With agency work, you are handling someone else's products/services. Typical examples would be lotto, dry cleaning, Australia Post, etc.
Typically the commissions for handling these products/services are sometimes tiny. Yet the claim made by the agency is that these are good commissions, plus they give the shop customers that they would never get.
Observations I will make here.
1) The commissions, over time, have a habit of dropping.
2) The commissions stated by the agency do rarely add up to the quoted figure. When I added up one client's figures, we found after fees; the 10% commission was more like 8%.
3) Good agencies demand the shop often do and spend to get these agencies.
4) Agencies often put barriers to the shop to sell other products. Yes, the customer comes in, but the store is limited in how it can offer additional products.
5) They interfere in the shop's management which is sometimes a positive as agencies know their business.
Is it worth getting these agencies? Many say YES.
Yesterday with the superdraw for $100 million, we saw long lines of people in shops. People who never came to a shop were coming into the shop. Loto was bringing in lots of customers to shops.
The challenge for the retailer is to use that added foot traffic to make more sales of other items because that is where the profit is found. The trouble with lotto is that their product rarely leads to additional sales. Still, a small percentage can add up, say 300 people buy the lotto. 10% purchase something else well that 30 new customers for the shop.
As yesterday's long queues show, it promoted the shop, and people got used to dealing with the shop.
Also, many shops are unmarketable without a good agency and cannot be sold. People will pay for a lotto agency, and they will pay for an Australian Post outlet.
What I suggest is that you look at your profitability
If you want a quick and instant way of finding out what did sell in your shop yesterday in the superdraw
Go to Register reports.
Now pick "Top N Stock Sales for a Given Period."
In the form put in yesterday, 20/10/2022 now compare the same with the report with figures from 13/10/2022, you will be able to see immediately what lotto brought into the shop.
