With commission falling on transport tickets across the country, newsagents need to look very carefully at the overall benefit of these products to their business. While transport tickets generate excellent traffic, I’d suggest that this traffic is inefficient for many newsagents with more than 70% of transport ticket sales including nothing but the tickets purchased.
Few newsagents are successful in extracting greater efficiency from transport ticket sales. In some areas time is against them as tickets are purchased by commuters rushing to catch a bus, tram or train. In other cases, the purchase is connected with work, making the purchaser not open to upsell. I’ve seen newsagents employ all manner of tactics to turn ticket sales into multiple item purchases.
Factor in the cost of stock – in Victoria we need to order at least $4,000 at a time and can only order every 10 days – and the cost of offering eftpos / credit card payment. With a 4% commission there is not enough left to cover the cost of carrying the stock.
Of course, the customer purchasing the transport ticket today maybe the customer who purchases a newspaper or a card tomorrow. See how difficult it is to navigate this issue.
It seems to me that Governments and others involved in the transport ticket supply chain have newsagents over a barrel. We (newsagents) are too weak to stop selling tickets so we accept lower and lower commission, believing that traffic is better than nothing. I’d like to see a professional study undertaken of what happens when a newsagents gets out o the ticket business. Does the world end as some say it will? Or, is the business better off?
We stopped selling tobacco products in my newsagency nine years ago and the benefits far outnumbered the lost sales.
Mark, it gets worse. In NSW our comnission is 2.5%. Having done the analysis of ticket sales approx 50% are purchased using a credit card, so we are behind the 8 ball from the word go. Factor in the time it requires for the staff member to serve, opportunities for people to hand out the wrong ticket, internal theft and the cost of carrying stock and I believe they should be removed from our business, they are a revenue negative product. What about basket sales?? Only 1% of customers pruchase anything in addition to their ticket. However there is always the argument that the customer who purchase a ticket could be purchasing a higer margin product later in the week. To my mind we should all band together and demand a higher return for our investment, and if we dont succeed, stop selling them. I would love to see the queues at the ticket windows if that happened.
Mark
We exited out from ticket sales 12 months ago and with the money we saved that was invested in stock we bought a coffee machine for our railway kiosk. We now sell $500.00 of coffee per week at a margin of 75%. I believe there has been little or no negative impact from not selling tickets.
Rowan,
Great intuative idea! I love hearing about little success stories such as yours. Hope it continues to work well for you.