If you are thinking about opening a Brick and Mortar New & Used Bookstore there are some things you need to consider before taking the plunge.
1) Cost to Open
Depending on where you live and the size store than you want this can vary from $5,000 to $50,000. You should budget for about $25,000 to $30,000
$2,000 – $3,000 for shelving
$2,000 – $5,000 to acquire stock
$5,000- $8,000 for inventory and POS systems
$3,000 – $5,000 for 1st month’s rent, last months rent and security deposit for your space
$2,000 for decorating and or remodeling
$2,000 for Signage
$500 for Checkout Counter
$500 – $1,000 for book display units
$500.00 for Utilities (Phone, Electric, Water)
2) Starting Inventory
There are many ways to pick up starting inventory inexpensively. One way is to yard sale for a period of 6 to 8 months prior to starting your store. Do not pay more than $.35 to $.50 for books unless you are positive of their immediate resale value. You can also attend local and regional Friends of the Library Book sales (a list can be found at booksalefinder.com.) This is your best bet as you can attend four or five sales within a 1 to 2 month period and acquire enough books to start the store. When picking out books make sure you have a diverse amount.
For a 1200 Sq. Foot store a general rule is:
250 – 700 Westerns and/or Historical Fiction
800 – 1200 Men’s Adventure
2000 – 4000 Romance (Avoid older series like Harlequin and Silhouette as usually they do not retain their value)
2000 – 3000 Mystery
500 – 700 Horror
1000 – 2000 Sci-Fi/Fantasy (While you will probably not have a lot of Sci/Fi readers they will come back often and spend a lot of money if you have a large and diverse section)
500 – 3000 Children’s/YA (Depends on your cities demographics)
300 – 600 Self-Help
200 – 300 Health
200 – 400 Cookbooks
100 – 300 True Crime
200 – 400 Craft Books
200 – 1000 Religion (Depends on your cities demographics)
50 – 100 Art Books
50 – 100 Pet Books
50 – 100 History
50 – 100 True War
50 – 100 Sports
These numbers will get you started in a general used bookstore. They will need to be adjusted once you open and you see exactly what sells best in your area.
3) Location
So many times I see fledgling bookstores in horrible locations. It takes 3 years for a bookstore to become fully established in the community. If you pick a location with inexpensive rent then your walk-in ratio amounts will reflect that. If you pick a location that is in an out of the way spot then the money you will have saved by not being in a higher profile location will be spent on endless amounts of advertising just to get people to learn about your store. If the location is inconvenient for consumers then you are going to be fighting an uphill battle from day one, a battle you might never be able to win.
My store is in a busy shopping center with an upscale grocery store chain and other small businesses that cater to the local community. From day one the store made triple net and while I do advertise I don’t spend more than $300.00 a month doing so.
Try to pick a location in an area where people shop. I know this sounds obvious but to some people it isn’t. Talk to other small business owner’s in the area and ask them how their business is doing and about how many customers they have a day. Try and pick a space that is around complimentary businesses.
Most bookstore owners start with at least 1,000 Sq. ft., you need that much space to offer a broad variety of books to your clientele.
Once you have your space picked out try to negotiate with the landlord. See if they would be willing to discount the rent for services. If the space needs some remodeling it may be beneficial to do it yourself and get a reduced rental rate from the landlord. Also, some landlords are willing to offer lower rent if a longer lease term is signed.
If applicable make sure to include an exclusivity clause in your lease baring them from renting to any other bookstore owner or general store than sells books as long as you are a tenant.
4) Inventory Control/POS system
It is not required for you to have more than a basic cash register and a calculator but it is a good idea to start right with an inventory control/POS system.
The two biggest in the industry are Anthology: Http://www.anthology.com and UBIC: Http://www.ubicsystem.com. Another option which is relatively new to the industry is Ka-Zam: Http://www.Ka-Zam.com
Anthology is mainly for New Bookstores so I will not go into detail about their program
Ka-Zam is Web based and charges a 4% monthly fee based on your revenue. The plus about Ka-zam is that you will not have a large initial monetary outlay but that 4% will add up rather quickly and if for some reason your phone service goes down then you will not be able to operate your business. They also integrate with all on line book selling venues (Which I will discuss more in depth later.)
UBIC is a complete inventory management and POS program. The cost with all equipment is around $7,000 and they charge $25.00 for monthly database updates. UBIC was designed and is used by a Brick and Mortar Used Book store owner and as such has many useful features. With the entire package you will be given the UBIC database and all of it’s features, a metal cash drawer, a hand held Bar Code scanner, a receipt printer and a bar code label printer.
Some features of UBIC include:
-Database of over 150,000 books with their bibliographical data and original publisher’s price
-Ability to track books in and out
-Ability to configure credit and track customer’s credit
-Ability to track customer’s reading history and prompts as to whether the customer has already read the book based on trade ins and prior sales
-Ability to configure coupons based on dollar amounts spent
-Ability to build a database of clients including phone number and address for marketing purposes
-Ability to sell new and used books
-Ability to reserve books as well as notification of reserve when a reserved book is scanned into inventory
-Ability to track sales by genre
-Ability to upload database to on line venues
Plus many other features. The downside to UBIC is that it is mainly a fiction database and most non-fiction titles as well as Children’s books will have to be manually entered into the database. It is not a hard process but it is time consuming. Also, it does not have the ability to update online inventory in real time like Ka-Zam but requires an upload to on line selling venues to remove books that have sold in the store.
5) Shelves
I had my shelving custom made by my Fiancee and I was able to save quite a bit of money and have shelves built exactly to my specifications. I called around to different furniture stores and the cost for a 4ft by 8ft bookcase was around $200-$300. That was way out of my price range. I could have bought shelves at Wal-Mart or Staples for about $80.00 but they would be too deep for my needs meaning I would be wasting prime retail space with a half empty shelf and I would have had to dump 1/4 of my inventory.
I have 50 4 X 8 Bookcases which are 8 inches deep. My Fiancee used 16ft Pine boards and luaun for the backs of the shelves. He sanded each shelf and sprayed a light coat of veneer on them. The shelves are also adjustable. The total cost for each shelf was $65.00. To this day people still come in and ask who made the shelves as well as commenting on how nice they look.
6) Signage
Check your lease and see what kind of sign is required. We were required to have a channel letter neon sign. We lucked out and found one on eBay but we were quoted $2,000 for a sign that simply said Book Store
7) Trade Policy
If you are going to operate a Used Book store you are most probably going to have to accept books in trade for credit. This brings new inventory in the store as well as building good will with your customers. You absolutely MUST receive cash at the end of every transaction. Trading bookstores that do 2 for 1 inevitably go out of business. There is no way to pay operating expenses and make a living if you are literally giving books away for free. People can be cheap and if you set your store up as a 2 for 1 store then they will bring you 20 books and take exactly 10 out and spent NO money. This will be your clientele base. Your browsers and cash spenders will not spend enough to make up the difference especially once they find out the trade policy.
The standard trade policy in the industry is 1/2 cash and 1/2 credit. Meaning that if they bring you $20.00 worth of books at Publishers prices you give them 1/4 of that in credit or $5.00, when they purchase $5.00 worth of books from you they give you $2.50 in cash and you take $2.50 off their credit leaving them with a credit balance of $2.50 which is good the next time they come in.
This credit policy works, you will always have a cash flow and it leaves you the ability to be more lenient. Remember I said never pay more than $.35 to $.50 for a book? Here’s why: Let’s say Mary Jane comes in the store and brings you a bag of Nora Roberts books, chances are you already have all of the books in multiples but because of your trade policy you can give her a little bit of credit which makes Mary Jane more likely to shop in your store. She buys 3 books at a $7.99 retail and only pays $6.00 in cash and $6.00 in trade credit. She’s happy because she got a bargain, your happy because she spent money in your store and at the most you paid $1.50 for the books she purchased. It’s a win-win situation and Mary Jane will probably come back because she has some trade credit left.
8) Advertising
The absolute best advertising you will receive is by word of mouth. If you provide a nice warm and clean shopping atmosphere then people will be more likely to not only come back but also tell their friends. Go the extra mile to please your customers and I promise you they will come back often
When advertising think about what has worked on you. Have you ever felt compelled while in your car or at the office to jot down something you heard on the radio? Radio advertising can be extremely expensive and it is difficult to hit your target audience, the same goes for TV advertising.
Advertising in the newspaper can be cost prohibitive depending on its readership and the cost of the ads. Remember to see if an ad campaign is successful you have to do it at least three times. If you advertise in any weekly or monthly circulars make sure you can put a coupon in your ad, that way you have the ability to track just how successful it is or isn’t.
Try forms of advertising that get your name out without costing a lot of money such as Author signings, book clubs, networking with other local business owners, and sponsorship of a community event.
I fell into what has turned out to be great free advertising. A friend of mine is a teacher and I had an influx of children’s books that I just could not use. They were a little too rough (but not ratty) for my shelves or I had too many copies so I donated them to her and her school. She talked to her principle and my store is now mentioned in every school newsletter and I feel good being able to help foster a love for reading in a new generation of children.
When advertising think outside the box!
9) On line Sales
You don’t have to sell on line to have a successful bookstore if you have planned your location well enough but it doesn’t hurt to have another sales outlet on those slow days which are going to happen no matter where you are located.
On line Venues:
Http://www.Amazon.com Pro-merchant subscriptions costs $39.99 a month plus 15% of each sale before shipping
http://www.Half.com No Monthly Subscription costs but a percentage is charged when your book sells)
http://www.Alibris.com Subscription fee is tiered as to how many books you have listed plus 15% of each sale before shipping
http://www.Abe.com Subscription fee is tiered as to how many books you have listed plus 15% of each sale before shipping
eBay stores Store Subscription fee, $.05 listing fee for each book which renews every 30 days plus 8% of each sale
http://www.BN.com As of this writing there is a waiting list for new sellers before approval, once approved no subscription fee but 15% of sales before shipping
http://www.Chrislands.com Will provide a custom built website for your bookstore $199.99 set up fee plus a monthly fee based on amount of books in inventory
http://www.Fillz.com / http://www.Aob.com Websites that will maintain your inventory across multiple sales channels
General Tips:
– Don’t keep more than two copies of a book on the shelf unless it is an author that flies out of the store on a consistent basis. My hottest seller as of this writing is Janet Evanovich so I keep everything I have by her on the shelf but I cap most other authors at 2 copies. Having too many of the same book takes up too much space and doesn’t allow you to have as much selection and it takes away that urgent feeling shoppers get. If they see you have 4 copies of a book they want they might wait to get it thinking that they’ll just come back next week or next month and pick it up. You don’t want that as they’ll either forget or find it at a yard sale or flea market.
– Keep the store bright, organized and clutter free.
– The more trade credit people have the more money they’ll spend in the store
– Make your advertising dollar stretch as far as it can
– Offer something to returning customers such as a rewards program so they will continue to shop with you and not your competitor
– Above all else, do your research, visit operating stores and see how they do things, talk to other bookstore owners and see what works for them.
Have fun with your store!
