Saturday Paper coming to Perth
From May 16, The Saturday Paper is to be available from Perth newsagents.
A week of newsagency management benchmarks: #4 stock turns
Each day this week I am sharing a newsagency management benchmark which I hope you find useful. The benchmarks are not rigid, use them as a guide to determine what is right for your business. I have developed these benchmarks over years of working with a variety of newsagencies in many different situations.
Management benchmark #4: stock turns
Stock turn is a measure of the numbers of times you turn the value of your average stock holding in a product category in a year. For example, if your average holding is $10,000 and your sales are $100,000 with the cost of those good being $50,000, the stock turn would be 5.
The formula is cost of goods sold for the category for the year divided by average stock holding value.
A common mistake is dividing retail sales value by average stock holding value. This would give you an inaccurate figure.
Here are benchmarks by key categories I suggest newsagents aspire to achieve:
- Stationery: 7.0.
- Cards: 3.5.
- Gifts: 7.0.
- Toys: 6.0.
- Plush 7.0.
In your newsagency software you ought to be able to report on stock turn for a set period or on a moving annual total basis. Seek this out and run the report to see your figure for yourselves.
If your turn is low you can correct this by increasing sales without increasing stock or reducing stock without reducing sales. either approach takes planning and commitment.
Key to achieving a healthy stock turn is for your to control your inventory investment.
The Queensland Government has an excellent page on stock turn. I encourage you to check it out.
I hope this series helps newsagents look at their businesses differently and to ask questions about their performance in the context of best practice in our channel. Newsagencies with the brightest future are those where data is respected and benchmarks are set to be achieved and passed.
Cool use of projection bring excitement to retail
In a retail store a couple of days ago where they projected onto walls to create a funky vibe. With projector prices at an all time low, wall projections an easy way bring a ver different vibe to a shop … and then change it at the push of a button. I could see this working in some of the larger regional stores out there where there is space to play with.
Dealing with oversupply of Modern Wedding magazine
I wrote to Modern Wedding magazine three days ago about the unjustified oversupply of Modern Wedding Cakes & Styling to a newsagent as I wrote about here. I am yet to receive a response. As with the publisher of Scoop and my similar complaint to them about the same issue, I have not received a response. if the publishers did care about their newsagent retailers they would respond to these issues in a timely manner. Their actions are commercially harming our businesses.
A week of newsagency management benchmarks: #3 revenue per square metre
Each day this week I am sharing a newsagency management benchmark which I hope you find useful. The benchmarks are not rigid, use them as a guide. I have developed them over years of working with a variety of newsagencies in many different situations.
Management benchmark #3: revenue per square metre
This is a tough benchmark to write about as it differs based on your location and your personal rent situation. For each of consideration I have come up with a range of situations and my suggested revenue per square metre per year benchmark.
But first I need to explain the measurement. In calculating revenue per square metre, revenue is all product sales only as this is a pure retail calculation. As for space, I am only interested in your retail space – not your back room and not from the top of your counter back to the wall.
Here are my suggested situational breakdowns:
- City shopping centre: $8,500.00.
- City high street: $5,500.00.
- Regional/rural shopping centre: $6,750.00
- Regional/rural high street: $4,500.00
These figures could be very different in your situation because of rent and other local factors. Use them as a broad guide only. The most important takeaway I’d like you to have from this post is to measure your number from last year, compare it to today – see how you are travelling. If you’re up, good. If you are down – fix it.
I hope this series helps newsagents look at their businesses differently and to ask questions about their performance in the context of best practice in our channel. Newsagencies with the brightest future are those where data is respected and benchmarks are set to be achieved and passed.
Promoting magazines for the season
This photo shows how bookseller Barnes & Noble is promoting home and garden magazines – timed with Spring here in the US. I’ve seen it in each Barnes & Noble store I’ve been into. I am sure we could drive magazine sales with multi title promotions like this.
Candy with magazines because it works
I have written about this several times over the years and write about it again today as it works. Check out the placement of candy with magazines. I see this in plenty of magazine retailers here in the US . It could work in some, not all but some, newsagency situations in Australia. Appropriate product choice is vital to success.
How customers abuse our newsagencies
At the airport last week I saw how customers had abused the Lovatts crossword stand at a WH Smith store.
Click on the image and see – they have been using the stand to test pens as well as a place to leave a used coffee cup.
At least they didn’t leave a mucous filled tissue or a filled baby nappy.
It challenges one’s faith in humanity sometimes – the way people treat shops.
Crazy US magazine subscriptions
Here in the US you notice the poor availability of magazines at retail. Sure they have the top selling weeklies and a selection of monthlies if you want to search for them but they do not have the depth of range we carry. Instead, there majority of magazine sales are vis subscription and it is no wonder considering the prices.
Look at US title Money. They promote a $5.00 subscription offer for a year but you have to actually sign up for two years for a total cost of $29.90 delivered – but that is still only $1.25 an issue. Postal rates enable them to do this. Australian subscriptions tend to not be as deep as this.
In Australia, a hope for over the counter sales is Australia Post pricing for magazines. If that increases we should benefit.
The Australian promoting a free tablet
Like many major News Corp. dailies, The Australian is promoting a free tablet computer as a gift with a 12-onth digital subscription. The ad pops up when you go to the website for The Australian – you can’t miss it.
ACCC sets details for conference on proposed magazine rule changes
Following a request I wrote on behalf of newsXpress newsagents, the ACCC has decided to hold a pre decision conference with newsXpress and other interested parties about the MPA proposed trial of magazine supply rule changes. This is an opportunity for newsagents to be heard on the proposed magazine supply changes, an opportunity missed by those engaged with this project to now. Here is part of what the ACCC letter to newsXpress said:
As you may be aware, newsXpress Pty Ltd has requested that the Australian Competition & Consumer Commission (the ACCC) convene a conference in relation to the draft determination issued by the ACCC on 12 March 2015 proposing to grant authorisation A91472.
The ACCC will hold the conference on Thursday, 23 April 2015, at the ACCC’s Sydney office (Level 20, 175 Pitt Street, Sydney). Interested parties may also attend the conference via video link from ACCC offices in Melbourne, Adelaide, Brisbane, Perth, Hobart and Canberra. The conference will commence at 12pm AEST. ACCC Commissioner Dr Jill Walker will chair the conference.
I am sharing this to update to keep all newsagents abreast of representations being made in pursuit of a more equitable supply model for all newsagents.
A week of newsagency management benchmarks: #2 gifts to cards
Each day this week I am sharing a newsagency management benchmark which I hope you find useful. The benchmarks are not rigid, use them as a guide. I have developed them over years of working with a variety of newsagencies in many different situations.
Management benchmark #2: gifts to cards
Three years ago I was saying newsagents should aspire for gift revenue to be equal to 35% of card revenue. Today, I think that number is insufficient.
My base recommended gift revenue to card revenue ratio today is 50% while my recommended ration is 1:1. That is, I am saying your gift revenue target ought to be equal to your card revenue – preferably higher as is being achieved by many newsagents.
I mention the 50% as a base for newsagents who are yet to fully embrace the gift opportunity.
Let me be clear about gifts though. I do not include toys and plush in gifts as they are in their own department – even though you could argue plush should be in gifts.
My suggestion is you look at your gift to cards revenue ratio for the last three months. If it is below my suggested minimum target of being equal to 50% of your card revenue, work on what you need to do to get it higher … expand your range, play with shop floor placement, engage in marketing. Sure, it’s hard work. The benefits are terrific given the better margin on gifts compared to some traditional newsagency lines.
If you don’t know where to start, look at your existing data as this will provide the best guidance as to the gifts you could sell.
Don’t look at gifts as a destination. Change is vital to attracting leveraging existing traffic and attracting new traffic. And remember when buying: YOU ARE NOT YOUR CUSTOMER.
I hope this series helps newsagents look at their businesses differently and to ask questions about their performance in the context of best practice in our channel. Newsagencies with the brightest future are those where data is respected and benchmarks are set to be achieved and passed.
Australian made Darrell Lea liquorice on the shelves in New York
Australian made Darrell Lea soft eating liquorice is on the shelves of supermarket and convenience outlets here in New York. I checked the packaging – yes this product is made in Australia. this is a good export story from a company that a couple of years was down and out.
Near the terrific Darrell Lea product is a US made knock-off product: soft chewing Aussie style liquorice. The packaging has Darrell Lea elements to it.
While imitation is the best form of flattery, if I was Darrell Lea I’d feel ripped off by this Walgreens house brand product – especially given the Darrell Lea product is almost twice the price.
Using newspapers to sell fashion
A retro-style designer fashion outlet in Greenwich Village New York is using stacks of newspapers in their window to draw attention to their business. While the window display worked and got me to stop and take notice, the irony of their use of newspapers to promote fashion was not lost on me.
A week of newsagency management benchmarks: #1 revenue to staff
Each day this week I am sharing a newsagency management benchmark which I hope you find useful. The benchmarks are not rigid, use them as a guide. I have developed them over years of working with a variety of newsagencies in many different situations.
Management benchmark #1: revenue to staff ratio.
First up, by revenue I mean the total value of general sales (cards, gifts, magazines stationery etc) plus your agency (such as lottery) commissions.
Based on an average gross profit performance in the based of 28% to 35%, the revenue per labour hour benchmark I suggest is $250.00.
If your gross profit is between 35% and 40% (which it should be), the revenue per labour hour benchmark is $225.00.
You could argue that rent should play a factor in the revenue per labour hour target. I could understand that. However, my goal here is to provide a blended national figure you could compare against, to enable you to look at your business against such a benchmark.
I know of businesses hitting the two figures I have quoted as well as businesses falling below. No matter where you sit, the revenue to staff benchmark ratio can be useful in rostering and managing staff as well as guiding shop floor decisions you make.
If you have a data point on which you need to improve, understanding that data point and the levers which impact it can be a tremendous help.
I certainly find using this benchmark to assess efficiency.
Note: the benchmark figures are a guide only. In reality, the revenue figure per staff hour should be higher. Also, for hours worked – include yours too.
I hope this series helps newsagents look at their businesses differently and to ask questions about their performance in the context of best practice in our channel. Newsagencies with the brightest future are those where data is respected and benchmarks are set to be achieved and passed.
Confronting the Scoop oversupply issue
Over the weekend I emailed several contact points at Scoop about their oversupply as I wrote about here last week. The email speaks for itself. I wrote it because I’m of the view we need to hold publishers account for the oversupply we are hit with given that magazine distributors have done little to address the problem. The Scoop example is a simple one to use as there was no evidence in the sales data whatsoever warranting additional stock to be supplied to the example newsagency.
I will let you know if the folks at Scoop respond.
Magazine distributor IPS completes today’s trifecta of magazine oversupply of small business newsagents
A newsagent contacted me this morning to advice IPS, the Fairfax owned magazine distributor, has supplied 92 copies of Wild Boar magazine in response to sales data showing net average sales of 39 copies.
This oversupply will cost the newsagent time, labour and cash. it will cost the publisher service fees – as the distributor is paid regardless – and production costs as a result of early returns being trashed.
Do you think this oversupply by IPS is unethical?
Is this behaviour by magazine distributor Bauer Media’s Network Services unethical?
Check out the supply and return data for Modern Wedding Cakes & Styling for a newsagent who contacted me yesterday. They received 3 copies of edition #17 on 21/7/2014. They didn’t sell any. On 12/1/2015, Bauer sent them another two copies. They have still not sold any. Today, they receive two more copies.
Newsagents are being asked by Bauer Media to trust their new magazine supply rule. I know the newsagent I am referring to in this post does not trust them. I agree. This gross and persistent oversupply demonstrates a broken model. It is behaviour not reasonably addressed in the proposed new supply rules which have been endorsed by the ANF.
That Bauer behaves this way only to newsagents disadvantages our channel and those who shop with us. It restricts our ability to compete as it taxes us with labour, space, freight and cash overheads our competitors do not have.
Do you think what Bauer has done here is unethical?
Magazine distributor Gordon & Gotch fails newsagents with Valentine’s Day title
Gordon and Gotch is today (Monday) distributing Good Things Valentine’s Day. Valentine’s Day was six weeks ago. There is no sense in supplying this title now and doing so makes newsagents less competitive. It will cost those who receive it time, space, eight and cash.
Gotch would still be able to scale out this title to newsagents under the lame and ill-considered new magazine supply rules endorsed by the ANF.
Sometimes it is appropriate to supply a seasonally themed overseas title to newsagents but not for Valentine’s Day. It is a season which ends with a thud at midnight on February 14. The prospects of newsagents selling this title in reasonable number to pay for space, labour and other costs are minimal.
Do you think Gotch distributing this title to newsagents is unethical?
Sunday newsagency marketing advice: promote obscure
Newsagencies are habit based businesses. People step through our front door for habit based purchases daily: magazines, newspapers, tobacco, drinks, lottery products, greeting cards. This traffic, while it has some challenges, is a given.
My question today is – what are you dong to attract shoppers for non traditional, non habit based, items?
What do you sell or what could you sell that is obscure, different for your type of business? Is it something you could promote? Make the right choice and you get people looking at your business quizzically. They will probably remember you for the obscure as there is not a shop on every block selling such an obscure item.
Stocking and promote what people do not expect you will help you achieve unexpected results. This is essential as if you do what is average, what is expected, you will only achieve average results and today average is not good enough.
Sunday newsagency management advice: plan for the economic storm
What is the worst that can happen to your newsagency business? A downturn in local industry, mass departure of residents, another newsagency or competitive business opening nearby, a collapse in consumer confidence?
These are other economic challenges could be around the corner yet too often small business newsagents are not prepared, they do not have a plan for dealing with the challenges.
I urge newsagents to take a moment and consider the worst economic activity which could hurt the business. Think about that and work back from the imaginary catastrophe on what you need to be prepared to do in order to get through it.
You can plan for an economic storm, I am sure of that. The best time for such planning is in advance of any such catastrophe hitting your business, well in advance in fact.
Those in hospital emergency departments, military, law enforcement and other public service areas plan and train for catastrophes all the time. It is essential to them being able to do their job in such circumstances. We in small business can benefit from the same planning and training.
Farewelling an employee – witnessing an Apple ritual
There is a tradition at Apple stores of clapping an employee when they leave the business for the last time as an employee. I witnessed it first-hand yesterday in their 5th Avenue store in New York. There were several hundred shoppers in the store at the time and around 50 to 60 employees. There was an announcement an employee was leaving to take a job elsewhere. All the employees burst into applause and clapped their colleague out the store. It was a special moment to witness.
One employee explained to me it’s like they are sending them off into the world with their blessing and good thoughts.
It was interesting to see the departure treated in such a positive way.
The best source for labour rate and public holiday information
Some newsagents retain association membership to access labour rate and public holiday information. If this is you, save yourself the money.
- Click here for an accurate public holiday list.
- Click here to access the Fair Work Ombudsman Award finder.
Here are other free resources some newsagents use associations for:
- Advice on checking shopper bags for possible theft.
- Advice from the Federal Police on reducing the impact of theft.
- How to do a magazine relay in your newsagency.
- How to address magazine oversupply.
I think newsagency associations are out of touch with the needs of newsagents. Also, given they serve two different businesses, they are conflicted and less effective for each.
Save your money – invest it in your business.
In the US for a week
I am in the US this week for a conference with elite Hallmark Gold Crown retailers in Kansas City. I have come over early to see some new retail businesses in New York and to attend East Coast COMiCON in New Jersey.
I’ll continue blogging while I am away as I have some topics to catch up on. Plus I have been writing a series for next week on newsagency management rations I hope you find useful.
While I am in the US I am plugged into business back home thanks to technology so I will comment on issues as they arrive.
I’m also contactable here as my Aussie number diverts at my cost.
What local cafes can teach us about magazines opportunities for the newsagency
In a café near a newsagency I was visiting a few days ago I noticed a selection of magazines available for browsing. Talking to the newsagent there was a disconnect between the magazines they focused on and those which were popular in the café. This presented an opportunity for the newsagent to learn more about magazines the currently sell yet which could be better featured – based on data from the café owner about what is popular with their customers a few doors away.
Sometimes, marketing insights we can leverage for our business can be found in businesses with which don’t have an obvious connection.