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Afterpay Touch Group - eServices Wind Down continued

POS SOFTWARE

 

Many of you have contacted us to ask us what is happening as a result of the Afterpay Touch Group winding down their eService business. 

Please give us some more time.

To fill you in, if you are not following the story.

Touchcorp was in Dec 2016, was making a profit of 11.5 million dollars

Take a look at its revenue figures in yellow and its profit in blue from the report 

See what Afterpay are walking away from? It states much of the changes in the economy.

We do not consider the ePay terminal, which is not integrated as a satisfactory solution.

But rest assured that we have been on to it. We have spoken to Touch management, ePay, Telstra, I think all major gift card distributors in Australia, the fisheries departments, NewsCorp, WA news, etc. I have also communicated to a whole lot more, e.g. Optus, VANA (who by the way have not responded for some reason), etc.   I can report all of these are in a state of shock about it too.

This is partly as who wants an extra box on the counter and partly as there is so little margin to be made out of these products that to make it work, it must be integrated. Beside our integrated solution gives I believe the best margins to retailers, why should they drop margin on a terminal?

I told these suppliers straight out that we consider this a significant product to our clients who are doing in the high teens millions of dollars trade a year with these products. Okay I told them, it does not produce a high income because your margins are so low, but it does bring many people into the shop. As a first-level approximation as even a small shop is getting about two trades a day. Assuming a client acquisition cost in retail in Australia at about $15 and about a third of the trade is new customers, we are looking at (2 a day x $15 x 300 days a year x 3 years x 33%) = a goodwill value of about $10,000 lost if no alternative comes forward.

Okay, we hope to have something soon to tell you, but please give us a little more time as we are reluctant to discuss what is being proposed until we have confirmation about where our users and we stand. The last thing we want to do is to say something which does not happen. 

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Afterpay Touch Group - eServices Wind Down – 30th June 2020

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At the start of February, we were notified that the eServices from Touch Afterpay confidentially advised us that they were closing down. Apparently it does not fit into their strategic priorities and as such their long-term growth. This was a shock as we have been using this service for almost twenty years. It is a very good service.

Presently we are discussing the situation with Afterpay and with some of their suppliers all that appear to be quite in shock about this announcement. Everyone is saying that they did not get enough warning to make plans although several like the NSW Fishing licence sales, told me that they do not have an alternative in place so if you want to sell their products after the closure then you need to contact them directly and they will if you are approved they will put you on a manual system. 

Some suppliers, however now, are looking at options, as they know that many of their sellers will drop their products if they need to go to a terminal and/or manual system. When we have some answers, we will get back to you.

Now, all we can say is that we are talking to people, we are looking for options and we may be about to do something.

If someone wants to discuss it with me further or they have some information that they think they should share with us about it, please let me know.

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Lastest newspaper delivery fees announced

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Looking at the new distribution fees, they vary but as a first-level approximation, I would say its average of just less than 1.5%

Surely they should be more if only because the Australian inflation rate in 2019 was 1.90% but almost certainly NewsCorp views are that this is all the market could afford. They may be right.

 

 

 

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Magazines and newspapers

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Two interesting reports are now available for retailers interested in print. The Magazine where the key findings here are that overall on Year on Year figures (YOY) printed magazines are about 8% down in readership, they are not releasing sales here, and digital readership is not just a touch bigger than print and Newspaper where print is listed as being about 15% down, and today digital readership is almost three (3) times bigger then print.  

 

 

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Newspaper Carrier Day

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For those that sell newspapers, some history, once they printed newspapers, they discovered that they needed a runner to deliver it, so the paperboy was invented. For hundreds of years boys like this guy pictured in 1961, got up early to sell newspapers on the street and deliver them to people houses. 

To honour these boys and some females, although they tended to be older, today we have #NewspaperCarrierDay 

PS For those like me, that used to be paperboys, your in good company both Albert Einstein and Martin Luther King Jr were paperboys too.

 

 

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Lottoland

POS SOFTWARE

This surprised me as its been a while, is that many in the lotto industry have not been following the news about Lottoland.

The matter went to the  NSW Supreme Court, and Lottoland successfully overturned a government ruling that threatened to end its business in Australia by declaring its gambling products illegal.

Lottoland remains in Australia.

I do believe that several people have much explaining to do with their claims they made to lotto franchisees about precisely what they would and did accomplish. Maybe that is why no-one is saying anything about it to them?

My view has not changed.

Lotto franchisers missed a golden chance to get something while the politicians, supposedly with their interests in mind last year, were talking of their concern for their small businesses.

 

 

 

 

 

 

 

 

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Franchise expo yesterday

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Franchise expo Melbourne 2017

I go every year to the franchise expo

I find it useful as I meet people, get ideas and see what is out there. This year I saw it was bigger than ever. Looking around, you always see something that seems interesting; you also often get a good idea of where the market thinks it is going. 

If there was any theme at the show, it is about having a theme product. A product that it has that stands out.Once you have that you can build on it.

I have always been dubious on franchises. What you are doing is introducing a new level. The problem here is that few SMB businesses have the margins to afford an extra level. Also if you want to be your own boss, why give yourself another level? Still, I have seen many do well in a franchise. Again, I had a chuckle when I saw at the show many stalls of lawyers, far too often franchisees need their services. The small business minister at the expo spoke a lot about this in her talk. You may want to check out this facebook group that I am a member of there are some excellent write-ups there.

Still franchises are growing, just about everything now is being offered on a franchise model, and this expo showed that they are growing bigger every year. 

Franchise expo Melbourne 2017

 

One point I have made in the past, and I make it again. Many of these people going to the show are the sort of people that would be interested in buying many businesses in our market space. Many there have the money, ambition, will and are looking. So many in our market space missed here a golden opportunity to sell their industry.

 

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Afterpaytouch patch error update

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They have released information on how to fix the problems caused by this month’s Microsoft security update.

I recommend that if you do this that you make sure the person doing it is very knowledgable on all computers that run the afterpaytouch software. It is much better to do these things on site. It has to be done on all machines running their software.  

The information on how to do it will be found here and a PDF version is available here.

If you have any queries, Afterpaytouch have a hotline service here 

Afterpay Touch Group

Phone: 1800 286 824

 

 

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Signage when its a problem

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A person owns a chicken shop. When he comes to work on Friday morning, he finds this big sign from KFC plastered on the side of his store. Pointing to a KFC store 800 metres up the road. 

He thought this went too far, as clearly from the reaction of people on twitter here so did most people.

It is not a new problem. I had a client that had a family general store and a massive quite sexual explicit sign went up, and they did not like it at all, The problem is that many people have leases on the shop but not on the signage. To the landlords, the signage is often worth more then the shop and this signage are usually operated by an advertising company that has signs everywhere. As such, what goes up on these signs is often something that the people nearby do not approve of although generally there is little they can do, although I have heard of people going out with a can of paint at night to fix the problem.

Although this is being portrayed as a small businessman vs large company, which it is, the same problem I have seen happening with large corporations. In this case, the problem was fixed quickly as the sign was removed promptly.

It does show a problem that if you are taking a lease on a property that you do need to consider, the signage and who has control over it.

I had a client that was not allowed to put a sign up advertising his cafe as it was felt that it would intrude on the commercial environment in the office block that the landlord was trying to create. They argued that without such a sign, how can their cafe exist? They lost the argument and soon moved out.

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Future of resturants

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This report from the US is fascinating. 

In 2015, Americans spent more money at restaurants than at the grocery shop. Forty percent of all new leases in Manhattan this year, more than clothing stores, banks, and health clubs combined, according to data from the real-estate company Cushman & Wakefield are moving into restaurants.

Based on the current trend in 2020, more than half of restaurant spending is projected to be “off-premise”—not inside a restaurant but in deliveries, drive-throughs, and takeaway meals which will be over  80 percent of the industry’s growth in the next five years.

It so the grocery shop may soon go another example of how delivery is becoming much more important.

 

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