There was a time when ink was massive for newsagents, with plenty of businesses turning over more than $10,000 a month, achieving excellent margin and doing this with minimal capital invested in inventory.
I know because around ten or so years ago out the back of one of my shops we were doing $350,000 a year in in sales.
Today, the ink market is fundamentally different.
Printer companies are selling more larger capacity printers, reducing the sales of ink in the first year or two.
Printer companies are launching printers, and associated cartridges, through major retailers, cutting out independents.
Margins are lower.
Shoppers are more price sensitive thanks to major retailer campaigns and thanks to more online businesses in the space.
Price sensitive shoppers are not loyal, making revenue from ink less predictable than ten or more years ago when ink did well because of in-store knowledge and service.
Should newsagents get out of ink? Has the category run its course in the channel?
There are plenty of newsagents doing well with ink. They are usually in regional Australia with a somewhat captive local market. However, the number of newsagents doing well with and making money from ink is considerably lower today than ten or so years ago. That’s what suppliers say.
Like anything in business, let your data guide your decisions. Consider your capital, labour and retail space investments against revenue over a year and assess this against alternative use of those assets.
Whereas ten or so years ago we could confidently say that every newsagent could do well with ink, today, that statement cannot be made.
True story punch line…Let your data guide your decisions. Look at the services provided and you will see the decline from ‘phone card to opal to -compare same period last year say end March to this year -interesting Lotto has not been one of them for sales are holding if not picking up, thankfully. N Parcel and the like are stalling. I wonder how LPO’s are going will Bill payment and other services..Passports of course will pick up when travel restrictions are lifted.
Data watch is an important regular process. Month to month Qtr to Qtr etc.
From data I have seen, over the counter bill payment transactions are declining with the service more likely to be used by time consuming matters that the service is not actually there to serve.
In terms of parcels, as that business expands with more providers, parcel pick up will decline faster too.
Well with that I’m off to the pub
Eddy,
To get yourself full of ink? no wonder sales are down at the newsagenxcy, all the ink is at the pub.
First one’s on me!