 321 338.