Buried in the recent draft report, Economic Structure and Performance of the Australian Retail Industry, by the Productivity Commission is a call on retailers to improve productivity.
Newsagents can improve productivity and cut wages, cut waste, reduce theft and drive better business decisions.
Hang on, think about that last sentence. Don’t move on until you go back, read it again and think about how you would feel if you really did achieve these benefits in your newsagency.
Seriously. I mean it. Read the sentence again. Here it is…
Newsagents can improve productivity and cut wages, cut waste, reduce theft and drive better business decisions.
Too many newsagents do not have these as goals. Too often they blame others when they realise that they want and need the benefits embedded in the goals.
So, here are some productivity gain ideas and opportunities for newsagents:
- Cut magazine returns time. Take the returns out of the back office where it is a specialist function and move it to the front counter, being done every day by any employee. A newsagency with $500K a year in magazine sales should spend no more than two to three hours a week on magazine returns including counting, topping, bundling and dealing with distributors.
- Cut other labour intensive work. Stop manual reordering of stock. Use your computer system. In an average newsagency, going from manual reordering to computer based reordering usually saves between four and six man-hours a week. Eliminate all manual business performance reporting. Get rid of your manual roster – do it using the roster facilities in your software. Stop manually managing magazine putaways. There are plenty more ideas like these. Use integrated EFTPOS and save time on every sale.
- Cut waste. Reorder stock using your computer system (yes, this is a repeat idea) and find that you will have less stock which does not sell. Look at your sales by time and roster accordingly. The roster often has wasted hours. Look at product sales and quit what’s not working before it becomes a loss making boat anchor. If a rep says you need more of a product, check their claim with your business data, let your data guide your decision.Reps want to get stock to your store, they are often paid to achieve this.
- Cut theft. Use employee initials or a code for every sale. Balance your cash every day. Have a zero tolerance policy (I’ve written about this before here and elsewhere). Do spot stock takes. Use the theft management tools in your software. Use stock control throughout but especially on cigarettes, greeting cards, ink, phone cards and other highly negotiable items. A newsagency without professional theft management processes should be able to increase net profit by as much as 10% in the first year.
- Make better business decisions. Make more fact based decisions based on accurate business data. Stop gut feel decisions. Your business data can guide you to more profit than how you feel at any time. Stop using department keys to record sales – scan everything. No excuses, scan everything. Build better data and use this to improve your business.
I know of a newsagent who has just successfully cut $34,000 from their annual wages bill by switching software systems (yes, to my Tower Systems) and implementing our time focused approach to magazine management. There are plenty of other examples like this one.
I am confident that every newsagency business in Australia can improve productivity. Yes, it’s a challenge. The benefits are substantial: reduced wages, reduced waste, reduced theft and better quality and more valuable business decisions.
Imagine how powerful our newsagency channel would be if we all did these simple things. I do. I imagine a strong, growing and productive newsagency channel leading small business retailers and powering ahead against the reports of tough times.
We can do this. We can improve productivity – individually and as a channel. We have the tools. All we need is the will.
I have been sharing specific advice with newsagents using the Tower Systems newsagency software – I have written a 2,300 article with specific business building tips and I share this with newsagents who ask. Email me at mark@towersystems.com.au if you would like a copy.
As I noted earlier, these are some ideas. Share yours with your fellow newsagents.
