Following my post in Tuesday about improving the business performance of a newsagency, I have received calls from newsagents keen to review and refresh their stationery offer. This is a good place to start as it is where I see many newsagents wasting considerable money in dead stock.
Newsagents usually end up with too much stationery stock when they allow suppliers to order for them, order using manual processes or do not apply tight management to the ordering process.
By ordering only what is selling and applying tight rules to new product opportunities, newsagents can expect to find their stationery stock holding reduce without any impact on sales. This frees up cash for use elsewhere within the business.
The challenge to moving from old practices to a profit focused approach to stationery will be a challenge for many newsagents as they rely on personal relationships with supplier representatives. For many, visits from reps are a welcome break in a busy day. While I understand the social value of the rep visits, there is a cost through oversupply which can diminish the return newsagents achieve from their stationery department.
With more competition in 2011 in stationery – the OfficeMax / Australia Post relationship and the full takeover of Corporate Express by Staples to name two – newsagents need to approach this year differently than in the past if they are to improve the performance of stationery. Improving stationery starts with ensuring that you have an efficient range on the shop floor. The best way to achieve an efficient range is to use sales data to drive reordering.
At the heart of this issue is years of habit. Our competitors rely on this and that many newsagents will prefer manual processes. Sure, we will say that we offer more personal service and better product knowledge than, say, Officeworks. No amount of personal service or product knowledge can help you move stock which should not have been purchased in the first place.
In situations where there is little useful or accurate sales data, newsagents can rely on sales data from organisations like GNS. Their top sellers list is an excellent place to start in building a successful stationery department.
Stationery is one of the few departments in a newsagency over which the newsagent has complete control. Use this and bank the results.
Newsagents who take stationery seriously usually find that they can increase sales by selling more of what sells. This creates the ideal win win. Be guided by your customers and this could be you.
We’ve been using min/max stock control since not long after we purchased the business, first on MYOBS Retail manager and now with Tower. It took time to set up but has made ordering easy and means that we rarely run out of stock that sells regularly. Slow items are reset to zero on hand quantities and not replaced once sold. If a customer orders a special item in regularly we set the stock level to always have one on hand. By checking stock levels against computer generated order reports we are aware of theft where we may not have been.
With help from GNS we re-organised our stock layout and selection to better reflect their top 500 while supporting our preferred brands.
Over the years this has provided us with continual sales growth in the stationery department and while not totally eliminating dead stock (we are bound to make the odd mistake when trying new stock ), we have much less dead stock than we purchased with the business.
Pen reps are the worst for overstocking us but we have developed a good relationship with our reps from Artline & Pentel and are happy with their service. They understand what we want and have been very good at servicing us properly. Any pen reps or brands we have been dissatisfied with no longer grace our shelves. You can’t reasonably stock the all so be selective to suit your needs.
All other stationery is ordered for three reasons only. 1) It’s on our system generated report, 2) A customer places a special order, 3) A rep shows us something new that we agree is worth a try, if these new items sell well they will be given re-order levels to become permanent stock lines.
We have experienced annual growth of 10-20% depending on the year and I put it down to using a system to ensure that we always have stock that sells on hand. I could not do this manually with any where near the efficiency that a well set up computer system does.
This is such a valid topic for growth of sales. I agree with Mark & Brendan that the Newsagents who have established a more formal strategy for stock management, such as applying minimum & maximum levels, based on sales trends, are certainly growing their market share.
The Point of Sale companies provide a great tool to assist you in this regard.
Just over 12 month ago, GNS in Victoria established a Field Support Role, for this very reason. At this stage we have been able to assist approximately 30 Newsagents. (The majority showing growth in sales) The idea of this role is to tie together shopfits / revamps, category flow & demographic review. This is not a simple “tidy your shelf” service, as we believe part of good stock management is as much about display, flow and product selection to your demographic, as it is about minimising dead stock.
This is such a positive topic to be discussing and if GNS can assist you please let us know. I will expand on this topic further in our next GNS newsletter.
I have this going with tobacco (great stuff) Inks (getting better all the time) next drinks then stationary. One trouble I see with stationary is the quality off data sent by group often inner and outer barcodes mixed up non consistency i.e. card board packs 50 sheets, coloured some come as 1 and others as 50. The other thing is stationary will have to be a gradual process over time.
Yeah, barcodes with GNS can be an issue as you say, particularly when an outer barcode is used but the stock is split or vice versa. The number of stock lines afflicted by this is not enough to cause great problems though. I’d love to simply have all stock arrived as it is packed by the manufacturer and we can do the rest with the POS to make it work properly. I just have all cardboard under one code according to size and this works fine. Some other products are a bit fiddly.
Peter/Brendan,
The problem of data quality and consistency has been brought to the attention of GNS before. They have done nothing about it.
Jarryd,
I have several Newsagents who will email me if we have an incorrect barcode. I fix it immediately, so all files going out are correct from that point. Please email me anytime with the product code for me to fix. Not offering any excuse as I believe we need to continually improve our accuracy of data, especially now more Newsagents are prepared to use data.
Some of the difficulties I see are that GNS, in the majority of cases only use outer barcodes. We scan everything in & out so these are generally accurate. In regards to the inner barcodes one of the difficulties is when a barcode changes and there is still current stock in either GNS or at Newsagents. GNS’s system can cope with multiple inner barcodes, so we just add to the list. The DDO Invoice file can only take 1 inner barcode so it takes what we would call the primary code (New code). When we update this field, it will appear incorrect to your product on the shelf. I am not sure if the POS systems can cater for multiple barcodes? If the systems can then we could find a solution. Remember there could be a lag of several months on any line between barcode change and all current stock selling through at both Wholesale and retail level.
When we have slower periods I do free up staff to re-scan all the inner barcodes, I would be expecting to do this again in March/April.
Don’t get me wrong we do make mistakes and we need to do this better. Please feel free to email me any time if you find an incorrect barcode and I will attend to it immediately.
Jason,
Tower works with magazines having a main barcode and a subset of issue barcodes attached to the main one. I would suggest that it may work similarly with an outer barcode as the main code and inner barcodes attached to it. Mark is the best person to set us straight on this.
The issue I have in a small number of cases is for example a box of fold back clips that are broken down into individual items when imported via edi. This may be something I have done at my end but I don’t think so. Lately stock item 60000 (confetti) has been arriving as an outer of 12 units via EDI when it is in fact an outer of 24 units. I’ll email you with other issues in future as they occur but as I say they certainly don’t happen on a frequent basis.
Jason,
what is your email please
Brendan,
Both of these issues are related to the inner unit of measure. On the Confetti (Code 60000) we have the inner unit wrong & I have fixed it in our system (Thanks for letting me know)
With the fold back clips, this will come down to personal choice on how you would like to sell the product. We have a good amount of customers who sell them as a box & many who sell in units of both box and each. What I need to do is ensure we have the correct inner unit of measure, so Newsagents can make the choice.
Please remember the DDO Invoice file gives us one field for each piece of information, so what do we put in this instance? The DDO file makes the assumption that all Newsagents will sell in the same unit, which is obviously not the case. In regards to magazines this assumption is fine, but in regards to stationery there is scope to adapt the unit of sale to suit your demographic, in many cases. It is my understanding once you import the file, the P.O.S systems will convert it to the inner unit of measure, hence breaking down the price. If we use the outer unit, the file will be wrong for you. If we use the inner unit the file will be wrong for others. In this instance if the unit on this product is wrong for you, then your system should flag the product and not import for you to make the decision manually.
Peter my email is jmcleod@groupnews.com.au if you find any products with either barcode or inner unit discrepancies.
Jason,
Just downloaded y latest order and the confetti issue was fixed. Thank you for the prompt attention to this.
Jason,
If electronic invoices files can only take 1 barcode then GNS need to look at the file formats they use. Clearly this isn’t adequate in a market where barcodes are constantly changing.
There is also the problem where GNS use the same barcode for the inner and outer (which really should be refered to as TUN or GTIN). This should not be done as the inner and outer barcodes are never the same (unless a manufacturer is not complying to international standards).
Then there is the issue of units of measure. EACH, BX12, PK5 – all these are useless to a POS system where a unit of measure is always a number. All units of measure in a stock system should an integer (ie. no text).
The unit of messier should also be a reflection of the inner barcode. If GNS has a box of 10 Fold Back Clips with an inner barcode that is printed on and designated to represent one box of 10 then the unit of measure should be 1, with the description being FOLD BACK CLIPS BOX OF 10. If a newsagent wants to sell those clips individually then they need to create a barcode at store level to do so.
These issues have all been raised in the past.
Jarryd
GNS is using the DDO Invoice format the POS companies have advised us to use. We have not changed or modified it at all. This file allows us to insert 1 outer & 1 inner barcode only.
I agree in regards to the PPU being associated to the inner barcode, so I will have all our products rechecked over the next few months and corrected.
Approximately 6 months ago I did a report to check any products with a matching outer & inner barcode and corrected any issues then. I will run this report again and have any corrections made.
In the PPU field we only put a number, never alpha numeric, as this is what is imported through the POS systems. In the GNS sell unit field we do put alpha numeric as we believe this is clearer for Newsagents purchasing from GNS, and does not affect the PPU import.
Thank you for your feedback. At any time you identify a product that needs review please email me the product code, so I can fix it immediately. I have several Newsagents assist me in this regard and it helps to ensure any mistakes are corrected quickly.