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

Magazine publisher offers better margin for direct supply

A niche magazine publisher has offered a newsagent a better deal for the title that what is available through Gotch. The offer came as a result of the newsagent querying why the magazine in in non newsagency retailers before newsagents get stock.

This was of interest to the newsagent as they have been a big supporter of the title. They were concerned non newsagent retailers nearby could take sales from them.

Here is part of the response they received.

You’re more than welcome to purchase the magazine wholesale direct from me if you want the magazines as soon as they come back from the printer. I sell them wholesale for $6.50 each inc GST and they retail for $12.95. I believe this is a much better profit margin than what the distributors are offering newsagents. I have a minimum order of 10 copies though, and postage is additional (just depending on quantity).

I suspect this price of $6.50 a copy is lower than the price charges to Gotch by the publisher.

It is dangerous for any publisher to open their own direct supply relationships as it damages the overall offer and could confuse return arrangements and other aspects of the supply model.

I’d like to see this publisher at least stop supplying now newsagency retailers after newsagents have the title. Then, I;d like to see them invest in our channel ahead of others as we are the magazine specialists.

6 likes
magazine distribution

Next generation adult colouring attracts special interest shoppers

IMG_2192Interest in adult colouring has evolved, thankfully, into special interest colouring with a terrific range of highly targeted colouring titles that connect with special interests cross a range of ages an interests.

What I especially like about this evolution is that mass retailers are not engaged in this space and that the special interest products are not being pitched by magazine publishers and traditional newsagency suppliers.

While the sales volumes are nowhere near what we saw when adult colouring first took off, there are interesting enough to be valuable.

2 likes
Newsagency opportunities

Magnetix – a terrific magazine specialist in Wellington

The Magnetix store in Wellington New Zealand is the best specialty magazine retail business I have seen. It is ideally located in a busy city, well laid out, makes browsing easy, carries a diverse range of magazines, respects categories and segments and engages in creative in-store merchandising. Plus, their coffee is good.

From the outside of the store on the street to deep inside you can see this is a specialist business.

Here are some photos from my visit yesterday. First up, the front of the shop.

IMG_2275

Here is a closer look at the table at the entrance. This is terrific for encouraging people to stay and drink their coffee and take a look at a few pages of the newspaper.

IMG_2276

Just inside the entrance, to the left, is a wall of magazine posters, displayed in a way that makes them more interesting than we usually see magazine posters handled.

IMG_2277

Inside and past the coffee counter is the entry to the magazine / card part of the business. Here is their father’s Day pitch. At other times of the year it features different seasons.

IMG_2278 (1)

Their approach to displays can be seen in the magazine section. Check out this display for British magazines. Brilliant.

IMG_2282

And see their promotion of Great Trains West as part of a Father’s Day pitch near the train magazines.

IMG_2289

Magazine sections are well signposted and easily browsed. In each category and segment the shopper is spoilt for choice, making the business a destination for the magazine lover.

IMG_2283

The magazine pitch continues at the counter,l with a small selection of other items.

IMG_2284

Here is a view from the counter looking to the back of the store.

IMG_2288

Here is a view looking from deep inside the business out to the entrance.

IMG_2290

Magnetix is a terrific business. It is a genuine specialty business. You could only have one of these in a city the size of Wellington, population of around 200,000. Having only one shop and it being the destination in the city for special interest magazines offers a traffic model that could work, even at magazine margins.

Don’t assume their magazine displays look like what you have in a newsagency. They are nothing like it. More space. Shop floor assistance. Hip staff – nerdy about magazines. They go deep into special interest and this is the key. Plus they import plenty of titles direct.

Some other points worth noting: Magnetix is in a high street situation (not in a mall), it is located away from the main traffic area of the CBD, meaning rent could be less, the coffee is run as a separate business in that it has its own traffic – it is not run as a bolt on to the magazine business. Both are best-practice.

If you are ever in Wellington, check it out. Newsagents will find it fascinating. We can learn a lot from what they are doing at Magnetix.

16 likes
magazines

Low cost lotto fit out for NZ retailers

Looking in detail at the lotto fit out requirements for NZ lottery retailers today and I saw why the costs to the retailers are considerably lower than in Australia. The base is the fit in the shop, not purpose built. Into this is dropped a Lotto unit. There is flexibility on what can be in or near the area. The total space allocation is adjusted by the size of the store. From what I understand the whole process is co-operative and respectful.

IMG_2273

This photo is from a Whitcoulls store on Cuba Street in Wellington that I visited today.

What you can see is the entire in-store commitment to lotto. No need for the writing desk or other items Aussie retailers are often forced to find room for without reasonable return.

The Tatts requirement for space in newsagencies is considerably different to what I see here in NZ. On The Run in SA appear to not have the same requirements / obligations as newsagents.

9 likes
Lotteries

Where do you keep the high-end markers in your newsagency?

IMG_2232I was in a newsagency recently where they kept a selection of high-end markers behind the counter including the ones in the photo. I asked if this was to protect against theft. Their response that it was to stop people coming in an sniffing them for a high.

Is this a thing? Are there people coming into your newsagency to sniff markers to get a rush or a high?

I remember it happening many ago but have not heard of it recently. Hence the question. I would love to hear from others on this.

I can understand being careful about product placement to protect against theft of these markers as I can imagine they would be popular with taggers, but not for sniffing in-store.

And for the record, the newsagency in question is in a capital city serving a broad range of people, not specific demographic.

5 likes
Newsagency management

Promoting Father’s Day cards on social media for the newsagency

Screen Shot 2016-08-27 at 2.54.38 PMNow more than at any time in the history of the newsagency channel we need to be promoting Father’s Day cards outside the newsagency.

Indeed, we need to be doing this for every card season.

Whereas in the past we could rely on our base traffic to generate a good result for any major season, this is no longer the case.

Today, we have more retailers of cards than ever competing with us. Some of those are smart at attracting card buyers to their businesses. Too often, newsagents rely on old traffic and that is not enough.

We must promote major seasons outside our businesses and do so relentlessly and with thought leading up to and during the season.

If we do not do this, all the other retailers competing with could grab attention that might otherwise face our businesses.

My question today is what have you been doing outside your business to promote Father’s Day?  It is not too late.

5 likes
newsagency marketing

Stationery retailers in Dubai told to not increase stationery prices during back to school

A news report in the UAE last week encouraged consumers to lodge reports of stationery retailers increasing prices at Back To School time.

The Commercial Compliance and Consumer Protection (CCCP) sector in the Department of Economic Development (DED) has called on retailers in Dubai not to increase prices of school stationery in view of the back to school season.

…

Al Awadi said inspection campaigns will be conducted to detect any unauthorised price rise and verify the retailer’s commitment to price regulations.

He said: “School supplies account for 50 per cent of the stationery sold during the back-to-school season. We call upon consumers to ask for the invoice on any purchase and retain a copy to be produced in the event of any complaints later.

Dubai is a place where you do not want to break any law. Read the full story here.

2 likes
Ethics

Growing c-store competition for newsagents

Check out this recent article in one of the c-store retailer magazines. It speaks about being local and offering everyday items like cards, stationery. lotteries and more of what newsagents used to be known for. This is not the first article pitching a c-store model that is a newsagent model and it will not be the last.

IMG_2146

Traditional newsagent suppliers are embracing other channels as the size of our channel shrinks. The more this happens the more the traditional Newsagency shingle fades in relevance.

5 likes
Convenience retail

Did the News Corp. Marvel promotion drive success newsagents needed?

The recent Marvel promotion run by News Crop. was not the success expected according to newsagents I spoke with.

What was expected prior to launch to be a red-hot promotion was soft, delivering a bump but nothing like that necessary to justify the prime space taken and considerable investment in inventory.

Looking back, there are a few reasons why the promotion may not have worked for newsagents as expected:

  • Timing. The promotion had to compete with two Marvel partworks releases and a raft of other product releases that were more appealing to Marvel collectors.
  • Additional product support. News Corp. did some work on additional product but it was not enough for a store not in the Marvel space to reasonable play in the space enough to leverage the licence.
  • Poor communication. News Corp., ever secretive, refused the opportunity to engage early on with newsagents who are seriously into Marvel. Their executives preferred to play the usual News Corp.arrogant line of they know best and there is no knowledge a newsagent could add that could help. The reality is, in this instance, they were wrong.
  • Too low end. Marvel fans play at a higher end, a more valuable end, than the products supported y the News Corp. promotion. Age you sell a $1,000 figuring without difficulty after a couple of days of having the stock you are playing in a different world and serving a different shopper than that focussed on by News Corp.
  • The usual mixed message. This is the chestnut issue of the coupon. Is it collected or not? Some do. Some don’t. Shoppers get confused and angry. There is an easy tech solution to this if News Corp. ever wants to be smart abut these promotions into the future.

The Marvel promotion did not generate the traffic or revenue I expected in the stores close to me. This is despite best efforts in-store: prime location, good collateral, engaging display.

The return on investment is not enough from this promotion – ROI is the only way to asses this. I hope News Corp. management take a thorough look at performance at the store level as I suspect they will be surprised with how it performed given the costs to newsagents of engagement.

6 likes
Newspaper marketing

Sunday newsagency challenge: ignoring people does not make debt go away

The only way to confront a cash-flow problem is to speak directly to those to whom you owe money. Ignoring them will only make the problem worse. Having ignored them and then asking others to intercede for you way down the tracking disrespectful to your creditors and unfair to those whom you ask to run defence for you. Hiding and being silent is not a plan.

5 likes
Management tip

Sunday newsagency marketing tip: zoom in

IMG_2222Rather than the usual Facebook post about a magazine with a photo of the full cover of the magazine, zoom in and show something more interesting. The photo with this post is part of the cover of the current issue of Australian Gluten Free Life. While the whole cover looks terrific, this image could gain more traction on social media.

The best way to promote magazines online is to do so in a way that reflects well on your business. A photo of a full magazine cover will not differentiate your business. This zoom-in photo of what looks like an Iced VoVo is more interesting and tasty looking.

The more different your social media posts the more interesting for people connecting with you on that platform.

5 likes
marketing

Sunday newsagency management tip: tell the truth

A gripe among newsagent suppliers is the time and money spent re-sending inventory or other items newsagents say them have never received only to find, at some point down the track, that the goods were received.

Before you say I never received it, be sue you never received it.

I know from my own work with newsagents through my software company some have said they never received an email about a topic of importance and when I show them the MailChimp evidence they have received each email, opened them and clicked on some content links they still deny it.

If you are not sure, say you are not sure. If you don;t have a structured process for managing everything coming into the business from stock to collateral to emails, get the processes in place so your answers can be more truthful.

7 likes
Management tip

Promoting the drone at the newsagency counter

IMG_2196We have a Spectre drone unpacked and on display at the counter to shop off the prize one of our Father’s Day card customers will win next weekend.

This drone drive sales when people see it. Having it on show is more successful than referencing the prize on a poster.

The drone  fits with the demographic we are targeting in the business. It is better than the usual old boring Father’s Day gifts and prizes.

4 likes
newsagency marketing

News Corp. wrong to call credit card surcharges on Opal top-up sneaky

News Corp last year ran a report by Benedict Brook, Commuters paying out hundreds in surcharges to top up travel smart cards, in which they claimed:

PUBLIC transport users across Australia could be unwittingly shelling out hundreds of dollars a year on sneaky surcharges to use travel smartcards such as Opal, Myki and Go. But it’s in one city that travellers are most affected — a situation that is only likely to get worse in the New Year.

The hidden costs are being levied by some retailers every time someone uses a credit or debit card to top up their travel smartcard, despite the fact stores already receive a commission for every recharge.

Had Brook done the job you expect of a professional journalist, he would have discovered that newsagents are paid a commission of only 23 cents for a $10 top up and 45 cents for a $20 top up. Our of these fees News Corp. appears to think newsagents should fund the processing costs including credit card fees.

If a customer uses a premium card linked to a frequent flyer or similar program, a $10 transaction could cost more than the commission.

Given the appalling treatment of small business retailers like newsagents by state governments in slashing commission on transport tickets it has become essential for small business newsagents to charge a credit card processing fee to recoup the cost of card processing.

While the repot is from late last year, I have only just seen it thanks to a newsagent colleague bringing it to my attention. They charge a modest surcharge to cover the cost of the card processing. They point out to me they can’t check the exact fee for each time of card as time does not permit. Their suggestion is a flat 50 cent card processing fee. That seems reasonable.

Supermarkets and national c-stores don’t charge a fee. They must be cross-subsidising the fee costs from elsewhere in their business. Sam business newsagents don’t have the capacity to cos-subsidise.

News Corp. should take more care with stories like this. It is wrong to claim it as a sneaky surcharge. The article should have included quotes fro newsagents, giving them an opportunity to explain the costs of taking cards, putting some facts in front of the situation – rather than the emotive pitch that disrespects these small family run businesses on which News Corp relies to support their products (for a low margin too).

15 likes
Ethics

Newsagents now in on the discount magazine

IMG_2994.JPGNewsagent franchise group Lucky Charm is running a three Bauer weekly magazine titles for $9.99 offer for people who have signed up to its points based loyalty program. My understanding is this is a national Lucky Charm promotion, mandatory on all businesses in the fifty location group.

The only ways this promotion is financially beneficial for the retailers are if it achieves incremental revenue that flows beyond the duration of the promotion and if participating newsagents are funded at 25% of full individual title retail price.

A risk is the Bauer magazine title promotion churns what would otherwise be purchases of other magazine titles. There is no benefit from such churn in my opinion other than to Bauer. The newsagent certainly does not benefit unless there is some payment from Bauer.

While a participating newsagent may use the promotion to attract traffic, I can’t see the benefit for Bauer if this does not achieve incremental business. Churning purchases from a nearby sub agent or newsagent is no real long-term gain.

The hurdle to get the deal is old-school in my opinion in that you have to sign up for a loyalty program that is points based. Such programs are considered old-school by loyalty experts now given the loyalty fatigue among shoppers.

But is this the new normal from Bauer. Bundle purchase offers not only at airports and in supermarkets but in newsagencies and even sub agents? Is this the Bauer plan – to never charge full price again? Or is it like Coke: this week the discount is in group A, next week group B and then group C.

Again, the only benefit is if there is incremental business. The latest circulation figures don’t indicate any benefit but who knows, deep in the data the folks at Bauer may have found something they like.

Now if you think this post in sour grapes toward Lucky Charm, not it’s not. I don;t want this bundle deal in newsagencies I own. I don’t this it is a smart offer is it does not respect the magazine department or the newsagency overall. Magazine publishers need people consciously purchasing a magazine for content and not because of price.

13 likes
magazines

Committing to newsagents and the Australian newsagency channel

With the number of newsagency closures and the retreating of some suppliers to newsagents, I felt compelled as the owner of newsagency software company Tower Systems to write recently to newsagents reaffirming my commitment to the channel.  I took the step as a note of positive affirmation.

Here is what I said in my letter:

Here are our commitments to you:

  1. We will not leave the newsagency channel. With more than 1,750 newsagent customers today we are here for you.
  2. We will fight for you. Beyond our software, outside of support, we will help with supplier issues, business strategy and other challenges you confront.
  3. No locked-in support. Taking support coverage is optional. We never block access to your software if you choose to not take support coverage.
  4. Lower support costs.
  5. Fast support. Most calls are handled when you call. If not, we call back fast.
  6. Easy management access. The leadership team of Tower Systems is available if you need them. We take customer service seriously and personally.
  7. Updates when you choose. You are in control of when you load updates.
  8. You are listened to. We offer the only transparent, user driven, software enhancement suggestion service. All our customers are listened to.
  9. Regular user meetings. Around the country, in city and regional locations – we offer free face to face training and networking through the year.
  10. Free training. Long after you install our software you have access to free personal training to refresh knowledge or provide training on new facilities.
  11. More integrations. Our direct links to Xero, Magento, Shopify and more mean you have more direct link options to help you grow your business.
  12. Business management insights. We can look at your business performance data and provide a personal analysis of what we see
  13. The Tower AdvantageTM. Our professional and friendly help from training to support to business advice. We are not your average software company.
  14. Owner access. Our owner, Mark Fletcher, is easily accessible: 0418 321 338.

You can purchase our software, lease it or even rent it by the month. You choose the path most appropriate to your needs. We make doing business easy.

END.

The channel is in a period in its life where change is the order of the day. This is disrupting many. One goal of my note was to say here is stability on which you can lean as you navigate changes.

Personally, I think there is a bright future for engaged newsagents who are embracing and chasing change. Revenue and GP growth are achievable. It’s hard work but it can be done.

15 likes
Newsagency management

The Examiner is better value that The Age on weekdays

IMG_2161In a comparison of news content and pages, the $1.60 I spent on The Examiner in Launceston yesterday is better value than the 60% more for The Age.

Comparing the two newspapers yesterday, page by page, from a local consumer perspective The Examiner is the better newspaper in my opinion – but the value at $1.60 is questionable … I don’t spend the money and we can see from circulation data fewer people do.

The challenge is falling ad revenue for papers is causing cost cutting and this is resulting in thinner papers, fluff filled papers. Ad revenue is falling because news is old by the time it is printed. For a print product to be purchased it has to have value.

Based on news and analysis consumption trends today, sufficient value is not there a print delivery seven, six or even fixe days a week. Except for a locally focussed product. I suspect newspapers like The Examiner have a better chance at a longer print life because of their local focus. The key is to find more ways to fund expensive local journalism.

4 likes
Media disruption

John Oliver on the importance of professional journalism

John Oliver passionately explains the importance of journalism in a democracy and explains the risks for democracy as print newspapers close for digital editions. You’ll need to use a VPN to place yourself in the US to get access to this as access to geo-blocked: https://www.youtube.com/watch?v=bq2_wSsDwkQ I have watched the whole thing and found it most compelling.

The video includes excellent fact-based graphics to explain the situation.

Screen Shot 2016-08-24 at 8.24.22 AM

8 likes
Media disruption

Has the popularity of the AFL licence fallen?

IMG_2140Several newsagents have commented to me that revenue from AFL cards is down this year on last year. While decline in AFL licence product revenue this could be a function of the number of outlets with the cards, it could also have to do with other retailers offering them.

I have noticed the AFL collector cards in every petrol outlet I have been in recent months as well as in c-stores. It feels like they are in more locations than in the past.

But maybe AFL products are not as popular as they used to be. Coles appears to be having trouble selling its AFL licenced micro figures and other items in the stand showing in the photo I took a couple of days ago. They now have AFL licenced product at the front of the store, discounted – and not only in this store.

The goal with licenced products is to get in and get out while the licence is hot. Products selling quickly is important for collectors too. That so much stock appears to be left with Coles is not a good look. But the Coles problem could be to to with this specific range.

In ym own case, AFL products have done well – the Hallmark wrist bands and team song buttons and cards. Plus the Korimco AFL range, especially the team mascots. So I suspect overall interest in AFL licenced product is strong and that challenges relate either to the supply money (the collector cards) or the product (the micro figures).

Regardless of the reason, what I see happening in the marketplace will make me more conservative about plans for next year.

Gordon and Gotch will need to allow newsagents to be specific in placing product requirements as the scale out model does not work in this changing marketplace, especially when return costs are so high for this specific product. Gotch could do this easily if they had reasonable technology in place. As things stand today, they don’t – their newsagent facing technology is appalling, damning small business newsagents to a ridiculous waste of time in managing inventory from Gotch.

5 likes
Newsagency challenges
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

What do you think of the Powerball changes?

Published on February 16, 2018

IPS releases new magazine contracts

Published on June 21, 2011