I see no upside in discounting copy paper. Sure, you may get a volume bump but I suspect this will come from people who only shop on price – such is the mentality of the volume copy paper shopper. I know because it’s what we do in my own office. When it comes to copy paper, we will go where we can get the brand and quality we want at the best price.
Newsagents discounting copy paper to drive traffic ought to look carefully at shopper behaviour in their own business performance data to learn whether their deep discounting in mid year and other sales generated the repeat business they need for the discounting to be worth it.
It is easy to get caught out by a competitor. One newsagency group has Victory at $4.95 a ream right now. Australia Post outlets have Reflex at $4.99 for a 550 sheet ream.
I think this type of discounting in a small independent business is a mugs game. I resist it.
I’d rather drive value with a volume offer or very targeted discount voucher rewards for return business. The data over two and a half years indicate this is more valuable in bringing shoppers back.
I`m working on a plan at the moment to change the way we sell copy paper. Got to give Reflex credit for the way have entrenched their name into peoples minds but am sick of never getting a deal on their paper. Also sick of the margin on offer from Reflex, going to shake things up on paper sales.
I agree Mark, it’s not worth it.
We buy 100 reams of victory on the midyear promotion and again on back to school promo and sell for $7.99ea. There is no sense in cutting the price and having to sell 5 times as much for the same profit!
All the extra handling and storage it is just a waste of our time and space.
We don’t do the midyear promotions(we do buy up at the cheaper prices though), and are more profitable because of it and we are thinking of not discounting at back to school too. We do not supply to schools.
We figure those that buy based on price will not look to shop at a newsagent anyway.
Unfortunately Australian Paper, the makers of Reflex, have allowed their number 1 most recognised and asked for product – Reflex Copy Paper to be “price set” in the minds of consumers at $4.99/$4.95 by continuously selling it to Australian Post, Officeworks & Big W who sell it at this price as a draw card (loss leader or no margin leader).
People will pay more for Copy Paper as a convenience purchase, but lets be honest, this price point $4.95 is what people expect to pay for Copy Paper.
Buy it as cheap as you can and sell it for $4.95 – and your customers value perception of the stationery section of your store is in the right place for you to sell more stationery.
Why do you think all the majors do this?
I am happy to sell my Victory paper for $5.95. I sell it by the carton and I sell heaps. It brings customers into the shop.
I advertise it as “Our regular low Price”. If I had storage space I would buy a pallet. I don’t have Office works or Coles just up the road but I have the Office Choice van trundle into town every fortnight. IGA has prices that go up and down like a yoyo but I just keep mine at the regular price. I find most who buy paper by other products at the same time.
Discounting copy paper IS a mug’s game but nonetheless an important marketing tool for the majors and Aust Post and we suffer because it works for them.
The local LPO, which sells everything but kitchen sinks, is able to participate in this Aust Post copy paper promotion and is slaughtering us with other lines such as stationery, cards, giftware, toys and a host of impulse lines crowding the counter simply because they get people in the door via this promo and (for a lot of lines) get Aust Post pricing.
The fact that their core business (on-time mail delivery) is neglected in favour of their extra activities doesn’t seem to be an issue with the powers that be and we are left to wear the consequences.
Our PO will be closing the Westpac In-store soon and I am concerned they will use this space to expand. They are not terribly competitive at the moment but with space would be and they have a captive market. We all have to pick our mail up at the PO so everyone has to go there but no one really has to come in my shop.