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

Author: Mark Fletcher

Is Tatts applying different rules to Coles outlets?

Two people have told me that Coles staff received as little as a couple of hours training in the sale of Tatts lottery tickets. If true, this makes a mockery of the training requirements imposed on newsagents by Tatts.

Less training coupled with lower corporate image branding requirements and, I suspect, no up front payment provides Coles outlets with a lower barrier to entry than faced by newsagents when taking on Tatts products.  Indeed, the costs of establishing a new Tatts outlet in a Coles location based on the trial model illustrate a considerable financial disadvantage for newsagents.

I’d expect the difference in the obligations of Coles taking on Tatts compared to a newsagency to be something taken up with the new federal government given their declared interest in the market power of Coles and Woolworths. I would also not be surprised to see one or two newsagents take the matter up with state based small business forums where a complaint could be easily prosecuted.

The photo shows a lottery ticket sold by one of the new Coles outlets selling Tatts products in Victoria. It’s now like the 7-Eleven tickets. This Coles ticket appears to be printed on the regular Tatts printer.  A newsagent got the ticket when a customer wanted it checked.

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Lotteries

UK crossword titles take space from Australian product

I’ve been helping out a newsagent recently and have been surprised at the volume of imported crossword titles they receive. Indeed the space taken by the UK titles limits what the business can do to properly display other titles. The imported titles don’t sell that well yet the distributor continues to supply – taking up space and labour – reducing the opportunity for the newsagent to better manage the business.

I’m pretty sure the folks at Lovatts will respond to this as they have in the past been frustrated at the impact imported titles have on the ability of newsagents to professional display their Australian product.

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magazine distribution

I don’t want to promote newspaper subscriptions

I wasn’t surprised to see the newsagent ripping off the home delivery stickers from the masthead of The Australian newspaper yesterday. As a retail-only newsagency the business makes nothing from migrating a customer from over the counter to home delivery so why promote it on product they sell? While there could be an argument that they are only an agent, a smarter approach from the publisher would be to commercial engage with the retail-only business.

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Newspaper distribution

Touch Networks launches paysafe card for safe online payments

Newsagents will have access to the paysafecard, a new product launched by Touch Networks for sale to shoppers wanting to shop online safely. While the margin is slim, 2.5%, there is no stock carrying cost.  here are some details from the product announcement sent today:

paysafecard is a prepaid voucher that lets you pay safely online. Prepaid means that you purchase paysafecard from sales outlets worldwide and you will receive a 16-digit PIN. Online payments are made by entering this paysafecard PIN on websites where paysafecard is accepted. paysafecard is safer than other payment methods because you don’t have to enter any personal information or your bank or credit card details when paying online.

Any newsagent can access Touch through their computer system.

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Newsagency opportunities

Are internal changes at Bauer the cause of magazine supply increases to newsagents?

I am told that a reason for the increase in supply of Bauer magazine titles to newsagents beyond what is justifiable in the sales data has its roots in a change in how allocations are managed for these titles.

ACP Magazines used to do their own allocations for ACP titles and had done so for many years – closely aligning supply to net sales. Undersupply was a common complaint by newsagents for ACP titles.

Since the Bauer takeover of ACP, I am told there has been a structural change affecting supply allocation. They have split circulation management into two areas, separating the circulation manager from those analysing sales data. Circulation reports to finance.  This change sees less focus on sales data and it is this that is resulting in newsagents receiving a significant increase in supply of Bauer magazine titles.

If my information is right and these changes have occurred at Bauer and they are feeding the consequences we are experiencing in our newsagencies then we as a channel need to consider a plan of action. Oversupply at the current level is commercially unfair to newsagents.

Newsagents who are not in the elite Connections Emerald group have to return full copies of unsold stock most of the time. This acts as a penalty on oversupply, taking cash from businesses as a result of an action over which they have no control.

With the staffing changes at Bauer it is no wonder people from inside and recently departed from the company are talking.

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magazine distribution

OzLotteries promotes 30 million Powerball win

OzLotteries, the online lottery agent, is set to experience even more growth as they actively promote selling the winning ticket in the winning Powerball ticket in last week’s $30 million jackpot. Their email to their customer database is appropriately happy. That you can buy a ticket in the next draw in a couple of clicks direct from the email reinforces the ease with which one can purchase lottery tickets online.

As any newsagent selling a lottery ticket winning millions will know, it can dramatically increase sales. This $30 million connected with OzLotteries will boost their sales – especially with their excellent marketing.

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Lotteries

Elle off to a slow start

Elle, the new title launched by Bauer this week is off to a slow start based on the twelve newsagencies I have spoken with. each is promoting the title in two locations including one feature position. Three reported sales and nine none.  I suspect the launch media campaign is yet to kick in. Also, we received very little in the way of collateral with which to promote the title or place it on the shop floor – like the stands leading to the checkout that I saw in a Woolworths in Sydney Monday night.

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magazines

The world can’t get enough back scratchers apparently

Proving once again I am not my customer, these back scratchers are selling very well. We’ve had this box out for less than two weeks. While managing impulse lines is hard detailed work, the reward is excellent with good products selling out well in advance of when the bill falls due. This, a 50%+ gross profit and that the range attracts its own traffic makes the work worthwhile.

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Gifts

IPS / Speedimpex commercial alliance to help newsagents with magazine supply

Magazine distributors IPS and Speedimpex have today announced they have formed an alliance that will see IPS manage distribution of titles from both companies. This move adds 1,000 titles to the IPS stable.

Newsagents will have access to Speedimpex titles at the IPS commission of 27% plus they will have online control over supply.

This is a welcome move.

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magazine distribution

Stock turn benchmarks for an average newsagency

I am often asked for my thoughts on stock turn benchmarks for a newsagency. The list below is what I use as a guide when assessing a business. While there are some differences between city and country as well as between high street and shopping centre, these numbers are a good guide as to the minimum turn.

  1. Stationery : 7.0.
  2. Tobacco : 12.0.
  3. Gifts: 6.5.
  4. Plush: 8.0.
  5. Cards: 3.5.

Stock turn (or inventory turnover as it is known in some places) is a good measure in retail. I find it useful when assessing a business restructure. It guides space and stock investment allocation targeting an overall business goal. It’s a measure that an draw attention to an inefficient department or category of inventory.

The faster you turn stock the better.

It is easy to blame your supplier of under-performing stock or the stock itself. Retailers need to take responsibility in my view and work stock hard with ideal placement, appropriate product adjacencies, good staff training and excellent in-store and external promotion.

Most newsagency businesses I see that are not performing well have a low stock turn. One of the best ways to address this is to order stock using your computer system, based on accurate sales data. Too many newsagents complain that this is too hard. While hard work may be involved initially, this will cost the business less than the poor decisions of not ordering based in reliable business data.

Dead stock costs more than the money spent on the stock. There are space, labour and opportunity costs to consider.

Newsagents can compare their performance through reporting in their newsagency software or they can do a rough manual calculation.

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Management tip

2014 Phantom diary supply a waste

I early returned our supply of 2014 Phantom diaries because of poor margin, poor payment terms, high cover price (high cost to us of theft), that Phantom sales are low for us and our diary offer is full with high margin product we selected for ourselves.

We should have been invited to order what we wanted.

We did not top the product as we could have – we sent back full copies.

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Diaries

Promoting Great Bakes partworks launch

We’ve been promoting the  Great Bakes partwork on the lease line, facing into the mall and it’s been selling very well. Given the mess that is partworks supply in Australia we go out hard with the first issue – using the dump bin approach in the photo. This works, delivering a good return on the space allocated for the launch and deeper in the shop for subsequent issues.

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partworks

Promoting the AFL Grand Final Record

We’re promoting the AFL Grand Final Record at the front of the newsagency next to our Hallmark AFL cards and our AFL licenced beanie Kids. This front of store placement is to attract traffic from the mall. The placement of the record next to newspapers is to attract impulse purchases from our newspaper customers. Early indications are good.

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magazines

Bartel sale to Reject Shop forces us to discount calendars

Until the Reject Shop next to us put in the same range of low-cost Bartel calendars as us we were selling them at the suggested price.  As soon as they got their calendars, we had no choice but to price match. We discovered the considerable price difference between our price and the Reject Shop’s price when a customer pointed it out.

Had we known that Bartel was going to supply the reject Shop we would not have taken on this range.

Suppliers need to be transparent with us – otherwise we are not able to make fully informed decisions.

Once bitten twice shy as they say.

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Calendars

Has Bauer adjusted its newsagent magazine supply model?

We have been grossly oversupplied with Wheels magazine this month, an increase of 30% on the back of a low sell-thorugh. I noticed it Saturday and was going to call them today. But talking with newsagents yesterday at the ANCOL trade show in Adelaide many complained about gross oversupply of Bauer titles – Motor, Top Gear, AWW and Gourmet Traveller.

Different newsagents reported oversupply of different Bauer titles.  Five or six newsagents expressed concern. Their experiences coupled with my own make me wonder if there has been a change made in the Bauer allocations process. Something is broken and newsagents appear to be carrying the cost of this.

Given that Bauer owned Network Services takes a zero tolerance approach to returns credits and given that their accounts office acts quickly to cut supply to newsagents even though the company may have a security deposit, it does not apply the same discipline to its own dealing with newsagents when it comes to oversupply.

The sooner individual newsagents test this in a forum of authority the better.

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Ethics

Customers steal good gifts from magazine

The free SK ii facial treatment essence gift was missing from a copy of marie claire in a newsagency yesterday so I checked other copies.  None of the three copies of the magazine had the free gift.

It amazes me what gets stolen sometimes. The SK ii product is a premium gift, at the high end of magazine gifts with purchase. It would be interesting to track this type of theft.

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magazines

Sunday newsagency management tip: take your end of shift seriously

It frustrates me the number of newsagents I speak with who say their staff have trouble balancing at the end of shift yet they take no action to rectify the situation. I am usually met with a shrug of the shoulders and what can I do? question.

What you can do is provide leadership for your newsagency by respecting cash for what it is, the lifeblood of the business.

If your end of shift is not balancing here is what I suggest you do:

  1. Establish rules. Be clear in what is acceptable. I’d suggest $5.00 over or under as the boundaries.
  2. Outline what you expect. If the balance is outside the rules, put in writing what is to be done and demand that this is followed.
  3. Act on people who fail. From failing to balance to causing, during the day, problems for the end of shift. You want the best people working for you.
  4. Train. make sure your people have the skills to behave as you want.
  5. Enlist help. Call your newsagency software company and ask them to review your data. Not balancing may be because of misuse of the software. It may also be due to employee theft. No matter what the cause, your software supplier ought to be able to help you with a plan of action for your specific situation.

Balancing at your end of shift is a serious matter. Ignore it and the cost to your business could be considerably more than the few dollars you appear to be out every day or so.

I was working with a newsagency recently where one employee offered up different excuses a couple of times a week for the cash being out. Over time the pattern showed they were either stupid or stealing. Either way, the only option for the business was to cut their hours.

This is serious.

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Management tip

Sunday newsagency marketing tip: embrace sports finals

With winter sports finals in full swing at local and state levels, now is an ideal time for newsagents to show their colours to both support local teams and to show customers and passers-by how we can help them show their support for local teams.

From crepe paper to cardboard to balloons, newsagencies are the go to places for showing team support. But we need to promote this more.  The key to making this work for your business is to show off your engagement – in supporting a team and in showing what you have to sell and maybe the services you provide.

The newsagency channel can promote sports team support far better than the major retailers. This is an opportunity for the newsagency channel to shine. Show people your local credentials and why they should shop with you.

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marketing

Newsagency management tip: quit stock seriously

Harmony Bracelets have not worked for us. While we have sold 35% of our stock, the rest has sat for close to two months. This morning I made the decision to get out of the remaining stock this weekend and put the $9.95 bracelets on sale at $1.00.  Now, less than three hours in they’re selling very well. We should be done by the end of tomorrow. This frees floorspace for us, giving us an opportunity for a new product story.

Too often I see newsagents hold onto product for the sake of hoped-for margin in the future rather than discounting and taking the cash today. Okay so we have lost money on the bracelets. The loss I am realising today is less, I suspect, than the loss because of non-performing product taking up floorspace.

You can’t bank margin from products that don’t sell.

So, when I decide to quit an item I set pricing for it ti actually sell out.  The usual starting point is between 33% and 50% off. next is 75% and finally we move to a $$ price point. In the case of the Harmony Bracelets, their recent performance was such that I felt I needed to go straight to the $$ price point. hence the $1.00 price. It is also helping that school holidays have just started.

One customer bought 14 bracelets.

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Management tip

How to avoid a dispute over your magazine returns

Here is magazine returns packaging advice I published here in July 2012 in a post called How to avoid being fined by Network Services.  I wrote the post after hearing from several newsagents about claims against them by Network Services about magazines not being returned to the Network warehouse.

This advice remains best-practice advice today:

How to avoid being fined by Network Services

Magazine distributor Network Services operates as victim, prosecutor, judge and jury in the handling of disputes arising from magazine returns.  While they will say that statement is unfair, it is how it is.  It is how newsagents who have experienced a dispute often feel.

While I have seen Network act fairly in some situations, I have also seen them act unfairly in others.  The frustration felt toward their handling of disputes is magnified since they relate to products over which newsagents have very little control thanks to the push model of magazine distribution in Australia.

Here are my suggestions for newsagents to be better able to deal with a magazine returns credit dispute:

  1. Make sure that you understand and carefully follow the current Network process for packaging and shipping returns and returns forms.  Do not ask another newsagent what the current process is, ask only Network. Get it in writing.
  2. Keep a copy of all forms, emails and other documents relating to returns in a separate date-sequenced file for Network.
  3. Create a log of returns shipping activity noting the date you sent returns, the courier used, number of packages and the name or the person who completed the returns at your end.
  4. Photograph each Network returns package – clearly showing the label.
  5. Get a receipt from the courier you use to deliver your returns to Network.
  6. If you deliver the returns yourself, take a photo of your packages before you leave the distribution depot.
  7. Make notes about any phone call relating to returns.  Include the full name of the person you spoke with plus the date and time.

The better you are able to prove what you did and when in the event of a dispute the faster the dispute will be resolved.

The process outlined above will also show some newsagents mistakes which led to credits being denied.

I urge newsagents to print this advice and train their employees to follow it for Gotch and Network returns.

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magazine distribution

Good to see ANF engaged on supermarket duopoly

It’s been good to see the ANF listed as one of the industry associations supporting the Australian Retailers Association campaign against the fuel discount programs of the Coles and Woolworths supermarket duopoly. It’s good they are holding the new federal government to account for their election promise about the supermarkets.

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Uncategorized

Promoting Astro Diaries from Universal Magazines

I’m pleased we took the floor display unit of 2014 Astro Diaries from Universal Magazines that I blogged about recently. We have the unit on the shop floor between the magazines and newspapers and the sales counter. We also have stock placed with our other diaries. I like the product because it feels worth the $19.95 price, is a newsagency channel exclusive and should sell for us.

5 likes
Diaries

Speedimpex devalues magazine covers with its stickers

International magazine publishers using airfreight magazine distributor Speedimpex ought to check where they are placing their promotional stickler on magazine covers.  Six different magazines I checked in a newsagency yesterday each had the stickers placed such that it was hard to tell the cover subject – devaluating the cover as a sales tool.  Nuts!

10 likes
magazines
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