Author: Mark Fletcher

The National Breast Cancer Foundation has decided to switch to Woolworths for retail distribution of their Pink Ribbon Magazine. Newsagents have happily handled the awareness and fund raising title for years. The switch to Woolworths is unfortunate is it reinforces the might of this impersonal profit focused retail giant. It also suggests a fading relevance of newsagents as the magazine specialists in the minds of all those involved in the decision and, it disrespects the work newsagents have done for breast cancer fund raising over many years.

There is not a week goes by that newsagents are not offering a badge, ribbon or other small gift in return for a charity donation. Their efforts for the Pink Ribbon program, through greeting cards, branded stationery and the magazine has raised plenty of money. Along the way newsagents have raised awareness because of their personal engagement with customers. This won’t happen at a supermarket checkout. The Breast Cancer Foundation has done their image a disservice by shunning the community newsagency. I suspect that supermarkets want the Pink Ribbon Magazine because it buys much needed social responsibility kudos.

More and more newsagents are using eBay to find new customers for stationery and circulation product. It is only in the last few days that I have become aware of at least fifteen newsagents using eBay to successfully move stock for better margin than in their retail stores. We have been doing this through our Inkfast online ink and toner business which we have advertised through Google, Yahoo and BidSmart over the last year. Now, connecting with the ‘eBay newsagents’, we are comparing notes on the costs of acquiring these online customers. It’s a fascinating new development. Unfortunately, or fortunately depending on your perspective, only a fraction of the channel will ever play online.

With PowerBall not going off last night and now worth $12 million next Thursday and OzLotto jackpotting to $6 million next Tuesday the sales dynamic in newsagencies will be altered for a few days. While it’s hard to plan for these things we have to find a way to tap into the extra traffic with appropriate add on sales while ensuring that existing would be magazine customers, especially, do not give up their magazine dollars for a lottery ticket.

In an average week, all games combined, no more than $10 million is in play. Already this week, including the Saturday superdraw of $22 million, $40 million is in play. That must affect the sales for other products.

As a result of the theft of a newspaper insert discovered a couple of weeks ago we realigned our newspaper stand to create a better view for our counter team. The stand was pivoted 45 degrees from that shown in the photo – more front on as people enter the shop. The result is a measurable increase in sales of the Trading Post.

This sales kick for the Trading Post from such a small move reminded me of the challenges of retail and newsagencies in particular. We have so many items and only limited space to get in front of people. Newsagencies are bright thanks to the colour of magazines, greeting cards and lottery posters. There is a ton of ‘noise’ in store. We cannot move everything we want to promote in the way we have the newspaper stand.

I wonder whether newsagencies are too ‘noisy’. For example, would a visually calmer shop sell more compared to the traditional ‘noisy’ shop? Are we, newsagents, hurting ourselves by bold lottery, newspaper and magazine displays at the front of the shop? Is this the reason stationery sales in newsagencies are down? Are our shops too full of promotional displays, posters, dump bins, signs, magazine posters etc. for them to be effective?

Suppliers want to get into newsagencies to tap into our traffic. Tapping into our traffic means making major noise. Customers can only give so much attention so each new display takes a slice of a finite pie.

Maybe it is time to start with a fresh canvas. Some already have in the magazine space, mag nation, for one, is a model many are watching and talking about.

My recent experience with the Trading Post suggests it is time to redraw the layout and display strategy for my shop.

I continue to be amazed at the feedback I receive from visitors to this blog, especially those contemplating buying a newsagency. While the industry, through associations and suppliers, provides access to data, it is challenging for prospective purchasers to play in a newsagency to see if it is for them. To this end ,we have decided to make our newsagency in Victoria available, within reason, for behind the counter and back room experience. The first step is a walk through the business after hours to explain aspects of its operation common to all newsagencies. We are not doing this to sell you anything. The idea came out of a suggestion put to me by a reader here – a request for time behind the scenes in a newsagency to see if it is the type of business they would be comfortable owning. If you are considering buying a newsagency and the walk through is of interest please email me at mark@towersystems.com.au.

The software on offer from POS Solutions, a competitor of my company, does not currently comply with magazine distributor standards. It has not complied for around three years. POS will be able to provide proof of their compliance in writing from the distributors once they have achieved this. Ask for this proof.

Software from my company is compliant and Computerlink has been since the beginning of IT standards for newsagents. It frustrates me that there is silence by so many – suppliers, newsagents and newsagent associations about the failure of POS Solutions to deliver compliant software.

Compliant software saves newsagents time and money. Non compliant software costs time and money. If industry suppliers cannot adhere to standards what hope is there for newsagents?

This silence by suppliers and associations has to end as it will be the only to pressure POS to deliver compliant DOS and Windows software. I sad DOS because most of their users still run DOS and there is no technical reason for them to hold back providing compliance on their DOS platform and therefore save newsagents the $15K+ it costs to migrate.

While POS will complain to their lawyers about this they would be better off spending the money necessary to provide compliant DOS and Windows software.

The Federal Government refuses to consider that Australia Post has an unfair advantage over independent small retailers like newsagents in the stationery space. The unfair advantage was no more evident than on last night’s ABC-TV Evening News in Brisbane. There was a story about their Driving Through the Years stamps. Australia Post is able to get national TV coverage for their stamp launch and a free kick for their retail outlets which sell the special edition stamps.

I’d have to front nude day or some other stunt in my newsagency to get similar TV coverage.

The 865 Government owned Australia Post shops have given over more than 80% of their floor space to non postage product, yet they are able to get their brand on national TV free of charge because the government protects them through their stamp and postal service monopoly.

Wake up people! Australia Post is hurting independently owned small businesses like newsagencies. They use the brand I as a taxpayer helped them achieve to now compete with me. They can sustain losses in stationery because of their stamp business. I don’t have that luxury. Their actions will cause some of these small businesses to close. The losses incurred will be blood on the hands of Mr Horward, Ms Coonan and their colleagues. They have been told about the aggression of Australia Post yet the ignore the facts.

Mr Beasley and the Opposoition could do well to focus some of their attention on this. Small business is a big consitiuency and the government, through its Australia Post inaction, makes a mockery of its own Small Business ‘policy’.

The Victorian Government announced with great flourish their new Myki ticketing system last week. My question is: Will newsagents who currently sell Met Tickets for 4% commission find their commission slashed to .5% under Myki when it is introduced as is happening in NSW? A commission of .5% is unsustainable.

Fairfax has announced it will reward the newsagents that have been selected as finalists for Newsagent of the Year 2006 with 2% bonus commission under the terms and conditions of Fairfax’s contract. The problem with this is the award process. There are no published criteria. Success is not based on any published KPI. Nomination is up to suppliers. To my mind, without detracting from the many worthy winners over the years, the Newsagent of the Year awards are more about patronage than business success. I know of many successful newsagents who are not politically connected and who have a low profile who have not even attracted a nomination.

In 2001 my company, Tower Systems, came 14th in the BRW FAST 10, 21st in the Deloitte Tech fast 50 and I was a finalist in the Ernst and Young Entrepreneur of the Year. I know something about award processes. In each of these three cases the process was rigorous and independent of the awarding body and sponsor. Getting to the finals required meeting considerable KPI measurements. The entire process was transparent and this gave participants trust in the outcome. Also, the process itself was beneficial.

If newsagents want to grow up and be taken as serious business contenders they need to ensure that their annual awards process is more transparent from the nomination process up. While many past winners would win again, a broader pool would be included in and benefit from the journey.

Fairfax and News could start the ball rolling by establishing criteria for nomination. That their Account Managers can nominate is a flaw because the nomination list comes down to personal relationships and they depend, to a certain extent, on brown nosing.