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margin

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.

6 likes
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.

8 likes
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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