I have a friend wanting to buy a newsagency.
I have told him that I don't really like it for a few reasons.
1.No family time.
2.Dying trend.
3.Hard work
4.Long hours.
Can you guys offer your opinions please?
PS It is $100k and offers a decent return
Buying a newsagency business.Your input please.
grabngo on 28/06/2017 - 11:46
Poll Options
- 4Buy
- 72Don't buy
Comments
number 2 - dying trend
Talk to your accountant, check the past history of earnings, location, competition, etc then decided.
but if you saying if its offers a decent return, why asking us? :)
Personally, I wouldn't.I use to work for Newscorp and worked closely with many Newsagents and most of them are not doing well. Some of the big ones are doing very well but most of them are not and only surviving thanks to Lotto ticket sales. I would advice against buying a Newsagency as well, its just not worth it anymore.
Lotto ticket sales is the ONLY reason I could see people visiting a newsagency.
Magazines and Cards might bring a little income and traffic if the location is good.Supermarkets and Servos dominate the declining Newspaper sales business.
Pens, Pencils and stationery… Pretty sure most people would buy online these days surely?I even buy my lotto tickets online.
A newsagent nearby split the lotto part from the newsagent part, and sold the newsagent part making the lotto a stand in the mall.
The newsagent part is close to closing. The lotto makes money.
Cut out the middle man and get the lotto licence if you must. Don't get the dead weight of a newsagent.
Hard work and long hours is an understatement.
Why do you think they are selling? Not enough money in it anymore?
Print media is dying.
If you were to buy a news agency make sure that you know what your client base is.
Older people still tend to purchase newspapers and the like where younger generations prefer online media.
Older people also have a tendency to die also.
Hi,
There is a really good blog at:
https://www.newsagencyblog.com.au/It gives you an insight into the struggle running a Newsagent has become especially considering you are up against the Supermarkets, Australia Post and Officeworks.
Number 2 dying trend.
have seen so many newsagency close in brisbane over the past few years, most of them just end up selling gift cards and crap like that, or get absorb by the local corner store mainly just to sell lotto tickets.
advice from a stranger don't do it unless you're happy to throw that hard earned cash into the wind :-)
A newsagency and most franchises are just poor business models, it's like giving yourself an unsecure shitty wage. However some people don't mind it, for them the idea is just, working for themselves is great irrespective of the money.
It is also become harder with the exit of Bauer Media in print News last year.
Newsagents were good 15 to 20 years ago when porn magazines were wrapped in plastic so being the owner you could take one without paying. Internet has killed that thank god!
Main concern for me is that is a dying trend. Other concerns will be there with a lot of jobs and in particular for just about everyone running a small business (if that is what the friend is intent on doing).
It should only be bought if the operator could bring something new to business. The existing model is broken, it's a dying industry and is almost completely being swallowed up by the internet.
IF - you can merge a newsagent with a cafe/bakery or some other sort of experience then maybe your friend might have a chance. What is nearby to the agency is really important - any competitors or supermakrets? Without providing another unique service, I would not see any benefit to investing in an agency. Profit reported today is not assured of profit next year.
it used to be good. my friends dad owned a newsagent and sold it for a bucket load of cash in the 1990s.
the appeal of owning a newsagency used to be the resale value. - sort of like taxi licences.
now with Uber (and other riding sharing apps) the appeal of "investing" in a taxi licence is so unappealing.
Newsagents operate in the gambling industry.
Definitely dying. Even the lotto part of the business has peaked for Newsagents. You can easily buy lotto tickets online now and all the major lotto companies push the online channel hard.
2.Dying trend.
Might as well buy shares in a dial-up internet company while you're at it.
My AOL is NBN outage proof.
The only ones that stay afloat now are the ones where the husband, wife and kids staff it all week. Hiring anyone will cut into your profits too much.
I believe that the revenue for lotto is 8% in WA so I'm imagining that it'd be similar around the rest of the country. Either way 0/10 would not attend would not recommend.
I used to own one but the goodwill component has gone these days.
You are essentially buying a job with long hours and no possibility for capital growth or increasing turnover.
Three in my local area have closed in the last couple of years.
To be successful, you would need to combine it with another business eg Post Office, General store etc to utilise the gambling component side of the newsagency in your drawing areaWhen I had a shop front business, the neighboring news agency had a few armed hold ups in the span of the 3 years I was there. Criminals saw it as an easy target, especially as most of the business was in cash.
It's another thing to consider because insurance for this kind of stuff starts to become expensive.
We have a local which was bought out by a chemist. They are the only newsagent int he area plus have the chemist trade which is not dying.
I have a friend who was in the newsagency business for more than 20 years. They had a shopfront quite close to a major hospital and on a major road. Unfortunately they did have a couple of hold ups at gun point - mostly because they also operated a very successful lotteries commission agency and it was the only one in the area. So it was quite a risky business - just opening every day - apart from the financial aspect. They had a large group of loyal regulars who would buy their papers, magazines and of course lotto tickets every day/week. Towards the end of their time in that location they had begun to diversify into homewares and gifts - led by the market as requests from their customers They were approached to move into a newly developed small shopping centre with the major draw card being a large chain supermarket which was expected to draw regular clientelle. They considered it and as it was just a little further up the road and they would still have the lotteries commission licence - the projections "appeared" to be excellent for bring in new business. Wrong!!!….. It couldn't have been worse. The numbers had been crunched by a very unrealistic developer and the landlord was gready. The centre was small and poky by comparison to shopping centres just a bit further drive. The supermarket sold the same papers and the same magazines and the so-called high rise developments that were supposed to be built in the the next couple of years… never started for seven years. And of course - young people attracted to the area don't buy newspapers or buy many magazines to go with their coffee. So you couldn't really depend on them. The loyal customers still bought their lotto ticket - but it was a hassle to park in the shopping centre; and on the other side of the road and many other excuses that saw even that group of clients drop off. Then the road works started and business dropped by 2/3. And nothing that they could do to entice people in. They expanded the homewares and gifts as that seemed to be working, but needing to have so much stock meant that their cashflow was tied up in that stock. It was a sign of the times with there being less and less profit in any of the typical newsagent items being available in many other places. The landlord eventually locked them out for unpaid rent and a nasty court case has changed their lives forever as they lost everything. I would suggest to your friend that he will lose his $100K in a newsagency. He won't be able to sell for a profit as no-one in the next generation will buy it. As with any investment - location is No 1 priority. Then look at what businesses around this newsagency sell exactly the same products. Then analyse the market and the demographics. Suggest to him that he asks those he knows - when was the last time they went into a newsagency. I bet for most it will be to buy a Lotto ticket or at best - a card. The Lotto tickets kept my friend's cashflow going. Not the newspapers.
Long hours!!!
News agency next to me is open from 6am till 6pm 6 days a week :o no way would I do that :/
Agreed with your assessment.
All you can do is make sure that your friend goes in eyes open to the reality.
It's going to be boring for the most part, stressful for other parts.