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

Author: Mark Fletcher

Why you should not use your card company, or any supplier, as a source of capital

For decades, some card companies in Australia have loaned capital to newsagents in the form of cash, or fixtures or equipment items as an incentive to sign long-term agreements. Some other suppliers have done this too.

Most loans are repaid through rebates, discounts off purchases, through the term of the agreement. Some are paid off through regular, non transaction related, payments.

Card companies have used the financial assistance offer as a carrot to win new business. It has worked well for them and for newsagents who may not have been able to easily source capital elsewhere.

For years, whenever I have been asked by newsagents or someone entering the channel about tapping a card company for funding, I have said don’t do it. That remains my position today.

Supplier provided capital funding comes at a cost. Some agreements I have seen, are unfair. In one case last year, the agreement I saw had a real cost to the business way above reasonable interest rate level. It was structured to roll on as a significant handcuff to the business with the fixtures involved having a book value eight years on when they should have had zero value by then.

I appreciate there can be challenges in raising capital in small business. In my experience you are better off without supplier funding than the challenges that can come with having it.

However, if you do go down this path…

  1. Do your homework.
  2. Do not rush.
  3. Understand all of the documentation.
  4. If in doubt, get legal advice.
  5. If the agreement asks you to acknowledge that you have had legal advice, make sure you get it.
  6. Do not sign if you have any doubt whatsoever.
  7. Make notes of all supplier representations leading up to the signing of the agreement.
  8. Keep a copy of the signed agreement and your notes from the time together in one place.
  9. Fulfil your obligations under the agreement.

The time issues arise from supplier funding agreements small business owners are usually at their weakest. Protect yourself from this by doing the necessary legwork up front and ensuring you fully understand what you are walking into prior to signing anything.

Card companies and suppliers have not set out to get people. Circumstances have seen it look like it though. With personnel changes as they are, it is only there words on the page with your signature that matter if there is a dispute. This is why records you keep can be vital.

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Ethics

How can Tatts rescue its relationship with newsagents?

Tatts needs to do something pretty amazing to rebuild its relationship with newsagents. The damage done over the last ten or so years, until the takeover by Tabcorp, was significant.

Urgent action by the management people a Tatts is needed to get newsagents and other small business lottery retailers back on side.

Here are a few simple steps that Tatts could take that would, in my view, immediately improve the situation and, most likely, improve revenue:

  1. Move focus to sales with same store year on year sales being the only metric for measurement of performance.
  2. Stop assessment visits. Stop penalising retailers for infractions such as other products on the counter and other ‘infractions’ that are yet to be shown to be detrimental to sales.
  3. Introduce a modest financial reward for year on year growth.
  4. Encourage leveraging the Tatts space in-store for other products.
  5. Make it easier for shoppers to find their local retailer on all Tatts digital touch points.

This is not a big list. It would not cost anything to implement. Tatts could even trial it nationally to June 30, 2019 and see how it performs.

By making it a trial, Tatts encourages buy-in from  the whole retail channel so the moves are a win at the local business level and a win for Tatts.

I doubt any of the five items on the list would have a detrimental impact on sales. In fact, I think they could have a positive impact. All it would taker is a management decision by Tatts to trial this list or something similar. It would a good next step to resetting the relationship, respecting the retail channel and showing that the relationship has moved on to new times.

Revenue is what matters to Tatts and to retailers. The current approach is handled at the store level in such a way that it can be a disincentive. It also lacks respect. The approach I suggest respects the local business owners and acknowledged a shared objective.

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Ethics

An exciting time in men’s gifts for newsagents evolving their gift offer

It is terrific to see the mens gift offering expand beyond stubby holders, socks and similar. Thanks to new wholesalers and better buying by existing wholesalers we are able to tap into cool gifts with a broader appeal than we have had in the past.

I am especially liking gifts that play well outside of seasons, as well as gifts that skew for guys but can work just as well for girls. It is a bonus is they work well for people 35 and younger.

Whereas in the past mens gifts used to be the same year in and year out, now we can play as if we are in  the fashion business, seasonally, knowing that what is in this season will have faded next season. Sure this is harder work for the retailer, but the benefits are worth it is we can become known as being a shop with cool gifts.

The changes over the last couple of years and in 2018 in particular in the mens gifts space are considerable. This is why I say it is exciting … because through this category of gift we can expand the appeal of our business both to existing shoppers as well as to new traffic shoppers.

Plus, many of the newer, funkier, mens gifts lend themselves to social media pitches. This is vital if we are to seek out and attract new shoppers to our businesses.

Finding the gifts is a challenge as you need to either have existing suppliers innovating through their buying for you or your need to seek our new suppliers who so not usually serve the channel. Both are options. I am seeing both work well in may businesses.

Given the number of cards we sell for males, it makes sense that we are strong in the male gift space. That said, gift sales in our channel skew strongly female, more strongly than the percentage of female cards we sell. I think this is because of buying choices by newsagents and others in our businesses who do the buying. It is something we need to fix, in our buying. The new products we have access to can help with that.

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Gifts

The Australia Post challenge to small business newsagents that politicians refuse to address

For almost twenty years Australia Post corporate stores have been reaching beyond selling postal and allied products, stepping into categories newsagencies and other family run businesses rely on.

What bothers me about this is that it is the government owned businesses acting to take business from small businesses. They do this by leveraging their government ownership, landing shoppers for a lower cost than is often the case for independent retailers and with overheads that are often less than for independent retailers.

I have written to many politicians about this, without success. While some letters have led to meetings, they have not resulted in any action.

The Australia Post corporate stores continue to offer products unrelated to postal services. They take revenue that could have otherwise benefited local family-owned businesses.

Successive governments have given in to big business and sold off government assets, but not the Australia Post retail network.

What I wrote to the then Minister for Small Business, Fran Bailey, in 2006 about an Australia Post catalogue holds true  today:

With respect, Australia Post owned retail outlets do not operate on a “level playing field”.  Australia Post has the government owned and supported Australia Post brand and exclusive Australia Post products and services with which to pull traffic for a very low cost per customer.

For decades, Australia Post stuck to post products and services.  Now, with a considerably broader retail offering, the benefits of its exclusive brand and post products provide an unfair advantage.

Australia Post offers products which I consider are not permitted under the Australian Postal Corporation Act 1989.  I urge you to look at the enclosed Christmas stars at Australia Post catalogue.  Over the twelve pages, I counted one hundred and fourteen items which I consider to fall outside of what is permitted under the Act.  Consider this selection:

  • Faber Castell drawing kit (pg1)
  • Jamie Oliver Books (pg1)
  • Dinnerwear Gift etc (pg1)
  • Binoculars (pg1)
  • Picnic Packs (pg2)
  • Maps (pg2)
  • Gardening Aust. Magazine books (pg2)
  • Brite Lanterns (pg2)
  • Vtech Kid Challenge game (pg3)
  • Learning Card Fun Packs (pg3)
  • Floor Puzzles (pg3)
  • First Words & Dictionary Packs (pg3)
  • Various items of plush (pg3)
  • Book packs (pg4)
  • Music CDs (pg4)
  • Photo album (pg5)
  • Social stationery items (pg5)
  • Cookbooks (pg5)
  • Children’s craft packs (pg6)
  • Kids stationery set (pg6)
  • PlayStation games (pg6)
  • Pencil and pen sets (pg6)
  • Chess set (pg7)
  • AM/FM radio (pg7)
  • Sudoku game (pg7)
  • Calendars (pg8)

These products, and others in the catalogue, are not incidental to nor do they relate to the supply of postal services.  They are products outside what the Act permits.  Of course, this comes down to interpretation.  But what do Cookbooks, Gardening Australia magazine books, Chess Sets and Binoculars have to do with what is permitted under the Act?

For decades Australia Post was profitable without selling calendars, greeting cards and the broad range of stationery it offers today yet now it seems that Australia Post and the Government consider such product categories essential to its commercial viability.  I would have thought that the postal product offering ought to be viable as a stand alone business – it is a monopoly after all.

Australia Post is using its powerful brand and exclusive postal products to draw traffic into Government owned stores and away from independent small businesses like mine.  Is this an outcome that the Government wants?  Is the Government happy to ignore the pleas of small business so that its own national retail network profits?

For decades, newsagents were profitable while they had a monopoly on the distribution of newspapers and magazines.  In 1999 the Government facilitated the deregulation of the distribution of newspapers and magazines.  As we have lost the benefits of exclusive traffic as a result of this deregulation, Australia Post has increased its range of newsagent type lines and thereby very successfully leveraged its continued exclusivity to more effectively compete with us.

The Government is profiting at the expense of my newsagency and other businesses like mine which compete directly with a Government owned Australia Post outlet, yet the Government refuses to even acknowledge that I may possibly be right.  In response to my letters documenting breaches of the Act all I receive is vague government-speak.

In my September letter I said that “Australia Post is our drought”.  A review of their Christmas catalogue illustrates how much this is the case.  For many years now it has been draining newsagencies of revenue.  Many are close to death as a result.

This is a very serious problem, causing families much heartache.  Please take notice.  Please understand that Australia Post is stealing our customers by straying from what is permitted under the Act and that its behavior, under your watch, makes a mockery of your claimed support for small business.

I urge the Government to amend the Australian Postal Corporation Act 1989 to limit what Australia Post can sell through its own retail outlets and to names postal items such as envelopes and Post branded packaging materials.  Such would be the action of a Government committed to small business.

Looking back and thinking about the many letters Ms Bailey and plenty of there ministers in governments of all colours would have received along similar lines, it is clear to me that politicians talk about small business but often fail to act.

It is shameful that Australia Post government owned stores continue to trade today in plenty of categories they should not touch.

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Australia Post

Bad parenting costs retailers money

I watched as two kids, around five and seven, ran amok in the shop Saturday. At first, they were having fun, not causing much triple. Then one kid tore a card and slid it under a stand while another started chewing on a small plush product.

The parents were not in the shop and could not be seen nearby.

I asked the kids to stop. The older one told me to f**k off. They ran around the shop a couple of times and then ran out and around the corner.

I stood out the front of the shop, expecting them back. A few minutes later, they did return and went to a couple of adults sitting at a table in an open coffee shop opposite the business. I walked toward them, the adults took the kids by hand and walked for the exit.

I decided to leave it there so I returned to the shop to retrieve and write off damaged stock.

This story is not unusual, especially in shopping centres, especially at school holiday time. Too often shops like ours are in the child care business, a place for kids to play while parents or others in charge shop or relax with a coffee.

Our policy is that if kids are in the shop unsupervised we look for the parents and if they cannot be quickly located we call security and expect them to remove the kids. In a shopping centre where many shoppers are not local we need a policy like this to address unsupervised kids with certainty. Unsupervised kids in a large shopping centre can be dangerous for them and for retailers.

I guess we open ourselves to the costs of this interactive behaviour in that we put products out to be played with and bring in products that will appeal to kids. So, yeah, it is our own fault. However, sheesh, I wish parents and those supervising kids would take more care. They ought to show more respect for our property by watching over kids.

We do factor shrinkage due to damage by shoppers in our pricing and we try and be vigilant on behaviour like I have described.

I’ve not written this post looking for empathy or guidance or snarky responses. I have written it because I am frustrated and writing about what happened eases the frustration.

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Newsagency management

Pitching Better Homes and Gardens

When I post about magazines on social media I use photos in the magazines rather than the covers. I think this is more interesting than a magazine cover shot, which is what most others use.

My magazine posts, which are infrequent, celebrate interesting content. It’s not about chasing likes and shares. This post about Better Home and Gardens reflects diversity of content in this issue.

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magazines

Debate on cashless church collections can benefit retailers

Further to my posts already about cashless retail comes a story in The Sydney Morning Herald about cashless collection plates at St. Mary’s Cathedral.

While there is plenty of debate about cashless collections by churches, it shines a light on the place of cash in everyday and this debate is useful for retailers contemplating reducing their reliance on or eliminating altogether cash in their businesses.

Here is the Facebook post from the church announcing the arrival of the collection plates:

 

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Newsagency management

Hallmark Keepsake ornaments popular in the newsagency

The Hallmark Keepsake Christmas ornaments are working a treat this year. They are driving in-store traffic as well as excellent online sales for the Hallmark Keepsake ornaments web site we created. What is interesting about online sales is that not one is from a local to the store. Indeed, 75% of sales have been out of the state.

We were able to get stock ahead of Target and this has helped drive terrific results over the last few weeks.

We leveraged the opportunity by engaging on social media, through a range of pages and groups. This was key to attracting shoppers outside the newsagency, shoppers who probably would never consider shopping for these sought-after ornaments in a newsagency.

While the online sales are excellent for driving efficiency for labour, inventory and space in the shop, they also raise the profile of the shop and play a role in general shop sales growth. And we can leverage the website interaction and transactions to drive other online engagement down the track.

The average basket depth of purchases online is close to $80.00. In-store is a little less.

What we are doing here is not rocket science. It is opportunistic though, tapping into a respected brand in a timely way to be first or close to first to market for the season and to do so with no additional labour cost, thereby maximising profitability for the business.

As I have written here plenty of times in the past, licenced products are particularly valuable in driving traffic. There are three Harry Potter Hallmark Keepsake ornaments that are working well as well as a several from the Batman franchise.  Here are short videos of two of the ornaments with sound. Sound drives popularity.

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newsagency marketing

Are partworks set to be a thing of the past in Australia?

With the unexpected liquidation of partworks importer and distributor Bissett Magazines, the question is: do partworks have a future in Australia?

The closure of Bissett came as a shock to magazine professionals. Bissett had what was effectively a monopoly on partworks in Australia. They had been in this position for many years, supplying newsagents through distributors as well as fulfilling subscriptions to the public directly.

I and others I have spoken with in our channel were shocked by news of the closure and still can’t understand how or why it happened. One guess is that they wanted out and could not sell the business. Who knows!

How Bissett operated with partworks regularly frustrated newsagents as they provided their direct customers what looked like better service and greater benefits than were available to customers who purchased partworks through newsagencies.

Subscribers usually got bonus gifts or items we could not access.

There were stories of newsagency customers calling Bissett’s offices with a query and being told to switch to a subscription from them rather than buying through a newsagency.

Then, there was the problem of not being able to get sufficient stock to satisfy cutaway requests. While newsagents often blamed the distributor for supply issues, it was the supply to the distributor that setup supply challenges from the outset. It became unclear if the supply issue to distributors was an Australian issue or a UK publisher issue.

I appreciate there are plenty in the channel who would be happy for partworks to disappear. My view is not as straightforward. A good partworks title launched with a solid TV campaign is good for our channel. It generates traffic and can set people on a path of return business, more deeply connecting them with our businesses.

On top of the closure of the Bissett business in Australia is news of challenges in some partworks businesses overseas. I hope those issues settle and a new model is determined to make partworks successful in Australia.

Financially, the opportunity is considerable. However, for it to work requires a reset around the processes, more certainty for newsagents to encourage their engagement, greater efficiency in the supply model and a tech-backed solution to better connect retailers and customers to retain more in the pool supporting a partworks title.

Unless partworks publishers work with people here in Australia to provide a more relevant to today route to market I do fear partworks will fade and eventually disappear from Australia. I’d prefer the challenges to be confronted and addressed.

What happens over the next few months depends on what the UK publishers want to do in our small market. We are a small market and that is part of the challenge. However, we have been viable for the UK publishers for many years. That can continue. The ball is in their court.

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magazine distribution

AFL Grand Final lunch

We’re celebrating in the office today ahead of the public holiday in Victoria tomorrow for the Grand Final parade.

You’ve got to love a state with a public holiday for a horse race and a foot game parade.

Anyway, we have cake and that’s a good thing.

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Fun

VALE JIM CASSIMATIS.

Jim Cassimatis, the owner of newsXpress Caboolture and newsXpress North Lakes, passed away yesterday afternoon surrounded by his children and family. It was very peaceful. He was calm and just drifted away with no struggle. Jim suffered a brain aneurysm on Sunday and had been in hospital since.

Jim served the newsagency channel for many years, including time as president of the QNF (Queensland Newsagents Federation). It was during this time that I first met him when I was representing the ANF in unity discussions.

Jim was a knowledgable and fierce advocate for newsagents and for Queensland. He served newsagents in the state well and selflessly.

Jim, and his late wife Barb, joined newsXpress many years ago. newsXpress Caboolture was an early member in Queensland, where the group began. He joined his North Lakes store when that opened some years later.

Jim was at the newsXpress conference on the Gold Coast just ten days ago may remember Jim, making a contribution as he always did.  He was keen to learn and understand.

My thoughts, and I am sure the thoughts of many in the channel are with Nick and his sisters, their extended family and with the team members at the newsXpress Caboolture and newsXpress North Lakes stores.

This is very sad news.

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Social responsibility

Are licensed post office businesses set to take action against Australia Post for fair pay?

Yesterday, I heard a radio interview with the head of an association representing Licensed Post Office (LPO) businesses in which they canvassed taking action against Australia Post for fair pay. They outlined the current model and, in particular, a decline in gross profit because of constraints in their agreement with Australia Post and because of the way they are compensated for selling stamps.

The association made a submission to a recent Senate inquiry and say they were promised a resolution by Australia Post. This has not been forthcoming. Hence their engagement with the media advocating their position.

One example was given that a $800.00 lift in revenue resulted in around $150.00 in gross profit. They said that is not acceptable given the labour model required under the Australia Post contract.

The core argument I heard was that they earned less than an award wage for doing work covered by an award.

While this is an LPO fight, newsagents may find it interesting, especially if they do take legal action.

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Australia Post

New lottery outlets impact the value of an existing businesses

Imagine the impact on your newsagency with lotteries if a new outlet opens a few minutes walk away.

Imagine you’ve worked hard for years to build up your business, traded through tough economic times and here you are experiencing nice growth and, finally, feeling that your head is above water.

And then you discover a new competitor, a business just like yours, with lotteries is to open and, for sure, take some of your customers.

In these weeks or months when you know a competitor is coming it can do  your head in as you worry abut revenue leaking from your business, growth you have achieved being wiped off. It can be distressing and can have you looking at the situation in an unhealthy way.

Once the competitor opens you have a new target, the new business. Even though they are new, and maybe new at business, it can play on your mind and have you acting irrationally.

I have never seen support from Tatts for this situation, where they have approved (encouraged?) a competitor to open close and take business from you.

This scenario of Tatts approving a new outlet close to a existing outlet is not new. It’s happened before. It’s happening now. It’s set to happen again.

I get that Tatts has the right to appoint new outlets and needs to do so as part of its business plan. However, from what I have seen, their process of deciding on new outlets, especially those close to existing outlets, is not transparent and can harm small family businesses.

There is no reasonable and independent path of review or appeal. Tatts is investigator, judge and jury. The small business negatively affected by a plan by Tatts to approve a competitor outlet is weak compared to Tatts in the process.

While I am no lawyer, from what I can tell it is a state or territory issue if a business owner wanted to agitate on this. Points of compliant and agitation could include tribunals such as QCAT, VCAT and the CTTT, small business ombundsmen, small business commissioners and, maybe but it is a long shot, state / territory gaming commissions.

I would like to see Tatts agree a code of conduct that offers structured measurable criteria for Tatts assessing and approving new outlets and that respect the position off any existing nearby outlet within a reasonable distance of any proposed new outlet. This process needs to respect existing small businesses ahead of any benefit perceived buy people at Tatts.

If I’m wrong in what I have written here, if Tatts does have processes I suggest they establish, please outline them in comments below.

Footnote: I don ‘t have lotteries in businesses I own for several reasons including this one. I don’t want a business that is easily impacted by decisions by a core supplier. A newsagency without lotteries can thrive.

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Ethics

Helping newsagents see beyond the traditional

My newsagency software company has launched a campaign that, in part, helps newsagents look beyond the traditional view of their business. here is the front of the first post and in that campaign:

I see newsagency businesses evolving every day. The diversity resulting from the evolution is wonderful, inspiring. For the future of retail businesses in the channel we need to see more diversification.

In my own shops we have been diversified for years. From experience I say, once you start on that path you gain momentum and pursue more and more change.

The newsagency software itself has diversified, to support newsagents and their businesses through change, embracing opportunities beyond traditional. While the staples of support for newspapers, magazines, sub agents home delivery and more remain, new facilities for attracting new shoppers and serving new product categories are vital for a brighter future.

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Newsagency management

Sunday retail management tip: on competing with big businesses

Small business retailers often express frustration at big business competitors: they have more money for marketing, get better supplier deals and often have lower overheads per dollar of revenue.

In my experience, there is little to be gained from worrying about these things, which we cannot change. There is more to gain from focussing on points of difference we can leverage.

For example, we can bundle items to make price comparison difficult or impossible, we can offer a loyalty pitch big businesses will not offer, we can be flexible in how and where we pitch producers while bug retail businesses are structured and, usually, inflexible.

Bundling is particularly useful as you can create a bundle unique to your business, which feels like it is a value proposition unlike anything they have seen to that point. While this is a product by product task, it is in these small steps that you can find success, by changing shopper perspective and winning business more direct competition may have denied.

Bundles can work in gift, stationery, cards, toys and more. It is easy to use tech to manage and track this.

I am yet to see a business that cannot more creatively compete with big business competitors in ways they have not leveraged up to that point. It is about being flexible, relative and locally engaged.

Big business competitors are not going away, they are not fading in size, they are not spending less. This means we have to be smart and engaged to compete.

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Management tip

Pitching boxed Christmas cards in the newsagency

We started with a small selection of boxed Christmas cards near the entrance to the business, to introduce their availability.

Already, we are seeing hero designs emerge. As is often the case, the religious themed cards sell well early in the boxed card season.

The connection with Make A Wish is valuable as boxed card customers love the charity connection.

Our plan for boxed cards involved moving the offer every two weeks in-store and supporting this with social media promotion regularly to attract people to the shop.

While there have been some who said having Christmas cards out in August was too soon, others were relieved to find them early. Christmas cards are different to hot cross buns in that they take time to write and prepare – hence the people who appreciate accessing them early.

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Greeting Cards

The first ever newsagent’s choir sets up discussion about teamwork and strategy

The newsXpress national conference on the Gold Coast this week opened with Pub Choir leading a 90 minute workshop that created a choir of newsagents and suppliers.

The 200 voices, who had never sung together before, singing Better Be Home Soon by Crowded House created a beautiful sound. The experience spoke to confronting challenges, breaking down barriers, working together and looking over the horizon at what could be.

The choir workshop was the surprise opening to the conference. newsXpress members had no idea ti was coming. The feedback since has been wonderful and inspiring for what it is leading to.

Over two days at the conference there was exploration of new traffic supplier opportunities, including suppliers who have not previously supplied newsagencies who spoke in depth about their traditional shoppers and how to find and serve them.

In one case, conference attendees learnt about a completely new product category that offers excellent margin and which has a strong following in Australia. Discovering how to engage with this with context of existing newsXpress product categories exposed another way to leverage opportunities for the business.

Everything presented and discussed at the conference was optional, as is the case with newsXpress.

On Tuesday, in a deliberately more intimate setting, seventy newsXpress members sat in an open circle and talked business in a personal way that was emotional and transformational. Many who participated have provided feedback about the profound impact of this three-hour session. Here is one message:

The introduction of #Pub Choir  set the scene for a conference that was going to be different…….and that it was.

Most enjoyable, entertaining and educational.

This morning’s round table discussion certainly was the most powerful and understanding I’ve been to. It was a ‘reality episode’ that really drove the point home that, as retailers, we cannot take our eye off ‘the ball’ for one second.

Here is a comment from another participant.

I have been a newsagent for close to thirty years and been to hundreds of meetings and sat on committees and been to many conferences. I have not in all that time experienced anything close to the inspiration, care, closeness and optimism as I have witnessed here. I mean this sincerely, the experience has changed my life.

I appreciate there are some here who will either through comments or privately mock this post or put it down. It’s okay. Think whatever you like. I have not written this to get your agreement. Those who were there know first-and what it was like and what it will mean for their businesses.

For me, it was a wonderful three days: inspiring, insightful and memorable. But overall, it was practical from a business next steps perspective.

In creating this newsXpress conference, I sought to put something together that was appropriate for our times, that focussed on next steps. I think too often planning conferences look too far ahead. In our channel today, the horizon is much closer.

On the choir experience, those who participated cheered loudly at the end of singing Better Be Home Soon as a performance. Then, at the end of the conference, we showed the video of the performance, and the cheered again. It’s a joyous memory.

24 likes
newsagency marketing

Newsagents feature in Take 5, on sale now.

While I’m not sure about the headline, it is terrific to see newsagents feature in the latest issue of Take 5 magazine. This is an issue to promote on social media as it humanises newsagents, makes us human and fun, if not wild! All good stuff!

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Fun

Look carefully at revenue at the start and end of the day

Talking with a newsagent recently about labour costs in their business and reviewing their data we could see that between 5am and 7am on the six days they were open they lost close to $200.00 a week.

They had two staff on for security reasons. The nature of the business, its location and management practices meant the early morning retail staff did not have much of value to do. This meant we could only judge the value of being open against revenue.

Digging deeper, we reached a first-step conclusion that the opening of the shop should be pushed back to 6am. This will more than  halve the loss given the revenue in that first hour.

What was interesting to me was the reason they continued to open early despite clear losses.

They were worried about upsetting the few customers who came in early. These were low margin value customers, customers buying products with low margin products and not shopping the rest of the shop then or at any other time.

They were worried about the negative comments in the community.

This had been the case for several years. Combined losses through the period of concern and inaction had mounted to in excess of $43,000 from these two hours of the day. My question to the owners was: has it been worth $43,000 to not act because of worry about what a few customers might say? Of course, the wander was no.

Only you can know if you opening and closing hours should be adjusted in your business. My advice is to first-up look at it as a purely commercial decision, so that you are sure of the numbers and what the financial decision should be.

The most common discovery in looking at businesses that are challenged is in labour management. Either the labour cost is too high for the business or wrong people are in some roles.

Data can be valuable in making changes. the key is to not over think the changes. Make a step, measure, assess and adjust if necessary. The alternative is you think, worry, think, worry and not do anything until you discover the inaction has cost you tens of thousands of dollars.

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Newsagency management

Fake licence products hurt ethical retailers

A competitor of one of my shops sells fake licence product for considerably less than the authentic licence products we sell. They have done it for some years.

While the landlord was unconcerned about fake products being sold in the centre, the licence holder was more engaged. However, they did not proceed with legal action because of the cost. The challenge was determining the source.

For licence holders it is a border force issue. Since the majority of containers coming into the country it is easy to get fake licence product into stores without the provenance being easily untangled.

At a recent gift trade show I saw the problem first-hand. There were a couple of suppliers with mid-tier licence products that were fake. By mid-tier, I mean not a popular licences as anything from Disney or similar. For sure the licences were strong and valuable, but not at a level or of a volume that the local licence representative would take action. and I think that is what they gamble on.

The challenge for retailers is being sure that what you stock is the real deal. Price is one way of checking. Branding and packaging are other ways. Another check you could do, if you have time, is at local indecent discount variety stores and independent tobacco shops. I have seen fake products in both types of stores.

in our marketing we pitch authenticity and we educate shoppers on how ton spot fakes in some product categories. In our experience, taking the high stand like this builds trust. This is important to return customers, those building collections within the licence.

Stocking licenced products can be a challenge because of unscrupulous retailers and importers. However, it can be worth it if you go in with your eyes open and have strong processes to counter fakes.

11 likes
Ethics
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