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

Author: Mark Fletcher

Survey reveals level of newsagent unhappiness with mobile phone recharge commission

The results from my quick phone recharge survey are in and while one could reasonably argue my survey questions were leading, the results from 137 participants make sobering reading for Optus, Vodafone and Telstra.

I hope the telcos take time to read what newsagents think and what they want. They would be ill-advised to ignore the results.

Newsagents want a better deal when it comes to phone recharge.  100% of respondents said they were unhappy.

Newsagents think the telcos treat them unfairly.  99.3% said they felt unfairly treated.

Newsagents are prepared to walk away from from offering the slim margin service unless margin improves. 31.1% say they plan to move away from selling mobile phone recharge / top-up.

Newsagents want to make more money from mobile phone recharge.   18.2% said they want 8% commission minimum, 28.4% said they want 9% – 10%, 19.3% said they want 11% – 14%, 29.5% want 15% to 19% and 4.5% want 20%.

Click here for a full copy of the survey results and see for yourself.

The question is, are the telcos listening? Will they show that their words of support for newsagents are real or will they show them as hollow?

The only parties the telcos need to deal with are newsagents and their commercial representatives. I’m told they are talking with associations. This makes no sense as the associations have no direct commercial relationship with newsagents. The associations are not marketing groups, franchisors or managing any levers with which to encourage newsagent engagement.

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Newsagency challenges

Slow Cooker 3 selling better off-location

FYI we are having more success selling the recently released Slow Cooker 3 away from our cookbooks, on the shop floor outside of the magazine department itself, than in the usual location for our range of cookbook titles. We’re using the Bauer basket builder stand for this.

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magazines

Sunday newsagency marketing tip: shoppers love positive products

Thanks to good buying by many newsagency suppliers we have access to an excellent range of positive products – products that promote happiness, optimism and generally positive messages – like the signs in the photo.

When we first got them they sold out in just over a week.

Now, with more stock, we are using them at the front of the newsagency on the lease line to attract shoppers from in the mall. It’s terrific seeing people notice one of the messages and walk over to browse the range. I am certain we would not get as many in the newsagency if the messages were not as optimistic.

We took care to place the signs so that strong positive messages stood out. A small amount of time invested helped us achieve our goal.

We have no doubt – shoppers love positive, optimistic, products.

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marketing

Sunday newsagency management tip: clean up as if your business is for sale

Housing real estate agents provide good advice to people selling their homes: clean it up, fix up obvious problems, remove rubbish, make the home look appealing.

Many retail newsagencies could benefit from following this advice … it’s my management tip today.

Clean out the junk in the shop, the back room and behind the counter. Anything you don’t use should go – give it away, toss it out. Make the business leaner, cleaner and fresh, make it more appealing.

Businesses burdened by years of junk building up and not being used can be a turn off for shoppers and employees. Often, you won’t see the junk until you go to move or close the business.

Pare back and feel good about losing the weight.

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Management tip

Newsagents being pressured by Optus

I’ve had several newsagents and people from one of my own newsagencies tell me that the calls and visits from Optus trying to get them to sign up to sell Optus products in-store are pressure-focuses. They don’t take no for an answer. Nothing like the Jenlist relationship at all.

As well as product and marketing ideas, newsXpress shared discount product opportunities for newsXpress members from some of our preferred supplier colleagues – providing even more opportunities for raising average achieved gross profit through the winter months.

 

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phone recharge

Are newsagency suppliers not up for a debate?

While I applaud News Limited for commenting on my recent blog posts here about their move to add a 80 cent surcharge to each copy of The Advertiser they deliver to select parts of regional South Australia, their comments reinforce a view that newsagent suppliers don’t like it when newsagents publicly disagree with them.

I regularly hear about suppliers disagreeing with something I have written here. I’m often told by someone inside the supplier’s business. When I suggest they comment publicly the response is often – they don’t want to legitimise your blog post.

We, newsagents and suppliers, need to be able to disagree and debate publicly for it is only through robust honest discourse that we can have a hope of finding some fair and just common ground.

Newsagents and suppliers don’t have to like each other, we don’t have to be friends. We need to respect each other and be fair in our dealings with each other.

Hiding debate, keeping it confidential, stifling it or restricting it to behind the back carping only serves the person or business engaged in that.

While I don’t care what people think of what I write, hearing about complaints behind my back makes me sad as that very act is a demonstration of a lack of interest in engaging on the topic.

Newsagent suppliers genuinely interested in the future of our channel can show this by welcoming debate with newsagents and engaging in public debate and discussion respectfully, seeking genuine common ground.

News has at least commented here and for that they deserve credit. That they have ignored the core issues and have used their comments to spin the issues is frustrating and does not serve their cause well.

All this leaves me with the question – do newsagency suppliers not want to publicly debate key issues with us?

NOTE: Any supplier is welcome to comment here at any time. Once the first comment is made all future comments are unmoderated.

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Newsagency challenges

Art of Crochet selling out

Our sales of the reissue of Art of Crochet have been excellent. We’re not alone. I’ve spoken to plenty of newsagents this week who are reporting the same thing – the launch has been excellent and many newsagencies are sold our and scrambling for more stock.

The TV campaign has been for more successful that I or plenty of others expected.

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partworks

Getting interactive products together

With more and more interactive products coming into our stores we need to place them together as they speak to the same customer. This is what we do as the photo partially shows … I could not get all the interactive products we currently have in the shot.  Grouping everything tells a better story, it says you own this interactive gift space.

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Gifts

Double standards in News Limited South Australian move

In a statement on May 15, News Limited explained why they are introducing an 80 cent per copy surcharge (Monday to Friday) to the delivery of newspapers to newsagents in selected areas of South Australia.  This statement included:

We aim to continue to deliver newspapers to all areas of South Australia. However, News Limited has been subsidising a number of loss-making routes for many years. For our West Coast and Kangaroo Island routes, we now lose a significant amount of money on every paper we sell. This has become unsustainable and so in order to continue to deliver our newspapers when and where our consumers want them, we have been obliged to add a freight surcharge.

This statement is from a company that has for decades denied newsagents the right to charge an equitable price for the home delivery of newspapers. Despite irrefutable evidence that many newsagents lose money on home delivery, News has, for decades, denied increases in home delivery fees to a level that make them break even let alone profitable.

News has, through its denial of a fair fee for service, forced newsagents to subsidise the home delivery of its products through subsidisation by small business newsagents.

This is the double standard evident in the latest move in SA.  The company says it needs to charge the fee to create for itself a sustainable model.  If it’s good for the company why has it not been good enough for newsagents?

Okay, the T2020 sessions last year said the company got it and that it understood newsagents needed to be profitable. But what’s happened? How quickly is it moving? The best way it could show good faith with distribution newsagents would be to deliver an immediate increase in home delivery fees to an equitable level, so newsagents did not have to subsidise this activity from their own resources.

What are distribution newsagents doing about this?

Thanks to agitation from a local MP in SA this issue is gaining more attention in the media – including coverage by the ABC. I’ve just done a radio interview on SA radio about the topic. Hopefully, this attention will get News more fairly engaged with newsagents.

I know from prior contact that News would prefer me to raise the matters canvassed here with them and not here. I think the issues raised here are issues for all newsagents. They go back decades. The only solution is for News to immediately permit newsagents to do what it is doing itself – to charge a fee that reflects the actual cost to the business of providing a service.

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newspaper home delivery

Woolworths shows how to quit ink

A colleague sent this photo from their local Woolworths showing ink that was priced at $29.99 now available for $6.00.

Beyond the pleasure for the newsagent of seeing Woolworths not been able to sell the ink within the shelf life, this photo shows Woolworths quitting stock at below cost price, taking action to move dead stock.  I mention this as newsagents often ask me about when to quit non-performing stock and how to go about this.

My approach to quitting stock is to let the customers show what the discount price needs to be to move unwanted stock even if it’s offered for free. Moving stock from the shop becomes more important that it sitting on the shop floor and taking space.  Once we decide to quit an item I want it gone within a week or sooner.

But back to the ink. Woolworths setting a price of $6.00 is interesting. This is easier for shoppers than, say, a % off or even the term – half price.  People looking at  cartridge can see that it’s $6.00 – no doubt about that.

It’s important we have a clear strategy for quitting stock in our newsagencies – including knowing how we will show the discount to our shoppers.

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Newsagency management

Snakes in the shop

We have been having fun locating this free standing floor unit packed with plush snakes in various places in our newsagency.

This easy to move unit is perfect for displaying these snakes.  We have had the unit at the front of the shop and mid way down – in each situation attracting engagement. People don’t come to us looking for a snake. Interrupting movement in the shop is all about driving impulse purchases.

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Gifts

Promoting World of Knowledge

The team at one of my stores has kicked up support for the next issue of World of Knowledge.

Thanks to some cool collateral they have gone for a vertical and horizontal promotion in-location. This is situated so that it can be seen by anyone walking down our main magazine aisle.

This type of title is very strong in the UK. I hope we can grow the category here.

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magazines

Bauer discounts TopGear at 7-Eleven

The 7-Eleven Facebook page is promoting TopGear at $6.00 – $2.95 off the usual price.  The deal is also being promoted on various websites that list deals and discounts – such as OzBargain.

This 32% discount shows 7-Eleven as a place for magazine deals – better than newsagents.

I would not be surprised if Bauer and 7-Eleven have negotiated a rebate based on sales to top up lost margin dollars – so 7-Eleven would be no worse off. However, I have no specific knowledge of this.

I am not happy about this deal. Newsagents account for more sales of magazines for Bauer than any other single channel. We should be offered cover price deals like this with backend rebates to protect margin dollars.

We have to ask – why is Bauer boosting the smaller 7-Eleven channel with a 32% off deal ahead of newsagents?

Here’s an announcement about this promotion that fell my way yesterday:

TopGear Australia has partnered with 7-Eleven in an Australian magazine industry first.

The innovative marketing partnership allows TopGear fans to download an e-voucher to their desktop, tablet or mobile phone from 7-Eleven’s Facebook page.

The voucher can then be presented at any 7-Eleven store, and guarantees purchase of a brand-new issue of TopGear Australia for just $6 – a saving of $2.95.

The promotion is the brainchild of TopGear’s web and news editor Dylan Campbell and was implemented by marketing guru Georgia Mavrakakis.

The voucher has been shared across TopGear’s 84,000-strong Facebook fan base, along with 7-Eleven’s 506,000 Facebook fans.

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Ethics

Robo Fish a terrific counter promotion

We’re promoting Robo Fish at the counter with this simple fish in the bowl display.

The supplier thought of everything giving us what we needed to set this display up in a small amount of space and to make the product look compelling for shoppers at the counter.

This is a terrific fun product and brings smiles to the faces of shoppers – I love that since even people not buying this get enjoyment from seeing the fish swim.

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Counter offers

Mobile phone recharge survey for newsagents

I have prepared a quick four-question survey for newsagents on selling mobile phone recharge. You can participate in the survey here. I created the survey because of the increasing number of newsagents I hear saying they will quit the product category given falling commission.  I’ll publish the results here.

In 2005 I wrote here about  a copy of a Vodafone mobile phone recharge invoice for a major supermarket showing their commission was 16% while for newsagents we were on 5%.  I suspect the difference between what supermarkets get and what we get continues.

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phone recharge

How the changing fashion ‘magazine’ can impact newsagents

I have been following a number of online and App startups in the fashion space, watching how they are connecting with readers interested in fashion and how they are providing an alternative to print fashion magazines.

Since magazines exist solely as a delivery platform for advertising, connecting with shoppers and monetising their enaggement is a holy grail for sites and Apps.

Monogram is an interesting App in this space.  It leverages the understanding and concept of magazines, collating content into magazines interesting to different shoppers. Monogram also encourages contributions to the magazines. The description of how it works is simple:

Monogram is a collection of fashion magazines created by the community. It’s a place to share your fashion stories and inspirations without having to start your own blog or building an audience. If you already have a blog, Monogram is a community to help you extend your reach.

Beyond our oversupply and undersupply challenges, beyond other retailers selling magazines and often getting trading terms that give them a competitive advantage, beyond Apps created by national and international magazine brands, there is considerable disruption from businesses like Monogram that more directly connect shoppers with common interests.

Leveraging the global interest in and engagement with crowd sourcing and using social media skills, among other techniqies, Monogram is building a following and helping people engage in their interest in fashion away from print magazines.

Newsagents need to be aware of trends such as this as we plan for our businesses. The world is changing beyond what we see in front of us and in our immediate community.  The more we understand this the better informed our business plans are.

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magazines

Selling cards for International Father’s Day

We are promoting a small range of cards of International Father’s Day on a stand facing into the shopping mall.  We are doing this promotion off-location since we suspect shoppers in the centre who could purchase such a card will not be in the centre looking for one.

Newsagents have an opportunity with minor card seasons like this to reinforce our position as the go-to retail channel for all greeting card purchases. That’s what we are doing placing this display on the lease line facing into the mall.

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Greeting Cards

Is this why newspaper publishers don’t use retail newsagents to grow OTC sales?

It struck me this morning standing in line to order a Bacon and Egg McMuffin in Sydney for a breakfast on the go that in front of me was a key reason newspaper publishers virtually ignored retail newsagents to drive over the counter newspaper sales.

Newsagents can’t offer the same value proposition as, say, a McDonalds. McDonalds advertises in the newspaper, it has products that can be bundled with a newspaper and thereby deliver access to the newspaper for almost nothing yet record it as circulation.

I can see that a newspaper ‘sold’ through McDonalds with a meal bundle is more valuable and rewarding for a publisher than a newspaper sold in a newsagency at full cover price. They would think that the McDonalds ‘sale’ is more certain and can be budgeted for. The advertiser probably makes this point too.

Since we don’t have fuel, burgers, suagry frozen water drinks or many other highly sought after daily purchase items that we control with which to bundle newspapers we will not be the focus of attention of newspaper publishers. I suspect we represent the old-school approach to newspaper retail they maintain because they have to and not because we represent what they see as future.

I wish newspaper publishers would give retail newsagents a go. I am certain that retail newsagents can grow newspaper sales through genuine partnership with newspaper publishers.

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Newspapers

Rocks Gems & Minerals partworks reissue?

Like many newsagents I suspect I was surprised to see the Rocks, Gems & Minerals partwork reissued yesterday – even though it did not look like a reissue thanks to new packaging and National Geographic branding. I don’t remember it looking like this last time around.  The stock code in the EDI file points to the previous issue so this is connected to the previous rocks title we received.

72 copies, that’s what we received in one of our stores.

What do other newsagents think?

If we had control of our ordering, we’d have asked for 30.  here’s what galls me and, I am sure, most newsagents. We have to pay to return the unsold stock. We are penalised for a poor scale out decision, we have to pay for someone else’s mistake. It’s a disgusting impost on any business let alone small business newsagents at the end of the magazine food chain.

And magazine publishers wonder why some newsagents are actively and openly discussing exiting the category altogether.

Supply is the problem. It is drowning the newsagency channel and no one in authority appears prepared to do anything about it.  The result will be even more magazine sales lost from the newsagency channel to supermarkets.

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magazine distribution

Red Nose Day charity well-loved

Of all the charities we support at the counter and elsewhere in the business, the Red Nose Day support gains the most attention and engagement. It’s well known, easily understood and appreciated.

While I have said here many times that the counter today has to be about high-margin (above 25%) product, we do schedule in space and time for charities we care about. Red Nose day is one of those charities. I especially like it as we choose to participate rather than having it sent without reason or connection to us.

If this year is like other years we’ll move all the stock in a couple of weeks.

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Social responsibility

Rolling Stone brand front and centre

We have spread the Rolling Stone brand, in three magazine titles, across the best shelf in our music section as we feature the Bob Dylan one-shot, the Led Zepplin one-shot and the regular monthly magazine. Our commitment is to maintain this full face placement for the next two weeks. We’ll give the Dylan title a run with newspapers at the weekends – given the shoppers we typically see then.

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magazines
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