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Why Buy A Newsagency?

Newsagencies enjoy a very stable consumer perception. The general public have grown up with their local newsagency, clearly understanding the core product and services they expect to get when they visit. This often leads to clients being very loyal, supporting their local small business.

 A Newsagency enjoys a “consumable” product range. A customer may visit numerous times a week to get their next Lotto, Paper, Magazine or Greeting Card.  Most Newsagents have evolved into smart Retailers, using this core foot traffic to up-sell added product & services. Phone recharge, Gifts, Ink & Toner being just the tip of ever increasing new revenue streams leveraged from this foot traffic.

There is constant National Advertising dedicated to product found at a Newsagency. Lottery Jackpots, Instant Scratch It’s, Weekly Magazines for example are using mass media advertising to regularly promote product found in a Newsagency, reinforcing this “brand” awareness.

In QLD, the Lotteries Act 1997 Legislation which governs Golden Casket, has protections in place, governed by the Small Business definition, precluding an owner who employs in excess of 50 staff or 2,000 hrs p/wk from holding a license. Details can be found at http://tatts.com/goldencasket/about/legislation

News Ltd Contract holders usually define a Territory, street by street. All paper sales within this territory go through that newsagent, providing degrees of protection from competition. This includes newspapers sold by the major chain stores & supermarkets. The Territory Agent drops their papers each morning.

Publishers & Distributors supply circulation product to newsagencies under a system called “sale or return”. Publishers supply agents on the basis of a “sell through” formula with agents returning for full wholesale credit, unsold product at the completion of the on-sale period. This system maximizes sales whilst minimizing the risk of dead stock to the agent. 

Some suppliers, like greeting card companies, also offer “sale or exchange”, mitigating risk of holding slow stock. Tobacco, Drink and Confectionery companies may also exchange dating stock if identified in an appropriate time frame by the agent.

If you were to buy a Coffee Shop in a shopping centre position, and there was a vacant tenancy beside that shop; there is little that may stop the landlord from letting the vacant tenancy to a rival Coffee Shop; likely halving your trade overnight.

Given the above protections in place, there is a far slimmer chance of facing such immediate & direct competition as a news or lottery agent.

Newsagencies enjoy a diverse product and service mix that uniquely compliments community needs. This broad consumer perception gives a newsagent ability to adapt and provide most anything that they can identify a consumer demands; only limited by imagination and implementation.

To find out the many more reasons why a Newsagency Business should be on your shortlist of business purchase intentions, call our Brokers today.