If you’re chasing cost cutting in your newsagency, you may be chasing the wrong thing
Most of the conversations I have had with newsagents lately started with the same question. How do I cut costs?
Fair enough. I ask it in my own shops too. Rent is not going down and neither are wages.
But I have noticed something. Some newsagents are spending all their energy on chasing cost savings and none of it on the business.
Someone will spend an afternoon chasing lower EFTPOS fees or getting insurance quotes and feel productive. The same person has not looked at dead stock in a year, or brought on a new product category.
That is the wrong thing, I think. You can make more money today and into the future by working on your business, in your business. I know the business books don’t agree.
I think the cost saving wins because it is easy. A phone call, a form, done. Working on the business is harder. You have to look at decisions you’ve made and be honest about them based on the evidence. That is uncomfortable, and so it waits.
What I see in the numbers
Here is what I see when I go through the numbers in a newsagency, mine included.
A saving of a couple of hundred dollars a month is hard to find and disappears in one bad quarter. Meanwhile, there is stock on the shelves that has not sold since March. A section running at 25 per cent margin sits where something at 55 per cent could be. Prices on some items are lower than they could be without hurting sales. And every day people walk in, buy what they came for, and walk out without an impulse purchase.
That is where the money is. Not in a cheaper phone plan or insurance.
Where to start
My advice if you want to free up cash and make more money is to start here.
- Run a report of everything that has not sold in six months. Mark it down and get it out within two weeks. That is cash you’ve already spent, sitting there doing nothing.
- Rank gross profit contribution by floorspace allocation. Most who do this are shocked.
- Reset your counter to attract impulse purchases. Surprise people, so they notice.
- Audit where the labour you pay for is spent. Typically, 20 per cent of that time can either be freed for more valuable work or cut from the roster.
- Look at your prices for the products over which you have price control. A 1 per cent price increase is unlikely to affect unit sales. You get to bank the 1 per cent.
None of that is exciting. It is where I have seen the biggest financial benefit, bigger than you will get chasing a cost reduction on insurance.
An offer
If you would like a second pair of eyes, I will look at your business for free and come back with specific opportunities to improve its financial performance.
I need two things from you. A monthly sales comparison report for the year to 31 August 2026 against the same period a year earlier, and a rough sketch of your shop floor layout showing each of your departments. Send them direct to mark@towersystems.com.au and I will come back to you myself.
I am not selling anything here. I want to show, with your own numbers, that working on the business is likely to make you more money than chasing a reduction in an operating expense. What you do with what I find is up to you.
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Disclosure: I founded Tower Systems (sold it in 2024 and still work for the business today) and I own newsXpress, and I own and run newsagencies.