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

Author: Mark Fletcher

How much do newsagents make on lotto?

How much do newsagents make on lotto? is another popular question people put to Google through a search. Indeed, there are at least 50 searches every day in Australia for this.

The short answer to How much do newsagents make on lotto?  is … not much.

The actual percentage varies by type of product and location. That said, it is less than 10% out of which the newsagent has to pay for:

  • Retail space. With lottery counter space and related requirements taking 15% – 30% of retail space and leases costing $50,000 in high street and $250,000+ in shopping centre situations, the cost can be high.
  • Labour. The average hourly cost is $24 Monday to Friday and around $45 an hour on Sundays.
  • Some technology.
  • Insurance. This can cost several thousand dollars a year.
  • Operating overheads like power.
  • Ancillary costs such as cash holding for prize payouts.

For many newsagents, having lotto is good as it provides a base core traffic to the business. Smart retailers leverage this traffic for other purchases. However, this is challenging as there are strict rules newsagents have to follow as to what products they can put where. They are not allowed to create a barrier to lottery product purchases.

The real drivers for what newsagents make from lotto are labour cost and rent cost. Newsagents who can control these to minimise costs of both while maximising sales are in the better position. There are plenty able to do this.

In many newsagencies with lotteries, they have staff dedicated to this service. This means they are not able to maximise the labour cost by selling more expensive and better margin products. Lottery customers want to be served quickly. hence, the need for the lottery counter to be staffed at all times. Customer service is a key reason people purchase lottery products in a shop.

So, in answer to the question How much do newsagents make on lotto? I am not saying it is nothing or bad. Rather, I am sharing that there are real business costs that eat into what newsagents make from lotto and that it takes astute and attentive business management to maximise the opportunity while providing the level of service key to growing revenue.

Not all newsagents have lotto in their business and lotto is often available in retail businesses other than newsagencies.

The best customer experience with lotto is over the counter, being served by a human, someone knowledgeable about the games and able to have a chat with you. This is personal customer service newsagents are known for.

Note: I own Tower Systems, newsagency software company.

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Lotteries

How to become a newsagent

How can I become a newsagent? This is an interesting question that close to 100 people type into Google in Australia every day.

If you want to open a newsagency business, you need to organise supply of newspapers, magazines, lotteries (if you want those products), stationery, greeting cards and anything else you want to sell.

There is no one place to do this. The relationships is the list, lotteries, newspapers, magazines etc. are supplier driven. There is a formal approval process to go through, often requiring some form of financial security.

It can feel daunting if you are going it alone.

If you join a group they may help you navigate the processes. Update: I’m the owner of the newsXpress newsagency marketing group.

The training process, too, is broken in that lotteries has their training requirements and if you are in this category then their training will be the most important.

For me, I think that it is what you do outside what has been traditional for the newsagency channel that matters since those categories are where you will get most future growth and GP%.

So, if you are looking to open a newsagency business or convert your business into a newsagency my advice is to research fully the product categories you wish to offer and talk with the suppliers to see if your location and business suit what they could be looking for in an approved retail partner.

Back in the day, the best initial entry point was newspapers, through the local council controlled by the publishers, followed by the magazine distributors. Today, papers and magazines are straightforward to organise and this is done through local distribution agents.

If you want lotteries, start there. Tabcorp and Lotterywest have structured publicly accessible processes, which you should thoroughly research.

Back to the Google searches. It is interesting seeing these, this number, daily. It is one of a bunch of keyword searches that demonstrate strong interest in retailers joining our channel.

The number of searches has not changed much through 2020, so it is not a Covid thing. There has always been good interest. In part, this is driven by developers looking for our channel to be represented in new developments.

If you are looking to open a newsagency or convert a business to be a newsagency, do your research, take your time, ensure you are sure in your own mind about the business you want to create.

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Newsagency management

Police crack down on Victorian retailers breaking the rules

Police have shut down retailers who changed what they sell to ‘allow’ them to open in stage 4 lockdown. I have heard about this from several high street locations.

In a couple of cases, newsagency businesses were open and nearby gift and card competitors took on some food products to justify opening.

It’s good the police got involved and enforced the stage 4 rules.

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Social responsibility

Are Kmart executives clueless

I was surprised to read this at The New Daily this afternoon:

Kmart comes out swinging against Premier Daniel Andrews
Retail giant Kmart has accused Victorian Premier Daniel Andrews of taking it by “complete surprise” by continuing the state’s coronavirus restrictions, and pledged to stand by its staff until its stores reopen.

The continued closure of shops across the Melbourne metropolitan region as part of Stage 4 restrictions have hurt retailers, with Kmart joining a chorus of business leaders criticising the Victorian premier.

Kmart managing director Ian Bailey said the unprecedented conditions had caused immense pain and hardship for the retail giant’s staff.

“The Victorian government’s roadmap for re-opening the state economy announced last Sunday took the retail sector and Kmart Group by complete surprise,” he said on Wednesday.

“We were not provided with any forewarning in relation to the massive extension to the continued closure of retail trading that was announced.”

I say surprised because the announcement of the extension by the Premier Sunday at noon was in line with my expectations and others in small business. Kmart should have better insights than me and many others in small business retail. Yet, we expected an extension based on the infection numbers we had been seeing.

Covid is a health emergency and the health issues need to be resolved first, ahead of big businesses moaning to be open.

I’m kind of surprised Kmart is closed when the Reject Shop is open.

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Social responsibility

Doctor Who saves Sydney retailer

Click here to read a story from the ABC yesterday about a Sydney retailer’s business being saves by specialising in Doctor Who products.

A Sydney retailer has survived the coronavirus pandemic thanks to a unique line of products: small plastic Doctor Who figurines.

The Who Central shop in Sydney’s north-west has seen record sales in recent weeks, selling out of most products and propping up its main picture framing operation in the shop next door.

Regulars here would now that I am a big fan of licences product. Over the years I have written about success with Disney, Harry Potter, Doctor Who, Star Wars and other licences.

From a newsagency perspective we can leverage these licences across multiple categories: greeting cards, games, stationery, figurines and more. Those who so well, telling a good story, often do well.

Right now, for example, in one of my shops we have a full display of Harry Potter products. We’ve been in this space for several years and have not left it because it sells.

A mistake I see retailers make is the assumption that they doppelgänger’s not have customers who love a particular licence. I say that’s a mistake as we continue to discover our little we know our customers, Also, we often do not know those our customers could buy for.

Specialisation in retail matters. Regional newsagency businesses are particularly well placed to leverage this.

Read the ABC story. It’s inspiring.

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Newsagency opportunities

I can’t believe a customer did that!

Here in Melbourne stage 4 today…

A customer at the newsagency counter pulls their mask down to lick their fingers before pulling a note from their purse to pay for a purchase.

Naturally, the response is – sorry, we are cashless.

This is not an isolated story. All through corona I’ve heard stories from retailers of customers doing similar – licking fingers, holding their credit card in their mouth while they reach for something else.

People spread the virus, especially stupid people.

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Social responsibility

Using inventory to extend the reach of the business

We imported this unique nativity set recently after we saw it at the Atlanta Gift Fair in January this year. It is not your usual nativity set. It’s weighty, beautifully hand-finished, strong in detail … well deserving of the $349.00 price point.

In the few days we have had it in-store it’s become a popular talking point with several customers considering the purchase. On social media, too, is driving interest.

We signed up to buy the piece to be part of a planned Christmas display feature;. We made that decision before corona was front of mind.

Based on the interest, we expect to sell this ahead of Christmas, reminding us that items we purchase for display purposes often, themselves, are sought after by customers.

With boxed Christmas cards arriving in-store, and selling, having this beautiful nativity piece on display has a place, even if we are weeks away from our more complete Christmas pitch.

Our approach with this $349.00 piece is in line with our broader approach to gifts. With the Reject Shop our closes competitor across several categories, we decided years ago to play in a different price-point playground. We’ve done this because we know people buying based on the lowest price for something are not loyal. Quality matters to us and to plenty of our customers.

But back to our nativity piece. What people often comment on when they see it is the quality. It is a truly beautiful piece. It does not feel factory produced. This, coupled with knowing it will not be found elsewhere, makes it valuable for us while we have it.

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newsagency marketing

Your own personal newsagency: the $14.99 a month all-in newspaper and magazine subscription

With the Apple News App, for A$14.99 a month for up to 6 family members you get access to a ton of Australian and international magazines and newspapers. All current issue content.

This from the Apple website outlines the content:

Apple News+, a subscription service that brings together hundreds of popular magazines and leading newspapers into a beautiful, convenient and curated experience within the Apple News app, is now available to Australian readers. Apple News+ presents full access to the best and most relevant publications to meet any range of interests from major Australian outlets including The Australian, The Daily Telegraph, Herald Sun, The Courier Mail, The Advertiser, Vogue, Australian Women’s Health, Elle, The Australian Women’s Weekly, Harper’s Bazaar Australia, GQ, Australian Men’s Health, Delicious and Australian Geographic, as well as several international newspapers and magazines including The Wall Street Journal (US), Los Angeles Times (US), The Times (UK), The Sunday Times (UK), National Geographic (US), Rolling Stone (US), Grazia (UK) and Hello! (UK).

Apple pitches it as your own personal newsagency:

Given that News Corp. wants compensation from Google and Facebook for taking revenue from them, maybe they offer newsagents compensation for their Apple relationship taking revenue from our channel.

Further on at the Apple website they detail more content:

Apple News+ subscribers can access current and past issues and individual articles from magazines such as Vogue Australia, Harper’s Bazaar Australia, Australian Women’s Health, The Australian Women’s Weekly, Elle, GQ Australia, Australian Men’s Health and Delicious. Australian subscribers can also access international newspapers and magazines including The Wall Street Journal (US), Los Angeles Times (US), The Times (UK), The Sunday Times (UK), Forbes (US), Esquire (US), Rolling Stone (US), National Geographic (US), New York Magazine (US), The Hollywood Reporter (US), Empire (UK) and Grazia (UK).

In reality this is another platform offering access to multiple titles for one subscription fee. These sites demonstrate the scope of the challenge to disruption of the print medium and the extent of fractional business publishers will embrace to extend the reach of their content.

There is nothing new here. It’s been happening for years. I mention it today as someone new to the channel was surprised to discover it is a thing.

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Media disruption

That the economy is in recession does not have to mean doom and gloom

News platforms are bursting with stories about the recession Australia is now in. There are the headline stories based on the numbers and the personal stories of people losing their businesses and homes.

It is easy to get drawn into the doom and gloom news cycle. Unfortunately, news outlets think bad news drives clicks, and, so, they run the stories.

In our local communities, I think it is helpful that we act against feeding the doom and gloom stories. It is helpful that we do nothing to negatively impact consumer confidence.

My suggestion is: focus on what has been working for you in 2020, present as business as usual, bring in new product, change displays, host in-store events, be active on social media, play happy music, run competitions, be a good local retailer.

It is these types of activities that distance your business from negative perceptions relating to the recession.

Yes, this is a tough time. Worrying about it being a tough time will not help you move through it.

You can’t control that there is a recession.

You can control what your business does. That has to be the focus.

I have been through two recessions in business. Each was different. This time around it is expected to be worse because of the global Covid situation. The reality is that for many newsagents, there are elements of Covid that help your businesses. In many newsagencies, revenue is up in 2020 so far. This is good news.

Be attuned to opportunity. Also, keep a low profile as no one likes a bragger during times of adversity.

Sure, the economy is in recession. I’m sure that in plenty of newsagency businesses there is plenty of good news.

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Newsagency opportunities

2021 year of the Ox 1oz gold coin out now and attracting interest

We are grateful for the opportunity to offer the just released 2021 $100 1oz Gold Proof Domed Coin – Lunar calendar – Year of the Ox from the Royal Australian Mint. This Lunar Year of the Ox 2021 $100 Gold Proof Domed Coin sells for $3,630.00. It is beautifully boxed and is appropriately stored in a locked cabinet, along with other collector coins from our Royal Australian Mint range.

Coin collectors are terrific customers. Newsagents have served them for decades as magazine customers. Now serving them with proof coins and collector items like this $100 gold domed coin is a real treat.

Can a newsagent sell a $3,630.00 coin? Yes, I think so.

The detail of this product is extraordinary.

We sold 100 of the Qantas centenary anniversary coin sets and they were priced at $180.00 each.

What I like about the products from the Mint is that they span entry level through to avid collector level. At the collector level, people will often purchase two or more of a new release. This is especially true for grandparent collectors who are purchasing for grandkids.

Coins are another category of expansion for engaged newsagents. Key to success is early access to embargoed release information as well as to insights that you can leverage for attracting shoppers you may otherwise not attract in your business. Because, after all, it is net new traffic that we are really after.

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newsagency marketing

A Sydney Morning Herald home delivery customer speaks out

Here is a note I received yesterday from a long term Sydney Morning Herald home delivery customer.

I found your details and wondered whether you could assist, or at least provide comments.  I don’t know how to write a blog on your website.

This was my Facebook rant last night and gives you all the details of this appalling lack of service since the  newsagency informed Mum they could no longer deliver her daily paper …

I am so angry, and before I begin my long rant, (apologies), I would really welcome any like experiences or feedback

Mum has subscribed to the SMH daily for 30 years.  Earlier this year her local newsagent advised that home deliveries had been outsourced.  Since then, Mum has never received a paper to her door (she lives in a Villa complex of 10).  She is 85 and has had a stroke (sorry Mum for the disclosure 😘).  She can’t walk down the driveway which in Winter is icy.  The papers are sometimes wrapped, unwrapped (and wet), shoved on the letterboxes or in bushes, and last week found right across the road.  We have heard all excuses “the truck is too big” (joke) “the driveway too narrow” (joke) … the drivers’ “aren’t insured” (wrong).  They are entering common property, as confirmed by Strata.  Mum is not getting the service she pays for.  We have battled for 8 months to get answers, and a resolution, and today I wrote to The Editor and cc’d one of the numerous people we have spoken to.  No, I have not heard from Lisa Davies the Editor, but I had a call straight away from the Team Leader who said they cannot “control or make” drivers deliver to the door.  What exactly then is “home delivery”?  How is this different from Coles Online or Amazon?  These drivers from National Delivery Service (NDS) are just lazy bastards … and no, you can’t speak to NDS.  I even registered with them pretending I was interested in being a delivery driver!  Yep, no response.

How sad that in her later years she can’t start the day with her paper as has been her routine for years and years.

Mum & I will somehow continue the battle … Just call us “Erin” … Erin Brokovich.  😡

Mark, I would welcome your feedback.

This plea for help is indicative of how broken newspaper home delivery has become. In an effort to drive down costs newspaper publishers pay less and less for what is a premium service, and customers suffer.

Note – I removed identifying details of the customer and the newsagent.

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Newspaper distribution

Considerations before taking your business online

Yesterday, I participated in a 45 minute discussion for my POS software company, which also develops websites for retailers, about taking a retail business online, including the consideration of what to sell and more. While the discussion was not retail channel specific, plenty of what was discussed would be of interest to newsagents considering a website:

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Newsagency management

Full face card pitch in there newsagency

We have rolled out a full-face card pitch in one of my stores as part of a card refresh designed to make card shopping easier and to leverage the full design of each card rather than only the top 25% of the design.

We have taken our time with implementation, having looked at plenty of card retailers overseas over the last 2 years and completing a comprehensive dive into sales data.

As part of the move we reduced overall SKUs but anticipate growth in sales due to improved shopability and broad range refresh. We have pursued a reduction in SKUs considering pocket turn and other data points. The long history of greeting card supply into Australia has been such that it has fed, and too often continues to feed, inefficiency.

The acrylic fixtures overlay traditional card fixtures, enabling the change to be implemented without he need for a shopfitter.

The changes have been in place for two weeks and early indications are terrific.

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Greeting Cards

People are loving this Father’s Day card

People are loving this card. A couple of times now people have bought it as their second card, their fun card bought for a reaction. Indeed, the second card purchase is a trend for Mother’s Day, too. Not a huge trend, but a trend nevertheless.

We have pitched the card at the counter, where it is easily purchased on impulse.

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Greeting Cards

NZ news outlet sees no significant traffic decline in leaving Facebook

One argument put forward by the government in support of their proposal to have Facebook and Google pay some but not all Australian news outlets has been challenges.

The Giant Stuff news and information business in New Zealand quit Facebook in July.

On ABC radio’s AM this morning information was shared indicating that the traffic impact for the news site has been minimal.

While I have shared my opinions here and here, I’ll note, again, that I think the code proposed by the government is poor policy that is being propagated to appease supporters. It is not the wise action of a free market economy. It is technically ignorant of how the platforms work and the control the publishers have.

The publishers set to benefit from the code, if there is a benefit, have broken business models. I doubt that any mon ey that may flow from implementing the code would support good journalism in Australia. That, in my view, is up to individual Australians, through the choices we make.

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Media disruption

Jeff Jarvis on the proposal that Google / Facebook pay for news

Jeff Jarvis is a journalism professor and an expert on news and, in particular, digital platforms of news. His tweets, in a thread, just now are interesting and timely in my opinion. be sure to read the full thread:

As I have noted already, the proposed move by the government is foolish, ill-conceived and pandering to media giants. They choose where their content goes. They have demonstrated the value of journalism in all their giveaways and discount deals on platforms line the Apple News platform.

You can see how ridiculous the move is by excluding the ABC and SBS.

The proposal by the government is dressed as supporting journalism but, I suspect, it has nothing to do with this.

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Media disruption

Evidence of changes to how and where we work – opportunities for regional newsagents

Further to my post last week about opportunities for regional newsagents, there have been several media reports over the last few days about businesses making these moves, long term committing to work from home and quitting plans for city based office facilities.

A quick search will deliver access to more reports like these.

Businesses, especially office based businesses, are looking at how and where their people work. This is where opportunities for newsagents emerge.

I do think there is a new niche of products and services regional newsagents can offer to facilitate relevance in these emerging opportunities.

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Social responsibility

Strong online jigsaw sales for newsagents

Back in March it was a punt to pitch jigsaws online. Online was crowded with discount jigsaw websites selling at 25% and more off retail and, often, offering free shipping.

Six months on, the decision to offer at SRP and to not offer free shipping paid off. As jigsaws became scarce, price was not an issue. Sales have led to return business, with no queries over price.

Over the months, the offer has been expanded to include more puzzles, not just jigsaw puzzles.

Range is key as people often buy 2 or 3 jigsaws in a transaction. From this we can see age diversity in their product picks.

Click and collect has proven to be as important as delivery. Also, as with any website connected to a physical shop, the website drives in-store purchases. We know this as shoppers come in and often say I saw that you have xx online…

Back in March another hesitation was around the shipping of the products. Safe shipping of jigsaws requires an attention to detail to ensure the box arrives intact and safe. Given that the box will not fit in letterboxes, there was also the factor of parcel delivery and ensuing collection.

After several trials, the process was set and it has worked well since.

Looking at the data, less than 10% of sales are to local addresses and more than half of all shipments are out of state. There is something special about selling to someone who is unlikely to ever visit your shop.

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newsagency of the future

Beanie Boo sales up in independent retailers by 30%

I like Beanie Boos and have liked them for many years. They are an excellent product with broad appeal.

There is more to like about Boos in 2020. The latest independent toy sales data collated by the respected NPD group shows Boo sales as being up by 30% in July. This is on the back of an excellent January to June.

Thinking about the success in 2020, in the middle of Covid, even in Melbourne where stage 4 is in force, Boos are successful and growing because they are:

  • Colourful.
  • Huggable.
  • Postable.
  • Collectible.
  • Regularly refreshed.
  • Low cost.
  • Fun.

It’s kind of an I told you so thing for me because there are some in the newsagency channel who five or so years ago mocked me for talking up Boos. Here we are, five years on, sales continue to be terrific, growing. Better still, Boos are a perfect online sale with two of my stores achieving at least $25,000 in online revenue. Add this to excellent in-store sales and you can see why I like the brand.

One final point – Beanie Boos from ty inc. sell to anyone from 6 to 90. People buy them for many more reasons than you may expect and this if what makes them a commercially valuable property … the breadth of appeal makes them space and capital efficient. They also play a key factor in birthday card and thank you card sales.

This is all great news, which makes me happy.

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Gifts
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