How newsXpress helps newsagents cultivate more enjoyable, successful and valuable newsagency businesses
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:
- MAGAZINES.
- Arrive invoices through XchangeIT – no other way.
- Only sell magazines by scanning. Never use department keys.
- Do not label all magazines. Do not label weeklies or high volume monthlies.
- When returning magazines, scan out returns. Do this at least weekly.
- 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.
- Early return at least twice a month – based on what is NOT selling.
- If you have sub agents – only supply them through the sub agent facilities in your newsagency software.
- Check your magazine account as soon as it comes in to ensure you have received all credits.
- Pay your magazine bills on time without fail – avoid being cut off for weeks without magazines.
- You control where magazines are placed, it is your shop. Do not be told by publisher reps where magazines should go.
- You do not have to put posters in the window. I recommend against this.
- You do not have to do big magazine displays – it is your choice. I see no evidence of it increasing sales.
- I recommend against letting magazine companies set up display unless you think they will help drive sales.
- NEWSPAPERS.
- You control where newspapers are placed, it is your shop.
- If you are regularly undersupplied, complain to the publisher as well as the supplying newsagent (if you do not have a direct account).
- Scan all newspapers you sell.
- Scan all newspaper returns – accurate data will be your friend in the event of a dispute
- 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.
- Manage your exposure to promotions where you sell stock for a tiny margin.
- CARDS.
- Put out your own cards. Learn what you stock. Take ownership of this most important product category.
- Ideally, do your own card order. It’s your money being spent. Don’t leave this to someone else to do.
- Agree on an ordering process with your card co. account manager.
- Immediately report any over or under supply.
- Trust your data ahead of your gut and ahead of sell-in reports from suppliers.
- Pay on time or risk being cut off.
- Discount seasonal stock at the end of the season for a couple of days to pick up stragglers and make an extra few $$$.
- STAFF.
- Ensure everyone has a list of things to do each day.
- Have a documented position description against which your employees are measured.
- Have a written roster every week.
- Have a structured process for handling annual and sick leave.
- Use payroll software for record keeping.
- Pay always on time and preferably by electronic transfer.
- Pay super on time. Do not start someone working for you unless they have provided a super account number with their tax file number.
- Change your roster regularly for casuals.
- STOCK AND SUPPLIERS.
- Only see supplier reps who have made an appointment.
- If a supplier rep tells you something will be a success, ask for the evidence.
- Use your computer system to guide ordering of stock – order based on sales.
- Order to a budget.
- Scan everything you sell.
- Scan out personal use stock.
- Set your own mark-up policy for items that are not pre priced.
- It is easier to discount than increase prices.
- Do not pay for an external stock taker – do it yourself through the year.
- Check high theft risk items like weekly or fortnightly.
- Arrive and price stock on the shop floor, and not the back room. You’ll sell more this way.
- SHOP LEASE.
- Pay on time otherwise you could be locked out.
- Do not agree to a new lease unless you have read the entire document and are prepared to agree to it in its entirety.
- Conduct discussions with your landlord in writing to maintain a paper trail.
- GST.
- Complete your BAS on time and make any necessary payment – to reduce the opportunity for you being audited.
- FINANCE AND OTHER MATTERS.
- 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.
- Pay yourself a wage or at least accrue this in the accounts.
- Integrate with accounting software like Xero – keep bookkeeper costs down.
- Ensure workcover (workers comp.) cover is up to date and maintained.
- Ensure you have appropriate council permits for what you sell – i.e. food.
- Have a structured banking process that ensures that cash is tracked at all steps and at all time.
- Take a data backup every day. The best approach is an automated cloud backup – ask your software company.
- Bank every day and bank the takings for each day separately to make reconciliation easier.
- 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.
The double standards of some suppliers
We have suppliers in our channel who steadfastly ‘territory protect’ denying nearby retailers from accessing their products while they themselves, the suppliers, run a direct to consumer website that could sell to anyone, anywhere.
I’m all for ending territory protection. We are in a free market after all. Likewise, I am all for competing with anyone online, too. I say this as there is one supplier that required physical retailers to not offer products online.
All these restrictions are a real turn off dealing with some suppliers.
Video key to promoting this Christmas on social media
Video content on social media is referenced by the platforms more than ever before, because it’s what the platform users give more eyeballs to.
This type of content is disposable, used a couple of times for the season and not after.
Here are three videos from the Christmas suite developed for newsXpress member use. First: mum and dad:
Dad cards:
Mum cards:
Videos like this are not blockbusters. They are easily locally produced for the disposable use I outline above.
In my experience, they get better engagement than flat photos of a Christmas card stand.
Newsagents not to blame for missing and late newspapers and magazines
In Victoria, New South Wales and Queensland in recent months newspaper and magazine distribution has become even more unpredictable than usual.
Too often, newspapers and magazines arrive late in newsagencies. Sometimes, they don’t arrive at all.
This is not the fault of the newsagent.
Talking to the newspaper and magazine companies you get the feeling they don’t see it as their fault, either. They point at those they contract with.
Newsagents find it almost impossible to get assistance that resolves the problem of late and completely missed newspaper and magazine deliveries.
The distress the situation is causing for affected newsagents is considerable.
VANA / NLNA cuts member fees to $0?
I’m told VANA / NLNA emailed newsagents last week promoting free membership for six months. I’m not sure if it is free for existing members or only new members.
In their pitch they say they provide members improved income, reduced costs and improved foot traffic. The marketing reads as a bit old school to me though, and out of touch.
Newsagents have access to very competitive insurance rates as well as easy access to HR support. They don’t need to be in NLNA to access these things.
As for an Amazon locker, that’s an agency offer that we know from overseas experience will do little for over the counter sales in a shop.
Like I said, it all feels a bit out of touch.
It’s on my mind because a new newsagent asked me about it. They felt that they could fail in their new business if they did not join. I explained that everything the NLNA business spruiks can be accessed elsewhere. I told them to save their money and that is belonging to a representative body was important to them, the better established and nationally representative ALNA is what I recommend.
People can join any group they want or feel is right for them. My only advice is do your homework, make sure it is a good fit for you.
Now, for disclosure, I own newsXpress. you could consider newsXpress a competitor of NLNA. I don’t see it that way as the suite of benefits and services available through newsXpress is very different.
Chasing value in the newsagency
Value matters in any retail business, and and retailers have more control over value than they often think they have.
Today, I want to address value in retail in the context of product value.
The value of a product depends on the gross profit for that product, what you sell it for less what you paid for it. The real value of a product is the gross profit less the labour, and retail space costs for the product. The value of a product over a year is these things times the quantity of the product sold.
If you sell a gift for $250 with a GP% of 50%, you make $125.00. That’s the same as the GP you would make from around 380 newspapers, 85 magazines or 100 or so lottery tickets.
The challenge is to have the right higher price point items that sell at good volume to deliver more bankable margin dollars than you will make from lower margin legacy products.
This is where an engaged marketing group like my newsXpress helps its members grow profit, and through this cultivate greater value for their businesses, and from that flows enjoyment.
Can anyone sell items worth $250 or more? In my experience, yes!
But, value is about more than the ticket price of an item. Other factors include:
- Buy price.
- Stock turn.
- Shrinkage.
- Differentiation.
Too often, retailers focus only on the buy price, thinking that buying better is what matters. It’s only part of it. You can’t bank a percentage. You can only bank gross profit dollars. hence, the importance of turn.
So, buying at the right price is important as is the right product that will turn quickly, ideally, faster than items it replaces on the shop floor – thereby driving more value from that allocated space in your shop.
I see plenty of retailers restricting what they can achieve in their business by deciding what won’t work, without even trying it. I’ll try just abut anything and let my customers tell me if it works or not. Now, of course, there are some constraints on that approach – space, capital and relevance to the overall business. But, I will certainly try products outside what is immediately assumed to be relevant.
That approach of trying things, in pursuit of growing value, has revealed plenty of opportunities I’d not have considered under the more traditional paradigm of retail. business management.
This is one of the benefits of Covid, we have permission to be more experimental in what we sell, how we sell, when we sell and where we sell. Embracing those opportunities, in pursuit of driving business value, will land rewards.
Production issues with The Age upsetting home delivery customers
Here’s what one subscriber shares on Twitter yesterday:
@Gay_Alcorn I accept that you've had production issues recently. These things happen. I'm not annoyed.
What I don't understand is why the onus is on us, the customers, to keep searching all morning for our paper, wondering if it's merely late, & finally we have to contact you
> pic.twitter.com/IcoEiUnsQZ— Karen (@kcIMT122) November 5, 2021
@Gay_Alcorn
Today's a good example. It's now 10:15am. The back half of The Age was delivered a few seconds ago. No sign of the front half.
What am I meant to do now? Wait to see if the front half shows up? Give up, & go out & buy a paper?
The lack of info is not good enough.— Karen (@kcIMT122) November 5, 2021
It’s another newspaper home delivery fail that’s on the publisher.
Melbourne made Christmas cards are proving to be popular this Christmas
This is a such an easy pitchy especially on social media, especially if you are in Victoria – Christmas cards made here in Melbourne.
Aussies was to support Aussie jobs right now more than in many recent years.
Kudos to Henderson Greetings for this move, and for providing retailers with collateral to let in-store shoppers know.
Newsagents: check out Officeworks
With non-essential retail back open in Victoria I got out to Officeworks earlier this week to see what changes they had made given their proximity to a couple of my businesses.
It is fascinating the shift in focus in Officeworks. While stationery and office related products remain at their core, they have products that speak to other purchase reasons, and through which they can expand the appeal of their business.
Their gifting, for example, has expanded from what I can see, especially indigenous inspired gifting, which is on trend right now.
Their 2022 diary story is fresh and forward-leaning, quite unique actually – but expensive.
Their calendar range comprehensive.
If you have an Officeworks nearby, I urge you to check it out, so you understand what you are competing with, even if you don’t think of them as a competitor to a newsagency. They are, of course.
I think Officeworks has come out of lockdown with renewed focus in terms of range and in terms of the shop floor experience. Each staff member I interacted with was happy, keen to help and happy to be serving customers.
Click and collect remains popular after lockdown lifted
Click and collect continues to be popular in Sydney and Melbourne businesses after lockdowns in each city has been lifted.
From what I can see it is stronger in these two locations than elsewhere in Australia. Maybe that has something to do with the two recent long lockdowns. I’m not sure.
I mention it today to remind retailers that having an easily accessible click and collect solution for ordering and pickup is critical even post lockdown as it looks like it will be here for some time.
Click and collect can open your business to shoppers you don’t usually see in-store.
It can also make it easier for people to shop with you while you are closed.
Click and collect makes it easier for family living elsewhere purchase for loved-ones near the shop.
And, it can offer you management options for staff in-store depending on the volumes you can achieve.
Now, thinking about newsagency businesses, what are shoppers purchasing through click and collect? This list is a sample, but certainly not everything: Cards. Gifts. Magazines.Newspapers. Stationery. Toys. This is based on what I have seen over the last month.
Right now, of course, there is a higher indexing of Christmas gifts in click and collect – because of the lack of trust in Australia Post and others to deliver on time.
My advice? Make sure you ave a click and collect option, make it easy for customers and for the business.
As retailers we have a trust obligation to our customers
There is a newsagent who has access to limited edition product sold to them on the basis that they place it in-store for customers to purchase but who, instead, places the product almost immediately in eBay, selling for two and three times the retail price.
I understand the appeal of making two or three times the gross profit, yes it really is that much. I do not understand the breach of supplier terms and the breach of trust with shoppers.
We will find out soon enough if their behaviour negatively impacts their own businesses or other newsagents who also purchase from the supplier. Yes, that is the risk here, that all newsagents are lumped together and judged based on the actions of one.
The value of limited edition product is the foot traffic it can attract and the joy of shoppers able to purchase it from you. This is more valuable long term than the repyutational damage that will come if you keep the product and sell it yourself for two or three times retail.
The scent of Christmas encourages Christmas purchases
For several weeks we have had a Christmas range of candles, soaps, scent sticks and more near the entrance to the shop, places so as to tease but not overwhelm.
It is terrific hearing customers comment. It’s always positive, and often leads to a purchase either of one off the scented products or other Christmas products nearby.
It’s an easy move placing gently scented products near the entrance and near other Christmas products.
In areas recently out of Covid lockdown, shoppers are keen for the Christmas experience. There is a curiosity about what has changed in retail. They are looking for a difference. It’s an opportunity for us to try things out and this is why I suggest to retailers who have not engaged with scents in their stores to consider doing so this Christmas.
We are loving the shopper reactions, and their purchases.
The Great Resignation could be a thing, something we need to consider
The Great Resignation is more than a glib phrase, it reflects a movement unfolding and being discussed worldwide in businesses, governments and elsewhere.
It’s a Covid thing in that people have had the work from home experience of flexible hours, no commute, enjoying the local community more and a closer family embrace.
A Great Resignation trigger is when a business asks / demands employees return to the office. It gives plenty, apparently, pause for thought about other employment options.
If this plays out as some think it could, local businesses that have benefited from more people working locally could continue to flourish as businesses call people back in.
Here’s a scene-setting story from CNBC:
Here is a news.com.au story:
Click here to access an ABC story about this from a few days ago.
I don’t know if The Great Resignation will be a big thing here in Australia or not. But I do think it is interesting to read about and consider how it could play out in the context of our local businesses. I kind of think it could be welcome disruption.
Now, thinking about this in the context of the newsagency software company I own. Mid last year we made it clear that we would not be requiring people to return of the office. Indeed, we have hired several new team members located interstate because they were perfect candidates and they wanted to work from home. These personal experiences make me think The Great resignation may not be great. It may be a thing, but not great … because workplaces will be flexible, especially small business workplaces if they can.
Covid rapid antigen tests banned in Western Australia
With newsagency stationery supplier GNS providing access to an approved Covid rapid antigen test product for sale in newsagencies, it’s no surprise there is strong interest from newsagents. But, there has been surprise, from myself included, in news that the use of rapid antigen tests is banned in Western Australia by direction of their Chief Health Officer.
I mention it here following contact today from several newsagents in Western Australia.
Great to see another local, independent, regional newspaper: Eyre Peninsula Advocate
Check out the terrific story about the launch of the Eyre Peninsular Advocate, a new local and independent newspaper to rise in the wake of a corporate rural newspaper closure.
COMMUNITYAnother SA regional newspaper is reborn1 min read
The new weekly Eyre Peninsula Advocate hit the newsstands last week, heralding the return of print news to eastern and western Eyre Peninsula.
Papers and Publications Managing Director Andrew Manuel said the reception from communities from Cleve to Ceduna had been amazing.
“Regional newspapers are so important to people living in the country,” Andrew said.
“When local newspapers close, it hits communities hard.
“Newspapers keep people connected to their communities and each other through sharing the stories that locals care about.
Check out the online version of the Eyre Peninsular Advocate too. Their subscriptions options are modest:
Just as our parliament, and democracy, would benefit from more genuinely independent representation, so do local communities benefit from more independent media outlets. I hope we see more indie papers start up, and thrive.
How newsXpress uses data to help make newsagencies more successful, enjoyable and valuable
newsXpress provides its members a range of educational and motivational material. Here is a recent example, a video in which we explore extraordinary Halloween sales success in a business not known for Halloween.
Note: this video is not about Halloween. Rather, it is about how thoughtful, fact-driven decisions can add thousands on gross profit.
What makes the success more valuable is the bonus margin exclusive to newsXpress members.
Here is the video I and a colleague made over a week ago for newsXpress members about this.
In sharing this I am sharing information anyone could use. Yes, there is a risk to this. However, it is tiresome seeing marketing emails to newsagents promising the world but offering no facts, no evidence, no actionable items they can trial.
What is outlined in the video can work for Christmas and at other times of the year.
Banks really don’t want over the counter business
I went to the bank at 11am Monday for an over the counter transaction onto to discover that they were closed Monday and Tuesday. I went at 11am because they had started closing at 1pm. Now, it seems, closing Mondays and Tuesdays is a thing.
The only reason I go to this brand is because our local branch closed as did the next branch we went to.
Anyway, I got there yesterday, waited in line for 30 minutes only to be told that type of transaction needs to be done in the city. It’s not a complex transaction, but it does require a branch authorisation, which they, apparently, can no longer do.
…
At one of my shops, we deposit cash every few days using the cash deposit ATM – when the machine is working. Currently, because we have been keeping records – the ATM has a downtime of more than 50%. When we approach people in they branch they say it’s nothing to do with us.
…
These are my recent local branch banking experiences. I have heard of worse from plenty of others in local small business retail.
The local bank branch network in Australia was unique, a point of difference for our country. I think it’s now lost forever.
Indigenous art popular for gifts, especially Christmas gifts
2021 has seen terrific growth in sales of products featuring indigenous art. From bags to purses, wallets to folders, cards to Christmas baubles, indigenous art has been a real feature of sales in our newsagency this year.
I love it.
I am especially grateful for the clear acknowledgement by suppliers of the artists involved.
We have been fortunate to source a good range of products across multiple categories and from several suppliers to serve this growing area of shopper interest.
We first noticed growth in interest on social media last year when we posted about a product. we leveraged those insights and continue, well over a year later, to see interest and sales growth continue.
Sure, this is commercially good for us. It is good, too, for the artists with their work on products we sell.
Products featuring indigenous art speak to those keen to support shop local.
Fascinating read: Apple as a cult
From a retail brand and experience perspective, this Twitter thread by Chris Hladczuk is fascinating:
Apple is the greatest cult in the world.
And every cult needs a place to meet.
Welcome to the Apple Store.
Here is how Steve Jobs built the most profitable stores of all time👇 pic.twitter.com/BS1uv84Teu
— Chris Hladczuk (@chrishlad) October 24, 2021
Even on a local small business single store level, there are point of application here.
Featuring The Saturday Paper
I love this placement of The Saturday Paper in the front window of a bookshop in Melbourne, which I saw over the weekend.
With over the counter purchases of newspapers continuing to decline in our channel, promotion of a full front page in the window every few days could be a way to stem the decline.
Many of us ripped out our front of store newspaper stands and gave that space over to more profitable lines, believing that newspaper customers will go to wherever they are in-store. Those moves made sense, and the make sense today for newsagents yet to make the move. But, such moves see newspaper front pages being seen by fewer eyeballs.
Looking at the photo in the bookshop window, I was reminded to treat a newspaper as a product rather than as a service or utility. This means looking at the front cover and leveraging it if you think it could attract impulse purchases in your area.
I am not suggesting a significant change to the treatment of newspapers. Rather, I am suggesting a more considered approach. If you think a front cover could attract impulse purchases, give it a moment in the spotlight.
Card fixture inspiration
Paper Source in the US have, for years, had doors as a backdrop to their card fixtures. In every Paper Source shop I have seen, they look good.
The shop early for Christmas message has cut through
Looking at Christmas related sales for a range of newsagencies and some other retailers and it is obvious that the news stories about supply chain challenges have cut through.
Across all Christmas related categories, sales are up compared to the same time in 2019. Yes, I compare with 2019 for a more authentic comparison since 2020 was Covid impacted.
Christmas single cards and Christmas boxed cards are a good indicator for our channel and both are doing very well, which is not good news for suppliers yet to deliver Christmas singles.
Gifts and toys, too, are performing very well, calendars, too. Toy shops I have spoken with say that October for them has been like the first couple of weeks of December for an average year – extraordinary sales.
The approach of shoppers appears to be if it could work as a gift, buy it now because who knows what the situation will be like next week.
Smart retailers are embracing the opportunity with easily shopped, practical placement or products people will want to give adjacent to cards, bags and wrap.
The obsession with supporting jobs impacted by economic changes in pursuit of reducing carbon emissions is ignorant and selfish
It frustrates me seeing some in the National Party and some in the media raving on about necessary support for jobs that will be lost if Australia pursues reasonable carbon emission targets.
They bleat and moan that we have to support the miners and others who will have to re-train.
It’s pathetic really.
Here in the Australian newsagency channel we have been going through and dealing with extraordinary structural change, loss of core income, loss of core shopper traffic, all in plain sight and all without a cent of government support.
While more recent changes have come about because of worldwide disruption to the print media model, the bigger changes began in the late 1990s when the Howard federal government took away protection for local small business newsagents, protection put in place by the federal government, in support of big business mates in supermarkets and a national convenience store chain.
Yes, the federal government took away protection, sliced off a ton of business newsagents relied on and they did this without any compensation to newsagents whatsoever.
The miners have seen the mess of climate change worsening for decades. Smart people in that industry prepared. It’s only the laggards complaining now, wanting government cash to protect them, when they should have been better prepared themselves.
It appalls me that the government may chuck billions at helping a relatively small number people / businesses adjust to a world chasing reductions in carbon emissions considering the history of the federal government forcing structural change on our newsagency channel and offering absolutely no support whatsoever.
I guess the situation speaks to how the Liberal and National politicians see small businesses compared to big businesses. The thing is, through their actions and inactions, we know they do not see us.
I have been writing about the failure of the Liberal / National Party coalition federal government to appropriately support local small business newsagents on whom they imposed deregulation and took away considerable business value. This, for example, from 2005, offers some background:
Newsagents and pharmacists are two forever-protected species as far as the coalition is concerned.
This is a quote attributed to Joe Hockey, the former Minister for Small Business in the Howard Government. It’s on Page 12 of the Perspective insert in the Australian Financial Review (Dec 30 – Jan 4).
Joe Hockey and his colleagues demonstrated their commitment to newsagents through their years in office by:
- Facilitating the elimination of exclusive newspaper and magazine distribution territories without compensation for taking away from newsagents this century-old right.
- Driving newsagents to enter into new contracts with publishers and permitting this to be done by newsagents negotiating on their own behalf and not using professional negotiators.
- Allowing poor leadership of newsagents at the time to wipe off more than $100 million dollars of value of newsagent businesses without compensation.
- Permitting a contract relationship for newspapers and magazines which deregulated one side of the transaction and left newsagents with an expensive and inefficient system which was designed for a regulated marketplace.
- Permitting the 865 Government owned Australia Post retail outlets to become more and more like newsagents, moving into areas traditionally serviced well by newsagents.
- Refusing to intervene in 2004 when Australia Post was engaged in what I’d consider grossly unconscionable practices when newsagents tried to establish an alternative bill payment network.
- Refusing to respond to newsagent representations in 2004 about an unfair magazine distribution system which operates at a loss for many newsagents.
Joe Hockey is wrong about newsagents. The Coalition has not demonstrated any concern for newsagents other than hollow words.
My point is that it looks like people in dinosaur climate-impacting sectors are about to be showered with cash by the federal government for reasons that were as relevant to the small business newsagency channel a few years ago. If it happens it speaks to government support for big business mates over small business retailers.
In fact, the situation newsagents had to deal with were bigger in that they were government created. Newsagents played no role in the changes coming about.