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

Author: Mark Fletcher

Sunday newsagency challenge: cancel all rep visits for a month

While supplier representatives can be invaluable for your business, they could be hindering your ability as the owner and manager of the business. They could be stopping you from seeing your business differently. There could be too much of them in your business indent enough of you.

My challenge today: Take a break from reps visiting your business. If they have products to pitch, get them to email.

Have a rep free month and see what decisions you make about buying that might otherwise have been made by a rep.

The goal here is for there to be more of you in your business and what you sell. This does not mean less buying from the companies the reps represent.

If you see, say, eight reps a month for 30 to 60 minutes each that is four to eight hours back in your pocket for the month, time you could spend on your business in tasks that reflect more on you than on the rep.

Your major competitors spend less time at the local store level with reps than you. This is a competitive advantage for them.

Suppliers reading this who are frustrated, here is your challenge: come up with processes for more efficient use of newsagent time. Rep visits at the local store level are inefficient.

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Management tip

Sunday newsagency management tip: look for transitional change

With change mission critical to newsagency businesses today it is important we check current revenue by department with that of three years ago. I say three years as that takes you back to 2012, when too many newsagents were not thinking about major change being necessary to the future of their business.

For the purpose of this analysis, do not consider any agency lines such as lotteries, bill payment or parcels. Only look at retail products: cards, magazines, newspapers, stationery, gifts, toys and other products you sell.

Compare revenue, unit sales and percentage of product revenue contributed by department.

Your newsagency software ought to provide this comparison easily. Read through it, think about where you are at today compared to 2012. Think about this in the context of the traffic you are generating. Has your business transitions as much as you expect?

These are important factors to consider, actors I will pick up on later this week.

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Management tip

Sunday newsagency marketing tip: pause your local newspaper advertising

If you advertise in your local newspaper regularly or semi-regularly, my tip today is you pause this spend and redirect the funds to Facebook boosted posts or locally targeted Google advertising.

For a few dollars you can test your ad, gauge the return and up the spend if the results are there. My experience is the Facebook posted ad process and results are far superior than local newspaper advertising. But remember my business is in a busy suburban area where a local newspaper ad is expensive and lost in the relatively full local newspaper.

If you do not advertise in the local newspaper or anywhere else then my tip for you is advertise! If you are not doing anything to attract new traffic to your newsagency you are nuts!

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marketing

In-store radio of no value to the newsagency

It is more than  year since I stopped streaming newsagency specific in-store radio in my business and I do not miss it.

Our sales growth trajectory has been maintained: revenue, basket depth, average sale value, shower visit time and shopper engagement are all up.

We still offer music that shoppers love, just not a newsagency specific station.

I supported in-store radio for years but now I know it is not missed by shoppers and did not contribute to the bottom line it is not something I would go back to.

While every newsagent has to make their own decision on this, I suggest you look at the cost and the tangible benefits you achieve as a result of the investment.

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newsagency marketing

Newsagents need to stop waiting for traditional suppliers to lead

It has been interesting hearing from newsagents and reading comments from other newsagents about the adult colouring phenomenon, especially those complaining about lack of stock from Gotch and Network.

While I welcome the colouring titles from the magazine distributors, the real money is in the specialist books, pencils and erasers we can access from other suppliers.

Informed newsagents were in this space many months ago, late last year even. They are the ones making the most from this. They got in early because of engagement with suppliers outside the traditional newsagency supplier mix.

Newsagents will not find new traffic by relying on traditional suppliers to get them in early on a trend. Traditional suppliers can help but rarely will they lead. I do not mean to be disrespectful to them – they play a role for sure, just not a new traffic leadership role.

We have to be on the front foot, out there looking for new products far are wide away from what has been traditional for us. It can be done as some of us have proven with success with adult colouring from months ago.

This is where the groups play a role. I know from my work with newsXpress what we were doing with adult colouring long ago in terms of product sourcing, training on the phenomenon and go to market strategy. I expect other groups were doing this many months ago as it is what groups do to demonstrate a point of difference over being independent.

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Newsagency management

New cash prize promotion from Pacific Magazines

Screen Shot 2015-08-14 at 6.48.56 amI like that Pacific Magazines is running another cash prize promotion starting next week. History shows the value of a simple promotion with cash prizes., especially if the promotion is specific to our channel. In a centre with two supermarkets and other outlets with magazines it is a welcome point of difference for us.

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magazines

Punishment of a thief caught stealing in the newsagency

We received a letter from the Magistrates Court advising that a person accused of stealing from the business has completed the conditions of their Diversion Plan:

  1. Donation of $100 to Make A Wish.
  2. Continuing counselling.
  3. To be of good behaviour.

While I appreciate the court advising us of this, I would like to know if the Diversion Plan worked over the long term. I’d like a trigger in the court system advising us of any conviction or Diversion Plan in the future.

The impact on any retail business of theft can be considerable and long-term beyond the financial cost of stolen stock or cash. Knowing the system works could help us have more confidence in the system.

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theft

Pitching Father’s Day in the newsagency

IMG_9112This photo shows part of how we have been pitching the start of the Father’s Day season in the newsagency. To the left of this is a display of products that guys purchase and that are part of our everyday range. For the core display you can see we are relying on the cards, gifts and the opportunity that one of our customers will win a Kogan Flat Screen TV to pull traffic.

We are leveraging the prize through promotions outside the business.

The placement is set to attract people to the display and further into the store with the next level and the level behind that. We use a finely tuned floor display placement principle to attract shoppers deeper into the store. This is done through thoughtful placement and creating display structure.

We are competing with aggressive and professional retailers for this and other seasons. It is not enough to stick products on a table with a Father’s Day sign. We need to emotionally connect so shoppers want to spend with us and feel good while doing it. Our emotional connection starts with the LOVE YOUR DAD posters headlining the display – they are a welcome departure from the usual Father’s Day pitch in retail, they are an especially good connection to drive card sales.

The range of products will evolve further next week as the season interest intensifies.

Part of our Father’s Day strategy is to use the increased traffic driven by the season to introduce people to our broader offer. We do this through product placement and our discount voucher program. We show shoppers what else we sell and we financially encourage them to look at what else they could purchase.

This is the value of the major card and gift seasons in a newsagency business – to the opportunity to showcase and leverage the rest of our business. It is why we must look at seasons as being far more valuable than the seasons themselves.

Don’t be put off by the range of cards or gifts in the photo. We have plenty more in-store for Father’s Day. This is a major season for us.

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Gifts

Calendars are our blossoms

IMG_9110As blossoms tell us winter is coming to an end, in newsagencies the arrival of calendars on the shop floor tell us winter is coming to an end. So it is in the newsagency this week with the first 2016 calendars out and selling.

Right now is our opportunity in the spotlight with the major calendar competition weeks away from engaging.

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Calendars

Marie Claire anniversary success

IMG_9114The latest issue of Marie Claire, the 20th anniversary issue, has been an extraordinary success delivering not only good sales but driving traffic with people coming specifically to purchase the title.

The buzz around this issue has been terrific, refreshing not only the title but the category as well. Well done Pacific Magazines.

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magazines

We need to be bold in buying stock for our small business newsagencies

IMG_9087 (1)I was in a newsagency in Sydney yesterday with plenty of the most popular adult colouring  titles. They were selling well. They were also attracting shoppers to the business from in the centre.

At another newsagency, they are out of stock of the most popular titles because they did not order enough. They were too cautious even though previous shipments had sold out.

The newsagent who backed their instincts has the stock and is reaping the rewards while the cautious newsagent is not making what they could have made.

Many newsagents have grown up in a world where suppliers order for them. In the growth categories today we have to do this for ourselves. We need to develop strong inventory management and reordering skills. We need to back ourselves as the newsagent I visited yesterday has. Sure, there is a risk. However, the rewards could be greater.

There are plenty of resources in our channel in the marketing groups and in supplier businesses where we can tap into advice on such ordering. That is exactly what the newsagent I visited yesterday. Indeed, his business is flourishing because of a series of bold decisions across several product categories, some of which he has not offered previously. But it is in the adult colouring space where his entrepreneurial skill is on show and the financial rewards, thousands of dollars in good margin revenue, are being banked.

We cannot be timid in our businesses, not if we want to grow revenue and profitability. Our best future will be found by us reaching outside what is traditional for newsagency businesses and acting in ways that are not traditional for newsagents. That is what excited me yesterday – seeing a newsagency and a newsagent energised and changing transformation.

These comments tie in with my thoughts about newsagency businesses and the convenience model. It is a model adjacent to a newsagency business model, a model requiring only small change.

Pursuing a broader retail model away from convenience and the traditional newsagency is tough hard work – and you need to buy with confidence. However, this is where the rewards are greater. It is also where we have a better opportunity to create a business that is genuinely different in our area.

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Newsagency management

Suppliers who do not transact electronically will lose business

For years newsagents have tolerated some gift and stationery suppliers who do not provide electronic invoices. Newsagents are moo demanding than a few years ago when it comes to transacting electronically.

Suppliers who do not provide electronic invoices are already losing business. One today told me it was too expensive. I wonder how expensive they will think it is when they realise the business they have lost.

More and more newsagents refuse to be held back by out of date processes.

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Newsagency management

Making the case to Transurban for better commission on Citylink top-up

I have made a submission through Touch to transurban pitching for an increase in commission for newsagents from the current 55 cent transaction fee. I was invited to make the submission following several emails to management on behalf of newsagents.

Here is part of what I wrote:

Newsagents pay around $23.00 an hour for employees in their businesses plus on-costs of around 15%, making an hourly labour cost of $26.45.

A Citylink top up transaction takes up to two minutes, resulting in a labour cost of 84 cents. Even if my estimate up up to two minutes is out by 50%, the cost is 42.41 cents.

On top of the labour cost is costs covering retail tenancy, IT infrastructure, insurance and other business overheads.

Then, there is the cost of transactions themselves, banking costs for cash and bank fees for electronic payment methods.

These are all factors impacting the cost of doing business, the cost of offering the Transurban top up service.

Finally, there is the opportunity cost. This is a consideration in a newsagency that has transitioned from the old-school loss-making agency model to the new style retail focused model. In the former the average overall business GP is 28% whereas in the latter the average overall GP is 45%. However, in the latter model you spend more time with customers selling items priced at $200.00 and more.

Hopefully my submission gets the attention of decision makers in Transurban and that they at least explore the commission they pay.

Newsagents deserve fair compensation for their efforts. The 55 cent compensation is not fair in my view.

Why my bigger picture view remains that our future is not in agency lines, I do understand many newsagents rely on these. hence my support for a better deal for them through representations such as these to Transurban.

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Management tip

Changes in Darrell Lea Dad’s Bags

IMG_9059Darrell Lea Dad’s Bags aren’t open like they used to be. In the bag all the goodies are in a sealed plastic bag. I’ve not had darrell Lea for a few years but I recall customers used to like checking the items in the bags. Not they have to pull out the plastic bag. I doubt it will hurt sales, just makes the Dad’s Bags little more big business than small business.

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retail

Gotch pitching music magazines on Twitter

Screen Shot 2015-08-11 at 9.13.49 amMagazine distributor Gordon and Gotch took to Twitter yesterday promoting a competition encouraging entries explaining why people like one of the magazines listed. Up for grabs is a Spotify premium subscription.

I like the competition and the special interest music magazines it promotes. While not a big deal, I wish Gotch helped newsagents promote this via own social media.

Competitions on social media are a great way to find new shoppers.

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magazines

Does Hubbed really have 680 locations?

The ANF promoted Hubbed parcel service claims 680 newsagent locations on their website.

Our marketplace of some 680 newsagents Australia-wide, coupled with great partners, delivers the best parcel, retail and lifestyle shopping experiences for the consumer.

Using the Find My Newsagent facility on their website you are taken to a map showing locations with Hubbed. Counting the locations listed gets to 238 locations: QLD: 65; NSW: 72; VIC: 17; TAS 21; NT 2; SA 19; WA 40; ACT 2. Even allowing for a miscount based on the map, the claim of 680 newsagent locations does not appear to be matched by the data published by Hubbed.

This matters as newsagents are promoted to get on board with Hubbed in part because of the ‘size’ of their network.

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Hubbed

Our politicians need to be audited as we are in small business

With major political parties now aligned on the expenses issue and suggesting there is nothing for us to see or worry about, we ought to remind them what life is like in the real world.

Small businesses, like newsagents, face onerous regulation. We are subject to unexpected policing and audits that add to our operational costs.

Small business newsagents face audit by the ATO for PAYG, FBT and other taxes, audit by State revenue over payroll tax, in-store audit by consumer affairs looking for unsafe products, council by-lays inspectors looking for the food licence, ASIC chasing our annual returns, and being tested in undercover operations for selling tobacco to underage shoppers – to name a few.

Our politicians face no such audits or overheads unless one of their number is caught out as has happened recently. They are out of touch with the real world.

At the very least our politicians ought to face the risk of an unexpected audit by an independent body at any time. Such an audit should look not only at their expenses but their level of genuine service of local constituents as well as other KPIs that measure their service to the community. This could give them a dose of reality that is sadly lacking in Canberra.

I had reason recently to write to my personal and business local members as well as the Treasurer on a serious time-sensitive matter. Only by local member, Adam Bandt responded. Josh Frydenberg and Joe Hockey remain missing in action whereas Bandt’ actively and fully engaged.

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Ethics

Packaging tape is expensive at Coles

IMG_9063Price checking of stationery at a nearby Coles on the weekend I discovered they have unknown brand packaging tape at close to double our price. But your would not know. It is only when you check the length of the role you see how expensive Coles is. Our roles are 50 metres in length while the Coles tape is 25 metres. A simple price check will make Coles look cheaper. But they are not.

This is the type of information we have to share with all working in our newsagency businesses. We should also share the price comparison on social media.

Coles is expensive when it comes to stationery. Check for yourselves – not just tape but other stationery items too. Once you have the facts in your area start talking about it.

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Stationery

The problem with new magazines for newsagents

IMG_8945A consequence of magazine publishers and distributors failing to address the poor financial return from magazines for small business newsagents is a reduction in space allocation in newsagencies for magazines.

In real terms we make less today than five years ago yet the cost to us of magazines has increased between 5% and 10% year on year through this time.

Whereas in the past magazine departments took up a third of floor space, today the space allocation is 25% and less – meaning fewer pockets and no spare space.

The problem is exacerbated by magazines in so many more outlets than newsagents. No wonder we are tight on space. We have to be!

Magazine publishers and distributors need to stop sending us new titles without checking. Many of us have no space for them and have to remove an existing title if a new title is to be given space.

This happened recently with two new titles from Universal Magazines: Beach & Bayside Homes and Kitchen Inspirations. We did remove two titles.

It is ridiculous that in this age of technology the publishers and distributors do not have in place a system to know for certain space availability in our stores. It is like they prefer to be ignorant as this enables them to send us magazines we do not have space to display.

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magazine distribution

Newsagents help

IMG_2886 (1)Check out the magazine a friend found in a bag with the copy of Gourmet Traveller they purchased from Woolworths last week. We can tell from the sticker left on by Bauer that the magazine is a return from a newsagent. The newsagent would have paid to return the copy of Belle that failed to sell for them so Bauer could make the gift to the Woolworths customer. Nuts.

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magazine distribution
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