Mumbrella reports on magazine closures at Bauer. The closure of Yours is a surprise as this title served a valuable niche.
The latest sales benchmark data, which I will release Friday, provides some context for the closures as the overall product category remains challenged.
This map shows the delivery points of online sales from the last few months for a Victorian based newsagency related business. The average sale value is in excess of sixty five dollars, not including shipping, which is charged for at cost.
The map does not show click and collect customers, and there are plenty of them.
All of the customers are not local to the business, not regular shoppers of the business. They have all been won through direct online engagement, direct to the website as well as through Facebook marketing.
I share the image to reflect the reach this business sees it has. Whereas a coupe of years ago it saw itself as a local business serving people who walk past or live within, say, ten kilometres. Today, the business reaches way beyond, it reaches to all of Australia.
I appreciate there are newsagent who say online is not a big deal and that social media is not useful for driving traffic and revenue. Data do not support those arguments. The opposite is true, and especially true for tech engaged small business retailers including businesses that identify or have identified as newsagencies.
This is how we can grow our businesses, by reaching shoppers located far beyond our four walls, by being accessible 24/7, by selling what people want and fulfilling through a appreciated timely service.
Footnote: I call this a newsagency related business as it is related. But it is not a newsagency as many would see it, not any more.
A newsagency business changed hands this year where the vendor included returned magazines as part of the inventory for which then purchaser paid.
The stock take was not undertaken by people skilled in newsagency business stock takes.
The solicitor for the purchaser had never aced for a client in the purchase of a newsagency before.
The accountant for the purchaser had never acted for a client with a newsagency business before.
On the shelves at settlement was thousands of dollars of stock of magazines for which the vendor had been given credit by their magazine distributor. The magazines were not topped. Some were nine months old, yet there they were, on the shelves, for sale to shoppers.
The expert in the transaction was the vendor. They are at fault here. They defrauded Gotch, and through them the magazine publishers. They deceived the purchaser, causing them to pay for stolen goods and, through their actions, encouraging the purchaser to sell stolen goods.
My advice to the purchaser was to engage a new lawyer, to pursue the purchaser, to consider pursuing their original lawyer and to advise Gotch formally of what was discovered.
Gaps in handling magazines allow unscrupulous operators to get away with crimes like those outlined above.
Gotch should verify all return claims. Publishers should demand it, and be prepared to pay for it. While I understand they do spot audits, which have found discrepancies that have led to newsagents paying compensation, that is not enough. The situation I have outlined above should not have been allowed to happen.
Every returns over claim should be caught.
Gotch and the newspaper publishers should consider working with the ACCC on an authorised process for handling the change of ownership of a newsagency business. This could ensure the stock take is undertaken by a registered, skilled and ethical stock taking business.
Sadly, it is not the first time I have heard a story like this and, I suspect it will not be the last.
It has been a tough baptism into newsagent life for the purchaser. Hopefully, they have learned to be more curious about situations they encounter in business for the first time and to have a healthy questioning about those they deal with.
Earlier this month, Gordon and Gotch launched The Market Hub, a wholesale business offering toys, gifts and other items.
In my opinion, Gotch should get its magazine distribution business right first. There are too many mistakes, too much oversupply, poor newsagent customer service and a poor tech platform through which newsagents connect.
As I have noted previously, Gotch could grow magazine sales for publishers by providing better service to newsagents, through a better tech platform. Indeed, the poor Gotch tech interface is a big barrier to newsagents taking on new titles.
There are items offers by Gotch through The Market Hub with a suggested retail price that is higher than the original supplier suggested retail. This potentially sets the participating newsagents as expensive and creates a false margin perception in my opinion.
Some items in the Gotch offer need understanding and support to drive sales success. Simply purchasing product and stocking it is not enough for such items.
FAILURE TO ADHERE TO DATA STANDARDS.
It is in the data side where I have concerns with how Gotch has gone about the launch of The Market Hub. Gotch sent to newsagents an EDI file using a format designed for magazine data. XchangeIT passed through the file, without testing.
The file contained errors. Gotch and XchangeIT people were clueless and, in my opinion, disengaged. It fell to the COO of my newsagency software company to detail the errors in the Gotch file sent by XchangeIT.
A big challenge was that Gotch was the supplier. The way the standard plays out is that having one company provide data for two very different types of products through one file format is problematic. yet, for several days, Gotch and XchangeIT resisted establishing a second supplier for Gotch to send through their data for The Market Hub.
While I don’t know about other software companies, XchangeIT agitated my newsagency software company, Tower Systems, to change its software to serve the approach Gotch and XchangeIT wanted to take. What this meant is they wanted me to personally fund, to the tune of many thousands of dollars, changes so they could bend XchangeIT data to work with standards not designed to accomodate the data they wanted to send.
I made it clear to them that out of all of us at the table, Gotch, XchangeIT and Tower, only I was being asked to personally fund any work. I refused. Instead, Tower outlined an approach they could take with no cost – by sending the data from a separate supplier.
Thankfully, it appears that The Market Hub from Gotch will be established as a separate supplier through XchangeIT, negating the need for any software changes. Why is this relevant? In my opinion it reflects the poor preparation by Gotch and XchangeIT for this project and an arrogance that they expect others to invest capital on their behalf. But they are from the magazine distribution side of the business so I guess that is their usual approach.
What should Gotch and XchangeIT have done differently? They should have engaged the software companies before sending the file. They should have followed the standards. The should have established a separate supplier for this new Gotch business. They should have thoroughly tested the data they sent.
Instead, they worked in secret and rush to newsagents flawed data, compromising the integrity of the data standards that XchangeIT ferociously protects when it comes newsagent data. It is a pity they are not as tough with themselves and Gotch as they are with newsagents.
A business owning three newsagencies went broke months ago, owing close to two million dollars. The liquidators report was released recently, declaring that the business had been trading while insolvent for at least two years. This finding could have serious consequences for the directors.
ASIC defines insolvent trading:
An insolvent company is one that is unable to pay all its debts when they fall due for payment.
Yes, the definition is that simple. The director of the company to which I refer above was a blowhard, a gunna my mother would have called them. Gunna do this or that, with an attitude that they were an amazing business operator. Except, they were not. Many suppliers to the channel were left out of pocket along with banks and the ATO – and through the ATO, all Australians.
In my experience, often, the louder someone is about how great they are in business the worse they are.
ASIC provides advice on what to do if your company is insolvent:
If your company is insolvent, do not allow it to incur further debt. Unless it is possible to promptly restructure, refinance or obtain equity funding to recapitalise the company, generally, your options are to appoint a voluntary administrator or a liquidator. The three most common insolvency procedures are voluntary administration, liquidation and receivership.
ASIC has plenty to say on insolvent trading, including:
If dishonesty is found to be a factor in insolvent trading, a director may also be subject to criminal charges (which can lead to a fine of up to $220,000 or imprisonment for up to 5 years, or both). Being found guilty of the criminal offence of insolvent trading will also lead to a director’s disqualification.
ASIC has successfully prosecuted directors for allowing companies to incur debts when the company is insolvent, and has sought orders making directors personally liable for company debts. ASIC also runs a program to visit directors, where appropriate, to make them aware of their responsibilities to prevent insolvent trading.
If you think you may be insolvent, reach out to someone you trust for advice and to be by your side as you navigate the challenges.
The newsagent in my story did not want help. They said there was no problem.
Right now is the time to pitch Kris Kringle gifts. These are gifts that usually focus on fun and sell for anywhere between $10 and $50.
We are enjoying terrific success with a range of fun gifts right now, for workplace gifts. Starting in a week or so we will focus more on heartfelt gifts, for family Kris Kringle gift opportunities.
FYI, this beer popping candy has been a hit!
Go into any Officeworks store and you are greeted by their school books pitch for the 2018 year. Their pitch is simple and compelling: save time and save money.
Right now, this is the pitch newsagents need to be making if they are in a competitive situation for school book orders for the 2018 year. The two are easy to pitch. The first is about ease of engagement and the second is about margin.
Given how Officeworks sells, it is tough to beat them on price for everyday items. It is in special interest areas where you have your best opportunity.
In terms of ease of engagement, you can take practical steps to ensure this is what you do.
Now is the time, however. If you want school book business for the 2018 year, now is the time to be pitching. Taking a lead from the Officeworks focus is smart, but in your own style, with a local focus and with a value-add that could be unique to your business.
If you are looking for school books / booklist business in 2018 and not already pitching for this business, you are behind, get to it, NOW!
Note: you don’t need to be near them to see them as a competitor, for Officeworks is everywhere thanks to engaged online campaign.
The Herald Sun today has content about crosswords, brain teasers. The editorial folk promoted it on the front page of the newspaper. The advertising folk, however, took money to cover up the editorial content, for an ad for an over 50s living business. They should carve out space for ads on the front page and not cover up editorial.
Kudos to the folks at Simson for being out early, yesterday, with same sex engagement and marriage cards. They have a terrific range that is already being pitched to retailers. Beyond the good news at the imminent removal of discrimination, new marketplaces have opened and opportunities cities for our businesses will abound.
ALNA released this statement yesterday on lottery betting:
Ban on betting on Australian lotteries a step in the right direction
New ban demonstrates the problem with synthetic lotteries and the need to protect consumers and small business.
FOR IMMEDIATE RELEASE
Australia, 15 November 2017: A ban on betting on the outcome of Australian-based lotteries is a positive move in addressing the problem of synthetic lotteries and its threat to consumer protections and ethical conduct, according to the Australian Lottery and Newsagents Association. The Association is continuing its call for the Federal Government, in coordination with State Governments, to legislate against any operation of synthetic lotteries in Australia.
The move by the NT Attorney-General Natasha Fyles to ban bookmakers licensed in the Northern Territory from accepting bets on the outcomes of Australian-based lotteries, demonstrates that there is a serious problem with synthetic lotteries.
There is still a need for Federal Government intervention, in coordination with the states, to protect consumers and the Australian businesses that contribute to our economy.
Adam Joy, CEO of the Australian Lottery and Newsagents Association (ALNA) said, “We are pleased that the Federal Government and State Governments, in particular, WA, NSW and Tasmania, have worked together to address this issue and to deliver this important first step towards an overall ban.
Consumers will still be bombarded with potentially misleading advertisements for these risky betting products that are lacking certainty around payout figures. And they will still be lured into profiting a highly unethical business, including at the expense of news and lottery agents.”
The Federal Interactive Gambling Act makes it illegal to have online scratchies and online pokies, and it should also ban online betting on lottery outcomes.
“The facts are that Lottoland is under pressure because it has chosen to operate as an online bookmaker that poses as a lottery, outside of the much tighter regulations, consumer protections, and higher taxes that official regulated lotteries adhere to.
“It has attracted criticism because it allows consumers to be misled in a number of ways, and the bookmaker uses concerning tactics to attempt to hijack customers from news and lottery agents.
Synthetic lotteries are a matter of national concern, and this decisive action is a positive step towards the urgent action needed to address lotto betting in Australia,” continued Mr Joy.
– ENDS –
What is the difference between Lottoland and official regulated lotteries:
Lottoland is a wagering website that sends bets overseas, with customers betting on the outcome of lotteries. More colloquially known as lotto bets (synthetic/fake lotteries), these online-only bookmakers are different to official regulated lottery draws.
They do not offer tickets in a draw, rather they draw from regulated lottery businesses and offer bets on lottery outcomes, relying on complex insurance linked securities to pay any winners (there has only been one million-dollar prize recipient, compared to official lottery’s 253 millionaires in 2016).
I often hear stories of challenges for small business retailers caused by local council streetscape and other works. Usually, the stories do not make the local newspaper. The Morning Bulletin in Rockhampton has recently published a story about the tough challenges cause by works in Mount Morgan, 45 minutes out of Rocky. It is worth a read.
Take a close look look at this ad that appeared on Facebook yesterday. It appears to be pitching a $41 million Tuesday lotto game. What it was actually pitching was a bet of the numbers selected by the OzLotto game.
If you click on the link it takes you to the Lottoland page where you can place a bet on the outcome of the lottery. This is why I question whether the ad as shown on Facebook is misleading.
At the very lease the text should say: You could win a prize by betting on the outcome of the numbers drawn in Tuesday’s OzLotto jackpot. But, of course, that exposes their product for what it is, a bet, not a lottery ticket.
This Pacific Magazines value-add purchase supporting several of its titles and exclusive to newsagents in the nexus marketing program is terrific. It will sell out.
There are multiple layers to the promotion we can leverage to maximise the opportunity, beyond the usual magazine focus.
There is a counter unit for pitching the amazing value Model Co. make-up products. This can bounce people to the magazine.
The there is the excellent social media collateral that is ready to use, making pitching the offer on our social media pages, something we can do in seconds rather than minutes.
The folks at Pacific have put a lot of thought into the campaign, giving us an offer that is compelling and supporting g it with materials we can leverage to make it work for us.
This is much better than asking for an aisle-end display that only leverages in-store traffic. this is the type offer that we can use to bring in new traffic or shoppers who do not shop with us frequently.
It is especially useful where one competes with supermarkets, as they will not have this offer.
I have dived right in, promoting this on Facebook and in-store, making the most of it at every touchpoint possible. I don’t often do this anymore with magzines. This offer, however, is different, well worth promoting. I want to sell out, early.
Click here to access a comprehensive article by John Turnbull and published by Independent Australia about Lottoland. It is a good read. be sure to scroll down to the comments.
A colleague asked me to pose a question here, related to the photo below of a shopper docket from Woolworths. Why do we continue to sell newspapers?
There is no doubt that print is not a model for the future distribution of access to news or long form journalism. The only barrier to its closure today is the lack of a viable alternative mad revenue model for the publishing companies.
That said, plenty have transitioned to digital, some with good success.
These deals like at Woolworths are all about slowing the sales decline, to bowler ad value in the print product.
When photographing products for use on social media, photograph to a story. Ic you do this you will achieve better engagement. The best story brings together multiple items in a single shot. Here is a good example. My text for this photo would be Happy Monday or Inspiring or Desktop support or Portable inspiration.
If you create and sell hampers in your retail business, use your software top track what is in each hamper and create a barcode unique to the hamper. This enables easy tracking of each individual item sold as well as the hamper sale. This is vital for tracking the performance of the hamper side of your business.
The software will also allow you to reverse any hampers made, retreating the hamper data back to the single items that made it up, should it not sell.
Some days, customer stories brighten the mood in the shop, and at the sales counter especially. I love it when people tell you why they are buying a particular product, especially if you were unsure as to who the customer for the product might be. This direct customer feedback can help you sell more of the item through more informed targeting.
This desk name plate is a good example. It is funny, very in-your-face. I have seen it bought several times now and in each case the reason was shared, and inn each case the shopper was different. The feedback has been useful in guiding social media posts designed to help connect with others with a similar need or interest.
While customer stories at the counter can take time and interrupt workflow, they can also provide valuable shopper feedback, which you can convert to revenue down the track.
The challenge is how to engage with shoppers in a time efficient way at the counter. It takes practice as you don’t want them to feel you are not interested.
For the record, I saw this name plate purchased by a wife for her husband, by a son for his mum and by a work colleague to leave secretly on the desk of their boss. The last story was especially intriguing. They say they will back with a report on how its was received.
