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Newsagency challenges

The future of the Australian newsagency

The future of the Australian newsagency channel is in the hands of those who own and run the 2,800 or so retail businesses that make up the channel. The decisions they each make in each of their businesses determine the success, or otherwise, of those businesses, and of the channel.

The decisions that will matter most are those relating to the products carried in the business, the narrative of the business and how you sell.

Before I get to that, I can say the future of the Australian newsagency will not be found in newspapers, magazines, lotteries, convenience retail, tobacco, cheap gifts, cheap toys or a canyon of spinners of products with names on them. The future of the Australian newsagency will not be found in any type of business competing with discount variety.

Suppliers, too, will not play in the future of the Australian newsagency. Despite them creating our channel, print media businesses especially have no interest in our future.

We can already see from retailers, newsagents, in the space that across Australia there is value to harvest from playing in premium and unique spaces, worrying less about price point and being smart when it comes to deciding your margin. Equally, there is value in the adage find a need and fill it in evolving our local businesses.

By products, I am particularly interested in products not common to the newsagency channel. Products such as clothing, gifts at $300.00 and more in price, books but not remainder books, cookware, collectibles people will drive for. Most likely products suppliers would not have in our channel today.

Sure, everyday products such as stationery, greeting cards and other categories our channel is known for will play a role in the future. Their success will depend on how smart we are in what we carry and how we price the burden of carrying. For example, selling stationery to those who need it is easy, selling to those who love is a whole different opportunity – one that is worth more I think.

There are no borders, rules or boundaries. What you can sell is up to you and your imagination as to how it is pitch.

By narrative I mean the story of the business the why for someone considering the business. If you’re a shopkeeper, you put products on the shelves. If you are a retailer with a commitment to a narrative, customers will understand the business, love being in the business and want what you offer because the narrative will nurture trust.

You nurture your narrative through what products you carry, how you place them in store, how you pitch them on social media, on your website and how personal you yourself are in and with them.

The challenge with narrative is that it must evolve, with you, time and the community.

By how, I mean when you sell and where you sell … having an ability to sell online is the key here. If you’re not online, you will have no idea what you don’t know.

Now if this all feels a bit new age like, I don’t mean it to. Today, in May 2024, we are in the midst of a period of immersive retail, retail people feel and experience. This is where your narrative plays a difference. A writing pad in a basic newsagency is a writing pad. The same writing pad in a store with a strong narrative could sell more easily and for more.

The more your shop and your website help people to feel things, the greater the success you will have.

What I am getting at here is that the future of the Australian newsagency lies in us being smart, engaged and creative, each of us making our own shop the best it can be. It won’t look like a cohesive channel, and that does not matters. What matters is that you create a business that is mighty successful locally, and with online shoppers who find you.

To those who don’t act, who don’t embrace change, I say farewell. The days of the old school newsagency are over. Time will catch you. This will result in fewer rooftops in our channel. I’m not sure how many, but on the current trend it will be 150 – 200 in the next 12 months.

To those keen to act, there are plenty of us in the channel who will help where we can. Reach out. Together we can ensure the relevance and success of our vital local retail businesses no matter how diverse our product and service mix and no matter what we call ourselves.

Footnote: There will be some who say the shingle should change, that news is not relevant. While it’s not relevant, what you call the shop does not matter all that much. It’s kind of like a picture versus a thousand words. What a shop shows itself as being matters more than what a shop calls itself. That said, Aussie newsagencies, being quintessentially local businesses are, in my opinions best off being called a name that is locally relevant – rather than some national name that is not locally relevant.

Second footnote: Reading back what I have written I know I have not made a clear and solid prediction. That’s because I can’t. There is no channel, no way to determine what all businesses in the channel will do.

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Newsagency challenges

Newsagents are dying says a newsagent who just closed their business

It is frustrating reading about a newsagent who has closed their business having sold the building to a developer who bags the channel they are leaving.

Newsagents are dying.

This quote is from Des Higginbotham, the owner of the now closed Ferntree Gully Newsagency in an article the local paper, the Star Mail. Here are some other quotes from Des:

“Newsagencies have changed a lot over the years.

“Ever since they took the newspaper distribution away from us, it changed the whole dynamic.

“We lost a lot of traffic flow, and a lot of cash flow – we used to give tasty trucks 1200 suns a day, with serious money!”

“Newsagents are dying, if it hadn’t been for tax lotto wouldn’t have survived,” he said.

While this may be Des’ experience, there are plenty in the channel who would disagree.

I know of newsagents who felt relief at quitting the distribution side of their business and relishing being focussed 100% on being retailers.

There are newsagents enjoying double digit growth in 2023 over a good 2022.

Sure, there are those in struggling businesses. In many cases this has to do with lack of embrace of change, lack of reaching outside the local area for shoppers. Those challenged today tend to still have the mindset of being agents rather than retailers. Suppliers have a bit to answer for with this.

I wish Des and Linda all the best. Hopefully, they will not talk down our channel any more. Maybe in retirement they could visit newsagencies near where they had their shop and see thriving and relevant businesses in action.

Every newsagent is responsible for their business.

Being a victim is unhelpful.

It is never too late to embrace change.

The biggest growth opportunities for our channel are product that deliver 50% and more gross profit opportunities. Some of these are outside what is traditional for our types of businesses. They help us attract new shoppers.

This is a fun space in which to play. But if you cling to an agent mentality like Des appears to have, you’re unlikely to see these opportunities.

It is disappointing that media outlets give voice to views that reflect on our channel as it was 20+ years ago as if those views are relevant today. All of us in newsagency businesses today should call this old-school view out and talk about the reality of where we are at today, the new opportunities that are working for us.

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Newsagency challenges

Online selling can have its challenges

In part because they are not in front of you, online customers can be challenge. Take this example:

Our 5 year old son has ordered them from your website without telling us using our credit card. We would like a refund please.

Now, how a 5 year old could do this as a. first time customer, ticking the right box, entering in the address as it was not auto filled. The challenge with a transaction like this is that the bank would side with the shopper and issue a refund.

Then, there are those who attack. This email is from someone who thought we were another business and was not happy when I told them they had the wrong organisation and suggested they contact the other business, which has no connection whatsoever with us.

You cxxt. I hope you fall over and die. You are an idiot. You know nothing about customer service.

One of the best (worst) tho was this one.

You need to refund me for this parcel because this is how it was delivered. It can’t have been my dogs because they were locked up all day. This is your fault.

Here’s the photo of the parcel they sent through.

And, here’s the photo of proof of delivery by Australia Post:

The extent of wild claims and scams are such that it’s important to factor a financial buffer into your prices online, so you can fund the scams that you cannot fight back on.

Big businesses deal with this by negotiating supply prices that have coverage built into the price model for this sort of behaviour.

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Newsagency challenges

Tobacco shop fires in Melbourne concern newsagents

Newsagents with shops next to or near tobacco shops are concerned for their own businesses in the event of an attack.

With so many attacks in recent months, I suspect all retailers near tobacco shops are concerned. An insurance broker I spoke with said it has to play out in terms of policy cost.

Just when we thought the culprits had been caught, more attacks came.

With most newsagents out of selling tobacco, many of us for more than 10 and 15 years, it’s nearby shops that are the concern, as they are potential targets. Illegal tobacco appears to be at the heart of the crime wave.

One of my shops has had a new tobacco shop open next door. It’s an odd looking business. Very open. dark. Inviting people deep in to purchase.

We have checked our preparedness, security and insurance. I think it makes sense for all Victorian newsagency businesses located next to or near a tobacco shop to do the same.

I know that what’s happening in Melbourne is causing worry for some local retailers. It’s best we focus our attention on that over which we do have control.

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Newsagency challenges

Did Are Media director of sales Andrew Cook just throw newsagents under the bus?

Quoted in the nationally distributed mediaweek email and online Monday, Andrew Cook is quoted speaking about our channel:

“A lot of people who are under 30 don’t often walk into a newsagent; they often don’t buy a tangible printed product”

I wrote to senior contacts at Are Media Monday within minutes of the email being circulated:

Maybe Andrew Cook should find out who actually shops in newsagencies.

Young people are buying cards, journals and social stationery in numbers not seen in decades. They are also consumers of pop culture, which newsagents dominate.

It is disappointing to see Are Media’s Director of Sales throw our channel under the bus.

I’ve not received a response.

I’d love to see the data on which Cook based his comments. Newsagents I have spoken with over the last couple of days disagree with his assessment.

Maybe it’s the magazines that Are Media publishers that inform Cook’s view because, for sure, folks under 30 are not likely to buy Who, New Idea, Woman’s Day, AWW, Take 5, That’s Life and others in their stable.

Some card companies started focussing more on younger card shoppers years ago. We see under 30s buying cards in our shops. Some stationery manufacturers have created products for this younger age once they realised that journaling is more popular than ever.

Then, there is pop culture. That space is huge and plenty of us do well in it. And, when I talk about pop culture, there is the usual licensed products you could think of, and then there are subsets, like Japanese stationery, which is huge in parts of Australia.

The newsagency shingle is meaningless today because of the extent of diversity of businesses in our channel.

Sure there are some newsagency businesses living in the past and relying on lottery products and an old looking shop for daily trade. There are many more, however, that have transitioned into vibrant fun retail experiences, shops having terrific success at attracting younger shoppers.

But let’s get back to Are Media director of sales Andrew Cook. What was he thinking? Why did he make a point of singling out the Aussie newsagency channel for the negative focus of what he said? Has he done this to create distance between the Are Media business and the newsagency channel?

I expect at some point some people from Are Media will tell newsagents how important they are, how much they appreciate them and to not dwell on Andrew Cook’s comments. Maybe they will say he was taken out of context. 48 hours later is a bit late to walk back what was so widely circulated.

Maybe Are Media does feel disconnected from the newsagency channel. I suspect they have less space in newsagencies with their magazines than they had a few years ago. Newsagents continue to reduce space allocated to magazines. It happens when you have a low margin product sent through an archaic magazine distribution system that rarely listens to retailers as to what could work in their businesses.

One of my shops does well over $400,000 a year in magazines. The category is important to us. Our magazine sales continue to increase. August 2023 was up 9% on August 2022. And, yes, we have user 30s buying some magazines, like skateboard titles, surfer titles, mountain biking titles and on-trend fashion titles.

Maybe I am making more of Cook’s comment than it deserves. To be honest though, I am tired of ignorant comments about our channel. We had a good Covid. Newsagencies are selling easily, because they are seen as good businesses. And, as I noted earlier, many of us have evolved to make our businesses appealing to demographics outside what was traditional for our channel years ago.

See for yourself Cook’s quote featured prominently in the email circulated to thousands of media professionals and on the mediaweek website.

Rant over, I’m going back to running my businesses. People in supplier big businesses come and go while many of us who own businesses are the ones doing the real long-term work in our channel.

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Newsagency challenges

If you think closing your newsagency or your retail shop for good is the only option …

I get it. Sometimes, the road ahead can have so many obstacles and the air is so heavy with fog that a pathway can be hard to find.

In the Aussie newsagency channel you can collect a ton of obstacles and feel surrounded by fog if you are drawn to the end is near talk and have your business rooted deep in the past for our channel.

If you feel like closing is your only option, I am writing this for you.

Stop. Collect data – your sales data, your financial situation information, local economic circumstances. Gather all the facts together, and go over them – not the emotion, the hearsay – stick to the evidence, the facts.

Usually, in the evidence, there is opportunity. The challenge is that often opportunities cannot be seen because of the noise of obstacles and fog. That’s why I say stop, get your evidence and sit with that.

My hope is that in your evidence there is sufficient opportunity to find a path forward for the business, and for you.

Turning a situation away from closing is my only option can only come about by one or a mix of:

  • attracting new shoppers
  • getting existing shoppers purchasing more
  • making more from some of what you sell
  • reducing costs

It’s pretty simple when you read the list. The hard part is the action, that’s where retailers can get stuck. I mean, attracting new shoppers is difficult, especially in small business where the levers we can pull are limited.

The best way to attract new shoppers in any local retail business is to introduce a completely new product category, to represent it well in-store and to pitch it appropriately on social media.

Your existing suppliers won’t have helpful advice in this area because they are your existing suppliers. You have to look outside your current pool of advice and influencers and look outside what people know your shop for. Choose a category that is fun, appealing and for sure traffic-generating. Ideally, it will be something not easily found locally, something that interests you. That last bit is important because one way to drive traffic for a new category is to be a bit of a local expert.

I get that it may be challenging to find the energy and money to make things work with a new category. If the survival of your business matters you’ll find a way.

The best way to get existing shoppers spending more is through a smart loyalty mechanic and having a shop people enjoy.

The best way to make more from what you sell is by charging more or buying better, or both. Don’t go crazy. A modest increase in GP% could work wonders.

Key to the success of any turnaround is starting on the road early, before fog and debris block the past. It’s important to all of us who own businesses to be looking well ahead, over the horizon, cultivating assets we can deploy when we think change may be needed.

Before I leave the topic I want to touch on reducing costs. That’s a common approach to saving a business. While it could help, rarely in my experience have I seen reducing costs alone be enough to save a business. Sure, it can be in the mix, but it alone is not enough. And the truth is that a well run business has trimmed costs already.

If you think closing your newsagency is the only option, reach out. There are plenty of us in the newsagency channel who will listen, and offer advice if you’d like it.

You are not alone.

Mark Fletcher
mark@towersystems.com.au mark@newsxpress.com.au
https://www.linkedin.com/in/mark-fletcher-tower/

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Newsagency challenges

What does your newsagency stand for? What’s unique about it?

In his 1960 book, Reality in Advertising, Rosser Reeves, a respected US advertising executive, introduced the world to the concept of the Unique Selling Proposition, USP for short.

Reeves defined USP in an advertising context:

  • Each advertisement must make a proposition to the consumer: buy this product and you will get this benefit.
  • The proposition must be one that the competition either cannot or does not
  • The proposition must be so strong that it changes consumer behaviour.

In the 1960s and 1970s, the concept of a unique selling proposition evolved from being essential to advertising to being essential in business. Finding your business USP was considered mission critical to businesses, retailers especially. Businesses drifted however and forgot about the importance of a USP.

Today, it is common to see ads with we will not be beaten on price or if you find it cheaper elsewhere we will sell for 5% (or more) less. These pitches are from lazy marketers who think price is the most important USP and while it is a factor to some shoppers, value is often about much more than price.

Jack Trout told us a few years ago that USP was relevant today. In 2000, he said that a Unique Selling Proposition was mission critical in business in his aptly titled book Differentiate or Die: Survival in Our Era of Killer Competition.

Differentiate of Die. There is no doubt about the call to action in the title, no doubt about the consequences of inaction.

Yet many retailers, for the most part, have remained still in the face of an onslaught of competition. Some newsagents have remained still.

Retail is complex, challenging and changing rapidly today. The differences between competitors fewer. Retailers are surrounded by competition and it grows by the day. Yet many have remained still and done nothing.

Our channel continues to be confronted by the migration to digital, more local retail competitors and online shops selling what we sell. Those who have stood still feel the impact more than others.

Smart retailers are re-acquainting themselves with the writings of Reeves and Trout and leaning about the mission critical imperative of having a Unique Selling Proposition.

Differentiation could be service, products or location or a combination of these. Differentiation will most likely not be price as anyone can match this easily. Price is, after all, the last line of defense in any business battle. That said, there are some major price-focused success stories – WalMart for example. It is rare in an independent retail situation.

To develop your USP, engage with your employees and other stakeholders. or, do it yourself with your own deep dive into what you want your business to stand for. This is leadership. Take your time. Determine what you and your business stand for. Following open and honest discussion and debate, the USP around which everyone in the business can willingly congregate will emerge.

A good USP will not require an advertising campaign to communicate. It will become obvious through actions and decisions. By living the USP in every facet of the business you soon become seen as unique by shoppers and this can drive excellent word of mouth and success for the business.

While differentiation in retail is more important today than ever thanks to today’s economic conditions, the approach to the challenge is the same as in the 1960s.

If you are not sure where to start when considering your USP, look at your POS software and the data it curates about your business for in that data will be insights into your points of differences things you can cultivate to have a stronger USP.

Your POS software is a good place to start as your shoppers show you through their behaviour what they like and don’t like about your business.

No one can tell you what your USP should be. It has to come from you, from inside your business. It has to reflect what you believe, how you want your business to be seen and known.

Here are some things that are not a USP.

  • Convenience is not a USP.
  • Opening hours are not the USP they once were.
  • Agency products like lotteries are not a USP.
  • Magazine range could be a USP as many have moved on from deep range cover.
  • Price is not a USP.

And while we are considering lists, here are some less than ideal things in business that could be a USP – note the strikethrough the S as they are not selling propositions but, rather, customer turnoffs that a retail business could become known for (in a bad way):

  • Poor customer service.
  • High prices.
  • An EFTPOS surcharge.
  • Poor range.
  • Bad opening hours.
  • Poor counter processes.

Here’s another list of some easy USPs:

  • Local community connection.
  • Community group support.
  • Product range.
  • Product knowledge.
  • Fun in-store.
  • Quality products.
  • Value.
  • Appreciation of shoppers (loyalty).

It can be tough coming up with something genuinely unique. But, once you have it, it can be worth the work.

Take your time. Do it yourself. Be the leader your business will love.

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Management tip

Will Vic. newsagents lose MYKI top-up sales in 2023?

Hello and welcome to 2023. Like every year for the last 15 or so, I think this will be a year of significant change for our channel, and through change we uncover opportunity.

The first news of 2023 is that the state government of Victoria will review the MYKI transport ticketing system this year, which may result in the cards themselves being replaced.

From a transport user perspective, MYKI is out of date and frustrating.

From a tech perspective, MYKI was out of date before it was launched.

From a retailer perspective, the minuscule commission from MYKI card top-ups does not cover the actual costs of providing the service and the dealing with myriad customer queries. But plenty continue to offer it, including me in one of my shops.

I don’t see how the MYKI cards can survive in a world rapidly retreating from physical cards. The old argument of older people want a physical card has been proven wrong with their update of credit card access through phones and watches.

I think it’s best to plan now for a business without MYKI card top-up so that when it does happen you’re ready.

There are some who like offering the top-up because having anyone in the shop its better than no one. That’s not true, actually. The best customers are those purchasing high margin products through which you differentiate your business.

There is no upside in services, especially minuscule commission services – these are best handled throng convenience stores. But … as with anything I write about here, what you do in your business is up to you.

For the one shop I have that offers MYKI top-ups, we will continue until the government decides otherwise. We don’t rely on it. It’s not core. But, it is a customer service that is appreciated locally … and for that we are grateful.

Happy 2023!

 

Footnote for any journalist finding this post. Newsagents losing MYKI is no biggie. It was always going to happen. The bottom-line value of MYKI is small. Local Aussie newsagency businesses have defined by what we do for ourselves rather than why suppliers do to us. It has been thus for many years now.

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Newsagency challenges

More from Australia Post on the situation with freight to and from Western Australia

We received this updated information from our Account Manager at Australia Post corporate late yesterday:

Introduction of a WA Emergency Service:  

With key road and rail transport arrangements into and out of Western Australia significantly disrupted or unavailable, we are obliged to declare an emergency ‘force majeure’ event. This means the acceptance and delivery of Parcel Post (eParcel) and StarTrack Road Express consignments under the terms and conditions of your existing agreement are unfortunately suspended and cannot be offered in the short term.

Until these critical lanes can resume efficiently, we have stood up a replacement “WA Emergency Service” option that includes an additional temporary levy to assist with the significant increase in road transport costs into and out of Western Australia. This will help ensure we can continue to deliver for our customers. The WA Emergency Service terms are outlined below and apply until the force majeure events come to an end.

  • The WA Emergency Service will incur an additional emergency measure cost of 40% (ex GST) of the freight charges currently set out in your agreement.
  • The WA Emergency Service fee is temporary and will apply to all articles lodged for interstate delivery into, or from, Western Australia.

The WA Emergency Service will come into effect for any parcels lodged and/or manifested from Monday, 28 November 2022. The fee will appear on your invoice and will be payable in line with your existing arrangements.

There is currently no change to our Express Post and StarTrack Premium services.

It is interesting to me that there has been no coverage on this in the news.

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Australia Post

Copy paper supply chain challenges impact Australia stationery retailers and paper users

Kudos to GNS for this advice to customers today about the challenges right now in sourcing copy paper in Australia:

Dear Customers,

GNS has been notified by Opal Australian Paper of a production issue at Opal’s Maryvale Mill, which is likely to impact Opal’s ongoing ability to supply copy paper to us.  Opal’s brands include Reflex, Victory, Brilliant, Australian, Planet Ark, and most private label brands sold by independent dealers.

The production issue relates to the ability of Opal to source wood, the key input required by the Maryvale Mill to manufacture paper. VicForests, a key wood supplier to Opal, has announced that in response to mandatory injunctions issued by the Victorian Supreme Court, it will be suspending most current timber harvesting activities, at least in the short term.  Opal sources 100% of its wood from third parties, including from VicForests, so the decision has had an unexpected impact on Maryvale Mill’s wood supply.  Opal anticipates that this situation may extend for at least up to a couple of months.

Opal is the largest manufacturer of copy paper in Australia, so the production issues are likely to create market-wide shortages and supply constraints for several months.

As a result, and to support our customers with managed supply over the foreseeable future, effective immediately:
•    GNS will move to selling all copy paper brands “on allocation”, with allocation of inventory based on customers’ historic purchase volumes over the last twelve months; and
•    GNS has removed all brands of copy paper from our online site, so purchases will only be able to be made via your Customer Service contact until further notice.

Until we can assure you of wider availability, we believe these measures are necessary to support an orderly and equitable market in copy paper.  We are also working hard to identify cost-effective alternative sources for these ranges and will update you in due course.

Please do not hesitate to contact us with any questions in relation to this matter. We appreciate this is a challenging time and thank you for your understanding.

Kind regards,

Paul Yardley | CEO

GNS Wholesale

I think the move by GNS to an allocations system for copy paper  is fair.

Click here to access the ABC news story about the Maryville Mill as it provides more context for the situation.

Amazon has stock. $28.95 for a box of 2,500 sheets. For those in urgent need.

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Newsagency challenges

In chasing volume, some suppliers let down their customers

Several suppliers in categories in or nearby our channel are reviewing retail partner arrangements, preferencing retailers who spend more with them as if the annual spend is the most important measure.

In a couple of cases, the local Australian suppliers are being told what to do by large international brands they represent.

None of those involved in this resetting of local retail relationships appear to have considered the impact on the customers, those who love and purchase their brands at retail.

Australian geography as it is sees many retailers serving small communities, dedicated communities.

In one such community, the retailer is delivering brand penetration several times greater than capital city retailers. But since their annual spend on a brand does not reach the bar set by the owners of the brand, they are losing the product.

This is a stupid and ignorant move by the brand. Some of their customers, brought to their brand by the local retailer, may pay more for online (once you add shipping) while others will give up on the brand, in part because of their actions against a local retailer they love.

Too many business owners and leaders chase volume / size because they think size matters.

While size does matter as an overall business performance marker, the best size, or revenue, is that which is spread across many accounts, many retailers. This approach is smart business as it means the supplier is not reliant on a few. But it is harder business to get and manager, with many more accounts.

Predictable business is important in any business. Serving a smaller number of large accounts is not as predictable as serving a large number of smaller accounts. Sadly, some large brands don’t see it that way. I guess leadership team members are not there long enough to see this.

In our retail businesses, we, too, need to manage for efficiency and predictability. This is why I try and have balance in my retail businesses, less reliance on a supplier or product category dominating revenue or GP achieved in the business. This way, one can fall and the business itself is not too harmed.

Any retail business dominated by one supplier is unhealthy at its core, at risk the supplier’s interests are not its interests.

There is too much talk in news outlets and business magazines about business size, too much obsession at business conferences and in industry trade journals about what big business thinks and does and about what successful big business people have done. we need to focus more on our scale, efficiency at our level, at business predictability at our level.

Business size does not matter. What matters is the value the business provides those who rely on it: the owners, employees and customers. In small business retail, our decisions and actions will do more to drive this value than a performance bar set by a supplier.

The suppliers chasing larger accounts, pushing us to reach an arbitrary bar they have set for doing business with them … good luck to them. I don’t trust them enough to believe that achieving today’s bar will satisfy them. I’d rather replace them with two or three smaller suppliers whop are more interested in and appreciative of my business.

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Management tip

Unfortunate coverage by the ABC of the Nine Media decision on newspapers in Tasmania

The ABC yesterday reported that Nine Media will review the decision to stop same day access to print editions of The Australian Financial Review and The Age in Tasmania.

However later on Wednesday, Australian Lottery and Newsagent Association (ALNA) chief executive Ben Kearney said he had been contacted by Nine and told the decision was under review.

He said no timeline was given, and the original intention may still stand.

“They’re going to look at that decision and consider some of the other options that might be available, so certainly from our point of view that’s really good news, that’s what we’ve asked for,” he said.

A couple of points in the ABC article have me scratching my head.

Newsagency co-owner Teresa Sturzaker said her Hobart business would take a financial hit if the original decision went ahead.

“The direct hit is a $25,000 profit per annum, so it’s about $2,000 a month that we’ll lose straight off the top starting,” she told ABC Radio Hobart.

The $2,000 a month figure from The Age and the AFR seems high. It equals $8,000 a month in sales of these 2 titles in one business. If that’s what they do, it’s awesome. But if that’s what they do I’d have thought Nine Media would have a plan B for them. If it’s a distribution business, based on what Nine and News have been doing around Australia it is only a matter of time before it is taken from the newsagent and managed through one of the new publisher distribution partners.

Launceston newsagent Garry Matthews said he would lose a lot more than just newspaper sales.

“Probably across the board, you’re not going to attract your general walk-ins anymore,” he said.

“If they no longer can come in and buy a paper and a cordial … it just means there’s one good reason why they don’t come.”

“It’s pretty sad that a big company like Nine should really care very little about Tasmania.”

Any newsagent running a retail business built and relying on shoppers coming in to buy a paper and a cordial is doomed. Supermarkets and convenience stores own that business. Over the counter purchase of newspapers has been in steady and predictable decline for 15 years. While there is an occasional bump because of a news story, the downward trajectory is set.

Smart newsagents years ago started attracting shoppers for other reasons. In know newsagents in rural and regional Australia, in small towns, that are thriving because they made this shift. Sure, they still sell papers, but they do not rely on them.

The report by the ABC yesterday plays in to an old and out of date narrative that does not serve the newsagency channel well. It makes our businesses look out of date. It does not reflect accurate reporting. The ABC should do better on this.

What people read in The Age and AFR is old news. The opinions that pack their pages are old, too. How people access this has fundamentally changed forever. There is no going back.

What News Corp. and Nine Media are focussed on right now is to achieve the best landing for their businesses, for their shareholders, and that does not include sustaining print forever. If you are a shareholder in either or both you’d want them to maximise profit as that sets your return. If print editions in Tasmania are loss making, you’d want them cut regardless of an emotive story from newsagents.

I get that it will be unpopular to call out the quotes from newsagents as I have done. We owe each other the truth. The truth is, print newspapers are in decline. The publishers have demonstrated this to us through their decisions over the years.

More fool any newsagent who expects the publishers to put newsagent needs ahead of the needs of their shareholders. Publishers have only one legal obligation, and that is to their shareholders. Any emotive argument to the contrary will fail.

My advice to newsagents for years has been and is today:

  • Choose to be a retailer, not an agent. the two are quite different. One makes you the driver of your success while the other tethers you to the success of others.
  • Chase new traffic every day. The more reasons for which you attract shoppers, the more sustainable your business.
  • Convenience is not a future for indie retailers like newsagents. Convenience retail in Australia is owned by big businesses with deep pockets, which which you cannot compete.
  • Don’t be your barrier to success. Too often I see local small business retailers decide against something for their business that will work.
  • Size doesn’t matter. Some of the most successful newsagency businesses in Australia today are small. Size is irrelevant.
  • Location dosen’t matter. Some of the most successful newsagencies in Australia are regional and rural.
  • The shingle doesn’t matter. The newsagency shingle is irrelevant to what you can achieve.
  • Only you can save you. No supplier, no association can save your business, only you can.
  • Make every day your pay day. The value of your business today is what you make today, not what you dream of selling it for in the future. Make every decision on that basis.

There is upside for our channel, plenty of good news. I talked about this recently when sharing the results of a traditional newsagency that I am fortunate to be helping to evolve: https://vimeo.com/756607390 I know of many success stories of growth and profit in our channel, in businesses that sell newspapers, but which to not rely on newspapers.

22 likes
Newsagency challenges

Hey, Are Direct, it’s about time you offered newsagents scan-based trading

Supermarkets have had scan-based trading for years with magazines, from back in the days on the now defunct Gordon and Gotch, then to Ovato, and now to Are Direct.

Scan-based trading is where retailers pay the magazine distributor for what is sold. That’s it.

The distributor / publisher carries the cost of shrinkage (theft, damage) etc.

The retailer makes margin from what they sell. They do not have margin ‘stolen’ by theft, or damage or failed supply … and I include damage and failed supply because the Are Direct process for handling claims by newsagents is a mess, time consuming, starting with the assumption the newsagent is wrong. Indeed, it is so bad that plenty of newsagents don’t even lodge a credit claim.

Scan-based trading is unfair in that newsagents don’t have access to it while their competitors do. This provides them an unfair advantage, facilitated by the magazine Are Direct and magazine publishers.

It’s unfortunate that Are Media spends on the old-school display competitions and similar yet fails to deal with the unfairness at the core of the magazine distribution model to newsagents.

The magazine distribution ‘experts’ at Are Direct will say it’s a data issue, that newsagents cannot provide the same accurate sales data flowing from supermarkets. This was nonsense when put 10 years ago, it is nonsense today. I say that as the owner of the newsagency software company serving more newsagents than. any other with newsagents icy software.

I tell you what … turn on scan-based trading for newsagents with accurate data and even more newsagents would achieve the desired accuracy.

This is an easy step for Are Direct to take, a fair step, a socially responsible step and pro small business retail step.

Look at a local newsagency competing with a major supermarket a couple of doors away. When it comes to magazines, the supermarket has a better deal, they make more money and save more time from how they are dealt with by Are Direct than the local small business newsagent.

Every single person at Are Media who is in contact with newsagents needs to understand this, they need to understand the unfairness of the situation as in related to newsagents.

Turn on scan-based trading for newsagents and create a fairer model for our channel, show your support for us in a practical way, show us some respect. 

28 likes
Ethics

Tips for hiring and retaining employees in local small business retail

Talk to anyone in business and they will tell you that hiring and retaining employees is one of the biggest if not the biggest challenge they face.

Retail is finding it tougher because working in retail is tough. Besides the obvious of being on your feet all day and how working in retail is seen by many, there is the challenge of dealing with difficult customers. Abuse of staff in retail is common, and no matter how much we provide support in a shop, there are customers itching to take their anger out on someone.

There are ways we can make working in retail more appealing so as to attract good people, and retain them. Here are some of my thoughts on this.

Hire people who want to work with you and help the business thrive. People working to make money only will only focus on that. You need to try and find people looking beyond this week’s pay check. You need people wanting to build something for themselves long-term.

Give your people power. Let them make decisions about the business, encourage them to be personally invested in the business, and this this help develop their skills. The more their future is enhanced working in the business the more they will love working the business and contribute positively.

Support them. Everyone working in your business is on your team. Nurture them. Train them. Support them. have their back. The more they experience this, the more they will do it for you. This support is especially key in retail where customers may be abusing at the counter.

Cut the mundane as much as possible. If there are mundane tasks in the business that could be eliminated with better processes, do it. The less mundane work the more people enjoy their jobs and that helps them stay with you.

Open the books. Sometimes people look for work elsewhere because they think the business can afford to pay them more. By opening the books you might be able to show enough for them to respect and appreciate what they are paid. Opening the books also offers the opportunity for them to think and act more like an owner, to be more invested in the financial success of the business.

Offer a pathway. As much as you are able in your local retail; business, offer people working in the business a forward pathway, opportunities for them to personally advance.

This is not a complete list, of course. It is offered to get you thinking about your situation.

The only topic I have not canvassed is pay. Of course paying the award is inadequate as it is the bar, and plenty would say it is a low bar. What you pay depends on your circumstances and, considering them, how you view your staff. If your staff are adequate, pay the award. If you value them more, pay them more within your capacity and considering what else you offer, such as flexibility to their schedule.

It is easy to complain that finding and retaining employees is difficult. It is hardware to take steps to fix the problem / challenge for your business. complaining achieves nothing. It’s the forward steps, no matter how small, that matter.

The newsagents best placed to find and retain staff are those transitioning or that have transitioned away from the old-school agency model, or at least in part – for it is these forward-focussed businesses that are more interesting.

…

I have owned retail businesses, newsagencies, gift shops and online shops, since February 1996, and own 4 shops today. I’m not an expert, nor am I professionally trained in this. But, I have learnt from many situations, many mistakes. Good people are essential to any local retail business. Business size is not a factor in attracting and retaining good people.

17 likes
Newsagency challenges

The retail job shortage has retailers changing-up their approach to recruiting

The challenge of hiring and retailing retail workers is worldwide. It is causing retailers to go to extraordinary lengths.

In a small US town I was in a few days ago, of the 25 shops on the Main Street, 21 were advertising vacancies in their front window.

In a Taco Bell that I visited (don’t judge me) 3 days ago, every place where this chain restaurant location would usually promote meal options and deals, they were advertising for people.

The moment you step into Taco Bell, you see this table.

Four of the windows had these signs facing inside and out.

The front window had sign writing, too:

Above the registers and at the self-service tech screens they had signs too.

But back to the table inside the front door. They had collateral pitching employee benefits:

On top of all this visual noise is the pitch at the counter. Yes, they were asking some (but not all) customers if they knew of anyone looking for a job.

In this Taco Bell outlet, looking for new staff was more important than promoting what they sell.

Apple responded to their staffing challenges with an announcement a couple of days ago. Apple is increasing the pay of retail employees by 10%.

Apple Inc. is raising salaries for retail workers in the US by 10% or more and upping its global companywide compensation budget as it faces a tight labor market and unionization efforts.

The company is hiking hourly pay for retail staff to at least $22 per hour, up from a previous $20 minimum, the company told employees on Wednesday. The move follows a pay bump in February after inflation grew more severe and some staffers complained about working conditions during the Covid-19 pandemic.

Apple and Taco Bell are not alone.

During the trip to the US I got to speak with a broad range of business owners and managers. Staffing is their top of mind challenge. Some are taking the Apple approach and increasing pay rates. Others are offering signing bonuses and new employee referral bonuses. Others are ensuring they run companies people enjoy working for.

The staffing problem exists across all sectors in all settings. Bigger businesses are more likely to use money to address the challenge. In small businesses we have more flexibility in terms of our response. But respond we must, otherwise, we will struggle to retail people let along hire new people when we need.

I am not suggesting we follow the Taco Bell approach. I think that approach is more rooted in decades of minimum wages and challenges in terms of the grind of the work in the business. I shared the Taco Bell story because I saw it first-hand.

Local small business retailers in Australia will need to address the staffing challenge in the way that is most appropriate to their situation and settings. If I was to offer any advice on this it would be be sure to have a plan, because you don’t want to react when facing a staffing shortage that is negatively impacting the business.

Let’s talk for a moment about why there is a job shortage.

More people are able to work from anywhere than ever before;. They can find good jobs, well-paying jobs, working from home. For plenty, this has enabled them to break free from minimum wage and jobs with a high commute cost.

There’s more gig economy work, too. This offers flexibility for people with other demands on their time.

I don’t see these things as temporary.

8 likes
Newsagency challenges

Perfecting the digital newspaper and magazine experience for travellers

You’d struggle to find print newspapers and magazines in airport lounges in the US now.

At LaGuardia (New York) airport yesterday, in the American Airlines lounge, I spotted this sign.

Clicking on the QR code takes me to an awesome website offering current newspapers and magazines. The range is extensive.

Once you select the title you want, access is immediate – all without needing to register, login or pay anything.

The copy of the paper is complete with ads.

Checking countries for which they have newspapers, Australia is not listed.

I spent an hour looking through the site, including the magazines, and that’s where I found some Australian titles.

Again, the reader experience was easy. You can zoom in and out with ease – on any device you are using. I tries this on my phone, iPad and MacBook. Such a good experience.

And, yes, in The Australian Women’s Weekly, there are ads.

I was even able to download titles, like AWW, for reading later. It was so easy.

I am surprised at how good the experience is, that it is free and that they ask nothing of me.

There are a couple of aspects to this experience that interest me: more evidence of digital first for what was print media, and, the tech story. The first was a given. But, it has been slow, because of the second. Tech has been slow and while what I experienced in the American Airlines lounge was good, it was not perfect. It was, however, a leap forward from two years ago when I last tried this out.

This is not about the traveller experience though. Well, it is, but looking down the path, it’s about how tech companies and others are removing roadblocks, to make the digital reader experience easier, faster and more personal. It is also about relationships that could be leverages to reach more eyeballs for instant access.

In terms of the tech, navigation is where I’d like to see change.Access is currently linear, like the print products themselves. I’d like more diving by topic, breaking stories free from mastheads. But, of course, that dilutes the value of the mastheads in the eyes of the publishers.

If you think about it, the print media distribution model was always destination shopper driven and distribution was always focussed on. this: newsagencies, home delivery etc … driven by the person who wants access to those products. The person has to know about the product and either want it or be curious about it.

The airline lounge experience is for the passer-by with some time available to read, it’s for the impulse shopper, the passer-by. That’s a different ‘shopper, and, potentially, a more valuable shopper for publishers into the future.

As publishers, and tech platforms, finesse their offerings, they will be more easily able to reach more of these people. I think partnerships will help drive this, using the masthead content as a value-add. This is where we will see more disruption.

That model, that future model, could / should be about stories reaching out to people, reaching more people, and not being accessed in a linear way.

I’m not doom and gloom for the newsagency channel based on what I have seen. This innovation, and what will come, are inevitable. Publishers are evolving, just as we must.

While I am sitting here in the lounge writing this, I am sat next to a large digital screen promoting an American Airlines / Oprah Book Club, Apple TV+ partnership through which I can watch Oprah interview authors and access those books to read while flying.

It’s the era of partnerships baby, and tech for what was print media!

So, where do we fit into all this? Today, if we offer print products in our shops, and not all of us do, we need to offer the best experience. And, while we do this, we need to evolve new traffic attractors, to bring more people. The best thing we can see in our newsagencies is new faces and the best experience is when they come back, again and again. Achieving that is 100% up to us as retailers. It’s not something agents would do.

The biggest risk to our newsagency channel is the newsagents who are not evolving, the newsagents who prefer to remain agents and the suppliers who encourage and enable them.

Postscript. It’s now 8 hours later and I’m in Wisconsin. I thought I’d try and access another title. Sure enough, access is locked to the WiFi at the American Lounge I was in.

It makes sense that access to locked to the location. It also underscores the opportunity of this tech to help publishers engage with new audiences.

8 likes
magazines

The dire situation facing the McColls newsagency business in the UK is a reminder of the challenges of the convenience model

While I am not privy to the financial details of the troubled 1,265 store UK McColls group, I have been in plenty of their shops, and other similar shops on the UK high street.

They identify as newsagents, like the other similar businesses. Convenience stores for sure, but newsagents, too. There is nothing unique about their businesses, nothing special.

This is what many businesses in the UK newsagency channel did years ago, they evolved into convenience businesses. I have written about it here before, in the context of some in the Australian newsagency channel referencing the convenience model. I am on the record with the opinion that convenience does to offer a good future for any independent small business retailer.

The challenge with convenience is that it is a mass driven model, dominated by huge suppliers hungry for mass sales. Scale is everything, and this starts with scale in terms of retail fleet. It’s why in the UK the supermarket chains dominate the convenience retail offering, making it hard for any smaller group and almost impossible for independent retailers.

We see the convenience model evolving here in Australia with the major supermarkets playing with their models and, in some states, opening more outlets. 7-Eleven is strong, and they offer abroad range of products. Petrol outlets are evolving too, with plenty offering more magazines and cards than some local newsagents.

Here in Australia, as in the UK, I see no upside whatsoever for newsagents in the convenience space. It’s price driven – meaning you have to buy as well as the big businesses. Convenience shoppers tend to not be as loyal, not destination shoppers.

But, hey, these are my opinions. What local retailers do is up to them, of course.

The local convenience model is facing several new challenges. Quick commerce is trying to attract the convenience shopper. These are businesses like Milk Run, which offers home delivery of convenience and supermarket lines within 10 minutes. They are eliminating the shop altogether from the convenience experience as they supply through dark stores. In the US you have Uber eats, InstaCart and Deliveroo all spending up in this space.

There appears to be no shortage of investors happy to throw millions at this latest innovation impacting convenience retail, offering another warning sign to any local independent retailer, like a newsagent, considering the convenience model as viable business move.

The news today that McColls is reportedly close to collapse is not what anyone in retail wants to read. And, possibly, their situation has little to do with choice of model. But, we only have to walk down any UK high street to see the cannibalisation taking place, the money being invested to churn customers from one shingle to another. There does not appear to be much investment in growing the market, just a battle for cash in that market.

While the McColls news can feel distant to our local retail businesses in Australia, I think it is a reminder of the challenges of local retail and the need for each of us to know what we stand for in our businesses, to know what differentiates us, and to ensure that this is an appreciated value proposition.

19 likes
Convenience retail

Some newsagents are finding linking to Shopify challenging

Not all newsagency software handles connecting to Shopify. And, time that do connect to Shopify do not do it in the same way.

This can leave newsagents frustrated, spending time double handling, missing sales, and giving up on online.

Good newsagency software provides a seamless two-way data flow between the newsagency software and Shopify. Stock details, pricing and images flow out, and sales flow back.

This makes the newsagency software the sole place for managing stock descriptions, pricing and images. It enables you to have an in-store and a different online price if you wish. It enables you to have an online description which is different to the main description.

Now, if this reads like a sales pitch for my Tower Systems newsagency software, it is. But, this post is more than that. I have heard recently of newsagents giving up chasing sales online because the newsagency software they were using did not offer a complete two-way relationship between the software and Shopify. they were wasting time, making mistakes because of double data handling and getting frustrated.

It’s 2022 for goodness sake. Tower Systems has been a partner of Shopify for more than 6 years. Back when we started with them there was commentary criticising us. Today, Shopify is the platform of choice for local retailers. Those who dawdled in this space have missed out and let others down.

I have a vested interest in Shopify beyond what my newsagency software company does. In each of my 4 newsagencies we win newsagency connected Shopify websites to connect with shoppers outside the shops, to win business we would otherwise not win. We run the shops lean in terms of labour. We need time efficient solutions. This is where the newsagency software Shopify link shines. It’s why I know the solution works, that it serves retailers well.

If your newsagency software does not fully integrate with Shopify and provide two-way connectivity, consider switching.

Oh, and my Tower Systems newsagency software also connects with Woo Commerce and Magento. Newsagents use them too, but they do require a level of tech experience in the shop to make them work for you. Shopify is simpler, it is also evolving faster, which helps you win more online sales.

Outside of those three, Shopify, Woo and magenta, there is nothing worth considering in my opinion.

4 likes
Newsagency challenges

Shanghai Covid lockdown expected to extend supply chain disruption

The 2-part lockdown in Shanghai due to a surge in Covid cases is expected to further impact supply chain challenges given its place in logistics.

Relying on accurate information from suppliers on availability is more critical than ever. Their attention to building their stock situation is key here, as is our own stock piling in our shops to ensure we have stock to sell.

Talking to a range of suppliers across multiple categories, these supply chain challenges are expected to be with us through to the end of 2023 at least.

Related, the new chair of the US toy association wrote about this a couple of days ago:

Supply chain disruptions are an immediate issue of focus impacting our toy businesses, including:

  • ocean freight creating a choke point in transport costs;
  • the impact of shipping challenges on global markets over time;
  • ongoing disruptions caused by the pandemic, including the current lockdowns in Southeast Asia;
  • US-China tariffs on raw materials that are a component in rising costs of global raw materials; and
  • tensions caused by the Russia/China relationship; a destabilized Europe’s impact on selling markets and manufacturing options; and the high possibility of China’s issues impacting other Asian countries.

Add to these global challenges continuing logistics challenges impacting particularly road freight in Australia.

It all makes a stronger than ever case for locally made.

6 likes
Newsagency challenges

Why are your EFTPOS merchant fees rising?

It’s an easy complaint to make – my merchant fees are going up, it’s not fair, time for me to consider another supplier.

Okay, yeah, that’s an easy take. It’s a cheap shot by me to call it out. But, let me explain and explore it with you.

My advice is to look at your data first.

I’ve looked at hundreds of thousands of baskets from many retail businesses.

The most common reason merchant fees are increasing is because of more sales transacted using EFTPOS.

While sometimes the actual fee basis, flat fee per Tx or percentage, increases, this is rare.

Yes, the most common reason a retailer paid more in merchant fees last month than the month before is because more transactions were paid for on a card.

So, the EFTPOS provider is not the cause of the issue.

Newsagents in some marketing groups have access to preferential rates that see them paying the lowest fees in the country.

But, that addresses only the base cost.

To address the growing cost to the business, of people using a card to pay, you need to be an engaged retailer. Here are some ideas:

  • Promote cash payment – if you want the costs associated with cash of course.
  • Be clear as to the cost of using a card. You could apply a surcharge, which I think is a ridiculous idea though.
  • Price knowing that cards will be used. Build the cost into your pricing model. Keep the bump under 2% and it is less likely to be noticed.
  • Lower a cost elsewhere to cover the cost. Look at your labour cost, for example. Shaving a hour of employee rostered time can save you around $30.00, that’s equal to purchases of $3750.00 on a card – depending on the type of card used.
  • Increase sales. While you should be single-mindedly focussed on this anyway, increasing sales helps you address the EFTPOS cost and more in the business.

It’s easy to kick a bank over EFTPOS fees. But … before you do that, look at your own behaviour. Here are common points in retail businesses that retailers overlook when they kick a supplier:

  • Dead stock. It’s easy to identity but often not. A problem not seen is not a problem to some. In my experience on conducting an audit of stock performance, usually, 20% of stock on the shop floor over which the retailer has full control underperforms and should not be there.
  • Bloated roster. Some prefer to spend money on people so they have time to themselves for relaxing, golf or to sit in the back office, where no customer purchases from.
  • Wrong trading hours. Some stay open too long while others are not open long enough. Either way has a cost to the business.
  • Being blind to theft. Theft in retail, like a local newsagency business, costs on average between 3% and 5% of turnover. Not watching for it, tracking it and mitigating against it has a cost to the business.
  • The wrong product mix. GP% is a key measure of retail business performance. Increasing yours beyond what is traditional for your channel provides you with a buffer. For example, transaction count / sales can decline and you can be okay. Measure GP%. Set a goal. Chase it. The air is cleaner in above average.
  • Ignorance. It’s not bliss. It’s not! There are insights in your software that can guide better decisions, faster decisions, more financially rewarding decisions. Yet, too many in retail don’t want to know. That failure costs them plenty.

The 6 items on the above list are all on the retailer to address.

I get that it’s easy to complain about high EFTPOS fees. If you are contemplating that, please take a moment to look back inside your business, look at the reason why and see if there are decisions you could make that are more valuable than complaining about EFTPOS fees or changing supplier. I’d be happy to help.

12 likes
Newsagency challenges

A lockdown without being locked down

I have 4 shops in Melbourne, two in Westfield centres and two on the high street.

Shopper traffic in the shopping centres is noticeably lower now than during any of the Melbourne lockdowns, but we are not in lockdown right now. Traffic is not only down in centres in which I have shops but others, too, from what retailer colleagues tell me. This is why plenty of retailers are on reduced hours – there’s not enough revenue to cover overheads, like wages.

Out on the high street, traffic is good as are sales. But shoppers are nervous, that’s what they say. In think that nervousness is a reason we are not seeing the retail sales surge like we did in the 2020 and 2021 lockdowns. back then people had government support funding available and they were funding dealing with the shift in how they work and live. Today, there is no government support and they are used to living and working in this situation.

Ten days ago we had the ANZ EFTPOS data indicating a significant contraction in shopping. Plenty of retailers support that with their own data and their first-hand observations, especially in shopping centres where the hit is hardest.

The experience is a reminder of the value of online and being able to transact with those not prepared to leave home, because online remains strong, and it enables me to reach people way beyond my local community.

3 likes
Newsagency challenges

Happy New year: News Corp. announces 13.6% price increase for daily newspapers

News Corp. sent this notice to newsagents yesterday:

10 January 2022

Cover price rise for News Corp Australia publications

Dear Retailer,

Effective Monday 17 January 2022, the Monday to Friday cover price of the following publications will increase by 30 cents to $2.50.

  • Herald Sun
  • The Daily Telegraph
  • The Courier-Mail
  • The Advertiser
  • The Mercury
  • NT News
  • Geelong Advertiser
  • Gold Coast Bulletin
  • Townsville Bulletin
  • Cairns Post
  • The Chronicle

A full list of all relevant News Corp Australia publication covers prices, retailer commissions and prices to account as at 17 January 2022 is provided below.

We ask that you notify customers of the price change and ensure your systems are updated on the effective date to reflect these changes.

We thank you for your continued support and look forward to continuing to partner with you in driving new sales opportunities.

Newsagents make 31.25 cents from selling one of these papers. The space the a single title newspaper takes in the shop can cost between $500.00 and $1,500 a year. The labour cost of handling the a newspaper title can cost around $3,500 a year if there are no issues – this does not include the cost of selling them. Other costs for the papers (theft, insurance, tech etc.) can cost around $500.00 a year. So, at the high end, that’s roughly $5,500.00 in costs, or 17,600 newspapers sold.

An average newsagency in a good suburban situation will sell 65 papers a day. That’s 23,660 a year, or $7,393.75 in gross profit, from which to fund the costs noted above. That leaves $1,893.75 to cover the cost of selling the papers and dealing with issues, like short supply or late papers.

By deregulating newspaper supply, the money newsagents make from newspapers has been slashed, making them borderline economically valuable in a newsagency business. But, we keep them.

9 likes
Newsagency challenges

Updated advice for new newsagents

Six years ago I published advice for new newsagents covering a range of areas of newsagency management. Here is my revised advice for new newsagents:

There is plenty to learn for the new newsagent and plenty an old hand can forget. I am often asked about important day to day operational tasks in running a newsagency so I started putting together a list. It’s an evolving work in progress, something I am happy to share with anyone – not as a definitive list of what you need to be on top of in running your newsagency business but something at least you can check against.

But, before we get into the list, let’s consider the biggest challenge / opportunity. What type of newsagency do you want to run? A retail business or an agency. A retail business is value focussed – value from sales volume, product Martin and shopper visit efficiency. An agency is about making a clip from each transaction ‘owned’ by another party like newspapers, magazines, lotteries. A retail focussed business will be more valuable over the long term while the agency business can appear easier to run.

You drive business value by playing at the boundaries of the business, broadening what you sell, the price points you can achieve and the new faces you can attract. I think it is vital for new newsagents to invest time and capital in this – broadening the appeal, and value, of the business, as that is what will play best when it comes time to sell.

Now, to the updates list of every day work in a newsagency:

  1. MAGAZINES.
    1. Arrive invoices through XchangeIT – no other way.
    2. Only sell magazines by scanning. Never use department keys.
    3. Do not label all magazines. Do not label weeklies or high volume monthlies.
    4. When returning magazines, scan out returns. Do this at least weekly.
    5. Do not early return magazines the day they arrive unless you have been sent too many. Often newsagent who early return deny the opportunity of sales.
    6. Early return at least twice a month – based on what is NOT selling.
    7. If you have sub agents – only supply them through the sub agent facilities in your newsagency software.
    8. Check your magazine account as soon as it comes in to ensure you have received all credits.
    9. Pay your magazine bills on time without fail – avoid being cut off for weeks without magazines.
    10. You control where magazines are placed, it is your shop. Do not be told by publisher reps where magazines should go.
    11. You do not have to put posters in the window. I recommend against this.
    12. You do not have to do big magazine displays – it is your choice. I see no evidence of it increasing sales.
    13. I recommend against letting magazine companies set up display unless you think they will help drive sales.
  1. NEWSPAPERS.
    1. You control where newspapers are placed, it is your shop.
    2. If you are regularly undersupplied, complain to the publisher as well as the supplying newsagent (if you do not have a direct account).
    3. Scan all newspapers you sell.
    4. Scan all newspaper returns – accurate data will be your friend in the event of a dispute
    5. You do not have to put out newspaper posters or place newspapers in a certain position unless you have signed a contract with a publisher agreeing to this.
    6. Manage your exposure to promotions where you sell stock for a tiny margin.
  1. CARDS.
    1. Put out your own cards. Learn what you stock. Take ownership of this most important product category.
    2. Ideally, do your own card order. It’s your money being spent. Don’t leave this to someone else to do.
    3. Agree on an ordering process with your card co. account manager.
    4. Immediately report any over or under supply.
    5. Trust your data ahead of your gut and ahead of sell-in reports from suppliers.
    6. Pay on time or risk being cut off.
    7. Discount seasonal stock at the end of the season for a couple of days to pick up stragglers and make an extra few $$$.
  1. STAFF.
    1. Ensure everyone has a list of things to do each day.
    2. Have a documented position description against which your employees are measured.
    3. Have a written roster every week.
    4. Have a structured process for handling annual and sick leave.
    5. Use payroll software for record keeping.
    6. Pay always on time and preferably by electronic transfer.
    7. Pay super on time. Do not start someone working for you unless they have provided a super account number with their tax file number.
    8. Change your roster regularly for casuals.
  1. STOCK  AND SUPPLIERS.
    1. Only see supplier reps who have made an appointment.
    2. If a supplier rep tells you something will be a success, ask for the evidence.
    3. Use your computer system to guide ordering of stock – order based on sales.
    4. Order to a budget.
    5. Scan everything you sell.
    6. Scan out personal use stock.
    7. Set your own mark-up policy for items that are not pre priced.
    8. It is easier to discount than increase prices.
    9. Do not pay for an external stock taker – do it yourself through the year.
    10. Check high theft risk items like weekly or fortnightly.
    11. Arrive and price stock on the shop floor, and not the back room. You’ll sell more this way.
  1. SHOP LEASE.
    1. Pay on time otherwise you could be locked out.
    2. Do not agree to a new lease unless you have read the entire document and are prepared to agree to it in its entirety.
    3. Conduct discussions with your landlord in writing to maintain a paper trail.
  1. GST.
    1. Complete your BAS on time and make any necessary payment – to reduce the opportunity for you being audited.
  1. FINANCE AND OTHER MATTERS.
    1. If you borrowed to get into your business, start paying this off from the first week, make progress everyweek. This avoids you having a challenge when you come to sell the business.
    2. Pay yourself a wage or at least accrue this in the accounts.
    3. Integrate with accounting software like Xero – keep bookkeeper costs down.
    4. Ensure workcover (workers comp.) cover is up to date and maintained.
    5. Ensure you have appropriate council permits for what you sell – i.e. food.
    6. Have a structured banking process that ensures that cash is tracked at all steps and at all time.
    7. Take a data backup every day. The best approach is an automated cloud backup – ask your software company.
    8. Bank every day and bank the takings for each day separately to make reconciliation easier.
    9. Use your software to manage the end of shift process to drive consistency and accuracy.

As I said at the start, this list is evolving with time. I hope it is useful to new newsagents and would be newsagents, to understand some of the day to day tasks you cannot afford to get wrong.

21 likes
Newsagency challenges

The turmoil of newspaper delivery for a regional newsagent under new News Corp arrangements in Victoria

Victoria is in the middle of considerable changes to newspaper distribution let by decisions of  News Corp.. While change can be challenging, as we have seen in Queensland and New South Wales, the newspaper distribution experts at News Corp. are certainly expert at the botch up. Newsagents are suffering, enduring higher costs and upset that they are letting their long-term customers down.

Here is the experience of one regional newsagent in Victoria in dealing with the Herald and Weekly Times:

The Herald and Weekly Times replaced the reliable transport company they had used for decades to deliver papers to us and many newsagents in regional Victoria. Under the new transport company arrangement, it has been a nightmare.

Previously, papers for home delivery were delivered between 2:30am-3:30am, giving us time to unload, wrap and deliver by 6:30am. This meant deliveries were done when there was less traffic on the road. Delivery people are working longer hours and are delivering to homes in a less safe situation given more traffic on the road later in the morning.

Newspaper home delivery drivers are angry and threatening to leave. Customers are disadvantaged with later papers, often coming after they have left for work.

Circulation people at the Herald and Weekly Times have been disinterested. They tell newsagents to be patient and that what newsagents are experience are teething issues. For the first couple of weeks this could be the excuse, but months in, it is no excuse at all. To be fair to them, maybe they are saying all they can given the company’s decisions.

The Herald and Weekly Times people set the OH&S standards that newsagents are consistently unable to meet now because of their failure to deliver newspapers on time. The consistent failure puts delivery drivers and the public at risk.

The failures of this change in newspaper delivery transport arrangements is impacting the mental health of some in our channel. Yet, management at the Herald and Weekly Times, and their masters at News Corp. headquarters in Sydney appear disinterested. It feels like the News Corp. financial situation is all that matters.

I get that News Corp. wants to cut costs. But to do so in a way that even more burdens are shouldered by local small business retailers reflects a lack of ethics, it represents poor social responsibility.

I tell newsagents who tell me about the challenges relating to getting newspapers on time for home delivery to quit newspaper home delivery. There is no upside. What you make today in real terms from newspaper home delivery is less than a couple of years ago. Few newsagents genuinely profit from it. It is a distraction to other parts of the business that should be experiencing double-digit growth, and which make you happier.

23 likes
Ethics

It’s fair-weather friends season

Some suppliers who have resisted opening accounts with newsagents without looking at the actual businesses applying now welcome retailers from our channel because of our good Covid story.

That we have been open throughout and thrived has shown them the value of retail businesses in our channel.

Suppliers who realised this last year and responded are not the ones I am writing about today. rather, I am writing about suppliers responding to the latest NSW / ACT / VIC lockdowns.

I am aware of several who have steadfastly resisted newsagents who now welcome them as customers. One is actively pushing into the channel, setting up some difficult conversations with existing account retailers when they do get to reopen. They have overcome a prejudice they help for years because they have a warehouse of stock they need to move and our channel is just about the only game in town for them. While it’;s good to see, I do wonder if they really have overcome their prejudice.

I am sceptical of some suppliers opening to our channel. If I was to take any of them on, I’d want certainty that into the future they will not restrict the product categories available to me. If they balk at that question I’d wonder about the long-term prospects for the relationship.

While there is considerable diversity among the retail businesses in our channel, it is, overall, strong, with a bright future. This is in part because of how much many of us have evolved from the shingle.

7 likes
Newsagency challenges
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