A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Author: Mark Fletcher

Suppliers who do not transact electronically will lose business

For years newsagents have tolerated some gift and stationery suppliers who do not provide electronic invoices. Newsagents are moo demanding than a few years ago when it comes to transacting electronically.

Suppliers who do not provide electronic invoices are already losing business. One today told me it was too expensive. I wonder how expensive they will think it is when they realise the business they have lost.

More and more newsagents refuse to be held back by out of date processes.

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Newsagency management

Making the case to Transurban for better commission on Citylink top-up

I have made a submission through Touch to transurban pitching for an increase in commission for newsagents from the current 55 cent transaction fee. I was invited to make the submission following several emails to management on behalf of newsagents.

Here is part of what I wrote:

Newsagents pay around $23.00 an hour for employees in their businesses plus on-costs of around 15%, making an hourly labour cost of $26.45.

A Citylink top up transaction takes up to two minutes, resulting in a labour cost of 84 cents. Even if my estimate up up to two minutes is out by 50%, the cost is 42.41 cents.

On top of the labour cost is costs covering retail tenancy, IT infrastructure, insurance and other business overheads.

Then, there is the cost of transactions themselves, banking costs for cash and bank fees for electronic payment methods.

These are all factors impacting the cost of doing business, the cost of offering the Transurban top up service.

Finally, there is the opportunity cost. This is a consideration in a newsagency that has transitioned from the old-school loss-making agency model to the new style retail focused model. In the former the average overall business GP is 28% whereas in the latter the average overall GP is 45%. However, in the latter model you spend more time with customers selling items priced at $200.00 and more.

Hopefully my submission gets the attention of decision makers in Transurban and that they at least explore the commission they pay.

Newsagents deserve fair compensation for their efforts. The 55 cent compensation is not fair in my view.

Why my bigger picture view remains that our future is not in agency lines, I do understand many newsagents rely on these. hence my support for a better deal for them through representations such as these to Transurban.

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Management tip

Changes in Darrell Lea Dad’s Bags

IMG_9059Darrell Lea Dad’s Bags aren’t open like they used to be. In the bag all the goodies are in a sealed plastic bag. I’ve not had darrell Lea for a few years but I recall customers used to like checking the items in the bags. Not they have to pull out the plastic bag. I doubt it will hurt sales, just makes the Dad’s Bags little more big business than small business.

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retail

Gotch pitching music magazines on Twitter

Screen Shot 2015-08-11 at 9.13.49 amMagazine distributor Gordon and Gotch took to Twitter yesterday promoting a competition encouraging entries explaining why people like one of the magazines listed. Up for grabs is a Spotify premium subscription.

I like the competition and the special interest music magazines it promotes. While not a big deal, I wish Gotch helped newsagents promote this via own social media.

Competitions on social media are a great way to find new shoppers.

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magazines

Does Hubbed really have 680 locations?

The ANF promoted Hubbed parcel service claims 680 newsagent locations on their website.

Our marketplace of some 680 newsagents Australia-wide, coupled with great partners, delivers the best parcel, retail and lifestyle shopping experiences for the consumer.

Using the Find My Newsagent facility on their website you are taken to a map showing locations with Hubbed. Counting the locations listed gets to 238 locations: QLD: 65; NSW: 72; VIC: 17; TAS 21; NT 2; SA 19; WA 40; ACT 2. Even allowing for a miscount based on the map, the claim of 680 newsagent locations does not appear to be matched by the data published by Hubbed.

This matters as newsagents are promoted to get on board with Hubbed in part because of the ‘size’ of their network.

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Hubbed

Our politicians need to be audited as we are in small business

With major political parties now aligned on the expenses issue and suggesting there is nothing for us to see or worry about, we ought to remind them what life is like in the real world.

Small businesses, like newsagents, face onerous regulation. We are subject to unexpected policing and audits that add to our operational costs.

Small business newsagents face audit by the ATO for PAYG, FBT and other taxes, audit by State revenue over payroll tax, in-store audit by consumer affairs looking for unsafe products, council by-lays inspectors looking for the food licence, ASIC chasing our annual returns, and being tested in undercover operations for selling tobacco to underage shoppers – to name a few.

Our politicians face no such audits or overheads unless one of their number is caught out as has happened recently. They are out of touch with the real world.

At the very least our politicians ought to face the risk of an unexpected audit by an independent body at any time. Such an audit should look not only at their expenses but their level of genuine service of local constituents as well as other KPIs that measure their service to the community. This could give them a dose of reality that is sadly lacking in Canberra.

I had reason recently to write to my personal and business local members as well as the Treasurer on a serious time-sensitive matter. Only by local member, Adam Bandt responded. Josh Frydenberg and Joe Hockey remain missing in action whereas Bandt’ actively and fully engaged.

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Ethics

Packaging tape is expensive at Coles

IMG_9063Price checking of stationery at a nearby Coles on the weekend I discovered they have unknown brand packaging tape at close to double our price. But your would not know. It is only when you check the length of the role you see how expensive Coles is. Our roles are 50 metres in length while the Coles tape is 25 metres. A simple price check will make Coles look cheaper. But they are not.

This is the type of information we have to share with all working in our newsagency businesses. We should also share the price comparison on social media.

Coles is expensive when it comes to stationery. Check for yourselves – not just tape but other stationery items too. Once you have the facts in your area start talking about it.

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Stationery

The problem with new magazines for newsagents

IMG_8945A consequence of magazine publishers and distributors failing to address the poor financial return from magazines for small business newsagents is a reduction in space allocation in newsagencies for magazines.

In real terms we make less today than five years ago yet the cost to us of magazines has increased between 5% and 10% year on year through this time.

Whereas in the past magazine departments took up a third of floor space, today the space allocation is 25% and less – meaning fewer pockets and no spare space.

The problem is exacerbated by magazines in so many more outlets than newsagents. No wonder we are tight on space. We have to be!

Magazine publishers and distributors need to stop sending us new titles without checking. Many of us have no space for them and have to remove an existing title if a new title is to be given space.

This happened recently with two new titles from Universal Magazines: Beach & Bayside Homes and Kitchen Inspirations. We did remove two titles.

It is ridiculous that in this age of technology the publishers and distributors do not have in place a system to know for certain space availability in our stores. It is like they prefer to be ignorant as this enables them to send us magazines we do not have space to display.

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magazine distribution

Newsagents help

IMG_2886 (1)Check out the magazine a friend found in a bag with the copy of Gourmet Traveller they purchased from Woolworths last week. We can tell from the sticker left on by Bauer that the magazine is a return from a newsagent. The newsagent would have paid to return the copy of Belle that failed to sell for them so Bauer could make the gift to the Woolworths customer. Nuts.

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magazine distribution

Sunday newsagency challenge: redefine your behind the counter view

IMG_8947Take a look at what your customers see in the wall behind the counter when you are serving them. What does it say about your business? Does it drive sales? Does it recast your business in their eyes? My challenge today is for you to use the counter to reflect how you see your business. Stop using it to pander to history. Stop leaving it be a memorial to laziness. Use the wall to make a bold statement.

The photo shows what is on the wall at my shop right now: high margin branded product including several limited edition lines from this range.

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Management tip

Sunday newsagency management tip: use pictures to guide staff outcomes

If a staff member has created a poor display, left the shop untidy or done something else wrong that is easily captured by photo, take a BEFORE photo, tis it and take an AFTER photo.

Place both photos on a noticeboard in the back room and explain the difference. Be clear why you want the look of the AFTER photo and what it means for the business.

Sometimes telling someone to do something will not be as well understood as if you show them with the type of photo example I suggest here.

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Management tip

Sunday newsagency marketing tip: facilitate telling local stories

IMG_9009Setup a wall in your shop or in front of your shop and invite locals to tell local stories in words and pictures. Be cool, call it your local graffiti wall of local stories.

Besides telling local stories, the idea connects your business in a bold way with drawing and colouring and this can play into your sales or pencil, markers, erasers and adult colouring art therapy products.

This is a feel-good activity for the community and your shop. It will help encourage optimism in your business and among those who participate.

The photo is from a graffiti wall I saw at a public event in Sydney yesterday. I walked past several times – it was busy with people of all ages drawing, writing and looking.

Be sure to have a sign that gives your wall context.

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marketing

Stepping into the world of the customer

Today I immersing myself in a fan-focussed event that is far removed from the world I live and work in. It’s an attempt at immersion in the niche world of one group of customers important to my business. I am going to try and understand them better and to find out what else they like that I do not sell today.

The better we understand our customers and those who could be our customers the better we can serve them.

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Newsagency management

Gluten free opportunity for newsagents

IMG_8959I encourage newsagent sot promote the latest issue of Gluten Free Life on their Facebook pages and elsewhere as this will drive sales. I did this a few weeks ago and know for sure additional traffic was generated for the business. When posting on facebook, write about coeliac disease as a gluten free diet is the only treatment.

Thoughtful promotion like this that can drive extra traffic for you and make a magazine more valuable that the 25% GP.

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magazines

Waste of time sending us this sugar book

IMG_8958I am frustrated we were sent ten copies of Sugar Smart Express Diet from Gotch. It’s a book. I can get similar books at 50% margin. Better still, I can control what I get. Shame on Gotch for wasting my time and money with this title – what an abuse of newsagents.

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magazines

Can newsagents trust the ANF promotion of Hubbed?

Screen Shot 2015-08-07 at 1.05.53 pmIf the ANF wants newsagents to support them as an industry association they need to retreat for commercial activity. Yesterday, the ANF sent out an email to newsagents promoting Hubbed. The communication has no disclosure as to commercial arrangements between Hubbed and the ANF.

A while back, following an outcry from newsagents, the ANF said it no longer had shares in Hubbed.

The marketing material sent yesterday was sent by the ANF, is copyrighted by the ANF and the contact address is the ANF address. This suggests a commercial relationship between the ANF and Hubbed.

If there is a commercial relationship newsagents need to know about it so they can make an assessment of what the ANF says regarding Hubbed compared to other services the ANF may not cover at all in its various communication platforms with newsagents.

Newsagents interested in Hubbed may want to start with questions about what appears to have been a restructure of the business last year.

My personal view is that industry associations ought to focus on being associations rather than engaging in commercial activity.

For the record I have no commercial relationship with any service competing with Hubbed.

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Hubbed

Why the spending of Australian politicians on travel and perks disgusts me

How can we trust politicians from the major parties who constantly lecture us in business and individuals about fiscal responsibility yet who ignore their own advice when spending on themselves?

The travel and personal entitlements stories of the last few weeks serve to reveal to us what appalling leadership we have in Canberra.

Their explanations demonstrate how out of touch they are. Their selfishness is breathtaking, only surpassed by their lack of ethics.

As a small business owner I look at the spending by a politician on a trip in the context of the tax I pay and how hard all in my business have worked to make those funds available. This is why the $5K helicopter ride to Geelong, the $12K business class trip for kids to Uluru and the hundreds of thousands spent on wasteful study trips overseas disgust me.

Here we are in small business and in our homes being lectured by parliamentarians of all colours about working hard, paying our taxes and being less of a burden on government while those lecturing us engage in a orgy of spending.

We cannot trust them, not any of them from the major parties. They have no perspective grounded in the reality of the everyday taxpayer.

I think we need to overhaul our parliamentary representation. For what it’s worth, her is what i would like to see:

  1. A maximum of three terms for any politician.
  2. A genuinely independent speaker.
  3. Elimination of political donations by companies and unions and capping donations to $1,000.
  4. All donations to go through a donations office, which passes them on once satisfied as to the source.
  5. Banning of all lobbyists from contact with parliamentarians. They ought tis pend their time talking with and serving constituents.
  6. Reduced family travel allowance and never above economy class.
  7. No use of VIP aircraft for anyone below prime minister level unless approved by an independent panel outside of parliament.
  8. Superannuation at the level of everyday Australians.
  9. Wage rises at the level of everyday Australians.
  10. No ability to pocket the Canberra accommodation allowance, purchase a home and profit at taxpayer expense.
  11. Travel expense disclosure no more than two weeks after the end of the month.

Politicians love to talk about public service. While the words sound wonderful, the compensation they receive make their ‘service’ about the paycheque, perks and jobs from mates in the future. It’s a massive scam and we voters let it happen.

Sure they work hard but so do many small business owners.

I know newsagents working 100 hours a week for under $40,000 a year and who battle the government because of poor small business practices mandated by out of date politicians. Such a newsagent is making a more valuable public service contribution than any politician.

Our current batch of politicians on both sides from to top down disgust me. They are ignorant, out of touch and selfish. We nee urgent wholesale change.

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Ethics

Adult colouring art therapy in the newsagency

IMG_8944 (1)Here is our current adult colouring art therapy offer at the front of the newsagency. The display in the photo is one of three locations where we have similar product.

We have served this niche for almost all 2015. It’s been highly profitable.

We are discussing our exit since many retailers nearby are now in the space including discount variety, majors, gift shops and newsagencies.

Like any popular fad, the keys to profitability are knowing when to get in, when to get out and the best range to offer when the fad is at its peak.

Planning is key. I worry that newsagents getting in now will be left with stock. My advice is to be careful.

Our buying focus has been on popular items as well as fringe items, to ensure the specialist nature of our focus. The value of having less mainstream titles has been good in-store and good through our social media engagement. It’s all about point of difference.

The most important factor in retail success has been interactivity in-store.

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Newsagency management

Pitching the BHG Colour Me title

IMG_8960We have the Better Homes and Gardens Colour Me title here with newspapers, next to girls mag like Frankie as well as with our adult colouring department. This is an easy impulse purchase opportunity – as long as we make it easy for shoppers who will purchase but may not know the title exists. This title is an excellent opportunity for newsagents.

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magazines

Newsagents: are your employees legal?

The foreign student scam impacting Australia Post in the news yesterday is a reminder about employer obligations. While I am not aware of student scams, I have heard reports of people working in newsagencies being paid cash in hand at a lower than award rate so they do not breach their student visa. It is important employee arrangements will stand scrutiny.

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Ethics