This depends on how much work you put in and how many different sources of revenue you generate. If you just sell a basic selection of newspapers, magazines and sweets you may fail to reach your target, but if you expand your operations into other areas such as drinks, the National Lottery, snacks, greetings cards and household goods, these lines could boost profits.
Ball says that extra avenues and smaller goods on the counter can considerably increase profits. “If you have a good point of sale or counter that is full of small items such as stickers, Instants cards, sweets and snacks, then people will buy them in droves. It is a good cash generator but you have to spend to earn and constantly update things with new product logos and promotions and products.”
Peter Cryer, owner of a newsagent’s in West Yorkshire, agrees. “A profit margin of between 20% and 25% is the level you should be aiming for. This is a good level but can be increased by extras such as the National Lottery which gives you a return of 5% on the total turnover, but you have to wait for them to approach you and assess whether your outlet is satisfactory or not.”
The margins on basic stock
||Average of 25% of cover price
||25% of cover price
||5% of total sales