Further to my post yesterday, the question do you think a newsagency is a good business to buy? is one I am also asked regularly.
Any newsagency is a good business to buy to the right purchaser, the person most suited for that business.
The answer really does come back to the purchaser because they may have skills ideal for a specific business. Equally, they may lack skills essential to a particular business – making them not the right purchaser.
The question demands an answer thoughtfully considers and takes into account who is asking, their skills, their resources, their experience, their fitness, their desire and their hopes and plans for the future.
While the business they are asking about is important, I see the answer as relying more on the person themselves. This is why I say any newsagency can be a good business to buy and often is.
I have a lot of confidence in the channel even though what the channel stood for in the past is changing rapidly, faster than ever before, to the extent that the channel is not the channel. But all of that is good in my view for I love change and the opportunities in change.
So, for the right purchaser, yes, a newsagency is a good business to buy.
Where it is not is if you are not interested in retail, not prepared for change, not appropriately resourced and expecting an easy ride. Yes, if you are lazy, a newsagency is not a business for you.
I say all of this as someone keen for more new blood in our ‘channel’. But it has to be good blood from energetic and optimistic retailers … because it is you who will help give us a terrific future.
Now is a great time to buy a newsagency if you want to participate in a time of great change and great opportunity that comes with great change.
There also needs to a thorough understanding of the seller, what has been tried, what has failed and succeeded. Some newsagencies just cannot be saved, be they in the wrong place, have wrong demographics or be victims of changing retail environment.
To my knowledge there are 6 Adelaide outlets that are in the process of or have faced the inevitable in first quarter of 2016 :
– one closed its doors, no announcement, private owner many years
– two closed its doors, corporate owner in busy shopping centre
– three closed its doors, absorbed by neighbouring chemist who took on the lottery
– four, in process of selling for 2nd time in just over a year. Previously owned for many years and historically profitable with good reputation. But is smallish and needs a revamp
– five, the least attractive of the 6, too small for gifts and no lottery, situated next to a PO selling cards etc. Sold to overseas buyer !
– six – newsagency in new shopping centre opened last year, corporate owner exiting
So, out of the 6, only one has a future and that is struggling to find the right buyer.
5 out of 6 were not good businesses to buy, certainly not as newsagencies.
Would be interesting to see what happens if some good Adelaide newsagencies came onto the market.
Crazy to buy a newsagency. You may as well opena video shop.
Andrew T: sour grapes from you as a failed retailer in this ignorant comment?
What makes you believe I was ever a retailer as opposed to an informed retail observer. You are flogging a dead horse my friend.
Because you visit here regularly and write from what comes across as anger and bitterness. There are many success stories that you work hard to ignore. Rather than try and talking down successful newsagents why not go stalk smoother blog.
Andrew,
Several of my customers have pet dogs that when left outside, constitute retail observers. Reckon they would have something more constructive to say than you.
Reasoned comments please.
AndrewT…………..
Informed retail observers don’t make comments like
“Crazy to buy a newsagency. You may as well opena video shop.”
That’s not the way to convince anyone that you are an “Informed retail observer”
Simply doesn’t wash mate.
Bitter Pills ?………..get a new prescription.
if newsagents operate like Fairfax, yes we will fail as a falling rock
I owned a newsagency for 5 years to 2009. It was 5 years of my life I will never get back. It was a terribly hard slog. I worked it hard and did all the right things (best practice) regarding software (Tower), stock levels, returns, product mix, giftware etc. You really would have to be mad to buy a newsganecy in 2016. There will be no such thing in 5 years time. Lotto yes, magazines, maybe, printed news, definitely not. My four children have NEVER read a newspaper, even when I owned the shop! If you haven’t already got out, you have probably left your run too late unless you can still find a gullible migrant looking to buy themselves into Australia but from what I see lately not even they can be convinced to buy a newsagency.
It is disappointing people who left the channel long ago feel the need to come back here and talk down what we are doing today based on what they did years ago.
There are many newsagents making good money their businesses, growing their businesses. While such stories may not suit the narrative of some, they are real.
It’s been a year plus since this article and comments. Anyone still thinks that newsagency is a bad investment when I am seeing large store-format newsagencies doing well in mid-size to major shopping malls including some in Westfield. My observation has been only in Queensland and why most people still thinking newsagency as traditional newsagency and cannot re-invent into a major retailer to compete in the differentiated market segment?
People who think a newsagency is not a good investment are not good retailers with their eyes on the horizon and an understanding of the commercial value of disruption.
Good retailers are not blinded or fooled by the potential of the current retail format. There are plenty of good newsagents retailers who have spotted opportunities and taken them. Investors know this.
I do believe we are arriving at the point where newsagents who have even not started transitioning are worthless not just as newsagents but to any investor.
Yesterday I spent time in a newsagency that I am considering making an offer on. Yes I’m new to retail but I can see that the modern successful shop has become a general retailer than really just happens to sell a few newspapers and magazines along with a range of many things.
A bit of imagination seems to be very valuable.
Shawn, I’d say not a general retailer. the successful ones stand for something, they leverage a USP, which is what makes them valuable.
Also, check this thread: https://www.newsagencyblog.com.au/category/buying-a-newsagency/
I have noticed in Sydney there is vastly different prices for newsagencies for sale. I am new to business so can someone summarise for me why one is $80k and another is $400K. I realise it is all about location etc. but these prices are very much at either end of the spectrum. I know I could research this however thought this site may provide a quick answer.
Sara, a business is only worth what someone is willing to pay for it. Remember that. Just because someone asks for a price it does not mean it is worth it – only your thorough assessment of verifiable business numbers can reveal what it is worth.
To be clear, it is the current financial performance of the business that should guide / inform the purchase price.