Tatts retailers are charged a percentage of sales by Tatts, imposing a cost of sales that fluctuates with sales revenue. The fee is like a penalty for success – the more you sell the higher the fee you pay. yet there has been no extra cost for Tatts.
Last week, a newsagent colleague doubled Tatts sales from $45,000 a week to $75,000 for the week. Their Tatts percentage of sales fee increased from $450 to over $800. This is in addition to other fees imposed by Tatts and the margin Tatts has embedded in their ticket prices.
Tatts agents have said to me this fee as a percentage is unfair, a disincentive to grow sales. Why do you think?
I am writing about this today in response to a request from a colleague.
If I was running Tatts and was serious about incentivising retailers I would charge a lower percentage the more they sold.
I don’t see why there are fees. We should be just paid our handling commission and that’s it. Why pay us commission then take back charges.
“Is the Tatts percentage of sales fee fair on retailers”?
No, no and no.
These figures are very close to my own for last week. What extra work did Tatts do to earn an extra $350+ for the week? None.
What did it cost my business? About an extra $300 in wages. And extra time in the shop for my wife and I. Because of the extra workload we both went in after hours to get other activities outside of lotto done.
Sure I earn the extra commission but wouldn’t it be nice if this fee was capped at a weekly average? Wouldn’t it be great if we got to keep the extra fee over the weekly average to help pay for the extra staff needed. Wouldn’t it be great for those smaller stores who just have Husband and Wife doing the hard yards to pocket the extra fee. Given that jackpot activity has slowed and many businesses have been struggling would it really kill Tatts to let us have this as a bonus? Given also the amount of outlay for new shop fit outs etc etc would it really hurt the share holders of Tatts to give something back to the people who still account for 85% of lottery sales? Come on Tatts, give us a fair go, please.
Wouldn’t it also be great to have somebody from Tatts reply here? Hey, a guys allowed to dream…..
What’s not fair is when they launch a new game telling you the commission is the same as on other games and then pay you 10% less.
And with the new fitouts with the tv screen/s they are charging an extra .05 % of sales to cover the costs to them of developing it ! They say this is a cheaper fit out now for the agents but I highly doubt it. More tatts spin. Worse still the ANF has done nothing to knock it on the head showing how worthless they are.
Paul, nit only it cost more for the new fitout it takes more space for bloody lotto counter too.
What concerns me is the analysts comments as again in this weeks FR that the Lotteries are a “cash cow” for Tatts.
Eric are you talking about the revised new ones that have 60″ tv screens in the wall to advertise lotto product that have only been decided on by lotto in the last couple of weeks ? They have apparently cut down the area required but there is more expense in the two screens. They have said it should be marginally cheaper than the other completed “current” fits. If it isn’t I will be extremely pissed off.
Paul,we are going to do the new lotto fitout next week. we have only 2 lotto machines but the total length for lotto from front door to the lotto counter is
4.3 meters. that is not including my shop counters. so total is 6.65 meters. what a joke Lotto!
Paul actually on the approved plan they want extra 20cm , so total length is 4.5 meters. i think it is 1.5 meters longer than my old one.
you also need to sign that you are going to pay the screen around $8000???
Mark, it seems very few people are aware of the costs being imposed on NEWSAGENT retailers by Tatts on fit out and new image in their stores.
What Paul and Eric are both pointing out is that you have to pay $8-10,000 on top of your fit out for the screens to advertise Tatts products in your store.
And once you have these screens installed in your store, you will then be slugged an extra 0.5% on top of the fees you have mentioned above.
It is outrageous.
In comparison, Woolworths Petrol Plus has opened 24 stores in NSW in the past 4months with NO lavish fit out and no staff training costs that are imposed on other small retailers who are new entrants into selling Tatts products.
The Woolworths fitout consists of a poster frame stuck onto cigarette cabinet doors which have been changed by the cigarette company from white to red.
This is something the ANF and NANA should be jumping up and down about.
eric, I would not be doing the new fit out until you take a look at what little expense Woolworths Petrol Plus sites have spent on their “Tatts image”.
In SA Tatts have gone heavily into the On The Run service stations .
Their requirements for Lotto counters ect is far less than that which Newsagents are required.
So we have a situation where two groups of retailers are selling the same product but are treated differently.
This puts Newsagents at a disadvantage it is not a level playing field.
Not only is there a huge difference in set up costs ,as On The Run do not have a dedicated corperate Tatts counter. But when it comes to audits Newsagents are also treated differently
Service stations sell other product all around their Tatts terminal and even sell product off their scratchies bench of a carton of stock placed next to a sign
Newsagents are failing audits for what I think are trival matters . Tatts have really stepped up their “Policing” to a level I have not seen before.
To me this seems harsh considering other Tatts outlets do not have to meet the same requirements
Can this different treatment by Tatts be taken to the ACCC, or Small business commissioner?
Unfortunately the large corporate partners of newsagents i.e. Tatts, magazine distributors, newscorp are all taking advantage of our industry being disjointed with poor leadership by the ANF and associations.
Unless the ANF is replaced with a body interested in supporting the newsagencies and NOT the major suppliers we will remain voiceless.
Amanda, we are in shopping centre run by cartels, it is part of new lease requirement to do new fitout.
Actually it is good that the run service station do not need to refit, let them look unprofessional . Refit is good to bring in more business as always when you do new fit out.
Eric I’m not so sure the servo’s not having a corporate Tatts look makes them look unprofessional ,they have good signage outside and really I don’t think the customer cares ,its just there and it’s convenient .
My gripe is a lesser level of compliance is required for the on the run group and every a mum and dad Newsagency fails a audit they are hit with a $200.00 fee how can the be equitable ??
I didn’t know about lotto audit, when was that happening ?
Amanda, If I had Tatts and had a Coles or Woolworths with me I would make exactly the case you make to Tatts – the unfairness between the overheads imposed by Tatts on a small business versus a much bigger competitor are unfair. The ACCC has the remit to consider such an argument.
Eric in SA we are “audited” about every 3 months . If we don’t pass their audit we have to pay $200.00 for a re audit