Managing your newspapers and magazines

The profit from selling publications may not be very big, but your customers still expect to find them at your service station. And satisfying your customers so they choose to return to your service station is essential to building a profitable business.

1. How the system works
2. Tips to selling more
3. Working with your newsagent
4. Direct supply

The ‘newsagency’ sector in your outlet may range from a few magazines to a ‘mini-newsagency’ with a large range of papers and magazines. This will depend on the display space available, the location of your service station and whether you provide publications as a service to customers or to make money.

Satisfying your customers so they choose to return to your service station is essential to building a profitable business. Even if there is not a large profit in selling publications, customers expect to find them at your service station.

How the System Works

Until 2004, most service stations received their magazines and newspapers from the local newsagent and received the standard 12.5% commission. Newsagents have ‘rights’ to deliver newspapers within a territory determined by the publishers, and service station operators have no choice but to take the papers from the designated newsagent.

Some newsagents work well with service station operators to develop sales and ensure they have the right magazines for that location. Other newsagents provide poor service, insufficient magazines and sloppy invoicing.

As magazine and newspaper publishers cannot economically deliver to the 20,000 sub-agencies where they like to see their titles sold, newsagents act as distributors to the network of sub-agents.

A Changing Environment

Changing shopping patterns have meant that magazine and newspaper publishers want their publications available at a wider range of outlets. Selling an extra copy to that busy, transient customer is important. Every copy counts.

Deregulation of the newsagency industry has made it easier for magazines and papers to be more widely available. The petrol discount phenomenon has driven consumers into selected service stations where they line up and wait for service and more people are shopping at the discount petrol outlets than ever before.

Sales and marketing of publications in service stations has changed - both for those with a supermarket alliance - and for those without.

The large oil companies and convenience stores have put pressure on publishers to supply publications directly to them. Outlets such as Coles Express, BP and Woolworths/Caltex made a deal in late 2004 with Australia’s largest publisher, ACP, to obtain magazines directly on full commission, expanding the direct supply system under which many convenience stores are already operating.

This took effect from February 2005.

Each direct-supplied outlet is required to complete the paper work and account for each copy as well as to display the latest titles in a pre-determined ‘planogram’ which sets out which titles will be displayed.

The advantage for the magazine publisher is that the service station group has a head office and that means one direct account. The publishers also decide which magazines are to be supplied to the outlet.

The disadvantage for the service station manager is that he or she has to do all the paper work which was previously done by the newsagent.

Direct supply is different to a ‘direct drop’ situation where publications are delivered directly to the service station but invoiced through the newsagent. In this case the supply of certain publications is assured by the publisher but the newsagent manages the account and takes part of the commission.

Working with your Newsagent

For the majority of service stations, supply will still be via the local newsagent and developing a co-operative working relationship is essential. Newsagents receive the magazines in the early hours of the morning. They deliver to your service station, monitor sales, top-up, invoice, take the financial risk and complete the ‘Returns’ paperwork, accounting for every magazine sold and every one left over.

Newsagents have large amounts of money outstanding and often wait months to be credited for the returned magazines. This is how they earn their 12.5%.

Service stations earn their 12.5% by providing the display space and longer opening hours, and by catching the impulse customer who comes in to buy petrol and goes out with a magazine as well as a loaf of bread and carton of milk.

These add-on sales can be lucrative and good display is imperative.

Getting on with your newsagent

• Be courteous and develop a working relationship.
• Discuss your space availability and the type of magazines you would like to display - and how you could grow sales.
• Know when your busy times are. Do you sell a lot late at night? Know who your customers are - male, female, executives, factory workers or families. This will give you and the newsagent a guide as to which magazines to stock.
• Discuss the ground rules and document a service agreement setting out when the publications will be delivered and how to order more stock.
• Insist on regular, clearly set out invoices.
• Pay your bill promptly.

Making more sales

• Dusty stock is not appealing.
• Tidy stock sells better.
• Know when the top weekly magazines are on sale - it’s usually Monday. Sales are made in the first two days after on-sale date for a weekly magazine and in the first week for monthly magazines.
• Display magazines with all the cover showing if possible.
• Display girlie magazines discreetly so your female or family customers are not offended.
• Call your newsagents and ask for more magazines or papers if you are running low.
• Display other newsagency type items close to the magazines - greeting cards, wrapping paper, a small pen selection. This will remind customers that they can pick up such items at your store.
• Mother’s Day is the biggest card sending event after Christmas and a special effort to display cards, flowers and chocolates in the lead-up to the second Sunday in May should pay-off in increased sales.
• Valentines Day on 14 February can be another lucrative occasion for selling cards, sweets and flowers.

Can’t get enough?

Getting sufficient supplies of particular publications can be a problem. At times the newsagent may not be co-operative but at other times newsagents may suffer the same shortages.

Publishers are cutting back print runs to save money in production and often there are insufficient copies to go around. These copies are spread over more and more outlets (service stations, convenience stores, supermarkets and speciality outlets) and this means fewer copies are available per outlet.

Try to switch customers to an alternative publication or offer to save one for them next week.

Many service station managers report that they are happy with the newsagent service and would prefer the newsagents to supply as they know the products, the area and do all the paperwork.

Only high volume outlets will gain direct supply and full commission from the publishers. For most outlets, developing a co-operative working relationship with your newsagent will be the best way to offer newspapers and magazines to your customers.