Everything I know about business I learned from a 13-Year-old paperboy

14. October 2021 Uncategorized 0

When I was a kid, I desperately wanted a new 10-speed bicycle. Not just any 10-Speed bicycle… No Malvern Star for me… it had to be the Raleigh Record 10 Speed. The one with chrome-tipped forks, French derailleur and alloy rims. In 1975, this was a $200 bicycle (so probably something like a $3000 bike these days…) It was to a 13-year-old me, as close to perfect as I could imagine…

My Dad made a deal with me. If I could raise half the purchase price, he’d meet me on the other half; even if it wasn’t my birthday. I don’t think he ever expected to have to pay out on that offer.

Now in 1975, there were no computers, no internet and no mobile phones.. People got their news from Newspapers and Sydney had 4 of them…  2 in the morning and two in the afternoon from rival news houses. You bought them at a newsagency, or as we called them “paper shops” or if there was one near you, a paperboy.

I was a paperboy. In order to raise the funds needed to buy my Raleigh Record 10-Speed, I fronted the local paper shop and asked for a job as a paperboy. To my utter amazement, and after a week or 2 of badgering, the shop owner decided to trial me and he sent me off to see his Dad.

Mr Peden junior was a friendly, mild-mannered bloke who was good with customers. His Dad was a crabby old bloke in a dustcoat and flat cap who worked out of a dingy workroom under the paper shop and grumbled a lot. He cared for nothing more than selling newspapers & magazines, and he ran his small band of paperboys like the military.  He scared the crap out of me at first – I was just 13; he was my first boss but he taught me lessons I’ve never forgotten.

He was unfailingly intolerant of unreliability, or tardiness. If you were rostered on a run, you were expected to be there, ready to start at 3:30 pm or lose your run, on the spot and forever.  There were no 2nd chances and to ‘lose’ your run was inexcusable. No ifs, buts or excuses were entertained, ever.  Conversely, he was very fair-minded. If you showed up, did your job well and made sales, he paid commission on the spot and usually threw in a bag of chips at the end of a shift. I once got ‘rolled’  on my way home from a shift by a bunch of older kids who stole my days takings.  He paid me my commission anyway…47 years on I still remember him fondly.

School got out at 3:10 pm, giving me 20 minutes to ride the 3.5 km from school to the shop, change out of my school uniform (school regulations!) and be ready to work at 3:30 At that stage, I had a dodgy old 2nd hand bike that had seen better days, but it got me to & from school.

By sheer dumb luck, the day I started was the day another kid failed to show up and I lucked into his run. It was probably the hardest run that the shop had as it covered a lot of distance and needed the paperboy to drag two barrows. It was also the most sought-after and lucrative run.

First lessons: Have a big goal, and be prepared to work at it. A big part of success is asking for the job, turning up, and being reliable.

Being a paperboy basically set you up as a commission agent.

  • You ran your own show, so long as you sold all the papers you took.
  • You could take papers as many as you could carry, but to come back with unsold papers in the barrow was a cardinal sin.  If the paperboys did our runs properly, we got back after the shop closed, so unsold papers couldn’t be transferred to the shop either and they were basically useless the next day.
  • We were paid 12.5% of everything we sold but paid a penalty of 1c per unsold paper at the end of the shift.
  • We were paid no wages, just commission.
  • At that stage an afternoon newspaper sold for 12 cents, and I was making about 1.5c per paper sold as my commission. (and now you see why the 1c per unsold paper was a massive penalty…)  
  • So , for every 100 news papers sold,  I’d earn about $1.50 in commissions.
  • Leaving the shop on my round, I’d be carrying nearly 350 newspapers plus magazines in two barrows – ever seen what that looks like when you’re a 13 year old kid? its heavy!

Now the run that I had, ended at the 3M building- a landmark building on Sydney’s north shore in the 60’s & 70’s. On the way there it visited about 20 other smaller office blocks; each of which was chock-a-block full of secretaries who would buy the afternoon paper for their boss and on Thursdays, the latest edition of Womens’ Weekly, and/or Womens’ Day magazine. Now while a newspaper would sell for $0.12, those magazines sold for about $0.85. So my 12.5% would earn me about 10c in commission on the magazine. A combined sale of a newspaper AND a magazine was $0.97. As it was her boss’ money, a $1.00 sale could earn me 0.$15 including a 3c tip if I smiled nicely and fumbled the change…. Next lessons: Understand sales forecasts – big news days would drive sales of the core-product, but always always, look for the upsell. Understand your product mix, and carry the right inventory at the point of sale. Smile while you sell.

3M building – Pymble NSW.

As I mentioned the run finished at the 3M building. Old man Peden had organised it with the Building Doorman that the paperboy was allowed to setup a display stand inside the building lobby, out of the weather; so long as it wasn’t there before 4:55pm, and had to be gone again by 5:30pm. That meant I had to finish the first stage of the run by 4:40pm latest, then drag my barrows with remaining stocks of magazines and papers back up a steep hill to 3M to setup in the lobby at 4:55. Setup meant papers and mags laid out in neat piles, confectionary items stacked at the end where they’d pay me, change trays ready and paper notes out of sight in a pouch.

At 5pm, the lift doors would open and for the next 20 minutes there was a steady stream of people leaving the building heading home. There were two lifts in the 4 storey building, so every 60 seconds or so, the lifts would open and belch out another dozen or so potential customers.  Some would head straight out the door, but many wanted the crossword for the bus trip… They were rushing to meet bus schedules and there was only one of me to serve, so I learnt to get good at mental arithmetic, make change and serve as many as I could in 60 second intervals for about 25 minutes. In between cycles, I tidied the piles of papers and mags, restocked confectionary etc so the store always looked tidy. By 5:25 it was over and done with; so there was no time to dither. An indecisive buyer could cost me sales and I wasn’t that good at math, so I always targeted the ones who had their selections in their hands and their purses and wallets open.

Lessons:

  • Be punctual and look for the time patterns & rhythms. I had to be right on time or the doorman wouldn’t let me setup indoors, so completing the first stage of the run, on time was critical. My sales period was just 25 minutes or so and the cycle was driven by 2 timed events 100% outside my control. (The lift doors and the bus schedules) I was selling a commodity product – all newspapers are the same and the buyer doesn’t care where they get it from, So, if its convenient and easy to buy – they’ll buy from you. Understand the rhythms and use them to your advantage.
  • Don’t waste sales time on ditherers. When margins are thin, you don’t have the luxury of investing a lot of time in the selling process. If they didn’t know what they want, spend time with a customer who did. The others would eventually work it out for themselves.
  • Position your products to encourage upsell. I used to put the headline displays right outside the lift to get their attention and lead them to the newspapers. The papers were in stacks, always in the same order and place. Magazines were next in line – and confectionary at the point of sale to get the round up to the nearest dollar. It encouraged easy maths, faster transactions and easier tips.
  • Speaking of tips… when they were really in a hurry (bus schedules) and where the sale was low value, (say, just one paper) I learned to fumble change! A 12c paper was often paid for with a 20c coin, requiring a 5c plus a 2c and a 1c coin for change. If they were in a hurry, I could sometimes make an 8c tip, which was 5 and a bit times the commission rate on selling 1 paper!

Bonus lesson: Understand your customer’s wants & needs, and they’ll be customers forever. Now Old man Peden took a liking to me because I made good sales, I showed up and always took more work when it was offered. Over time I gained a little ‘seniority’ and he allowed me some liberties that weren’t available to the other paperboys. 

On the 3M run, I developed a few “special” customers. Customers who wanted something extra. They’d have special interests- boating, cars etc and I’d make sure I had the latest editions of the magazines they wanted. One bloke in particular, a quite senior manager at 3M was fan of a particular style of a magazine (if you know what I mean…) We’re not just talking Playboy or Penthouse, he wanted the ones that came in sealed plastic bags and had names like ‘Hustler’ and ‘Ribald’….  Now normally, no 13-year-old kid would be allowed anywhere near those kinds of mags, much less sell them, and I’m sure if my mum found out, there’d have been hell to pay….but as I’d uncovered customer demand, and old man Peden was pragmatic. He didn’t care – it was in a sealed bag and a sale was a sale… so I was allowed to slip one of these inside a marked Daily Mirror once a month, and put it aside for him. On release date he’d just turn up, hand over a $10 note for a $6 sale and I’d hand him the specially marked newspaper with its special insert and he’d walk away, No change required. It saved him the embarrassment of walking into a store to buy it, none of the other 3M people knew about it and I earned almost as much on that one sale as I’d make in the whole afternoon of selling. Win win win…. The lesson : Learn what your customers want, make it easy for them to have it, and the sale will take care of itself..

I did that run 3 days a week , and averaged about $15-$20 a week income which was a small fortune for a 13-year-old in 1975. I learned to sell, to be predictable and reliable – a virtue in a commodity market, and I learnt the value of selling products over services. I sometimes mowed lawns on the weekend, but selling papers was much more lucrative. It made enough for me to be able to purchase the coveted Raleigh 10-Speed within about 10 months… and I purchased it outright without calling on my Dad’s match offer, and felt better for it. You can bet I looked after that bike… The final lesson: Set achievable goals. There’s no better feeling than achieving a goal under your own efforts.

Besides the 3M run. I had other runs that I would do if I had other free days after school . One involved running between cars at one of Sydney’s busiest intersections and the sales rhythm was set by the changing of the lights..  It was fast, frenetic and I took my life in my hands every time I stepped off the traffic island…but it was even more lucrative than the 3M run was… There’s a whole bunch of other lessons from that one that  I could expand on, but that’s for another time….


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