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

American Express needs to be a better Australian citizen if they want us to believe they support small Australian retailers

American Express invests heavily in their annual Shop Small campaign, pitching the business as a good corporate citizen with a commitment to social responsibility. It’s a feel good campaign with plenty of support from small businesses and shoppers.

Shop Small is a movement dedicated to helping businesses at the heart of our communities. Whether you’re a small business or a Card Member, there’s something for everyone.

While Shop Small is nice PR, American Express engages in legal steps to minimise the tax they pay in Australia. This behaviour is at odds with there Shop Small campaign as tax minimisation hurts Australian taxpayers including small business owners.

How Amex paid no tax in nine years on $10 billion by Michael West explores how American Express minimises their Australian tax obligation.

American Express has paid no net tax in Australia for nine years, according to its latest financial statements. That is zero tax on $10 billion in revenue.

Michael West goes into considerable detail about how the company acts to pay less tax in Australia.

Over the past nine years, the financial services juggernaut has racked up revenues from its credit-card services of $9.93 billion and shown a tax gain, rather than a loss, of $900,000.

American Express Australia Limited used to pay tax in this country, but thanks to a “restructure” in 2004 billions in profits have since been siphoned out to an associate in the tax haven of Jersey.

I would prefer American Express to stop spending money to make itself look good with the Shop Small campaign and instead  be a good corporate citizen and pay a fair contribution of tax as this would be more beneficial to the economy and all Australians.

rather than shifting revenue offshore to a more favourable tax jurisdiction, I would like to see American Express pay Australian tax on its Australian revenue. Back to Michael West’s report…

The 2008 annual report for the Australian arm of American Express notes: “Included within borrowing costs in the income statement is the discount charged on the transfer of receivables to AECA of $370 million.”

Through this arrangement, Amex in Australia has transferred almost $5 billion in credit-card receivables to a related entity in just one year, and at a large discount. These receivables are money due to be paid by customers on their credit cards.

It is the actions of all global organisations that shift Australian revenue overseas to minimise Australian tax that hurts our economy. Worse still, the actions of American Express and others intensifies the tax burden on small businesses, the very group that American Express purports to support.

We need to not let American Express and other global companies get away with not paying their fair share of tax. Consumers can act, small business retailers can act – even if our politicians fail to act as they have done for many years on this.

Every small business owner knows how tough things are in Australia. Most have felt pressure from various points of government for funds for various taxes, levies, fees and more. We can’t revenue shift like the big  businesses.

Kudos to Michael West for his report and shining a light on this issue.

Footnote on Michael West – what he is doing through his website is business journalism that I am keen to see more of. His direct to market approach is smart and appreciated.

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Ethics

Ken Murphy memorial

Further to my post about the passing of former QNF CEO Ken Murphy, a memorial will be held at the Queensland Cricketer’s Club on May 24 at 4pm.

Ken was a warrior for newsagents, particularly Queensland newsagents. The memorial is an opportunity for those in our channel back when Ken was involved to remember his contribution.

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Social responsibility

Are you ready for after Mother’s Day?

The next big season for newsagents after Mother’s Day tomorrow is Father’s Day – if you are not doing a mid year sale or something similar.

My question today is what are you doing after Mother’s Day?

My advice is do something!

You should be in  position to come out today with something strong, with a focus, designed to drive traffic. Something you are proud to promote outside your business.

If you look at your key competitors they go from season to season. The whole year is planned, integrated. They will come out of Mother’s Day with something big and bold, something they promote outside their businesses.

If you are in  a marketing group they could already have something for you. If they don’t you have to put something together yourself.

In my own situation I am coming out of Mother’s Day with one season, which folds into another season, which then folds into Father’s Day.

The ideal season you create is one with supplier support for driving margin and providing traffic leveraging opportunities, something for which you have strong branded collateral so it looks like you are part of something big.

These months between Mother’s Day and Father’s Day are the worst for retailers who do not have a plan.

Gone are the days when you coasted on the back of certain lottery, stationery and magazine traffic.

You have to create your own success. You do this by attracting new shoppers.

You attract new shoppers by promoting outside your business.

You promote outside your business with opportunities people who do not currently shop with you value.

Value is something you can create based in a brand shoppers love and for which your business is already known in the area.

It starts with you creating product-based opportunities that fit with your business and that local shoppers will love.

It is not too late. I urge every newsagent reading this to make this week and the next few weeks count. It’s up to you, not your suppliers.

But back to my question – Are you ready for after Mother’s Day? I hope so. It starts today.

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Newsagency management

Sunday newsagency management tip: frictionless loyalty drives sales

The Mother’s Day traffic spike is a reminder of the value of a frictionless loyalty program. That is what I saw in-store with discount vouchers with first-time and infrequent shoppers using the voucher they received for an additional purchase. The vouchers absolutely drove incremental purchases.

I call it frictionless loyalty because there is no paperwork, no sign up process, no delay. The rewards are easy to understand. People responded by shopping the shop, again, after their first purchase.

Major seasons are a perfect opportunity to do this.

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Management tip

More middlemen entering our channel

The newsagency channel has had several start-up middlemen operations enter, claiming to offer newsagents good supplier deals while at the same time pitching to would-be suppliers that they have access to newsagents who want to buy their products.

My experience is you can’t offer both sides of a transaction margin beneficial opportunities without adding value yourself. Buying cheap is not useful without support to help you sell the inventory you buy.

I am not naming any of the start-up operations as one has already threatened me with legal action.

My advice to newsagents is to do your homework. Understand fully the relationship sought. Be certain of any promises made. Understand how the model fits what you need in your business.

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Ethics

Wow, Tatts invests in second online platform

Tatts Group has taken a 15% stake in Jumbo Interactive, the operator of OzLotteries, it was announced today. This has happened as tatts has extended its commercial relationship with Jumbo for online sales of Tatts products. The expanded relationship includes more tatts products being available on the OzLotteries platform.

Newsagents wondering about the plans of Tatts for online should read today’s announcement as strong statement from Tatts about online.

The announcement details what the share acquisition revenue will be used for. It includes:

expansion opportunities identified by Jumbo such as approaches to accelerate the growing charity lottery business.

The expanding charity lottery business is certainly interesting. Its represents another example of disruption challenging the single focus lottery retailer, such as many newsagency businesses.

Also in the release is this about Jumbo:

In 2000, Jumbo sold its first lottery ticket on the internet and witnessed a dramatic rise in popularity due to the convenience of buying tickets online. At first customers were attracted to the security of never losing a ticket and the convenience of automatic number checking, prize payments and auto-play. In 2012, Jumbo released a lottery app for the iPhone and a new transition began driven by the convenience of mobile lotteries. A new app for the Apple watch takes the customer experience a step further with prize alerts, winning numbers and ticket management now available on the wrist.

Yes, lottery product engagement on the Apple watch. #retailersnotneeded

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Lotteries

Advice to retail newsagents: take care with the fidget spinner craze

The fidget toy craze has peaked in Australia in the last two weeks with extraordinary media coverage. Retailers with stock have been cashing in. Suppliers have been struggling to keep up, some have been selling stock they don’t have.

I anticipate the craze will start to fade in revenue terms in the next month. My advice to newsagents is to be careful about stock levels.

This craze was evident months ago and that is when engaged retailers stocked up, ahead of the curve.

In Hong Kong two weeks ago I saw a ton of suppliers with various versions of the spinners and other fidget products. This told me the market was to be flooded. That is happening right now as several wholesalers have air freighted in stock.

Be careful. Stock quality products and know it is better you sell out rather than be left with unsold stock. Too many got caught with loom bands.

There are still opportunities for fidget spinner and related products, especially in the premium space of adult focussed fidget products that can sell for $200 and more. That range interests me considerably.

I say the craze is fading because of the mainstream media coverage. Once any craze hits mainstream he rely adopters exit as it is no longer cool. The early adopters are the ones who usually make an opportunity like this. It is useful to watch them.

The lifecycle of the fidget craze will vary by location, however. In capital cities it will fade first and this could be noticed before it has peaked in rural locations.

Yes, there are long-term opportunities with these products, especially in therapeutic areas. But that will not deliver the sales volume of the peak. Remember kinetic sand. I was doing hundreds of dollars a week and it stopped, before starting again but at a much lower level.

Oh, and re the suppliers who took your orders and told you the stock was coming and then said they ad oversold, remember that for next time.

Footnote: if yo are wondering about what this is about, read the terrific article in the New York Times.

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Newsagency management

Tatts promoting online for Powerball $50M

Online and in shopping centres over the last couple of days Tatts has been promoting online purchases of tickets in tonight’s $50M Powerball jackpot.

Here is a screen in a Brisbane Westfield centre.

Their online ads encourage printers to use their app.

While Tatts demands newsagents promote Tatts in-store, Tatts does not reciprocate in its own marketing.

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Lotteries

A personal invitation to look under the hood at the newsXpress online strategy

newsXpress now operates six customer-facing websites and is about to launch two more and has commenced planning for two more after that.

The newsXpress web strategy is the most comprehensive web strategy of any newsagency group in Australia. It attracts new in-store shoppers for newsXpress business as well as healthy online sales.

newsXpress has resolved the questions others wrestle with – accurate store stock on hand data, account reconciliation, shipping, aggregating an order across multiple retailers, geolocating to deliver online orders to the best and closest local stockist, click & collect and online LayBy.

newsXpress knows how to be #1 in the Google searches that matter.

I write today to personally invite you to a two-hour behind the scenes look at the newsXpress web strategy. Here are the details of each session. Click on the respective link to book online.

  • ADELAIDE. May 23. 10am. Rydges South Park, South Terrace.
  • SYDNEY. May 24. 10am. Mercure Sydney Airport, Wolli Creek.
  • MELBOURNE. May 25. 10am. The Kew Golf Club, 120 Bedford Road, Kew.
  • BRISBANE. May 30. 10am. Hotel River View. Kingsford Smith Drive.

I am hosting each session and will outline the strategy behind the sites, show you the results, dive deep into sales and other data with you and share next steps.

I will also share where the web strategy fits into the broader newsXpress model and outline the benefits newsXpress offers its members through which they can redefine their businesses in a rapidly changing marketplace.

Plus, I will share insights from three recent international e-commerce conferences I attended, where I gained some valuable insights.

What newsXpress is doing online is ground breaking and it connects independently owned retail businesses under unifying online platforms, driving traffic and revenue.

This session is for those interested in joining newsXpress. If joining newsXpress does not interest you, please do not book to attend.

Sorry but I don’t have time in my schedule to add more cities at this time. Nor will we film the sessions for confidentiality reasons.

If you have any questions I’d be happy to answer them. You can also contact the newsXpress National Sales Manager Peter Francis on 0423 298 020 to find out more about newsXpress. Click here for an overview document: newsXpress: What we do.

Mark Fletcher.
Email: mark@newsxpress.com.au  M | 0418 321 338

PS.  Outside of online work, newsXpress has a well thought through strategy of recasting the consumer connection with the brand, redefining the news in newsXpress.

PPS. Yes, I am a Director of newsXpress. BTW, the vast majority of what I write on this blog has nothing to do with newsXpress nor my other business Tower Systems.

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Newsagency management

Interesting pitch with crossword titles

In the Newslink store at Townsville airport yesterday I noticed small format crossword titles in the last two rows of a unit with pens and journals. It is the placement with pens that interests me as in the transit situation this co-polacement is smart.

What we can sell with magazines varies greatly between retail situations.

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magazines

Ruth magazine reflects special local interest

In Townsville yesterday I am pleased I got to see Ruth magazine. This is a terrific special interest title, focussed for locals in Queensland. It is the sort of magazine you want to see in a newsagency as would struggle to find it in any other retail outlet selling magazines.

Special interest magazines are important to our businesses.

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magazines

Would you like to sell Lottoland in your newsagency?

The folks at Lottoland have said they would like to work with newsagents in Australia.

I have had newsagents ask how they can do this, how they can sell Lottoland in their shop.

If you are interested in selling Lottoland in your newsagency let me know. Email me at mark@towersystems.com.au.

Given how Lottoland is sold and what is sold, I suspect the costs of being able to do this in-store would be minimal.

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Lotteries

How to deal with community groups that ask for donations

Local businesses are being hounded by individuals and community groups to donate cash and products. It feels like the number of requests is up this year.

Often, the requests are from people you have never seen in your shop.

Requests from schools, charities and other community for donations can be a challenge for any size business. If you do not take a structured approach to this you will find yourself giving away plenty for little or no return.

Requests are often loaded with guilt.  People can be passive aggressive in their approach. Often, people requesting help leverage pester power. It can be hard to say no. There are too many stories of retailers giving a gift as a prize, receiving the Thank You poster and achieving no benefit for the business.

My advice is that you determine the amount you are prepared to donate in a year. This is best donated as a voucher for redemption in the business.

Next, publicly invite community groups to submit to be considered as part of your annual giving commitment. Ask them to submit what they would / cold do to support your business so that your business has the resources necessary to support they community.

HOW TO PICK GROUPS TO SUPPORT

Focus on community groups that support you. That is, groups with members who support you. The more they support you the better you are able to support the community.

Be prepared to ask where people shop for the items you sell in your business. Ask if they will change in return for your support.

Asking these questions underscores to you the importance of approaching the decision as a business decision.

Be thoughtful and deliberate. Support the groups that support you. This is important as it helps you stay within a budget.

REWARD ENGAGEMENT

In addition to any direct gift, consider an offer whereby anyone who is a member of the group who shops with you accrues an amount you donate to the group. You could manage this through your software. It could be you offer a discount to the shopper as well as accruing a value for the group.

This type of program could also be in addition to your core giving program as the value here is driven by sales – hopefully, incremental sales.

EDUCATE GROUPS ABOUT GOOD ENGAGEMENT

Here are things groups you support can do to help your business. You should ask them to do these things:

  1. Tell members to buy from you.
  2. Write about your business on their Facebook page.
  3. Distribute flyers of your offers.
  4. Have you speak at a meeting.

WRITE ABOUT YOUR ENGAGEMENT

Once you have a decision on which groups you will support, write about this in your newsletter and on Facebook. Not just once but multiple times. Invite them to provide you with content to publish too. Talk about their good works.

Ask them to write about you too.

Footnote: the advice in this post is part of the advice newsagency marketing group newsXpress provides its members. A more comprehensive form of this local community group giving advice was first shared with newsXpress members in 2015.

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Newsagency management

Politicians pander to big business media mates while ignoring small business

It has been a disappointing weekend for small business in Australia. The government is set to give big media companies valuable free kicks, because of the “challenges” faced by those companies.

Of course, the media companies love the financial benefits they are gaining. And there appears to be little opposition outside of government – because the media companies can make or break you.

What made the announcement disappointing is all the bleating about the budget deficit. Yet here they are able to give more away to big business mates. And at a time when independent and small business retailers are confronted by extraordinary structural change, for which they receive no government support. Indeed, politicians have stood by and watched as Tatts forced small business newsagents to overcapitalise the lottery side of their business.

Small business makes a greater contribution to the economy yet we are ignored, except at election time. More fool us for being sucked in.

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Ethics

Sunday newsagency management tip: make your shop smaller

The shop we took over recently as too big for what we wanted to do with it in the short to medium term. So, rather thankful the excess space with stock and rather than fixing the problematic back part of the shop, we installed a black curtain, blocking it off.

The curtain was cheap and installing it was a breeze.

We put some Ikea shelving in front of the curtain and we are a professional looking space, the right size for what we want right now. Plus we have a work area behind the curtain for us to play in.

I see too many retail businesses with too much stock – because they have not trimmed their space to what is appropriate to the business. Do not put stock in the business just to fill up the space.

A quick visit to Spotlight or similar and you can create a professional looking wall without the cost of a shopfitter.

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Management tip

Sunday newsagency marketing tip: be smart with photos

Next time you the a product photo that you plan to use in marketing, make sure it is the best photo it can be.

My advice is to put more than one product in a photo.

Pose the items so they tell a story beyond the products themselves.

Have fun.

Don’t overthink the photo as any social media content is scrolled past in a second or two, unless you are lucky.

In the example here I have a unicorn gift items in front of  frame. I felt the two worked well together, playing off each other.

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marketing

The suburban newsagency card department

This post is an update on the high street location business we opened a week ago. This is a business we purchased from the administrator of a failing specialty card and gift business. The business has been opened with minimal capex. Indeed, the only capex has been for signage.

In the middle of the shop we stuck with the existing card fixtures for the next few months while we learned about the local shoppers and what they like. The reaction in the first week has been terrific.

We took off some gift shelving that was on the top of the card unit, to create better across the shop sight lines.

Here is what the card department looks like with around 1,200 pockets filled:

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Greeting Cards

Promoting the WIN A CAR! competition to drive magazine sales

I urge newsagents to serve this coupon on POS software receipts during the WIN A CAR! promotion from Pacific Magazines. Every touch point you can offer for a promotion like this is valuable. Shopper receipts are an ideal way to reach existing shoppers.

Out of store, use the collateral from Pacific. I have used the art below on Facebook from Thursday morning this week to reach people:

The more touchpoints the better for this newsagent-only campaign.

In my own situation these touchpoints include social media, at the entrance to the business, at the weekly magazine display, on receipts and at the counter.

Experience with past campaigns like this one is that the greater the engagement the greater the sales uplift. That greater engagement is on each of us in retail. pacific has provided the collateral. All we need do is use it.

To those preparing to comment here and complain about poor magazine margin and that you have better things to promote – don’t comment. Instead, engage with this proven promotion and leverage incremental business. The alternative is you chase magazines out of your shop. There is no win from that.

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marketing

Have I wasted my money on a subscription to The Age?

In February this year, in support of professional journalism, I subscribes to the Washington Post, the New York Times and The Age. I wrote about it here and here.

In the wake of the news Wednesday that Fairfax is cutting editorial staff by 25%, I wonder if the subscription for The Age is a good move. I signed on as a subscriber to support quality independent journalism. I feel dudded. Fairfax titles already struggle because of limited journalist resources. The 25% cut will hit hard.

What is a trusted newspaper if it does not have journalists creating the product at the core of the business? As Mark Day wrote in The Australian yesterday:

Fairfax says it intends to use more contributors to fill its column­s, but it intends to pay them less. It is a recipe for disaster, for if a publishing company cannot­ offer journalistic quality, it has nothing to offer. You can’t keep cutting the core of the business because, soon, there will be no business left.

I get it that Fairfax is in a tough situation. All print media is. My outsider view is that the company should have sought savings by cutting print editions. I expect they are losing money on print at least four days a week. I say that thinking of how thin the papers are some days. It is embarrassing what we charge for what feels like a pamphlet more so than a newspaper.

My thinking is: cut the weekday editions, produce beautiful bumper weekend editions and make money off of print and drive the migration to digital for weekday. Maybe would keep a Wednesday edition but certainly not Monday, Tuesday and Thursday. Make Friday a Friday / Saturday newspaper.

Cutting loss making print editions should mean the company is better resourced to create the journalism that is its differentiator. Or am I missing something here?

The other move I’d make is to deliver a digital experience that is best-practice. Currently from fair fax it is far from best practice. As a subscriber to the Washington Post I am enjoying a terrific online news experience that also provides access to quality journalism. The digital experience itself is key, especially on a pone as I suspect the majority of news site accesses are from a phone or mobile device.

The Washington Post tech and design team have produced a platform that makes me happy to pay for access, for the experience. Their investment in quality journalism reminds me my subscription is a good investment. This is what Fairfax needs to provide. Right now, their online experience gives me too much clickbait and a browsing experience that is not ideal for the iPhone.

Cutting editorial staff at Fairfax right now does not make sense to me, not this round. Hopefully, we see The Guardian, BuzzFeed, HuffPost in Australia and others fill the gap with quality journalism as Fairfax management appears disinterested their core differentiator.

Footnote: I am serious is asking the question. It is what I first thought when I heard the news of Fairfax cutting 25% of editorial staff.

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newspaper masthead desecration

Newsagency benchmark results: Q1 2017

The March quarter was patchy for retail newsagency performance. While the overall channel performance was flat, plenty peaked and plenty troughed.

It is dangerous to look at the overall and take that as the performance metric for the channel. It is not, as many individual newsagents know.

Here are the headlines from the latest benchmark study:

  1. Gifts are the fastest growing product category. However, there is disagreement about what to call gifts with some putting toys in gifts while others run a separate toy department. Most newsagents with gifts reported double digit growth. The businesses with weaker gift sales are those with the more traditional, old-school newsagency, gift offering.
  2. Of the third of businesses with a separate toy department, year on year toy revenue is up close to double digits.
  3. Cards performed reasonably well with 2.8% growth in the quarter with everyday accounting for a strong proportion of the growth.
  4. Stationery was soft with a 1% increase in revenue.
  5. Books are making a resurgence with a third of participating stores showing a separate book department and this achieving close to double digit growth.
  6. Newspaper unit sales fell 10%.
  7. Magazine unit sales declined 9.5%.
  8. 45% of businesses have overall GP in the old-school band of 28% to 32%, 35% sit in the 30% to 35% band while only 20% run with GP above 35%. Those businesses, with GP at 35% or above, are the ones with a bright future as it is only them with the capacity to hope to weather annual labour and rent increases.

For this latest study, I have looked at data from 167 newsagencies – large and small, city and country, shopping centre and high street: Newspower, the various versions of Nextra and newsXpress as well as independent.

Overall, Q1 2017 delivered better results than Q3. Here are the overall results:

  • Customer traffic. 70% of newsagents report average decline of 1.8%.
  • Overall sales. 55% reported an average revenue decline of 3.0%.
  • Basket depth. 60% report a 1.5% decrease in basket size.
  • Basket dollar value. 65% report a decrease in basket value of 2%.

Some look at these and other data points to see how they compare and are relieved if they are not in the worst group. This is a mistake in my view.

The best way to use the benchmark results is to understand industry trends. For example, if your gifts are not growing by double digits and gift revenue is not more than card revenue then you have a problem. If you are not in toys enough to have a separate department and are not achieving growth in toys then you have a problem.

What does success look like? This is an important question as there are newsagents contemplating there is no upside, nothing worth fighting on for. I disagree. There is plenty of upside, for those prepared to create it for themselves.

I think any newsagency business can be successful, regardless of location and situation. This is more true today than at any time in the past thanks to what we can see being achieved online – not only in newsagency businesses but through other retail channels.

For a glimpse of success, take a look at these data points for one newsagency for which I have seen performance data:

  • Number of sales: up 5%
  • Average sale value: up 16%
  • Average item value: up 16%
  • Average items per transaction: up 3%
  • Overall revenue: up 21%.
  • Overall business GP: 40% (no lotteries or agency business).
  • Cards: revenue up 19% and accounts for 23.8% of overall revenue.
  • Magazines: unit sales down 2% but weeklies up 3% and overall revenue contribution is only 18%.
  • Gifts: revenue up 100% and account for 35% of all revenue.

Now, before you dismiss this as being an exception. This business is long established, in a highly competitive situation. It is debt free. What sets it apart is that every decision is made based on data, not gut, not emotion, but data. The business regularly promotes outside the business and in a way that is not common for a newsagency. In-store, this does not look like an average newsagency.

Every year on year comparison report I have looked at has its own story. It reflects not only the challenges of small business retail but also the challenges of product categories, local challenges, owner challenges and more. The comparison data is a narrative for the business.

I urge you to ask yourself daily, what have I done today to reach a new shopper, someone who does not know we exist? This is what successful businesses in the benchmark study are doing and doing well.

DOES THE NEWSAGENCY CHANNEL HAVE A FUTURE?

Yes! Absolutely. If you are prepared to shrug off what has been traditional for a newsagency business, stop hoarding, embrace change and embrace social media – you can have a bright future. The transformation from traditional to the new world has to be urgent and dramatic.

AGENCY IS OVER.

My opinion remains – there is no upside in any agency parts of the business.

OPTIMISTIC.

I am optimistic for my own newsagency businesses and for the businesses of many newsagents. Indeed I have opened a new outlet in the last couple of weeks.

HOW TO USE THESE RESULTS

Look at your own situation. Compare your year on year results with those detailed here. If you are doing worse, act. If you are doing better, celebrate briefly and then get back to it.

There is no time to lose. We are in a period of extraordinary change and challenge on many fronts and the best way to confront change and challenge is to lean in and bring it on.

WHY I DO THIS STUDY

My interest in the study is as a newsagent and as a supplier to the channel through Tower Systems and through newsXpress. I want the channel to grow for selfish reasons and because it has been my life since 1981. I am invested.

BENCHMARK GOALS

I am often asked for benchmark goals newsagents ought to aim for. Here are some benchmarks I have developed in my work with newsXpress and through Tower Systems:

  1. Gross profit: this is the goal gross profit for all product sales not taking into account any revenue or costs related to any agency business. The traditional newsagency average sits at 28% to 32%. For a newsagency focused on the future, the goal has to be at least 45%.
  2. Ratio of Gift revenue to Card revenue: 50% minimum. The goal ought to be 100% or more. If you do $100K a year in cards, target to do $100K in gifts, or more.
  3. Revenue per employee – $250 an hour minimum not including agency revenue. This is a contentious KPI. If you think it is not for you, work the numbers back and see what your number needs to be based on each labour hour in the business.
  4. Revenue PSQM $4,500 – $8,500 depending on country vs. city / high street to shopping centre and depending of product mix. Higher GP lower revenue required.
  5. Overall revenue mix percentage targets: Cards: 25%; Gifts/toys/plush: 25%; Stat: 10%; magazines/newspapers: 20%; other: 15%.
  6. FLOORSPACE ALLOCATION: Cards: 25%; Gifts/toys/plush: 25%; Stat: 8%; magazines/newspapers: 15%; other products: 15%; office/back room / counter: 12%. It’s rare you make money from an office or store room.
  7. Mark-up goals: Stationery: 125%; Gifts 110%; plush: 110%.
  8. Occupancy cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation.
  9. Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business. (See above).

Mark Fletcher.

Email: mark@towersystems.com.au  Website: www.towersystems.com.au  Blog: www.newsagencyblog.com.au

M | 0418 321 338

9 likes
Newsagency benchmark
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