Independent bookstores rising from the ashes

Great article! Some of those stores sound like a lot of fun. Wish they were in my neighborhood!

Just yesterday was a newspaper article about the 20th year celebration for Broadway Books in Portland, Oregon.

http://www.oregonlive.com/news/oregonian/steve_duin/index.ssf/2011/08/broadway_books_and_its_lessons.html

Several months ago they hosted AW writer Jamie Ford and it was packed for his reading (which was terrific, by the way). It's a small place, granted, but focused on its customers.

It's about 12 miles away from me, so not my neighborhood, but still promising.

Sadly my local used book store closed down, in a local newspaper the owner had no problem saying the decline in booksales was to due the e-book.
However, I'm not sure that's entirely true, if you create an atmosphere that's inviting, you have what readers want, at a reasonable price then you are doing your job.
The bookstore in my neighborhood, was not inviting and kinda icky, I checked in once a week and was never able to buy a book, they just never had what I wanted (YA) nor did he ever seem to want to buy YA books (I tried to sell him some)
Right now, YA is a huge market, and if you are still set on carrying (no joke) six copies of the Bourne Identity, 20 copies of varying Tom Clancy titles, but not a single decent YA... I think he might have been the problem behind his demise. Not knowing the market and not keeping up with what sells.

Right as our chain bookstores were closing in South London, we had a new independent (Farthing Books) open in the area, who seem to be doing quite well.

I think one reason I prefer independants is because they usually offer a much wider range, rather than the fairly standard set of bestsellers that some of the chains were offering.

Hopefully this will be a growing trend, sort of like micro-brewing of beer has been in the U.S. The still-enormous problem independent bookstores face, however, is the book-distribution system, which has evolved to favor the BIG CHAIN STORES, much like the distribution system for other commodities has evolved to favor WalMart, Target, Lowe's, HomeDepot, OfficeMax, etc.

caw

When chain bookstores first started, a few experts said all of them would flourish, and then be out of business by the year 2000, and independents would then take over again.

The timeline was wrong, but it's starting to look like those experts were right.

I have a used bookstore in Brooklyn, Babbo's Books. The last three months have been surprisingly good and this despite noticeable differences in what people are buying since e-books (definitely fewer new hardcovers). I'd assumed it was just an indication of an uptick in the economy. But this article renews my faith that bookstores will be around for a good, long time.

It's true that distributors and publishers alike favor the big stores, sometimes to ridiculous degrees. I couldn't believe the amount of money Borders owed to publishers, something like 45 million to Penguin alone. That's disgraceful.

re: independant stores

Hello folks,

The problems of running a business are universal. Between fixed costs, rent, salary, utilities you have the cost of goods sold, the actual cost of the product when all factors including mark up, shrinkage (theft) and other losses are included. What remains is usually less than 5% of sales. Any disruption of the cash flow can be disasterous.

Controlling fixed expenses means you don't rent the best space. That's why most independent bookstores are in older or less reputable neighborhoods, usually in smaller spaces than needed. The cost of labor is an essential problem. Low wages mean you can't get the people you would like but rather youngsters or students. Sometimes you get very lucky and get someone who is semiretired. Because of youth and inexperience your shrinkage rate usually skyrockets, either from embezzlement or lack of skill in dealing with shoplifters.

Cost of goods sold can be the killer. When I started my business in 1971 the cost of my entire stock was about $1500. When I finally closed that one store in 2001 the inventory was nearly $200,000. I had more in comic books than the entire beginning inventory. Not only that but I was leveraged to a dangerous level. This is not uncommon in this industry. That's why I am not surprised when one of the paricipants indicated a laarge chain store owed a huge amount of money to one publisher.

How do such things happen? The product is overpriced and the publishers know it. To get it into the stores they must offer incentives, one of which is easy credit terms. When the independants began to fold in Atlanta I was horrified to learn that some of the most respectable owed huge amounts to the distributors.

What do E books have to do with all of this? They cost considerably less than the brick and motar stores, having no warehousing for their product or distributon costs. They don't have the exposure either. That's quite a trade off.

Things have changed. I don't know what effect the collapse of the real estate bubble had on square footage but I would think it brought costs down considerably. A friend of mine, specializing in remainder and/or discount sales, negotiated with landlords who had long term abandoned sites for rent. He would go into the sites without a long term lease (or even as a tenate at will) and set up a discount barn, advertising it as a special sale for a while in the media. As long as the sales were good he maintained the storefront. When sales deflined he folded up his tent and moved on. I couldn't believe he did business this way. It wasn't like my concept of growing a business at all. He didn't bother to price the merchandise or even categorize it. He simply dumped it on tables and placed a cashier at the door. Since he was selling his product by price alone he wasn't concerned with repeat sales or the loyalties of his customers. The price did that. He bought his inventory by the truckload for pennies on the dollar. If the product didn't sell at the price he set it he lowered the price until it would sell. When it reached it's point of sale it always sold and he knew it.

I'm seeing some of this kind of marketting in the large chain stores recently. I was at a Books A Million the other day and noticed a large amount of floor space devoted to discounted ex library books. When I was active in the business ex library books were disdained as the worse source of second hand books. Evidently the painful ecomomy has changed that notion.

I don't know what the ultimate solution is to the profit/ratio problem in the book industry is. I can only suspect the quality and variety of selection is not a great as it could, or should, be.

Glen T. Brock

Overpriced books have exactly zero to do with anything. Books are still selling in huge, huge numbers, and as long as a product is selling, you can't blame the price of that product for failure.

And, no, it is not incentives that get books into stores. I don't think you understand the book selling business at all. Chain bookstores have nearly always dictated everything to publishers, not the other way around, and chain bookstores Must Have Books To sell. Period.

They take as many as they can possible display, and always want more. They want so many that few have the chance to remain in the store for very long.

Publishers very, very seldom have to offer any incentive to make bookstores take books. Bookstores either take books, or they don't have a product to sell. Publishers offer incentives for special display space, usually for books written by bestselling writers, but little else.

And your reason is dead wrong behind even this. Chain bookstores have had publishers by the short hairs since the beginning. It's simple. Publishers need bookstores more than any bookstore needs a single publishers. Chain bookstores make a LOT of money, and a heck of a lot of profit off books, but they can also more or less blackmail any given publisher. The bookstore can always get books, but a publisher can't get a bookstore unless the bookstore says they can come in.

But it's just wrong to say a product us overpriced when so many sell. Demand always dictates price, and the reading public is still buying books in incredible numbers. If the reading public stops buying them, prices will drop. Until then, prices will, and should, remain high. No business is going to sell something for a dollar when people are willing to pay ten dollars. Right now, immense numbers of people are paying the current price for books, and continue doing so year after year.

So they are not overpriced.

Chain bookstores, some of them, have failed purely and simply because of over extension in bad times, too much competition willing to undercut them, online bookstores such as Amazon, and some incredibly stupid business decisions, which is why Borders died. Amazon has given many bookstores fits, but Amazon is a brick and mortar bookstore, it's just one that sells online, rather than having people walk in.

E-books still make up a small percentage of sales, and even most e-books are sold through mainstream publishers, and are written by bestselling writers.

Warehousing is a publisher problem, not a bookstore problem.
The giant chain concept was never a good business model for more than one or two chains. It isn't the best, even for one or two, but the current price of books has nothing at all to do with it. To make it a good model, the price of books would have to be considerably higher than they are now.

As for help, there is no better help in a bookstore than youngsters and students. Even if you could pay higher wages, these are still people you would hire. Selling books is not rocket science, so hiring rockets scientists, along with rocket scientist wages, to do the job would be silly.

McDonald's makes billions in profits, but they hire youngsters and students, at low wage, because these are the people most qualified to do the job of selling burgers. Do not expect them to going looking for better help at higher wages anytime soon, no matter how much profit they make.

Now, it's true that independent bookstores are seldom located in high rent areas, but this is simply smart business, something most of the chain bookstores seem to have no clue about.

And most bookstores owners I've known, especially the successful ones, do not rent, they own. Renting always puts you at risk, so the choice of renting in a high rent district, or owning in a cheaper district, is a no-brainer.

Location & Layout in Bookstores -- Overlooked a lot?

Overview
Fixed and variable costs aside, it seems that one qualitative thing (with quantitative measurements) much overlooked or mentioned in passing in such discussions is location.

Examining the success of say, McDonald's, from a purely property perspective, illustrates the importance of location: High foot traffic areas that include the target market in high, sustainable numbers. But McD's is an easy example.

If you ignore Borders' unwise business decisions, they also had location down. As did / does B&N.

The Local Competition
Nearer to my area is a local chain store called "Page One"; it has location down, too. In competition are Dymocks, Swindon Book, Commercial Press, and Trinity / United Press (translation of name). Of the last four mentioned here, only Commercial Press is doing as well, if not better than Page One, again, due much to location.

Briefly, Dymocks is out of the way, catering to tourists, but not getting many as far as I've been able to observe. Swindon Book is hard to find, and seems to be missing an “s” on the end of “Book”. You need to know the area to find the street itself. And Trinity / United Press keeps to certain districts, or maybe just the one.

Location & the Target Market
However, except Swindon Book, the rest know their target markets. Page One and Commercial Press stand out in this regard:

Page One focuses on expatriate customers and consumers as well as the affluent locals, offering an admirable range of English-language novel and manga for the English-reading audience while catering to its Chinese audience, too. So, this chain's stores are located where its primary target market likes to hang out, e.g., high-end shopping centres, so its rent is high. And since the store is usually in a large shopping centre, people normally browse, buy and go -- other things to see and do.

Commercial Press concentrates on the Chinese-reading public, and includes school books as well as (cheap-ish) stationery. Its stores can be found at street level in busy shopping districts that cater to the mid-income bracket crowd. It has no coffee shops or rest area of its own. The surrounding cafes and tea shops, etc., provide that.

Interior Design
A second thing I don't think gets emphasised enough is interior design.

Borders got it right with the inviting, comfortable atmosphere. B&N, to me, felt more alien. Layout makes a huge difference.

Interior Design: Page One
Bringing it back to the local chain store, Page One, has an inviting layout: spacious entrance with books on tables, then shelves and an elevated area for more books. Sections are divided clearly and decor is warm and comfortable. You're encouraged to browse just by the atmosphere and the soft but bright lighting (staff are also professional and helpful). The store is quiet and everyone is respectful of each other: customers / consumers recognise that you're there to look for a book or several, same as them. And the store usually has an area specifically devoted to YA and kids, where everyone expects kids to linger and do nothing but read / browse. This area is not at noisy as you might expect, either. Reading kids are quiet and more silent than their adult counterparts.

However, one noisy-ish feature that is popular is its "separate" coffee shop. (Even there, however, the conversations are low in volume and respectful of other patrons' right to a quiet environ.) Located within the store, it insists you check your unpaid books at the entrance. And there are no power sockets as far as I recall. This doesn't encourage customers to linger long, whether or not they have a laptop, iPad1/2 or Galaxy Tab. But even if power sockets were not a consideration, patrons of the coffee shop never linger over-long (e.g., about an hour or so only), as many only go there for a coffee and a chat with friends.

Interior Design: Commercial Press
By comparison, Commercial Press is brightly-lit, noisy, crowded and no one really lingers long in any area. It's a chain store that encourages you to find the book(s) and item(s) you want, purchase and leave, ASAP. Browsing seems to be discouraged thanks to the layout of the shelves: compact, narrow spaces between them. Appears they want to squeeze you in, then eject you – if you can't stand such enclosed spaces. However, it works for their target: in-and-out at top speed. (The primary culture of this city, btw.)

Independents: Location & Interior Design
As far as the independent bookstores go in this city, there are a a few. But they are located in out of the way spots, usually in an upstairs shop that is little bigger in space than a small flat / apartment (about 400sq ft). Signs are posted on the outside of the building, but you need to be observant to catch the actual location (normally says something similar to, “2/F., xxxx building,” (good luck looking for the building entrance or the stairs!)). Cramped spacing makes some of these places uncomfortable to be in. But the smell of books and the silence found in these places more than make up for the claustrophobic feeling.

Independents: Marketing & Customers
These shops are frequented through word of mouth. Loyal customers dominate and the shops contain selections targeted at a sustainable market niche, for example, business only, Chinese culture only, translated books only, etc. The owners (and any extra staff) know the books in the store, know where to look, and can recommend similar books, without looking at a database.

However, the independent stores do little marketing, except through referral. But rent is much lower, and the building in which they're located is usually in a busy shopping district, so they do get foot traffic of a sort.

A profit is made, but clearly not as much as the chains. However, those that have survived, have been in business for years. So they all got the combination right (for them).

Snitchcat said:

Interior Design
A second thing I don't think gets emphasised enough is interior design.

Borders got it right with the inviting, comfortable atmosphere. B&N, to me, felt more alien. Layout makes a huge difference.

Click to expand...

I noticed that as well. I always felt at home in Borders, whenever I visited it. A few weeks ago, after learning that Borders was going out of business, I visited the nearest Barnes & Noble, and felt less at home there. At the time, I thought that it might have been because it was smaller (Borders had two storeys, Barnes & Noble one), which thus meant less books on the shelves. But now I wonder if the layout made the difference as well.

Layout makes a lot of difference due to the ambience of the place.

Compare any two stores in the same industry and targeting the same market: one will be more inviting than the other, almost completely due to merchandise layout, lighting and decor.

McDonald's vs. KFC. Both are fast food. Both target the same markets. Yet, which would you rather walk into? Personally, I prefer McDonald's -- it's alive in a way that KFC could never be.

Shu Uemura vs. Joyce Beauty. Up-market cosmetics and beauty boutiques. I like them both, but walk into Joyce Beauty more thanks to its layout: welcoming, comfortable and cosy. I also don't feel self-conscious which is what happens with Shu Uemura due to its overly "sterile" decor -- white, pristine. I understand the branding behind it, but it doesn't appeal to me.

Joy and Peace vs Staccato (mid- to top-end shoe stores). Love both stores. Both say, "welcome!". The only difference between the two: which style of shoes I liked better!

Back to the book stores: I walked into a Borders a long time ago, and then a B&N.

Both had "open" entrance areas. But whereas Borders offered me a sense of cosiness and invitation, as well as the freedom to browse and stated, "Welcome, friend", B&N's atmosphere said, "You're a stranger here".

Looking at photos of these stores also helps. Great way to compare without having to go wandering for hours.