Some disappointing news for newsagents selling Optus mobile recharge. Optus is cutting margin while our costs of providing the service is increasing. How Optus can justify cutting margin is beyond me.
If their costs have gone up they should deal with it in call charged and not by clawing margin from small businesses like ours.
I’d also like Optus to be transparent with us on the commission they pay Coles and Woolworths.
Here is what ePay is advising retailers:
epay Australia has received written notification from Optus/Prepaid Services advising that your new margin for all Optus products is 3%.
The new margins will come into effect on Monday 16th December 2013. Please update your internal systems as appropriate to avoid complications in reconciliation.
As an agent of Optus/PPS delivering electronic recharge services, epay Australia is contractually obliged to activate the new margin structure, as advised to us, on the above date.
This will be newspapers in ten years.
From now on Cash only with Optus credit.
Better off telling the customer hold on 2 seconds , run into woolies and buy one at a discount price and resell it .
seriously at 3% if that is all the sale is for and no other in store products i think i will say the system is down .
For some reason most of my optus sales are for the lower end $10 or $20 so if i miss out on my 30 or 60 cents then so be it
I will be introducing a surcharge for Optus recharge done with a card, a sign will go up clearly explaining why. We stopped selling Optus phones and SIM cards after the jenlist debacle, they really are screwing their retail network over.
Anyone who knows someone who works in a major supermarket – ask to get a copy of their invoice for recharge products. send it to me.
Australia Post staff used to get a 10% discount off recharge vouchers, I don’t know id this still happens but I bet AP still made money on the transaction so how poorly are we treated.
shauns
If your going to woolies make sure you get over $100 worth,then you can buy a carton of carlton dry from dan murphy,s for $30 on your shopper docket. Might help erase the memory of getting shafted by optus.
Steve I like the sound of that.
I had a customer last Sunday ask for a $29 Vodaphone cap. After I did the transaction she told me there is a 10% discount, she had the text message to prove it? Turns out it was a one of the major Supermarkets offering this.
Why do we not get treated the same with these discounts and specials.
Shuans your right most of our optus recharges are usually $10 or $20.
Might tell them to go next door to the LPO and create an even longer line of inpatient people.
I like the extra charge cost for Optus. The more this occurs the less Optus business there will be and the harder it will be fpr Optus customers to recharge conveniently. i will either put a surcharge on their business, cash only or not offer it at all. I dont sell Visa cards for the same reason and Ukash is for cash only.
Optus treat us this way because they can and know there will be no consequence. If It were the big 2 they would simply be delisted.
Time we took some direct action and did the same.
id happily support an organized embargo of optus recharge, probably illegal for me to say that, so sue me
As usual we will all just bend over on this one and cop it. Optus and many other suppliers know we are weak, we have no real representation at any level and will screw us accordingly. Unless we stand up and do something as a collective then all we can do is “bite the pillow”.
Well said Allan
I need glasses. I always have trouble finding the optus button
Optus can survive without newsagents, they have every supermarket, petrol and convenience store so I don’t see the need for them to give us higher margins.
Optus won’t lose sales if newsagents don’t sell their product, if someone needs a recharge they will easily get it somewhere else.
We now do recharge because its easy and the odd customer requested it, but if it became a hassle I’d get rid of it tomorrow. We only started selling it a year or so ago and all that’s changed in my business is I no longer hear ‘that’s weird all newsagents sell phone credit’.
And 99% of the time it’s purchased on its own.
I`m going to look at my basket sales and if it`s true Jenny that most sales are made on their own then I might have to look at wether Optus recharge is worth having. I`m sick to death of working for peanuts on so many products, sure phone recharge is easy but what is standing up for yourself to suppliers really worth? It may be true that Optus doesnt need Newsagents but it is also true that this “Retailer” doesnt need Optus either.
Anyone acting on this should make the most of their position by handing out a flyer explaining why.
I agree Jenny. Optus don’t need newsagents. It’s easier for most people to recharge using an app, online or via the phone. With all these options the market for physical voucher sales has to be declining. There are still some consumer groups that need/want vouchers – under 18s, people with older phones or older people with phones – but the category certainly isn’t one with future opportunity for growth.
I am not sure that Optus wouldnt miss us.
Coles and woolworths would be more clogged up as would there service stations. 4000 outlets the biggest retail footprint?? in the country. My customers will be told sorry cash only as the big guys are screwing us again. But Vodafone we can offer ( I get 6%now) In profit it is probably only worth $60 a year at 3% if they have 20% marketshare.
Optus started screwing the little guy when the got rid of their 2 distributors and then wanted us to sign their stupid contract. They wouldnt accept returns etc and reduced the % on items. some of us said stick it up your a….. And they backed down. I never signed a contract with anyone. there is a hero in Optus that is making a name for himself and looking for a promotion. Lets see who we can screw next he says. We are convenience stores and our customers come to us because there are no long queues (and we are mostly nice people and offering a great service) Mark says hand out a flyer and we should also say we are getting screwed by the big guys again. our customers feel sorry for us because they know the big guys are screwing everyone. Use it as our point of difference and keep telling anyone who listens that we are the last before they have everything. sorry for the rant may aave got off the track a little.
Does anybody know if we are allowed to charge a fee for recharge product?
Allan,
I doubt you are allowed to charge a fee specifically for the recharge product. However you are allowed to charge a fee for EFTPOS (no more than what it costs you).
who says i cant charge $21 for a $20 recharge? is it in some contract? optus know they will cop a little flak for a few days, then life will continue on as usual. they rely less on physical recharge hence the reduced commission, as you say roll over and take a mouthful of pillow.
Rick,
While I don’t have a copy on me I’m reasonably certain that there will be some kind of agreement containing a clause that sets the maximum price you can charge. If there isn’t, Optus can simply request it of you.
For me the issue isn’t worth worrying about. I now charge a surcharge for electronic recharge products paid for by card where nothing else is purchased. If the recharge is part of a larger basket, then no surcharge is added.
If the customer doesnt want to pay the surcharge, Woolies is 50 metres away. I hate the surcharge practice but we dont really have a lot of choice in this one, and the $ involved are not worth getting in a twist over.
Newsagents on Twitter should tweet about this and include @Optus in the tweet. They will notice. I’d suggest you’re clear in your tweet:
Why is @Optus cutting margin for small business newsagents by 25%? Are they hitting Coles and Woolworths the same?
Hi some agents are geting 10% on optus at e pay
Optus just call about my tweet
So like Mark said tweet about the way Optus is treating small business because they don`t like it
Well done Garry!
Call it coincidence but we sold heaps of recharge today. Every time I was asked for Optus I was close to saying no but instead refrained to see what else was purchased. A few times there was no add on sale but then one girl comes in and buys $35 worth of scratches with a $30 Optus recharge.
That said I am still going to monitor sales of Optus product very closely.
just did my first ever tweet , not sure if i did it correctly but i think it is there 🙂
Sold a few optus today all single sales .
maybe telstra could send out some free sim cards and i would love to hand them out ,
Keep the Tweets up. Optus must eventually notice.
Was this a furphy or has Optus backed down? I’ve received no notification from Epay that this was going to happen and my optus margin @ 5/1/14 is still 4%.
last statement 3% this statement couldn’t tell you as I somehow didn’t sell any optus and only Telstra figure that one out
Weird. Given the small amount of optus I do and the free assessment of optus’ shortcoming I gave to some of their employees following jenlist’s shafting I can’t see why I’ve missed out on this.
do you sell handsets ? I am sure if you sell like 2 a month you get 4 % not to sure I have never bothered to look into it , not enough coin in phone sales or credit sales
No I haven’t sold a handset since I managed to move the last of the ones I was left holding when jenlist went to the wall. At least 3-4 months since I got rid of the last one.
Actually Shaun your probably right. Optus works on 6 monthly totals so I’d still be classed as a reseller. If this is right that means optus has moved from an incentive plan to sell sims (sell enough and we’ll give you a higher margin) to a punishment plan (sell sims or we’ll cut your margin) with nary a peep from them, just let Epay tell the poor sucks. Talk about gutless.
most sales for optus are $30 or less (for me) so we are talking about 20cents or something hardly going to make me say hey I better get in phones or sims so I gain the extra coins I mean cents .
Your right on that one Shaun. 15% margin on a phone that someone brings back because the screens locked up and you have to sort it out because you sold it. Been there, done that and never doing it again.
This goes to the whole agency discussion. We need to understand where we make our money today and into the future and we need to focus on these things.
Optus’ latest margin move is disrespectful of newsagents.
Just downloaded my latest epay invoice and there is a message attached saying Telstra are in the process of reviewing retailer margins and changes will result from this review effective from the 13th of October. Somehow I feel these changes wont be in our favour.