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

gross profit

Your sales data has answers. Are you asking the questions?

Most newsagencies are sitting on years of sales history that’s not used.

Picture two newsagencies in neighbouring suburbs. Similar size, similar mix, similar rent.

In the first, the owner spends a slow afternoon behind the counter, then reorders whatever sold last month.

In the second, the owner exports uses AI to create orders based on what’s selling over time. They also use AI to spot trends and look for allied products. They then cull products and suppliers that aren’t performing.

The second business is growing net profit while the first one is treading water.

be like the second newsagent. Smart. Making fact based decisions. Chasing profit.

Questions worth starting with

  • Show me my top 20 and bottom 20 products by gross profit, not by sales.
  • In which weeks of the year do I regularly run short on cards?
  • Here is my roster and my hourly sales. When am I overstaffed, and when am I short?
  • Here are my recent Google reviews. What do customers praise, and what do they complain about?
  • Here is a month of my Facebook posts. Which product areas am I ignoring?
  • Then ask a follow-up. The first answer is rarely the best one. I find “Why do you think that is?” and “What would you change first?” usually get you to something you can act on.

AI gets things wrong, and it does so with complete confidence. Check any number before you act on it. Keep customer names, emails and loyalty details out of anything you upload.

It also won’t fix the floor. It might tell you the card wall underperforms on weekends, but someone still has to refresh that wall and help the customer standing in front of it. Independent stores win on their people, on the way staff greet customers and suggest products. Data can show you where to focus that effort. It can’t do the work.

I hear plenty of concerns about AI from retailers, mostly around copyright, energy use and jobs. They’re fair conversations to have.

Sitting it out is a business decision too, though, and it has a cost. The gift shop up the road isn’t sitting it out. Neither is the online seller in your collectables category, or the franchise group with an analyst at head office.

You don’t need a course or a consultant to get started. Set aside an hour this week, export one report and ask it three questions. Then write down one thing you’ll change.

Next week, try a different report.

A small shop can’t outspend the big players or undercut them on price. It can know its own business better than they do. An hour a week with your sales data is a cheap way to start.

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AI

Advice on How to Decouple Your Newsagency From the Channel: Five Jobs, Two Years

I have written plenty here about why I think newsagents need to decouple from the channel. The data points to less than ten years of life left in the traditional newsagency. The question I get asked most is how.

Decoupling is not a slogan and it is not a rebrand you order from a signwriter. It’s not restricted to any particular brand of newsagency either.

Decoupling is five jobs, done in order, over about two years. I watch newsXpress members do this work, so what follows is drawn from real shops.

Job one: find the number that is not yours. Go through your last full year and add up the gross profit from lines where somebody else sets the commission and can change the terms without asking you. Papers, magazines, lotteries, parcels, bill payments. That total, as a share of your whole GP, is your exposure. For a traditional newsagency it usually sits between half and three quarters, which shocks most owners the first time they see it. The goal is below a third. One afternoon with your POS data gets you the number.

Job two: make the floor tell the truth. Your floor is a budget. For each zone, note the share of space it takes and the gross profit it produces, divide one by the other, and sort. Most shops find a quarter of the floor producing five per cent of the profit. Quit the dead categories through a proper clearance, bank the cash, and give the space to what earns: cards, gifts, celebration. Put the papers at the back. I mean that literally. The paper customer will walk for them, and on the way they pass everything you actually make money on. Rerun the table quarterly. Move one bay each quarter.

Job three: replace the traffic before it leaves. This is the hard one, and I think it is where most transformations stall. I know of a shop with a terrific mix, gifts leading, print under ten per cent of GP, whose customer count still fell seven per cent last year. Changing what you sell does not by itself change why people come. Agency lines rented us traffic for a hundred years. Now you create it yourself. A loyalty program with real names and birthdays in it. A window that changes monthly, without fail. Small events. Local product, because the honey from ten minutes away brings in people Hallmark never will. Social media about what you unpacked this week. None of it is glamorous. All of it is weekly.

Job four: change the word. Only now do you change the sign. A rebrand on top of an unchanged shop is wallpaper. New trading name, new signage, and update your Google listing category from newsagency to gift shop, because that one field decides what searches you appear in. Check your lease first, since permitted use clauses can trip you up. Tell the story as growth: we have outgrown the old name. And do it while you are trading well. The worst time to rebrand is when you finally have to.

Job five: decouple the owner. A shop that runs out of your head is coupled to one more thing that will eventually leave. You. Document the routines. Give staff real departments with real numbers. Review the figures monthly like a board would. Nobody is queuing to buy a newsagency, but a profitable gift destination with owned traffic and clean numbers is a business a buyer can imagine owning. Decoupling and exit value are the same project.

Four numbers on the back room wall, checked monthly: customer transactions, the share of GP you control versus the share others control, GP per square metre, and the basket. If transactions and your owned share of GP are rising together, it is working.

You are done on the day no boardroom decision made without you can materially hurt your business. That is the whole test.

It starts with one afternoon and your own sales data.

Let me know if I can help: mark@newsxpress.com.au.

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Newsagency management

A much-loved bookshop went broke, and every experience retail cheerleader should study why

I was in Brussels last week with two other retailers, looking at good local indie retail. One shop on my list was Cook & Book from when I was planning last year was a cool bookshop playing in the food and book spaces, a famous complex in Woluwe-Saint-Lambert that fused bookshops and dining across themed rooms, one of them with a car hanging from the ceiling. People travelled to see it. Reviewers called it heaven.

We did not get there. It went broke.

Cook & Book was declared bankrupt in June last year, after almost twenty years of trading. Thirty or so people lost their jobs. The business had been weakened by Covid, then inflation and rising costs, and was in a judicial reorganisation, Belgium’s version of administration, hoping for a buyer. One serious candidate emerged, a former CEO of Delhaize Belgium no less, and withdrew at the last minute because he could not reach agreement with the landlord on lease terms. The landlord, the local municipality, was itself owed more than 500,000 euros. It got its building back. It did not get its money.

I think about Cook & Book because it overfed what the experience retail cheer squad champions: Destination. Theatre. Instagrammable. A reason to visit that a screen cannot replace. All true, and I say versions of it on this blog myself.

And it still went broke.

Cook & Book had the traffic and the affection. What it apparently did not have, for years, was numbers that worked. Theatre brings people in. It does not lower the rent, shrink the wage bill or lift the margin on a book. A spectacular format with restaurant overheads and bookshop margins is a hard equation on a good day. Add a pandemic and an inflation spike and it stops being an equation at all.

The lesson is not that experience retail is wrong. It is that experience is a traffic strategy, not a margin strategy. You still need product that pays for the floor it sits on. The theatre is the invitation. The basket pays the bills.

Cook & Book dies at the lease from what I read.

Rent arrears of half a million euros. A rescue that collapsed because buyer and landlord could not agree terms. Fourteen hundred square metres of fixed cost that no amount of charm could shrink. When the end came, the landlord held every card.

I wrote recently about online sales giving a retailer an off ramp when a lease turns bad. Cook & Book is the other side of that coin: a destination business with one huge site, one landlord, and no way out. However magical the shop, the person you sign a lease with holds more of your future than any customer does.

For every Australian retailer being told to add experience, and it is good advice as far as it goes, the questions underneath do not change. What is the gross profit per square metre of the theatre? What happens to the model if traffic drops 20 per cent for two years? How exposed am I to one landlord, and what is my off ramp?

Cook & Book could not answer those questions well enough, and it was one of the most loved shops in Europe.

Being loved gets you customers, press and a queue for the waffles next door. It does not get you out of retail’s oldest maths. Nothing does.

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retail

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.

…

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.

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Newsagency management

Not another boring EOFY post

No. Not from me.

You already know the required stuff. Run the stock listing, take the backup, ring the accountant. You’ve read that post a hundred times and you’ll read it a hundred more this week. I’m not adding to the pile.

What interests me today is the other list. The one you never write down. The jobs you keep meaning to get to and keep finding a reason not to. New financial year tomorrow, so it’s as good a night as any to stop dodging them.

Start with the dead stock. You know exactly what it is. You walk past it every day and your eye slides straight over it, because you stopped seeing it months ago. It’s been sitting there a year doing nothing. Mark it down hard, bundle it, give it away if that’s what it takes, but get it off the floor and put something that actually sells where it was.

Then have an honest look at your hours. Are you open at times nobody comes in, just because you always have been? In there from eight when the first real customer turns up at half nine? Trading Sundays for a figure that doesn’t cover the cost of being there? You can reorder stock. You can’t reorder the hours of your life, so spend them where they count.

The roster is the same question, and it’s a harder one because it’s about people you like. Are you rostering for the trade or for habit? Two on when one would cope? Be fair and be kind about it, but be straight with yourself about what each shift brings in.

Put your prices up. There, I’ve said it. You’ve been frightened of it for years, sure the customer will walk. Most won’t even notice. The few who do were never the ones keeping the lights on. You were never the cheap option and you were never going to win that fight, so stop pricing like you’re in it.

And bring in something mad, new. Something fresh, something with no business being in a newsagency, something that stops a regular in their tracks to ask what on earth it’s doing there. Back a hunch. Take the punt you’d usually talk yourself out of. Worst case, you mark it down next EOFY with the rest of the dead stock. At least you’ll know.

None of this is on the required list. That’s the whole point. Get one of these done and next year is genuinely better than this one, not just compliant.

So before you flip the calendar, pick one. Just the one. Be ruthless about it. Start the next when that’s sorted.

Happy new financial year.

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newsagency of the future

One sale, or three hundred newspapers

Sell a newspaper for $3.50 and you make about 12.5 per cent. That’s 44 cents in your hand. Sell a $250 item at 55 per cent and you make $137.50.

Do the division. One $250 sale is worth more than three hundred newspapers. You could sell a paper to every adult who walks past for a week and still not match what one good sale puts in the till.

We all know this. So why do we keep leaning on the 44 cents?

Because the paper is easy. The customer comes in, knows what they want, pays, leaves. No risk, no money tied up, nothing riding on your judgement. It feels like business because it’s busy. But busy isn’t the same as making money, and the newspaper proves that every single day.

The $250 sale is hard, and it’s hard in two ways we don’t talk about honestly.

You have to find the item first. That means backing your own read on a range, spending real money on stock that might just sit there, giving it decent space and light, and waiting. Some of it won’t work. You’ll buy the wrong thing now and then. That’s the price of playing in the part of the shop where the money actually is. The paper never asks any of that of you, which is exactly why it pays you 44 cents.

Then you have to find the shopper. And here’s the bit that stings. That shopper is already in your shop. They come in for the paper, or the lotto, or a birthday card. You see them twice a week. You know their name. It has just never crossed your mind that they’d spend $250 with you, because somewhere along the line you filed them as a paper buyer and left them there.

They’ve filed you too. Years of selling them a paper has taught them what you’re for. They don’t look at your good stock because they don’t think of you as the shop that sells it. So they buy the $250 thing somewhere else, from someone who bothered to see more in them than a paper sale.

That’s the real work. Not just buying the right product. Looking again at the people who are already in front of you, and shifting what they think you’re for.

The maths was never the hard part. The habit is.

Now, what is the gift item you sold was worth $1,500? yes, there are ‘newsagents’ doing this.

…
Mark Fletcher founded newsagency software company Tower Systems and is the CEO of newsXpress, a marketing group serving innovative independent retailers, including newsagents, who continuously evolve their businesses to be enjoyable, relevant and successful. You can reach him on mark@newsxpress.com.au or 0418 321 338.

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Newsagency management

Do you spend too high time repricing stock in your newsagency?

I see newsagents waste hours on work their software could do in minutes, and repricing is the worst offender.

You know the job. A supplier sends through a price rise across their range, or you decide the plush department needs a margin tune-up before Christmas. Someone sits at the back computer opening one product at a time, keying the new price, clicking save, a few hundred times over. Everyone hates the job, so it gets put off, which means weeks of selling at old prices on new costs.

Or, it could be that you have finally decided to adjust your prices ahead of losing the credit card surcharge you currently have and need to cover costs another way.

The Stock Manager facility in the Tower Systems newsagency software handles this in bulk. Pull up everything from that supplier or department and change the lot together. A range-wide price rise is a five-minute job.

The part I want every newsagent to understand is the gross profit option. When a supplier lifts costs and you only pass on the dollar amount, your margin percentage shrinks without you noticing. Do that across a few suppliers over a couple of years and you have quietly given away points of margin in a channel that cannot afford to give away any. Stock Manager can reprice a whole range to the gross profit percentage you choose. Decide what margin your gift department must make, then make every item in it comply. That is managing, not just retailing.

Pricing is the headline but not the whole story. Details, images and descriptions can all be updated across a range in one go. The bulk tag tools matter if you run a connected Shopify store, because building a collection by opening hundreds of products individually is nobody’s idea of a Tuesday night.

My usual disclosure: I work with Tower Systems, so weigh my words accordingly. But the advice stands whatever software you use. If your system makes you reprice item by item, you are paying for that limitation in wages, and in margin you never noticed leaking away. Ask your software company to show you their bulk editing tools. If they cannot, that tells you something.

One tip from the Tower support desk: back up before any bulk change. Bulk cuts both ways.

Your time is the scarcest resource in your shop. Better spent out the front with customers than out the back keying prices.

5 likes
Newsagency management
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