The latest issue of Mindfood is a magazine you may ant to get out of the usual magazine fixture and place on full display. The cover is bright and appealing – the kind of cover that gets a magazine picked up and considered. I love it.
What is Kelley joining? The stuck on house ad on the front page of the Weekend AFR covers it up. Another disappointing cover-up of front page newspaper editorial content.
I am told unauthorised Star Wars products were being pitched to newsagents last week. The person pitching was seeking orders, secured with a deposit. The company they claimed to be from is not an authorised Star Wars licenced product supplier. While the products could be legit – but it is hard to tell at this point – the process feels far from legit.
My advice to newsagents is to be careful. The Star wars licence will be fiercely protected,. You do not want to be caught with products that are not authorised.
Do not pay a deposit to any supplier, especially one pitching in-store for the first time without an appointment. Right there are alarm bells.
In my view the only magazines you need label are low volume monthlies. If you do label, get it right. This photo shows worst-practice labelling. The label covers the most important word on the cover of Quarterly Essay.
Removing the label – on the right of the photo – makes this title more compelling and the topic more easily understood.
I urge newsagents to remind team members about the proper placement of labels. Get it right is it should help drive sales.
Also, take time to reassess the titles you label. Label less and save time and money.
As the Seven Network discovered recently, people love cat and dog videos. I know from calendar sales cats and dogs are popular. This is why I have the latest issue of That’s Life out in a feature off-location position to leverage interest in the pets. The free booklet is a perfect reason to give this issue of That’s Life a promotional boost.
With magazine cover prices not keeping up and no movement in newsagent margin percentage, the only option is to cut the cost of carrying magazines. While most newsagents have cut labour costs by using newsagency software to manage sales and returns, many are yet to manage the retail space.
I created a spreadsheet space cost calculator. This is the first step to managing magazine space for profit: understand your weekly magazine pocket cost. It could be that your cost is small, making magazines profitable.
In most newsagencies, however, the high cost of retail space and the high cost of labour will mean a high per pocket cost. Pocket costs are exacerbated by systematic and planned gross oversupply of stock to newsagents.
The best way to cut the overhead costs associated with magazines is to reduce the space allocated. This does not mean cutting magazines, or at least not cutting as many magazines as you may think. No, it is all about reducing the amount of space allocated to magazines.
Here are the steps I recommend newsagents take. They are steps I have followed for years in my own newsagencies. They are steps I have recommended to others with success.
Despite what the magazine distributors might say, you have control over the magazine space you pay for. The process outlined here, while time consuming, provides the distributors with a visibility of data about your business on which they must act if they are ethical in how they run their business.
I urge you to give them the benefit of the doubt embedded in these processes. I am confident that if you follow the processes I have outlined you will achieve reduction. It may take some extra steps or duo ling of work – but it will work.
Keep your communication civil. Be clear that you do not want to quit magazines altogether. Outline your cost base and that unless the change you seek is brought about your business is under broader pressure on its very survival.
Magazines are important in any newsagency. The million dollar question is how many magazines? I think that number is currently somewhere between 600 and 700 titles. I am confident this figure is understood by key people in magazine publishing and distribution. Thanks to the work outlined here you can fit 700 titles today in the space you would have used for 1,000 titles previously.
The difficulty right now is that we newsagents are agitating for more efficient supply while magazine distributors are operating with some publisher contracts that hark back to a time when there was less pressure on the issue of oversupply.
There is no shortcut to this process, no way to avoid the work of the steps above. Sure, there is a time commitment. It is your business. You need to invest in its future. Complaining about having no time takes time away from getting the work done. get on with it – pursue the one goal of achieving a lower overhead cost for magazines in your business.
What do you think? Let me know. Also, let me know if you need help.
To publishers: if you read this and worry about your title, my advice is only worry if your title is supplied at a volume that makes it unprofitable for newsagents. The equation is simple really – oversupply and your title is more likely to be cut … as it should be.
To the ANF: Where are you in all this? Lost at sea, preferring to hop behind publishers and distributors without offering critical analysis and professional thought to practical steps newsagents can take.
Twitter went a bit nuts two days ago with a photo of Victoria Beckham (Posh Spice from the Spice Girls) shopping in a newsagency with her kids. While not ‘news’ to some, it was news enough to be reported by Metro to its 209,000 Twitter followers. There are more than 300 stories online about this shopping visit.
In the UK this is a good story for newsagents, illustrating relevance.
What is more interesting to me is that the story is a story. It’s kind of – okay so newsagents may have some relevance if Victoria Beckham shops there.
I guess the channel ought to take the victories it can.
The reality is our relevance is ours to nurture. We do this through what we range in our shops and how we pitch our products outside our shops.
While a celebrity visit would be good for business, it would only be good for a short time. Our long term success relies on our standing our ourselves through what we do, how we do it and how we position it externally.
When you scan magazine returns, your newsagency software should provide to you a report listing discrepancies between the magazines you scanned for return and what your newsagency software thinks are to be returned based on arrival and scanned sales data.
Do you check your discrepancy report?
Checking the discrepancy report is a basic newsagency management task. In a few seconds you can see if you are returning all magazines due to be returned. The report also highlights for you magazines that may have been stolen. This last insight is important with theft accounting for between 2% and 5% of product revenue in a typical newsagency business.
It frustrates me when I am asked to help newsagents deal with a magazine returns problem and discover they do not regularly check for discrepancies between what they should return and have scanned for return. In these instances these newsagents have operated in ignorance by not checking the accuracy of their returns.
One I spoke with recently said their returns were being done properly. It turns out they were;t being done properly. Checking the discrepancy report would have highlighted this when it happened rather than using the report after the event to support the claim back to the newsagent that they were managing the returns process incorrectly.
Scanning returns is simple. The overall magazine returns process is equally simple. That said, people do make mistakes. Time pressures, poor training of new employees, tack interruptions, ignorance and other factors can lead to the scanning of returns being incomplete or wrong.
Laziness about the technology itself – hardware, software status and internet connection – can also play a role in returns not being processed accurately and to the level of compliance required by XchangeIT and through to the magazine distributors.
Given the long established standards overseen by XchangeIT and their process of compliance over the accredited newsagency software companies it is hard to get it wrong, hard to fail at returns processing but fail some newsagents do.
I think all of us who work with newsagents on the management of their businesses need to revisit the basics, we need to help them get these everyday tasks right, to lift the quality of business performance and reduce the occurrences of mistakes as every mistake has time and cost consequences not only for newsagent businesses but also for supplier businesses.
I appreciate this is a long winded blog post. Please, take a moment to check that your magazine returns processes are best practice.
At Coles Bauer is offering Yours for $2 when purchased with Woman’s Day or the Australian Women’s Weekly. It is frustrating seeing Coles pitch they are cheaper than others for the same products. That said, from a pure marketing perspective I like that shoppers can browse the promoted products.
Woolworths has an exclusive offer promoting Better Homes and Gardens at the moment that is confusing. The only promotion I saw in the magazine department was this sign pitching a $20 item for $15 when purchased with the magazine. I can’t work out what the item is.
Newsagency marketing group newsXpress has just passed 200 member locations, achieving a new milestone for the business.
This is a good story not only for newsXpress but for the newsagency channel as the core focus of newsXpress is optimism among newsXpress retail business owners and their employees – optimism for today and optimism for the future.
Achieving growth takes hard work in any marketplace. In the newsagency channel it is especially hard given some of the legacy supplier relationships, limited local newsagency capital availability and the clouds of negativity too many talk about. The growth of newsXpress is against trend, it is an achievement everyone involved with the group from the local store level through to supplier team members can be most proud.
In addition to excellent growth in the number of businesses in the group, plenty of newsXpress stores are reporting shopper traffic growth, revenue growth and business efficiency improvement. This is being achieved through the careful introduction of new product categories that attract shoppers who may not otherwise shop in a newsagency.
The most important service provided by newsXpress is the optimism it builds with members and those who work for them:
Having cleaned house and reduced members in 2013, newsXpress started growing in mid 2014 on the back of plenty of good news being shared by newsXpress members. The state by state breakdown now is:
The current membership breakdown by type of business is as follows:
newsXpress is not focused on the size of the business. rather, the focus is on the people in the business – referring people who are proactive, embrace change and are committed to a newsagency of the future.
Newsagents are joining newsXpress from other groups as well as from no marketing group membership at all.
The most common question newsagents have when exploring joining newsXpress is what is the one thing you can do to grow this business? The newsXpress answer is direct yet hopeful:
Anyone who says they have the next big thing for newsagents, the one thing they can do to save their business or make massive amounts of money for the business is wrong. There is no one thing, no silver bullet, you can do to turn your newsagency business around.
newsXpress will never sugar coat, never over promise. We believe the truth is what sets a business free to chase its real potential. We think this is why we have newsXpress stores growing.
Valuable and sustained success for newsagents comes from many small steps. We call it our small steps strategy. Many small steps we guide you to take compound to success – not all of them as some will not work for you but as they are small steps they come at a small cost. This is one feature of the strategy. We don’t outline before you join all the small steps because that would be giving too much away. Also, many steps require access to newsXpress exclusive deals as well as in-store training and other support that is only available to newsXpress members.
Here is a video explaining some of what newsXpress does.
Click here to access a document outlining what newsXpress does in more detail.
Footnote: I am a Director and shareholder of newsXpress. I am happy to report here growth achieved by other newsagency marketing groups.
A post I wrote yesterday about convenience store competition in Sydney has become a discussion about pay rates and an argument about whether newsagents pay award wages.
Three commenting on the post say newsagents do not pay award wages. One, Burgess, goes further saying: Bet you London to a brick for each newsagent who pays his staff award wages, there are atleast ten others who pay less than award wages, this is so especially in major urban areas . To feign ignorance or to suggest only a small number entertain such devious measures, is being a bit simple and also extremely naive.
Chandra follows this comment with: Totally agree with you Burgess. It’s not only newsagents but I dare to say that majority of small businesses are doing it.
These comments damage our the newsagency channel and small business retailers generally.
When you start or purchase a business you accept the obligation to operate lawfully. Every payslip, BAS, tax return, payroll tax return … they are all statements from you that you fulfil your lawful obligations.
If you pay less than the award rate to any employee I hope you are caught and prosecuted.
If you know of newsagents paying under the award rate or paying employees off the books, report them. Do not let their illegal behaviour damage the reputation of our channel.
There are no excuses for ignorance. We all have easy online access to award rates and government mandated employee terms and conditions. There are no excuses.
If you underpay employees or scrimp on your obligations such as demanding they pay for uniforms you require them to wear you are asking for trouble for your business not only from government but also from the employees themselves as your own behaviour toward them invites them to treat you in a similar unethical way. Don’t complain if they steal from you.
But back to the purpose of this post: Do newsagents pay under the award rate? I say it is not as widespread as Chandra, Dean and others say. I have heard of it and have spoken to the newsagents I have heard of it about. I have not heard of it being widespread.
I’d love newsagents to comment on this. If you pay the award, say so. If you don’t, say so.
Chandra claims the majority pay under the award. Burgess says for each paying the award ten pay under the award. Dean said many newsagents don’t pay the award. Are they right? Do you want their opinions left on the record as representing your newsagency business?
We want customers to trust us. We want governments to support us. We want national suppliers to use us ahead of supermarkets and others. These positions are earned through respect and our own social responsibility. Are we as a channel socially responsible?
You don't get that service with @dominos pic.twitter.com/vUejMVBeER
— You had one job (@_youhadonejob) September 21, 2015
hiPP is a stand out supplier for on-trend stationery and gift packaging. If you want a point of difference I urge you to consider them.
The photo shows part of the range on show at the Reed Gift Fair in Sydney.
I particularly like the notecard packs and that they have two designs each pack – look at the left side of the photo. I also like the marble design bags, wrap, invitations, thank you notes and napkins.
Everything I saw on the hiPP stand is worth considering if you want a point of difference in these product categories in your newsagency.
Sure, your existing card and wrap suppliers will probably not want you to consider hiPP. I’d suggest you ignore them as hiPP products have a broader appeal than products from everyday card and gift suppliers. You won’t see hiPP in supermarkets or mass variety, for example.
Suppliers need to understand that having a point of difference is important to small business newsagents, to major retailers especially. This is where specialty design-led suppliers like hiPP can work well for us. Through their products we can frame our narrative of specialty retail. This narrative will help drive sales of the everyday mass range as well.
My advice for newsagents taking on hiPP is that you introduce one or two themes with aisle-end displays, capping your main magazine aisle. Showcase the designs to shoppers not shopping for these products today. They are so unique and so well made that people will purchase on impulse for future use. That is how they have worked for me. This approach also enables you to offer the range without taking product away from existing suppliers.
In terms of product display, I’d encourage you to display hiPP or similar design-led products in a way that respects their design. i.e. not on hang sell. Consider using a piece of furniture to feature the products Pitch the products as differently as they look compared to other wrap and card products you have. Your display ought to reflect the difference.
I have loaded a high res image so you can see the detail. Click on the photo.
The ad from GIO is considered more important than page 1 editorial content at the Sydney Morning Herald.
This photo shows two convenience stores on George Street in Sydney, next to each other. What makes this direct competition even more surprising is that there are eight other convenience stores within a two minute walk of these two shops.
While Sydney is busy, it feels like there are too many convenience stores. Two next to each other in the photo is extraordinary.
Imagine this type of competitive situation for your business – a retailer next to you selling 80% of what you sell, one the same hours. How do you compete? What differentiates your business from theirs?
Convenience stores have no protection. Suppliers want their products everywhere – for convenience.
I mention this today as there are newsagents who continue to push for protection. I think that is a hard push to make where we see small businesses,like these convenience stores, apparently surviving without any protection.
While there may be other factors in play with these convenience stores, factors beyond the competitive products that help them survive – but such factors are not obvious to me.
Australia Post has a booth at the Reed Gift Fair in Sydney. While primarily pitching their Startrack delivery service, they are also pitching e-commerce solutions of relevance to retailers running businesses that are relevant to shoppers today. The presence of Australia Post ought to surprise others who should have been at this trade show and who are not.
This trade show is interesting because of some stands that expand the appeal of the trade show and because of some suppliers who ought to be there and are not – also because of the diversity of the retailers attending. The floor of the trade show speaks to changes in the retail channels to which this show appeals.
From where I stand, changes = opportunity = optimism.
Good on Australia Post for having a crack at this trade show.
In The Sunday Telegraph newspaper yesterday I noticed several ads for half price home delivery of the newspaper embedded within articles on several pages of the newspaper – like they were part of the editorial content while, in fact, they had no connection with the editorial content.
Good suppliers to retail businesses list their retail partners on their corporate websites. Do your suppliers do this? Ask them, if they do not, ask why not? if they do, ask them to list your business.
Whereas years ago there were four or five highways of shopper traffic to a newsagency, today our best traffic is fed by hundreds of streets and lanes.
A good supplier will support you, list your business and help people who like their products find you. This type of marketing support from a supplier is marketing 101, essential in my view.
This is the most basic of management suggestions to newsagents – read your emails at least once a day, preferably more often.
A newsagent I spoke to last week said they read emails Mondays and Thursdays, because they are the magazine days.
At the very least, read emails daily, preferably through the day or if you must limit it, twice or three times a day.
Otherwise you miss opportunities.
Tobacco sales are declining in Australia as a consequence of public education and plain packaging. They are declining in most newsagencies from what I can see. Is it time for you to quit tobacco product altogether.
If your sales are under $2,000 a week, you are close to the point at which you are not achieving a sufficient return on investment to justify the space, labour and inventory investment. While I think the health case for quitting tobacco is clear, making it about the financial return makes it a business decision and that ought to be easier to assess for some.
My challenge today is: should you quit tobacco in your newsagency?
Related: I remain shocked the national newsagent association, the ANF, accepted funding from a tobacco company.
Footnote: I quit tobacco products in my newsagency in 1999 declaring that as a business attracting families I felt the category was inappropriate.
The Reed Sydney Gift Fair is only two and a half hours old and already it is busy. In fact, busier than expected for a Saturday. That show itself, while smaller than most others for the year, is good. I have walked the whole floor and there is plenty to see. Several suppliers are using this show to pitch model line refreshes and extensions in the run up to Christmas.
What is interesting is this is a local trade show – pretty much NSW only businesses, from right across the state.
It is also the sort of show you can do in a few hours and that seems to be appealing.
This photo shows how a Coles supermarket in Melbourne had Country Style magazine shoved into their magazine fixture yesterday morning. It was the second Coles I had been in in 24 hours with this magazine handled this way. This is appalling for Country Style and all magazines as it screams: we don’t care about magazines!
What does the publisher expect? – they sent considerably more volume than the space allocated for the title (because of the free shopping bag packaged with the magazine) and, I suspect, did not pay for extra space in Coles.
Yes, I get that the bag is a free gift and designed to drive sales. All it has done here is facilitate a messy display that disrespects the product.
In your typical newsagency you would not see this. We are more professional at handling magazine issues that require more space than usual for the title. Sure, we complain about it, but we do the work – because we are proud of our shops and how we represent what we sell. Some newsagents store the extra stock in the back room while others shuffle magazines around to accommodate a larger than usual issue.
The irony of the situation is that supermarkets like Coles get more money than newsagents from some publishers to support magazines yet they support the category with less care than newsagents. That is wrong and publishers ought to see it – but they won’t because they think they need supermarkets. More fool them.
Publishers who want their magazines handled professionally ought to quit supermarkets, support newsagents and fund newsagents so we can make a living wage from the category. This would be a win for the publisher and a win for newsagents. It would stop the mess in this photo at Coles, a mess that disrespects Country Style magazine.
What really galls me is the ignorance and arrogance of the publishers behind the MPA trial when they say newsagents need more training. This photo and what I saw in the other Coles show that oles staff need more training.
If you see similarly appalling magazine displays in supermarkets please send photos to me so we can shine a light on this.
I have had three newsagents call me this week about employee theft. Two were hit by employees they trusted who had worked hard at covering their tracks.
The third newsagent has no regard for cash balancing, no tracking of stock sold, no checking of new stock, no oversight of employee behaviour around the assets of the business and no process cash they take from the register for personal use – in front of employees.
If you want to reduce theft in your newsagency:
This list is not new. Sadly, there are newsagents being stolen from today who could stop it if they acted on this list.
We received plenty of issue #2 of the Art Therapy partwork. We sold out of our 160 copies of issue #1. Issue #2 is on the lease line with other colouring titles. It will be expanded today with new titles. With adult colouring titles everywhere, the bubble has to be close to bursting. Be careful.