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

3loves free online dating site out of beta

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Our 3loves, free online dating site has come out of beta with a new design and close to 7,000 active profiles. For a free site, 3loves packs a punch if we do say so ourselves. Compare it to RSVP, lavalife, redhotpie, match, adultmatchmaker or indeed any of the paid for sites. 3loves delivers what they deliver with absolutely no cost involved.

3loves has been in beta release since late November. With the new site design just launched is better functionality and even stronger scammer barriers. We are striving to keep 3loves scammer free.

3loves was targeted earlier this year in a Google ad campaign siphoning traffic off for RSVP. Once we outed the scam, the campaign which benefited the Fairfax site was shutdown. We learnt a lot about affiliate marketing and how NOT to promote our free online dating offering.

We’re using 3loves to generate traffic for our Find It online classifieds model which is being launched in partnership with newsagents. Ads currently running on 3loves include three which directly benefit newsagents.

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Uncategorized

Free daily newspaper conference

Free daily newspapers are growing so much in the US that a conference has been created to discuss strategies. Newsagents ought to have a fly on the wall representative at the conference. Free dailies are here to stay, they are a valuable part of the print mix for publishers. Our interest is that we need to be educated about trends before they impact our businesses – hence our need to be at this conference.

Thanks to Newspaper Innovation for the tip.

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Newsagency challenges

Returns missing at Network Services

Supplementary magazine returns are those returns sent by newsagents to magazine distributors ahead of their recall date. This is usually done because of gross over supply, an uneconomic shelf life or lack of shelf space.

At a meeting of 35 newsagents in Newcastle this morning all but two reported that they have trouble getting the PBL owned Network services to credit newsagents for supplementary returns on time. These newsagents cite month after month of having to call and email chasing credits – often resending the returns from two and three times.

There is no such delay by Network on the other side. They expect newsagents to pay on time and cut off supply if this is not achieved.

The anger in the room of newsagents toward what seems to be a sloppy and labour intensive supplementary return credit practice was palpable.

All newsagents are looking for is for the Network accounts department to treat newsagents as they, Network, demand newsagents treat them. Waiting two and three months for credits for supplementary returns is an awful impost on these small businesses.

It was odd today in Newcastle to hear of so many newsagents reporting that their supplementary returns go missing. Network management must be aware of the problem.

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More regional magazines

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Regional magazines are more popular than ever, or so it seems. Coast, Cravings and Dish are good examples of the genre, covering a specific region from the perspective of the title’s subject matter. While SA Life is the pin-up child of regional magazines – it’s taken the SA market by storm – a swag of more niche titles have entered the market.

Regional magazines, such as the three above, are usually of high content and production quality. They have to be to break through the clutter on newsagency shelves.

In my own newsagency, as best we can tell, we have more than 15 Australian regional magazines. Not SA Life however. .

A challenge for regional magazines is where to place them. While their subject matter dictates current location, there are so many that I’d like to create another area featuring regional magazines and thereby underscore an important point of difference we offer. Such a display may be short term given that few of these titles pay their way. Of the titles we carry, data shows that only three have sales which come close to justifying their existence.

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Magazine partwork season in Australia

Over the four weeks from May 23, five new partworks will be launched. Most are for children except for Charmed which focuses on a broader demographic. I know from personal experience that Gordon and Gotch has a list of newsagents who aggressively promote partworks – make sure you’re on it if appropriate.

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magazines

Inefficient transport tickets

With commission falling on transport tickets across the country, newsagents need to look very carefully at the overall benefit of these products to their business. While transport tickets generate excellent traffic, I’d suggest that this traffic is inefficient for many newsagents with more than 70% of transport ticket sales including nothing but the tickets purchased.

Few newsagents are successful in extracting greater efficiency from transport ticket sales. In some areas time is against them as tickets are purchased by commuters rushing to catch a bus, tram or train. In other cases, the purchase is connected with work, making the purchaser not open to upsell. I’ve seen newsagents employ all manner of tactics to turn ticket sales into multiple item purchases.

Factor in the cost of stock – in Victoria we need to order at least $4,000 at a time and can only order every 10 days – and the cost of offering eftpos / credit card payment. With a 4% commission there is not enough left to cover the cost of carrying the stock.

Of course, the customer purchasing the transport ticket today maybe the customer who purchases a newspaper or a card tomorrow. See how difficult it is to navigate this issue.

It seems to me that Governments and others involved in the transport ticket supply chain have newsagents over a barrel. We (newsagents) are too weak to stop selling tickets so we accept lower and lower commission, believing that traffic is better than nothing. I’d like to see a professional study undertaken of what happens when a newsagents gets out o the ticket business. Does the world end as some say it will? Or, is the business better off?

We stopped selling tobacco products in my newsagency nine years ago and the benefits far outnumbered the lost sales.

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Newsagency challenges

Chopping naturist magazines

Tan.JPGNaturist magazines are dying if the data from my newsagency and others I have seen reflects a national trend.

While never in the top selling titles, Tan, H&E and a couple of others usually paid their way at least. No more – I suspect that these titles are not cash-flow positive in any newsagency.

Without a stocking subsidy to cover labour and real-estate costs, there is no choice but to request that the titles are no longer supplied. While the publishers will not be happy with the position, they need to understand the cost to newsagents of under performing titles. Each magazine pocket had a real-estate cost. Each issue has a labour cost to process arrival, return and upkeep. Then there is the cost of lost opportunity, of having underperforming stock on the shelf.

This is what newsagents must do – decide on the threshold, where depth of range can be cost justified and then kill the titles which fall below. Cash-flow is the ideal measure since it goes to the heart of a healthy business and it is very easy to measure month by month title by title.

It makes no financial sense for me to subsidise Tan and H&E just so I can feel better about my magazine range. The saved pockets will enable me to better display nearby titles which are selling well.

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magazines

The high cost of jury duty on small business

A newsagent friend has an employee away on jury duty with a cost to the business of $145 a day in wages to the employee and $152 a day for the casual employee brought in to cover. For the first 10 days the juror was compensated $36 a day and this comes back to the employer. After the first 10 days it increases to $72 a day – leaving the newsagent significantly out of pocket.

When the juror sought permission to be excused from selection because they worked for a small business which could not afford them being away for any length of time, the court refused and left the newsagent with an expense the business can ill afford.

While I understand that the jury system needs people of all walks of life, such a high cost imposed on small business employers seems unreasonable.

Ripping thousands of dollars off the bottom line of a struggling small business does not seem just.

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Newsagency challenges

Is this the next free newspaper in Australia?

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Is Sensis planning to move the Trading Post newspaper from a paid model to a free model?

Open any edition of the Trading Post weekly classifieds newspaper and you see them actively promoting their online offering. It makes sense given how much classified advertising has migrated online.

I know that in Victoria, sales of the Trading Post, at $3.00 each, continue to fall dramatically – 25% in the last year based on data I have seen from many retailers. Sales will reach a point that the retail presence is no longer viable.

This is why the Sensis experiment with the Trading Post in the Northern Territory is interesting. In NT, the Trading Post is handed out free – just like mX is handed out free daily in Melbourne, Sydney and Brisbane.

The Sensis investment in the NT experiment is considerable – they print an NT edition in Melbourne and ship to NT. There is nothing in this about building for retail sales of a print edition. The NT free edition pushes the website so the goals are clear.

If the NT experiment works I’d expect to see free distribution of the Trading Post elsewhere. They have to do something to keep the brand alive while they transition from print to online.

Maybe Trading Post will be the next free newspaper distributed in Australia. It makes sense and if I were a Telstra shareholder I’d be all for it.

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Newsagency challenges

The Land stuck on ad

the_land.JPGThe Land from Rural Press, now part of Fairfax media, has a post it note type ad stuck in the middle of the front page.

At least this time it’s not on to of the masthead. Still, editorial would have to be at least a bit miffed that an ad has been given priority over their cover photo.

As with these stick on ads on the newspapers, they generate trash and frustration. Advertisers will realise one day.

Thanks to my colleague in NSW who tipped me off with the photo.

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Uncategorized

NDD, First Fleet and magazine distribution (II)

My blog post yesterday about reports I had heard about NDD discussing moving their deliveries to First Fleet resulted in calls from various people who did want to be named. Some were wanting to find out what I had heard, others want me to name my sources and others had extra information.

I am confident that the report is accurate and that NDD is considering or has considered in this past week a commercial relationship with First Fleet. Whether it happens or not is another thing. I would have thought that newsagents and publishers would be against such a move as NDD and First Fleet would be the only stakeholders to benefit. For example, without the opportunity to share costs, newspaper publishers and others using trucks currently used by NDD would have to either pay more or make alternative arrangements.

While I accept that NDD must put its business needs first, the experience of 2004, when Gotch and Network moved to First Fleet, and the resulting fall in the quality of distribution services must concern them. In making the move they would lose a point of difference.

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Newsagency challenges

Powerball jackpot opportunity at the newsagency counter

powerball_20mill.JPGTo the many newsagent suppliers who read this blog I wish one of your would seize the opportunity of lottery jackpots. This Thursday Powerball offers a $20 million prize. Lottery sales will be up by around 20%, much of this as a result of additional traffic. Upselling across or near the lottery counter is easy and newsagents would welcome the opportunity to add value to a lottery product sale.

While entrepreneurial newsagents use jackpot traffic to boost sales elsewhere in their business, others, the majority, do not and they would wait for a supplier driven offer.

My pitch to suppliers is that a network wide offer attuned to easy upsell at or near the lottery counter would be ideal. I appreciate there are costs associated with creating and distributing such a product and that the risk in expecting newsagents to embrace the upsell tactic is considerable. However, until a supplier tries this we will not know if it works.

Personally, I know hat upselling around a jackpot is easy. In my newsagency, the team has had success with magazines, pens, other lottery product and newspapers. With at least twelve such jackpots a year the opportunities are regular yet still special.

I pitched this idea to Lovatts, the crossword folk, a year ago and it seemed to be too hard for them. Hopefully another supplier can come to the table with a timeless product offer which will work with lottery customers. What we need is the ideal win win win where suppliers, newsagents and customers benefit.

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Lotteries

Lotto case update

It’s good to see the Lotto payout fraud case getting more coverage.

This case is about whether Lotteries NSW (and possibly the newsagent’s insurance company) can leave the small business newsagent carrying the responsibility for employee fraud which seems to have happened because of poor Lotteries procedures.

The matter of breach of contract with NSW Lotteries is something newsagents need to investigate and discuss urgently. If a breach is proved, it’s likely you’re on your own.

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Lotteries

NDD to switch distribution to First Fleet?

I’ve heard that NDD is this week considering moving to the First Fleet organisation for the packaging and distribution of the magazines they represent. Such a move would most likely lead to a cut in the number of distribution days. Currently, NDD product can be delivered five or six days a week. Under a First Fleet arrangement I would expect this cut to one or two days a week. This would impact newsagent customer service and workflow.

Publishers who moved to NDD because they did not want the First Fleet restrictions would be unhappy.

First Fleet does not deliver everywhere. Often newsagents in previously serviced remote locations have to travel some distance to collect product which previously was delivered to their doorstep.

Newsagents, publishers and even major retailers such as Coles and Woolworths will recall the impact on their businesses when Gotch and Network made the move a couple of years ago. In some states it was six months of disaster. Newsagents, collectively, lost hundreds of thousands of dollars. I know of one major retailer who threatened a major compensation claim at the time – not sure that that proceeded though.

Gotch and Network moved to First fleet to cut costs out of their operation. Project Hero it was called. The hero was their P&L – the move was most successful so it’s logical that NDD looks to achieve the same gains.

Given that its current distribution arrangements are a point of difference I am surprised NDD is seriously considering this move.

From a newsagent perspective it could be another reason to rethink carrying NDD product at all.

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magazines

Online versus print job ads

Check out page 4 of the April 2007 job ad survey from ANZ economists. On Page 4 they graph the weekly average number of ads in newspapers versus online. Newspapers are flat and online is showing excellent growth. It’s sobering stuff for any business relying on newspapers to drive revenue and or customer traffic.

Newspaper publishers have been grumpy recently at the ANF over their job ads reports.

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Online classifieds

NSW Lotteries blames the little guy

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The report in the Sydney Morning Herald yesterday about the District Court case commenced by NSW Lotteries against a newsagent demands careful attention from newsagents.

It highlights the risks newsagents face in managing payouts, regardless of whether NSW Lotteries, or the lotteries operator in any other state, has robust procedures. Consider this from the SMH report:

Mr Bannon claimed that the newsagency was in breach of its contract with NSW Lotteries and therefore the lottery company should be indemnified against the loss.

I would have liked the SMH to explore this further and report on why NSW Lotteries considers the newsagent to be in breach and what the implications of such a breach could be for the newsagent if proved.

My understanding is that if such a breach is proved, the insurance coverage NSW Lotteries requires lottery agents to have could be considered void by the insurance company, leaving the small business operator to carry the cost of the fraud – unless their general business policy offers relief for the employee fraud they appear to have been victim of.

I am shocked that NSW Lotteries had a system in place which allowed newsagents to manage a first division prize claim. To blame the newsagent for a breach of contract, over a process which should never have been handled at the store level in the first place is nonsense. NSW Lotteries have acknowledged issues with the old process by making changes.

The case this week in the District Court is not the only matter involving major NSW Lotteries prizes, newsagents and the issue of breach of contract. Of course, Lotteries is safe if they can prove the breach in other cases. That only leaves the insurance company to void the policies – because of the breach – to protect their bank balance. Newsagents face the biggest risk in these cases and that’s the story I would like the SMH and others to cover.

Newsagent associations ought to be all over this case. I suspect that when they do become involved it will be too late for some of their members.

UPDATE: Today’s SMH has this story including this from the newsagent’s lawyer:

“The [newsagents] have been betrayed by a person they had no reason to doubt. They now find themselves in the position of being sued for half a million dollars plus costs by an agency of the government,” Mr Stevenson said.

As I suggested earlier in this post – watch for more cases on State Government owned NSW Lotteries suing newsagents.

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Newsagency challenges

Great magazine cover from The Monthly

monthly_magazine.JPGThe designers at The Monthly are pumping out exceptional covers. Innovative and bright. Even in traditional newsagency magazine racking their current masthead stands out. This is crucial given the sea of colour in the magazine aisles.

With the low level of browsing of the news and current affairs space, covers like this one from The Monthly is sure to draw people across for a look.

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magazines

Promoting magazines

mag_promo.JPGBen Kay, manager of my newsagency, set this up today on a stand out the front of the newsagency. It’s not a new promotion but it is uncommon in newsagencies. We often get so caught up in the daily grind that we forget to remind our customers of what’s new and of the deals like the amazing Lindt chocolate with Delicious this month.

While it’s reasonable for newsagents to say that customers will know if new issues are in, we are on a mission to chase impulse purchases in as many ways as possible. We’re treating every sale as a victory. we have to – disruptive construction continues in and around our shop as the landlord ‘adjusts’ the centre.

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magazines

Women’s Weekly promotion

We’re running a one day magazine promotion to support Australian Women’s Weekly. Any customer buying Take 5 and That’s Life can purchase AWW for $2.00. The team member selling the most will receive a gift as a reward for their effort. Central to this mini campaign is us talking with our customers about AWW. We’re funding the promotion ourselves and promoting it over the counter and on a stand at the front of the shop.

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AWW is doing it tough and we felt that an over the counter offer like this could reacquaint some of our Wednesday regulars with the iconic title. I appreciate the offer may be seen by some as devaluing the brand. My view is that having a stack of product on the shelf and not moving for the month is as devaluing.

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