Be Careful What You Buy Right Now
I want to say something plainly to newsagents who are buying new ranges over the coming weeks, whether at trade shows or through rep visits.
Some suppliers in this channel have not caught up with what is happening. They are pitching stock sourced at last year’s prices. That stock is arriving in Australia with this year’s freight costs baked in. The margin you think you are buying is not the margin you will actually get.
FOMO is the oldest sales tool there is. A rep will tell you this range is selling hard in other stores, that you will miss the season if you do not order now. Some of that will be true. Most of it cannot be checked in the room, which is the point.
Ask for evidence before you commit. Which stores are performing with this product? What does the sell-through data look like? What happens if it sits on your shelf? Vague answers mean the pitch is not ready to become a purchase order.
Here is something worth remembering: every sales person who walks into your store has a target. Your order helps them hit it. That is their interest in the transaction. Whether the product sells through in your store is entirely your problem once the invoice is signed.
Freight costs have shifted significantly. Products sourced offshore last year are landing now at higher costs. Some suppliers have absorbed that. Others have passed it on quietly through margin compression or reduced pack values. You will not know which category you are dealing with until after the sell-through.
Buy tight. Buy what your customers are already asking for. Buy what you are confident will sell within sixty days. Do not buy on a rep’s enthusiasm, on manufactured urgency, or on the hope that your store will perform the way another store did.
Your cash flow runs your business. Guard it.
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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.