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Tips on promoting Set For Life

A newsagent recently commented about me on a private Facebook page of The Lott retailers. Mentioning me, they said:

he hates Tattslotto, & thinks he’s the king of retailing. He’s a VERY nasty individual, who loves to incite hatred for anything Tatts, or anything not branded ‘newsexpress’. If he had his way we would all become gift shops, selling bug-eyed soft toys, bobble heads, & jigsaw puzzles. Financial reports need to be read in context with what was happening at any given time.

A friend told me about is as I am not in that group.

I reached out to the person who wrote this, to discuss their opinion. They refused. It got me thinking and researching. While I am on the record calling for better, fairer, treatment of newsagents by Tabcorp (formerly Tatts), I am also on the record with plenty of instances of providing advice supportive of the sale of lottery products. I sought to discuss this with the above correspondent, but they didn’t want to listen.

Here is one of many available examples of my support for lottery products. It is from August 3, 2015. Here is my post from then:

Making the most of Set for Life in the newsagency
Mark Fletcher
August 3rd, 2015 · 1 Comment

While I don’t have lotteries in my newsagencies, I have been helping a few newsagents engage with Set for Life to make the most of the launch opportunity. This is important regardless of Tatts also offering it online.

Here are my tips for launching this new game in your business:

  1. Know the target demographic. All I have read suggests this game will appeal more to a younger audience than traditional lottery games in Australia. Play to this demo in your marketing.
  2. Talk about the game online, on Facebook and other platforms where you represent your business.
  3. Tell stories about what the $20,000 a month could mean.
  4. Run a competition on how would you spend $20,000 a month.
  5. Consider launching with a competition or promotion where one customer wins a $8.40 Set for Life ticket – run this for four weeks.
  6. Look for stories from the US where major prize winners have been able to take prizes monthly for many years.

It is not too late to go big and loud in promoting Set for Life as it will take some time to build interest in the new product. It is essential you do more than sell the game across the counter.

I have two points to make in writing about this: 1. Set For Life is a game that benefits from promotion. The above advice is useful today and, 2, I am not against lotteries. Rather, I am against any supplier that treats retailers in the newsagency channel unfairly.

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Lotteries

Mental health is about more than one day of the year

While today is RUOK? Day and media outlets will focus on it, the mental health challenge for businesses owners and, indeed, the whole community is a 365 day a year challenge.

Recent Bureau of Statistics figures reinforce why this is a 365 day a year challenge:

As an employer of many 15-34 year olds, the stat for suicide is horrifying. The broader suicide rate in Australia is horrifying.

I have written a few times here about mental health. Not as an expert, because I am not an expert. rather, my interest is as an employer and as someone who craves for a healthier and happier country.

Today, RUOK? Day, I share here a revised version of information I have shared here before on this topic, and in particular about the mental health of newsagents and those in our businesses.

Despite all the ads on TV, despite the work of R U OK?, despite the work of agencies like Beyondblue, despite the stories in the media, mental health, especially mental health within the small business community, and especially the newsagency community, is not talked about.

The challenge is that we cannot always see unhealthiness. If someone is physically unhealthy, we can usually see it, but not mental unhealthiness. For sure there are occasional signs like behavioural outbursts that don’t make sense but you can’e be sure and often you don’t want to ask for fear of making it worse.

In small business retail and in our channel there are challenges that can make things worse: bullying landlords, overbearing suppliers, demanding customers, relentless competitors. These and other factors can make someone see the road ahead through clouded eyes. For some of those on the other side, however, how they handle a situation could be driven by how the small business has dealt with it up to then.

I am all for personal accountability and often say we need to own our own situation – we sign our leases, we sign magazine contracts, we go into business. However, we do these things expecting fairness. Too often there are people on the other side of a commercial relationship who do not act with fairness.

Social media is a factor with mental health as it gives everyone a megaphone and the ability to publish an opinion without thinking it through. I know in schools social media is a big focus in mental health awareness, especially around bullying.

It is hard to know the mental health of anyone. That person smiling at you or joking with you could be in a dark place in their mind. This is why it is important we talk and ask colleagues how they are doing and why we all need to help when we think help could be what is needed.

In the workplace, I think being open with each other so that everyone has a shared and open experience. If there are business performance issues, rather than keeping them secret, talking about them could help ease tension: a problem shared and all that…

There are wonderful resources from government departments available. For example, The Victorian Government has a page online on this topic, which includes good practical advice:

  • Make time to exercise each day: For example, a simple daily lunch time walk can help maintain a positive outlook.
  • Practice mindfulness: Mindfulness means being aware of your reactions/feelings/thoughts as you have them. This helps you choose how to manage matters as they arise. Mindfulness is a great tool to help lower stress and anxiety levels.
  • Adopt work/life boundaries: Don’t let work overtake your life. Set some boundaries to ensure you have time for both work and a social life. You might decide not to discuss work from 5pm Friday night to 8am Monday morning because weekends are for family time only.
  • Connect with others: Find someone worthy of your stories – a confidant or mentor you can talk to about your business experiences. Make sure this person is supportive, a good listener and someone whose opinion you value.

This website also lists indicators:

  • Physical signs: For example, a constant knot in your stomach, tense neck and shoulders, feeling nauseous, heart palpitations or chest pains.
  • Changes in behaviour: For example, being unable to sleep, crying regularly, feeling moody or often irritable, increase or loss of appetite.
  • Unclear thinking: For example, not being able to make decisions, not understanding directions, not being able to focus, being inattentive.
  • Feeling sad or anxious regularly: We all have bad days – they’re a normal part of life. This flag needs attention if you begin to notice feeling like this regularly.
  • Disconnecting from others: This may include not joining in social activities, choosing to spend time away from family and friends or stopping hobbies/sporting activities.
  • Feeling overwhelmed: It is difficult to find solutions to problems, and in some instances it feels like they are insurmountable. Problem solving becomes difficult

And it lists useful resources:

  • Business In Mind: Business In Mind is an online resource specifically designed to support business owners who may be experiencing mental health challenges.
  • Beyond Blue:  beyondblue provides information and support to help everyone in Australia achieve their best possible mental health, whatever their age and wherever they live.
  • The Ripple Effect: A resource for rural communities that addresses suicide in rural areas.(Ph: 03 5551 8587)
  • Sane provides online information, support and connection for every Australian affected by complex mental illness through its website, peer-to-peer forums and helpline. SANE also has a range of factsheets on managing mental health in the workplace. (Ph: 1800 18 7263)

Our approach to mental health as business owners has to be continuous, on-going. It can’t be a one day of the year focus or a stunt. It has to be part of how we run our businesses, everyday.

In my own experience, talking is key – offering an environment where people can talk, where they know it is safe to talk, where they are encouraged to talk and where active listening happens. While it is not always perfect and does not always achieve what is hoped for, it is documented as being valuable.

While RUOK? Day today is important for awareness, that awareness and engagement need to be year-long.

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Management tip

Updated tips on how to grow greeting card sales in your newsagency

Greeting cards remain one of the most financially and traffic valuable product categories in any newsagency business. Newsagencies are top of mind for major seasons as well as for less popular card giving captions.

I know from experience that engaging with the category can increase traffic and sales for the category. Here are my refreshed top tips for engagement if you want to grow card sales:

  1. Pitch at the counter. Always have a two or three cards for impulse purchase at the counter. If they don’t work in two days, change them. Otherwise, change weekly.
  2. Make it easy. Setup a small writing desk. Let people write o the card. Sell them a stamp and offer to post it for them.
  3. Pitch at the entrance / exit. Follow the national approach by Coles. They do it because it works. You choose the cards. Do not purchase extra cards, use existing stock.
  4. Train and engage the team. Ensure every staff member understands your cards and knows how to approach shoppers. Reference cards in every team meeting.
  5. Staff picks. Close to the counter have a selection of staff pick cards. These should change regularly.
  6. Include cards in every gift display.
  7. Include licenced cards with other products in-store form the same licence.
  8. Be a specialist. Leverage low volume captions that most other retailers do not cover. Captions like Thank You Coach and New Home give you the opportunity to remind people about giving cards.
  9. Reward loyalty. Ensure every card purchase is a step toward a loyalty bonus. Differentiate your business through this.
  10. On social media. Promote a single card or a single licence or a single theme in posts. There should be at least 3 card related posts every week.
  11. Promote to businesses. Businesses send cards – if they do not they should – pitch bulk purchase at an offer.

I think we as retailers carry the prime obligation to drive card sales and to attract new shoppers to our businesses looking to purchase cards. We are on the front line. This, to me, is what sets our obligation. We need to do this by being engaged with the category, loving it for its high margin and traffic generation and being creative in our pitch. Our influence is greater than we and suppliers have allowed it to be over the years.

What I have written here is a subset of a much larger piece on greeting cards.

I hope you find the suggestions useful.

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Greeting Cards

Tips for driving crossword sales in the newsagency

The crossword segment of magazines continues to perform well in retail newsagencies. I see plenty of businesses reporting growth and those reporting decline report a lower decline for crosswords.

Crosswords respond well to in-store engagement and promotion. For a small investment of time, you can expect a lift in sales of crossword titles. Here is my current list of top engagement opportunities for a retailer with crosswords:

  1. If you have a table where shoppers can sit for a while, open a crossword and placing some pens nearby so people can engage and complete a crossword together.
  2. If you don’t have a table, set one up as this is an easy way to boost sales.
  3. Move the entire crossword segment next to weeklies. Every time we have seen this done there is a terrific sales jump.
  4. Also place crossword titles with their parent brand: Better Homes and Gardens and Australian Women’s Weekly, for example. This could be done as co-location – in addition to regular placement. I say also as this should be a secondary placement.
  5. Call out a crossword title as a staff member fave and note why with a small sign in front. This type of personal recommendation works well in book retailing.
  6. In front of top selling weeklies, place a plastic or acrylic pocket with A5 titles from the same brand as both titles are bought by the same shopper.
  7. Pitch a crossword or two at the counter.
  8. Consider a crossword themed window.
  9. Consider a crossword lovers event. It could be a simple afternoon team with the idea of them meeting each other and sharing stories. Your focus could be to thank them for their love of crosswords.
  10. Trial placing your most popular two crosswords next to daily newspapers. Count how many you place so that you can measure the success.
  11. Run a loyalty program for magazines. Crossword shoppers will appreciate this and drive more whole of business shopping as a result.
  12. Shine a light on your range on social media – let locals know that your business is the local destination from crosswords.

I get that some reading this will say we only get 25%, why bother. I agree the margin is disrespectful. However, crossword shoppers purchase out of habit. That makes them valuable to us beyond the crossword purchase.

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crosswords

Tips for leveraging big lottery jackpots in retail

Big lottery jackpots can be a challenge in terms of shop floor management as well as that they can suck cash out of the local economy that might otherwise have been useful for spending of products in your shop. Big lottery jackpots are also an opportunity to leverage, bringing in people you have not seen before. The key is what you do with the new traffic.

Here are some tips for shop floor management:

  1. Have a clearly understood queuing system.
  2. Have someone on the floor triaging shoppers. For example, someone may want a simple quick pick. You might have these ready for immediate fast purchase.
  3. Ask early. Immediately you know a bog jackpot is happening, list $70M, $80M or $100M or more, immediately start pitching to every customer. It’s better you win the purchase early in the week than the lottery outlet they are closest later in the week.
  4. Play good music.
  5. On the heaviest day, invite a local busker in to entertain, have kids activities on the shop floor incite a local charity to run a sausage sizzle out the front of the shop. The goal here is to add to the event feel and support the jackpot.

Here are some ideas for leveraging big lottery jackpot traffic:

  1. Get everyone on board. Everyone working in the shop needs to be on the same page about the jackpot, leveraging the opportunity at the counter, talking to customers, sharing dreams, selling.
  2. Make it easy. Preprint tickets ready for people to purchase as a lucky dip. All the same price. Something they could buy with change.
  3. Respect other shoppers. Make sure that anyone wanting anything else in your business can easily shop with you. Manage any queue well. Talk about this on Facebook, that even though there is a jackpot , you are making shopping easy, fast and helpful. It is vital that people see your business as more than a lottery store.
  4. Reward early shoppers. Bring purchases forward by offering those who buy in, say, the first four days of an on-sale. With most impulse purchases for a large jackpot being in the last two or three days and these often made while people are out and about, try and ‘steal’ that business from other retailers. Here are some Earlybird jackpot ideas:
    1. Each purchase of a ticket in the jackpot over and amount you choose gets a free $1 scratchie – you could win $XXX.
    2. Each purchase today goes in the draw for a FREE $50 bonus ticket. Get them to write their name and number on a small form. Print the ticket to show it’s real.
    3. Each purchase in the jackpot between now and XXX (three days before the draw) goes in the running to win a System X (choose a size based on your situation).
  5. Map the route. Sketch out your floor layout and mark the route most jackpot customers will travel. This shows you the areas of your shop where you need to focus, where to place impulse purchase lines. These impulse purchase lines should be easily understood, priced for easy purchase, easily carried and relevant.
  6. On social media. In the week before the jackpot, while you may be tempted to promote it, talk about other products that help define your business because beyond the jackpot, this will matter.
  7. Make them walk through it. Create a fresh environment of products through which lottery shoppers to walk. This is where you pitch what you do that is different. It is crucial shoppers walking through the front part of the shop feel and see the change.
  8. Pitch at the door. As they enter and, crucially, as they leave. Show them products they would not expect you to have in the shop. Make it easy for people to buy these products.
  9. Pitch at the counter. Stand where your lottery customers will stand. Look at what they will see. make sure your messages are clean, simple and engaging. Everything they can see should be about getting them to spend money with you.
  10. Care for your team. The week of a large jackpot places extra demands on everyone. Help your team members through this with extra attention on breaks, coffee, water, snacks and other things to demonstrate appreciation for the extra demands on them.
  11. Have fun.

The value of any lottery jackpot to your business beyond lottery commission depends on what you do.

Footnote: this advice is part of the extensive newsXpress knowledgeable accessible by newsXpress members. It is a deep well of advice and encouragement for building more valuable businesses.

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Lotteries

Excellent retail advice for Myer relevant to our channel

If you can grab 15 minutes today, please watch the business report from the ABC last Thursday night abut Myer. It is interesting and sobering and relevant to our retail businesses.

What the experts tell Myer they need:

  • dialled up in-store theatre,
  • investment in good front line people,
  • more comparative shopping (price),
  • understand that all people don’t want to shop in a shop.

All retailers need these things, and more. I found the report valuable and fascinating.

Note this: 10% of revenue for Myer now comes from online. 10%

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Newsagency management

Small business finance advice

The Australian Small Business and Family Enterprise Ombudsman has published some excellent tools that will be helpful to small business retailers in the area of funding.

This type if advice is critical in this era of business owners engaging with FinTech companies that offer high cost easy to access financing without the need for security. These too good to be true finance offers usually are, actually, too good to be true. I have seen retailers pay too much for stop gap funding when, in reality, they should have looked at entering formal administration. All the funding did was add to their costs.

The ASBFEO advice is timely and useful. I urge newsagents to read it so they are aware of the advice even if it is not relevant today.

Click here to access FitsME – Essential guide. Click here to access the Funding Guide. The advice is this document is excellent. My only complaint is that the documents are sponsored by a finance business.

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Newsagency management

New format for more regional News Corp. newspapers

News Corp  earlier this week announced format changes for these titles: CQ News, Gympie Times, Fraser Coast Chronicle, Central & North Burnett Times and the South Burnett Times. This is on the back of changes in some other regions.

Dear Retailer,

Each issue of CQ News is read by an average of 7,000 Central Queensland residents,* connecting them with essential local news, sport and opinion that matters most to their busy lives.

To ensure we continue to deliver the deep connection we share with our readers and advertisers, while maintaining global best practice and ensure long-term sustainability, we are evolving.

What is Happening? 

CQ News will adopt a smaller, friendlier and contemporary 350mm tabloid format. This newspaper will continue to be printed on the newsprint loved by our readers.

When do these changes happen?

CQ News will move to the new 350mm tabloid format from publishing date Friday 13 September, 2019. The last publishing date in the current format will be Friday 6 September 2019.

What does this mean for our retailers?

An in-store point of sale suite will be created to assist in notifying and informing your customers of the upcoming format changes prior to the official launch.

The new format change will provide a more compact user friendly experience for your loyal customers to enjoy on a daily basis.

What does this mean for our readers?

We will let our readers know about the new format in paper and online in the lead up to the changes. We will also launch a brand marketing campaign to inform and inspire Central Queensland locals as we launch the new-look paper.

Where can I find more information? 

For more information, please see our FAQs attached.

While the shape of CQ News is changing, our commitment to the Central Queensland community is not. Our role in providing essential local news, sport and opinion to our readers remains as vital as it has always been.

We thank you for your support of our ongoing evolution to ensure our newspapers remain the trusted, proud voice for the Central Queensland community in the years ahead.

We look forward to taking this latest step to keep delivering for our readers and advertisers with you.

Regards,

News Corp Australia

Click here to see one off the FAQ documents issued.

This is a move that has been in planning for a while. I don’t see anything concerning in it. If anything it will freshen interest in the print product and, possibly, offer retailers more options for placement.

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Newspapers

Free e-commerce workshops for small business retailers

A free workshop for small business retailers: How to find new customers by selling online direct from POS software for your specific type of business using Shopify and Magento.

This is a free workshop I am running for my POS software company that may interest newsagents. In the workshops I will provide context in terms of how retail, physical and online, is changing. I’ll share trend insights from overseas that have small business implications. I’ll look at being prepared for what’s next.

You’d be most welcome at this free workshop where we will explore Shopify and Magento direct connected POS software for specialty retailers: jewellers, garden centres, produce, toy, firearms, fishing, outdoors, newsagents, pet, gift, book, bike and adult.

At the interactive and engaging workshops we will focus on new online insights for 2020 and beyond that are relevant to indie small business retailers.

  1. Hear from current case studies what other indie retailers are doing.
  2. Find out how to use online to drive in-store shopping.
  3. Learn how click and collect actually works.
  4. Find out about the different buy now pay later options for online sales.
  5. See how stock data including images flow easily from the POS to online.

Each workshop will be live and interactive and relevant to your type of business. It could save you thousands in web developer fees. This will not be a sales pitch. We will share what we know having done this work ourselves for the retail businesses we own in the homewares, pop culture, collectible, plush, gift and games segments of retail.

We live everyday the challenges of pricing, marketing, shipping and more and we will share out learnings.

We will cover hot topics including: SEO, shipping options, free shipping, the role of social in online sales, returns, bundles, branding and a plan b for your web strategy.

Click on your preferred city below to book. Each workshop (except for online) will be in an easy to get to capital city location.

  1. Sydney. Sept. 30. 10am.
  2. Adelaide. October 1. 10am.
  3. Perth. October 2. 10:30am.
  4. Hobart. October 3. 11am.
  5. Melbourne. October 4. 10am.
  6. Auckland. October 7. 10am.
  7. Brisbane. October 8. 10am.
  8. Canberra. October 9. 10am.
  9. Online. October 10. 10am. AEST.
  10. Online. October 10. 2pm. AEST.
  11. Wellington. October 14. 10am.
  12. Christchurch. Oct. 15. 10am.

We are local. Tower Systems serves 3,500+ specialty businesses – with POS software and websites. We make what we sell. We use it ourselves too, in our own retail and online businesses.

With these workshops and all we do, goal is to help you enjoy a more successful and valuable business.

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newsagency of the future

Landlords continue to change traditional newsagency businesses

Every week I hear from a different landlord (or two, or three)pitching a tenancy, or tenancies, if their centre that would be ideal for a traditional newsagency. When I ask what they think a traditional newsagency sells they almost always say: papers, magazines, lotteries, cigarettes and lollies. Pushed, they will add cards and phone recharge.

Some say they would not permit a newsagency to sell gifts while others say yes to gifts but no to homewares or toys.

Landlords of shopping centres are a problem for our channel. They are living in the dark ages.

These shopping centre landlords do not want newsagencies of 2019 and beyond. No, they want convenience stores offering categories that we either have left behind or managed to a small footprint as we chase new traffic and higher overall GP%. Which is okay. There is a place for those businesses, the businesses that offer papers, magazines, lotteries, cigarettes and lollies as their core.

So, in addition to Australia having more retail space per capital than most other countries and our retail space priced higher than most others, we also have to content with landlords who guide retailers to setup businesses that are focussed on the past more than on the future.

They get people agreeing to this. I heard from someone last week who had just signed a lease for a new 30-shop centre being built in regional Australia, in an economically affluent area. They had agreed to a 150 sq m newsagency that would sell papers, magazines, lotteries, cigarettes and lollies. Oh, and cards and small gifts (under $20).  This would be their first retail business and they wanted help to create it. They thought they were on a winner, based on projections from the landlord.

I suggested they get the projections in writing and ask the landlord for people to speak to, to guide the creation of the business. The landlord refused, saying the projections were guidance only and not  to be relied on. In talking abut how they planned full the shop they figured it as 33% magazines, 20% cards, 25% lotteries and the rest in convenience products and management.

I asked they has created a cashflow projection model for the business. They had not. They referred back to the landlord projection on  how good a newsagency would be.

And landlords wonder why some traditional newsagency businesses go broke.

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Ethics

AFL Footy record a profitable business

Mediaweek yesterday had the story about the results of Pacific Star Network, the sports radio and media business with Craig Hutchison as CEO.

Pacific Star Network reports Crocmedia financials for 2018-19

FY19 revenue of $67.0 million was up 140% and underlying EBITDA of $9.0 million (guidance: $8.75-9.25 million) was up 208% on the prior corresponding period (pcp), respectively.

In the story is a report abut the purchase of the AFL Record business from the AFL.

In July 2018, PNW’s wholly owned subsidiary Crocmedia signed an agreement with the AFL to acquire the AFL Publishing business. The business is responsible for numerous football related publications, including the iconic AFL Record publication, which has been the official match program for more than 100 years.

The AFL Publications business had a purchase price of $8.1 million comprising $5.850 million cash less working capital adjustments of $0.244 million and $2.250 million prepaid advertising to be retained by the AFL. The AFL Record performance was in line with expectations, with revenue of $6.846 million and net profit after tax at $2.269 million.

That is a net profit  33.14%, an extraordinary result.

Now, while most of these publications are not sold in newsagencies, the report does indicate the value that can be achieve from a niche publication with an efficient distribution network.

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magazines

Update on our pre-order pitch in the newsagency

Two weeks ago I wrote briefly about a pre-order pitch we are making. What I did not say is that we were primarily pitching online. Well, today, two weeks on, we have banked more than $9,000 in revenue – for stock the will not arrive for another four weeks.

What makes the experience even more valuable is knowing in advance of stock arriving what the hot sellers will be, what we can feature knowing it will sell two, three and four times faster than other products in the model line. This is invaluable.

The success I am talking about here is from one store, with a niche product category that is also pitched in majors. What we have done is leverage the opportunity in a more flexible way that you won’t see in the majors as operationally it is too challenging for them.

Our spend on advertising so far  – $0.00. We have leveraged an email database that we have built up of people interested in this product category as well as a specialty Facebook page created for the category – again, without spending anything on advertising.

My core point is that success is out there for the taking, not too far away from our shingle, as long as we are opportunistic, back ourselves and are creative at reaching possible shoppers.

What we are doing is not that unique, it is certainly not the first time preorders have been offered in this niche. What is different is that wee started planning a year out, building the email database, growing the social media community and creating a backend engagement approach that enables us to make the most of the pre-sell opportunity.

The reality is that we build an infrastructure like a big business would build, but on a small small business budget of $0 spend.

Retail has fundamentally changed as has businesses under the newsagency shingle as well as suppliers who supply the channel. Further, change is far from done. This is why we have to keep innovating, to play a good game on a moving pitch in rough weather.

It is at the fringes where we have opportunities to make good money.

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Newsagency management

The borders between retail channels are fuzzier than ever

The days of staying in your lane for specialty retailers is long over. Look at almost any specialty retailer and they earn from products outside the specialisation reflected in their single.

I was reminded of this recently when at a large bookshop. They had this massive wall of socks.

I don’t see a connection between books and socks except that people who read books also wear socks. It turns out the wall became free as a result of remodelling and they wanted a single category solution for the wall. Socks happened to fit. I am told the results have been terrific.

The sock wall i9n this awesome book shop was a reminder to not be constrained by the obligations of the shingle.

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Newsagency management

Magazine sales trials boost sales

It is terrific seeing magazine publishers trying different approaches to boost sales.  I am aware of five different title-specific trials being run right now in selected newsagencies. Each is designed to achieve incremental purchases of the target title in the participating store. Each trial is being run in between 5 and 10 newsagencies.

I like the trials as they will provide experience and data soon which decisions can be made. I also like that the trans are different to what we have seen in the past for magazine promotions.

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magazines

ATO warns small businesses on sales suppression software

The ABC has reported the ATO is clamping down on small businesses using sales suppression software to minimise tax.

Ms Jenkins said the ATO was also cracking down on the use of sales suppression software that disguised the transactions within a company’s records.

“There is some really sophisticated software out there that is helping people avoid paying the right amount of tax.

“But whether it is cashless payments or whether it is the use of platforms or apps, it means there is really a trace of your transactions.

“We use merchant data and other sources of information to identify where things just don’t look right. Then we go and have a chat to them and say, ‘Hey, can you explain?’

In the mid 1990s there was sales suppression scam operating in the newsagency channel. I became aware of it because my newsagency software company lost businesses because we refused to offer such a facility.

There was a software program into which the retailer could enter a code and then an amount of cash they wanted to take out of the business unreported. A second set of records was maintained for the ATO and another records for the business owner.

I know because the software was demonstrated to me several times, by someone who had worked for the software company that created the software. They had approached me. I did some more checking with newsagents and discovered the facility in the software was being used.

The matter was reported to the ATO. At their then Box Hill office in Victoria they assembled a task force including representatives from the ATO, Federal Police, Federal Attorney General office. Victorian State Revenue and Victorian Attorney General office. Several of us with knowledge were brought in for a demonstration of the software. There were several follow up meetings with the ATO in Sydney.

Eventually, my software company stopped losing sales because we did not have the tax avoidance facility in our software.

Any retailer deliberately and systematically underreporting their income to avoid tax deserves what they get from the ATO and from any suppliers they impact through their actions.

11 likes
Ethics

Nine (Fairfax) disrespects newsagents in latest newspaper pricing move

Nine (Fairfax) has announced a 20 cent (6%) cover price increase for The Sydney Morning Herald yet only a 1 cent, or 1.6% increase in margin for the retailer. In my opinion, this further downgrade of margin for newsagents is disrespectful and offers retail newsagents encouragement to ditch the product category.

Here is the detail of what Nine has announced.

This move offers newsagents an appalling return on the space, labour and capital required to support the sale of newspapers in a newsagency.

I wonder if it is more evidence of a theory that the publishers want to move more retail of their product from newsagents to convenience stores, like 7-Eleven, supermarkets and petrol outlets.

Look at a general retailer. They will get 31.5 cents from a $3.40 item sold. That is 9.26%, down from 9.68% on the current price.

The massive Nine corporation is showing what it thinks of small business newsagents in this move.

What Nine is doing here, in my opinion, is like the federal government move to cut penalty rates. It is shameful, disrespectful and preys on the weak and vulnerable.

The question newsagents have to ask is: Is it worth stocking Fairfax titles or newspapers more broadly? The trajectory of margin is clear. The latest decline in real terms continues the trend.

How much longer will newsagents put up with being screwed over like this? I mean, seriously, how much longer?

Print newspapers, especially dailies, are dying. There is no upside. Newspaper publishers are managing their exit and they are doing this in a way that best suits them. Hence, these moves that disrespect newsagents.

I think the days for accepting their motherhood statements that newsagents are important them are over. If newspaper publishers thought newsagents were important to them they would actually respect them. They are doing the opposite – making more money for themselves while at the same time less for newsagents.

So, the product is dying. It is what it is. I think newsagents need to, for themselves, decide when they will exit the category. They can decide this on their terms, with their timing.

For me, this Nine announcement encourages the decision to quit the category.

Nine will say the papers are losing money and they cannot give newsagents more. Who cares? Not me. I am a newsagent providing a service. Show me some respect or get out.

Oh, and what makes it worse is that newsagents have to pay for shrinkage. One paper stolen will take the sale of nine papers to cover that cost. I suspect supermarkets don’t pay for stolen papers. I suspect they pay only for scanned sales. I say this because I understand some are on this model for magazines.

Footnote: click on the image for a larger version.

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