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

Author: Mark Fletcher

Negotiating greeting card company rebates

Rebates from greeting card companies are important to newsagents.  They can range from a few percentage points to above 30%.  They can significantly enhance the return from the card and wrap department.

Newsagents need to take care when negotiating greeting card rebate arrangements.  they need to read the fine print and understand the full implications.  here are some questions worth considering:

  1. Is the rebate paid if you are late paying any account?
  2. What is the rebate paid on?  One card company I know does not pay a rebate on related (non greeting card and non wrap product).  This makes that company worth less than companies which pay a rebate on all or most other product.
  3. When is the rebate paid?  One company I know pays off invoice – i.e. immediately.  others pay quarterly or annually.  the difference from a cash flow perspective can be considerable.
  4. Does the rebate reduce for any other reason – if you receive funding from a card company for example?
  5. Is there a sales target you must reach to achieve a rebate?  If so, what happens if you do not reach the target?
  6. Does the existence of the rebate agreement lock you into space allocation and other rules which could impact on the business?
  7. What is the term of a rebate related agreement and what are the implications of early termination?
  8. How does the rebate agreement play out should you sell the business?

My point here to newsagents is to carefully consider all terms and conditions relating to a greeting card rebate agreement.  Do your research.  Ensure that the agreement suits your personal and business needs.  Talk to other newsagents to ensure that what is on offer to you is fair for your business and the investment you will make with the card company.

The goal has to be a fair and equitable relationship between your newsagency and your greeting card supplier, a relationship where both businesses win.

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Greeting Cards

Master Chef stock availablity

Kudos to News Magazines for working to ensure aditional stock availability of the launch issue of the Master Chef magazine.  Plenty of newsagents have ordered extra stock and while supply was a challenge earlier in the week. stock was flowing yesterday.

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magazines

Even overseas food magazines sell well

uk-food-titles.JPGWe have a good range of overseas food magazines.  All are selling well.  Take easy cook magazine from the UK – we receive four copies and average sales of three each issue.  This is a good result by any measure.  I like the overseas food titles because their content offers a point of difference over Australian titles.

While in terms of overall sales volume the overseas titles account for less than 10% of total food magazine sales, carrying them makes us more of a specialist destination for food titles over other retailers selling magazines.

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magazines

June 7, Ipad day

Okay, the iPad is ordered and the delivery day is set for June 7.  The next step is to finalise the 3G plan (probably Telstra) and sort out a few content subscriptions.  I’ll certainly sign up for a subscription to The Australian as that appears to be the most iPad ready newspaper in Australia.

I am looking forward to wholeheartedly embracing this new device – not for a day or two but for the long term.  I want to see what difference it brings to my work day as well as to my consumption of news and information.

Heresy I head some say!  Well, maybe.   I expect this device to be a game-changer but that is only based on what I have read.  I need to experience it myself before I understand the opportunities and the risks for Australian newsagents. So, I have taken the plunge and placed the order.

PC Magzine has just published an Australian iPad buying guide.

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Media disruption

The $50 ethical dilemma

We were offered $50 to allow someone to weigh packs of AFL collector cards (not the newspaper cards) so they could find packets with premium cards and buy just these. Premium cards weigh slightly more than regular cards.

We said no thanks as we felt it would be unfair to our regular customers, the kids who will buy more than a thousand packs over the season. They save to build their collections and hope to get one of the premium cards.

While not one of life’s big ethical dilemmas, it is an interesting question – what price to veer off one’s moral compass.

There will be some who are happy to take the $50 and allow the boxes to be weighed and purchased. It’s a completely personal decision. That said, if we put our customers first then we have to say no to the $50.

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Ethics

Promoting Weight Watchers magazine

weight-watchers-may2010.JPGWe are promoting the latest issue of Weight Watchers magazine with an in-location display.   While we would usually successfully promote this at the counter, I wanted to see how the title performs with this type of display.  I want to educate shoppers as to this regular location.

We also have two pockets of Weight Watchers magazine located in with the weekly magazines.

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magazines

Promoting Top Gear magazine

top-gear-may2010.JPGEven though the latest issue is a week old, we have created a small display at the end of the men’s magazine aisle for the latest issue of Top Gear.  With Top gear being the top selling title in the category, the small display acts as a beacon for car titles and a last minute reminder for people leaving this aisle and heading to the counter.

We will leave this display up for at least a week – as long as stock permits.

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magazines

Herald Sun production problems

The production problems with today’s Herald Sun newspaper meant that we did not receive any newspapers until 9:15 this morning.  What was most interesting is the number of new customers who visited between 7am and 9am.  These were people who usually bought their newspapers from the supermarket.  At least we offered customer service, explaining the production problem and providing an availability time esitmate. I gather that the supermarket employees were unhelpful.

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newspaper home delivery

Tuesday sales for Master Chef magazine

Based on a small sample group of 12 stores, sales for Master Chef magazine appear to have been patchy yesterday – very low in some (1) and good (8) in others.  What is interesting is that the stores with stronger numbers had weaker Monday sales.

While somewhat unfair since they are from two different categories, I am comparing the performance of Master Chef  to Prevention last year. The launch budgets were similar (if I recall correctly).   Prevention had a stronger first day and follow up on day two.  More of the launch budget was spent in retail, particularly newsagencies.

Based on what I have heard from newsagents, I suspect that a review of the launch will show that inadequate retail marketing collateral and scale out mistakes held the first issue back from reaching its potential.

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magazines

Promoting Prevention magazine to women

fhn_prevention_may1010.JPGWith all the magazine promotional activity around at the moment we decided to reposition our Prevention magazine offer.  We now have it facing shoppers as they leave our card aisle and head toward the counter.  Given that most card customers are women I expect Prevention to work well for us in this location.  This location is on the side of our newspaper stand – a side we have not used much previously.

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magazines

Battles of World War II

battles_of_world_war_ii.JPGWe are promoting Battles of World War II, the new part series, in two locations to make the most of the opportunity.  We have a good war / combat section with magazines and books so it fits in well there.  We also have it in our partworks department – a good display across the back wall.  It will be interesting to see how this part series goes as it is quite different in that the reader is not building something.

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magazines

3D bunnies

Associated Press is reporting that the US issue of Playboy magazine which goes on sale this Friday will have a 3D centrefold.

This is the year of 3D with magazines offering glasses for TV shows, 3D movies everywhere and now a 3D Playboy centrefold.

Gimmicks are fun and can deliver a sales lift.  However, sustained above average performance is based on the product itself.

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magazines

Master Chef magazine off to a good start

The launch issue of Master Chef magazine performed well yesterday in the newsagencies for which I have received sales data.  Sell-through ranged between 15% and 36%.  There was a good mix of shoppers looking specifically for the title and those who happened across it while looking for something else.

The result is good given that the latest issue of Good Food magazine was released yesterday with considerable promotional support from ACP Magazines.  Competition is healthy!

The only complaint with the launch I have heard is insufficient marketing collateral.  I’d be interested to see the percentage of the launch budget invested in in-store collateral.  Given the foot traffic in newsagencies, this is an opportunity not to be missed.

Yesterday’s performance of Master Chef puts it close to that of the launch of Prevention magazine last year – except that Pacific Magazines did a better job with marketing collateral.

I’d expect some newsagents to be chasing more stock of Master Chef magazine by the end of the week based on the sales numbers yesterday.

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magazines

Newsagents negotiating on workplace changes

In another example of the high cost of rushing changes, representatives of the federal government are working with newsagents and their representative bodies to overcome problems caused by the workplace changes introduced earlier this year.

I don’t know who is to blame for the changes which looked set to significantly increase newspaper home delivery costs and make many casual employment arrangements untenable for newsagents.  That said, it was a government initiative and so the government must be responsible for the months of uncertainty and stress for many newsagents and their employees.

The resolution which is ultimately negotiated ought to have been put in place prior to making the changes.  Had this been done, considerable time and money could have been saved.

Governments have an obligation to get it right.  They keep telling us how hard they work for us – maybe they could show it by not introducing problems.

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newspaper home delivery

The test for the iPad fast approaches

Apple has set prices and the launch date for the iPad.  The next three weeks will show whether the hype for the iPad translates into sales here. Apple says they have sold more than 1 million units in the US since its release five weeks ago.

It is only once publishers see the interest here (cash over the counter) in the iPad and other similar devices that they will make a decision on investing in the new distribution channel.  Many today say they are working in the area but for most this means waiting for hardware sales data and watching closely what US publishers are doing.

News Limited is the one local publisher with a strong public position on the iPad.

I’m looking forward to getting an iPad and experiencing it first-hand.

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Media disruption

Promoting World Cup magazines

fhn_worldcup_counter.JPGWe are promoting Soccer International Magazine’s World Cup 2010 program at the counter this week. While sales have been okay from the location with other World Cup titles – in the men’s magazine aisle – I wanted to see what could be achieved with a counter display.

We are still developing our broader World Cup campaign so guidance from the success of this title will help in the next few days.  The display is situated near the World Cup trading cards.

Since we did not have any collateral, we went with a black and white copy of the cover as the backdrop.  It looks more effective in person.

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magazines

Famous magazine with newspapers

fhn_famous_may10110.JPGWe have found that Famous magazine sells well on impulse with newspapers – hence the small stand we setup yesterday morning to run for a couple of days this week.  This simple display using a copy of the front cover works well with a few titles so we try and give fair representation to publishers with the space.

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magazines

Promoting Woman’s Day and OK! for $6.95

fhn_wd_ok.JPGWe are promoting the bagged Woman’s Day / OK! magazine $6.95 offer at two high traffic impulse locations – on the unit shoppers pass as they leave our busy women’s magazine aisle and at the sales counter.

We chose to not place this offer next to Woman’s Day since we did not want to pitch it to our regulars for that title. I see this as a value proposition and therefore more likely to appeal to a different shopper.

While we are supporting this and other value promotions, I have to note that I am not a fan.  I don’t want to educate customers to not pay full price for magazines.  That said, I understand that other retailers like the offer and so feel somewhat compelled to support them.

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magazines

Launching Master Chef magazine

masterchef_magazine_may2010.JPGAlong with newsagents and other retailers across the country, we are launching Master Chef magazine today.  We have placed a display stand next to our main newspaper stand.  We also have stock of the magazine in with our food titles as well as in the food display with our weekly magazines.

Interestingly, Master Chef was the first magazine we sold this morning – someone came in specifically to make the purchase.

We were limited in the space we could allocate to our Master Chef display since the publishers only sent one poster plus the stand.

Publishers who want to promote magazines need to send all supporting collateral with the stock or before.  If they rely on a merchandiser to bring collateral when they visit, space is usually already allocated.

I am not sure if there is a connectuion but our supply of Good Food magazine from ACP was significantly cut today – still more than we would expect to sell but it is the first such cut I have seen for the title.

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magazines

Obscene bank profits offend small business

The high bank profits being announced since the global financial crisis are obscene.

While many individuals and businesses are struggling, the profits being made by the banks are soaring.

In my work with newsagents I hear almost daily of the challenges of dealing with Australian banks: overdraft fees have increased dramatically, bank guarantee fees have increased exponentially and fees for basic services have also increased significantly.

Take bank guarantees. These are important to newsagents in shopping centres. Landlords require security and the bank guarantee was a good mechanism for providing this without having to deposit the cash – you could secure the guarantee against the business. Now, the banks either want the cash or if they do take the business as security fees I have seen are eight to ten times what they were.
Newsagents relying on bank funds and services are facing considerably higher costs and higher reporting and compliance demands today than two years ago. In some cases I have seen, the increase in bank related fees has been has high as twenty times.

On top of the extraordinary increase in fees, most banks have changed their rules as to security required for funding. This has seen some newsagents have to refinance elsewhere.

The banks are happy to do deals for our over the counter EFTPOS business yet gouge us for other transactions – especially in the light of the amount of small business friendly advertising they do.

The gouging by banks of newsagents and other small businesses is a reminder that cash is king. This is the way to push back. Rely on them less. While that may sound naive, it is the best step we can take to cut our bank fees and send them a message, Use them less and hurt them where it counts.

Further reading:

Why banks are failing australia.  smartcompany.com.au. Robert Gottliebsen provides an excellent insight into the bank problem faced by many small businesses.  Excellent reading!

How banks are using the GFC to cover up goughing.  news.com.au.

Westpac can bank on fury.  heraldsun.com.au.

Banks pounce on interest rate hike.  abc.net.au.

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Newsagency challenges

Riding Justin Bieber mania

justin-beiber-fanzine.jpgACP has published Justin Bieber Fever today, an A4 16 page collectable. This will appeal to the tween girls who love Justin Bieber and make up much of his fan base. We will further capitalise on Justin Bieber Fever by promoting presales of the Justin Bieber 2011 calendar.  To cap off and further leverage the Bieber mania, our in-store radio, newsXpress radio, is playing one of his songs on reasonably high rotation.

We will have Justin Bieber Fever at the counter as it’s something parents could buy for their kids.

This title is a great example of the need for us to pay attention to new products.  Some people will put this title out tomorrow in the teen section without realising that it’s an excellent impulse sale opportunity.

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magazines

Mother’s Day rush

mothers-day-rush.JPGIt’s kind of fun watching Mother’s Day shoppers on Mother’s Day.  They are short of time, often stressed and prepared to buy almost anything.    And so it was today, this morning at least.  Great card, book and gift sales again today.  Your see the occasional shopper which is grumpy that you don;t have a bigger range available.  Most know they have left it to the last minute.

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newsagency marketing

Hallmark Mother’s Day TV commercial drives traffic

The Hallmark Mother’s Day TV commercial has worked well. Many people came into my newsagencies asking if we had them. Some asked by the Hallmark brand and others asked if we had the cards which recorded your voice. Plenty of people asking were not regular customers.

One customer in particular was interesting.  He was kind of panicked.  He had to get one of these cards – because his mother loved the TV commercial.   He wanted one of the recordable cards.  He’d been to a major retailer and couldn’t find it and they offered little help. We helped him.  Once he had his card he bought a roll of wrapping paper, a newspaper and book.  Not a bad sale for a new customer – hopefully the experience he had will bring him back.

Those I personally served I asked how they heard about them. 100% responded they saw them on TV. Having shoppers come in and specifically ask for a product you sell is wonderful. Thanks Hallmark for driving this traffic.

We set ourselves up to leverage the TV commercial opportunity by including Hallmark products in monthly newsletters and other marketing collateral.  Connecting our brand to theirs helped link us to their Mother’s Day TV campaign as well as to their campaigns planned for later this year.

While I am sure that newsagents without Hallmark cards had good Mother’s Day sales, it is the new traffic which we saw in my newsagencies, as a result of the TV commercials, which has provided us with a point of difference this year.

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Greeting Cards
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