Buying a bookstore- just curious

Fenika · Dec 2, 2011

I went to a bookstore in the town I grew up in tonight. They are having a going out of business sale, and I wanted to see if there were any good deals. (Aside: Chaos Titan's third book is out already. Who knew. Anyone near our home town can go grab a copy

)

Anywho, the business was for sale even though they are working on liquidating the inventory (Still at 25% off right now). I got curious and saw the ad. $60k, which didn't seem a bad price. I didn't catch the square footage- but it's ample. Plenty of room to redesign- put in some couches, maybe a coffee area

(Star-ucks is RIGHT next door though). Host some write ins or book clubs... Yeah, I'm dreaming

So anyways, I said to the lady at the register "Not a bad price, but book stores are such a hard sell right now." She claimed that the store was making a profit but the owner was just in PA and <something, something> (Here I quickly and un-meaningly zoned out as all my little daydreams danced around in my head. I snapped back to reality just as I realized I totally missed whatever she said and decided to smile and nod.)

It's not like I have the money, though it would be fun to ask a friend's father who owns a lot of businesses to humor me and chat with him about owning a retail store. I know any business is a ton of work and I have no business training, but, still curious- Anyone know what it's like?

And why did Border's go out of business officially? Did they say? Just decrease sales?

I would so love a career change right now. *sigh*

LilGreenBookworm · Dec 2, 2011

I don't know if Borders ever said officially why they went out, but I can pass along what I was told by a manager who had been with the company for like 15 years or something. What I was told is that Borders was trying to buy some new stores and renovate existing ones and once they blew an impressive sum of money, the recession hit. They took a huge loss and didn't have the money to finish the projects. They struggled for years before finally going under, and even though I knew it was coming, it still broke my heart.

I was that kid who skipped eating lunch to spend my money at the bookstore, and Waldenbooks was my haven. Every weekend I went in, and the staff all knew me well enough to know exactly what to recommend. I was extremely upset when their Preferred Reader program changed, and even more so when Waldenbooks closed down. I've been to several B&Ns across the country and never had a good experience (probably just bad luck, I know). I think I'll just stick to garage sales and flea markets for awhile...

alleycat · Dec 2, 2011

$60k seems high to me for a bookstore these days, unless the business owns the building they're in, or they are in a particularly good location (having Starbucks next door would help, but then there's a Starbucks and Walgreen's on every corner).

I would talk to someone not connected to the store who has run a bookstore (not just worked at one). I used to have a friend who owned one; she couldn't make a go of it even though she was in a busy grocery store shopping center--and this was years ago when brick and mortar bookstores were more viable.

benbradley · Dec 2, 2011

I "almost" know something about this business. If you're in any way more serious than "just curious," get on this list and ask - a bunch of these people operate/run/own or have operated retail used bookstores:
http://www.bibliophilegroup.com/biblio_list.html

Jamesaritchie · Dec 3, 2011

A friend of mine bought the entire contents of a used bookstore to start his own store, but that's as much as I know about it. He found his own building at a much cheaper price, one with two big rooms in front, and large inventory space in back, and opened a new books store on one side, and a used books store on the other.

Too soon to tell how it will work out, but right now he's pleased, and he intends to set up Internet sales soon.

His outlay was considerably more than sixty thousand, though. But how much money always depends on on inventory, location, and sales record. You always, always, always need to look at the competition in your area, AND at the accounting books before buying a business of any type.

Telling you it was making a profit is one thing, but you need to see the actual numbers.

ohthatmomagain · Dec 3, 2011

I think you of course need to get all of the facts... but sometimes you just need to chase your dreams. Talk to your friend's father about possible backing and if he is on board, go for it... just my 2 cents.

MaryMumsy · Dec 3, 2011

Jamesaritchie said:
You always, always, always need to look at the competition in your area, AND at the accounting books before buying a business of any type.

Telling you it was making a profit is one thing, but you need to see the actual numbers.

As a CPA, I wouldn't trust just 'the books'. I would want to see the income tax returns in addition to the books.

MM

Fenika · Dec 3, 2011

Thanks for the info folks. I'm getting a little obsessed daydreaming about this

I would be really in over my head if I jumped on this right now.

I don't have anything to compare to for the price, but it's in a prime location- on a busy highway (a highway with traffic lights every half mile or so) in a major tourist area that's now busy year round. TONS of commercial shops around- clothes, home goods, everything.

Maybe if I study business and save up, I can open a bookshop in two or three years. Perhaps this same location will be still a bookstore and I can make an offer on it.

Book competition is low- a few small names closed down and there's only one big name in the area (a non-chain, with lots of toys and random things for the tourists).

Meanwhile, I can daydream about a shelf of local books, some pet books on a side display...

I so wish this would have been a great time for me to get started. Then I could look at the books and get all the info and decide...

Gillhoughly · Dec 3, 2011

I could see talking to the Starbuck franchise owner about knocking through a wall so patrons of both businesses have flow through. Book readers will want coffee, coffee drinkers will want books.

But don't go into a business until you know how to run one. There's a lot more work involved than just helping others find the perfect read.

You have to keep track of thousands of items in the inventory, sell with a small profit margin, lose money when an author's book signing doesn't go well, deal with shoplifters, patrons with out of control kids, cleaning the washroom, insurance, leaky roofs, vacuuming the floor, dusting the stock, tax forms, employees not showing up, dealing with sales people, non-deliveries, damaged stock, getting up day after day after day to do the same thing again and again. If it's busy enough to stay in business, you won't get much writing done.

I'd rather shop in a bookstore than run it.

gothicangel · Dec 3, 2011

Borders' problem was that it didn't know which market it was catering to. Book buyers? DVD's? CD's? Games? They were trying to out Amazon, Amazon, and unsurprisingly they failed.

When they say 'business' for sale, what does that mean? Are they just selling up, or is it in the hands of the administrators? Does it have debts?

I have the same fantasy. But what I would do [like a second-hand store near me] is have a small seating area, a coffee machine and a roaring fire for the winter months. They key to bookselling of course is customer service.

LLauren · Dec 3, 2011

If you are even slightly serious about this, you need to investigate it with the hardest eyes you can muster. I don't know where you are, but there are regional bookseller associations. (SIBA or the Southern Independent Booksellers Association covers much of the southern part of the US.) Do you subscribe to the e-newsletter, Shelf Awareness? It's primarily dedicated to independent booksellers, but has good general information. Do you know if you have a SCORE (Service Corps of Retired Executives, part of the SBA) in your town? If so, they are superb advisors, and it's all free.

My managing editor was the manager of an independent bookstore for more than twenty years. If you want, I can put you in touch with her. Look at the website in my signature. Go there. She has a contact form link in the bio at the end of her column, A Reading Life.

Good luck!

Fenika · Dec 3, 2011

I wish I could be serious about it, but I'd be so in over my head unless I found great business partners who were willing to do lots of work up front and then less once I got settled in. Besides, Gillhoughly did a great job scaring me off

(Except the idea about knocking out a wall between the shops. Genius.)

But again, maybe something in a few years. I'll look into those resources.

CheshireCat · Dec 3, 2011

Just guess, but I imagine the price you were quoted for "the store" includes only the stock and name. No way a building in a good location would go so cheaply. They probably rent or lease.

Personally, I wouldn't invest a dime in a used bookstore, since I believe the eReaders are going to eventually make the sale of used books return to what it once was: selling rare and valuable copies, mostly of hardcovers.

Ebooks are cheap, eReaders are getting cheaper, and most publishing people I know believe ebooks will take the place of mass market books AND used books. (Yay!)

Today's bookstores, if they want to be successful, need to be set up to sell new books (hardcovers and trade paperbacks, especially), AND have the capability of selling ebooks to customers. Plus having an alternate revenue stream such as gifts in the store.

The profit margin on books is amazingly thin, always was, but these days it's razor-thin. If you want to succeed as a "bookstore," you have to offer other things as well.

And educate people so that they know they can order books online -- ebooks or paper -- through your store rather than just Amazon or B&N.

Even with all that, I'd never encourage anyone to get into the bookselling business without a lot of education and enough capital to carry them through at least the first two years.

DreamWeaver · Dec 3, 2011

I am absolutely convinced, as a former employee, that Borders committed suicide by total financial mismanagement. When our small mall bookstore converted from the Waldenbooks computer system to the Borders computer system, every accounting crosscheck and doublecheck procedure we had went by the wayside. Borders were totally irresponsible financially.

You know that old adage, "Watch the pennies and the pounds [read: dollars] will take care of themselves"? Borders didn't even watch the pounds, much less the pennies.

Putting grocery executives in charge didn't help. There is a huge difference between a rotting banana that must be written off and a book which can be returned for credit, and therefore a huge difference in how one manages inventory. [/gnashing of teeth]

Our little mall store was still making a tidy profit the day Borders pulled the plug. It makes me want to cry.

blacbird · Dec 3, 2011

Even Starbuck's has recently downsized, closing many of their vastly over-expanded locations.

In Machiavellian analysis, I'd suggest that buying this dinosaur is a bad idea.

caw

jennontheisland · Dec 3, 2011

blacbird said:
In Machiavellian analysis, I'd suggest that buying this dinosaur is a bad idea.

I agree.

Bookstores, particularly ones that sell used books, are not financially viable. When I was becoming self-employed with the assistance of an EI program (canadian) one of the people who provided us a workshop on inventory management said that the small business most likely to go hugely into debt before failing (and most common to fail) was bookstores.

For 60K I'd want to see a lot of financial info on the business, and I'd want a good small business accountant to have a look at it. And even if it looked decent, and if I had money to burn on a just-for-fun company I'd still never be willing to pay them what they're asking. Not even close.

Fenika · Dec 3, 2011

Just fyi, it's not a used book store. I didnt even see a used section.

Just trying to keep my daydream from the used book perils

But yeah, more doses of reality don't hurt.

alleycat · Dec 3, 2011

I didn't think you were completely serious about this. It's a little like someone saying they'd love to have a quaint cafe or a coffee shop or a florist shop. As I'm sure you're aware, things often look one way from the outside than from the inside. Running a florist shop isn't just about making flower arrangements, it's about running a business. Or, as Bruce Williams said about his florist business (paraphrased), "My best customer was the big yawning dumpster in the back of the store."

ChaosTitan · Dec 4, 2011

I nearly cried when I heard these stores were going out of business. Like Fenika, it's in my hometown, and eons ago I went to church with the owners. I can believe that the store makes money, because other than one other private bookstore near the boardwalk, there isn't another new books store for miles. The only B&N is 40 miles away, and the closest Borders was about 100 miles away. They have another location in a town about 30 miles north, and they used to be the only bookstore in that county.

Delaware's book buying options are seriously limited.

I hope they find a buyer, but I'm not holding my breath.

Libbie · Dec 4, 2011

alleycat said:
I would talk to someone not connected to the store who has run a bookstore (not just worked at one). I used to have a friend who owned one; she couldn't make a go of it even though she was in a busy grocery store shopping center--and this was years ago when brick and mortar bookstores were more viable.

A good friend of mine has been managing a chain book store for a few years. He is seriously considering starting his own book store now that he has a good handle on how to run a tight ship. It's definitely not the kind of thing I'd recommend jumping into unless you've got some retail management experience, the more the better -- or unless you can find a willing partner who has that experience and can train you.

Retail management is iffy during the best of times -- many stores operate in the red all year long and only make up their losses during the Holidays (which is why it's called Black Friday -- you go from being "in the red" to "in the black"). Brick-and-mortar book shops are having an especially hard time while the industry adjusts to all the online sales.

But I don't think independent book stores will go anywhere as a whole. The models may change, though, and for that reason it could be a rocky time to look at getting into the business, when it's in such flux -- particularly if you don't have any kind of innovation/entrepreneurial experience to help see you through the transition period.

One business model I think will stick around with much more surety is the book store that will buy used books and resell them at a discount -- either as the whole business model or in conjunction with selling new stock.

dgiharris · Dec 4, 2011

CheshireCat said:
Today's bookstores, if they want to be successful, need to be set up to sell new books (hardcovers and trade paperbacks, especially), AND have the capability of selling ebooks to customers. Plus having an alternate revenue stream such as gifts in the store.
.

This.

IMO, the key to bookstores is providing an atmosphere where customers stay and pay. Coffee shop/bookstore mergers are profitable. Also with the proliferation of all things computer, going back to a Kinko's model of providing an "office environment" via printing, copying, collating, etc is also a viable revenue stream though there are other associative costs and infrastructure required.

Truthfully though, imo, second hand bookstores are not all that profitable and there are other more profitable businesses i'd rather start up. A second hand bookstore is enough to make a living provided you are the principle worker bee as well as owner. It's by no means a turn key business where you can hire someone to run it for you while also raking in the dough (like running a McDonalds or Subway).

And the romanticism gets old fairly quickly as being a business owner in any venue is a shitload of work.

Mel...

Fenika · Dec 5, 2011

It's tough in Delaware. There was a Walden Express in the Dover Mall, but it was pretty small and died with Borders.

We have plenty of people all too happy to part with their money around here, and they come in droves to do it. Convincing them to spend it on books, or to not spend it online for books, is the trick.

Maybe someone will buy the store though. If it can make money now as a dull, bare store with minimal character (no couches, special signs, or fancy displays), then maybe someone would have good success adding some charm to it.

James D. Macdonald · Dec 5, 2011

There has been an up-tick in the number of independent bookstores lately.

If you have $60K that you won't mind losing, give it a try. (Don't gamble with money you can't afford to lose.)

Phaeal · Dec 5, 2011

The Starbucks next door might be a blessing or a curse. It likely draws people who read, who might stop into your store. However, my idea of the bookstore's future is to become a recreation destination by combining the coffee shop and book vending. Where I live, comfortable and sizeable coffee shops with WiFi are in HUGE demand as alternate study halls, hang-outs and safe meeting spots for cyberdaters, small business people/clients and tutors/students. Since our two Borders closed, forget about getting a weekend seat in any of the remaining coffee venues.

A bookstore/coffee shop without a nearby Starbucks or similar but in a high-"intellectual"-traffic area (near colleges, upper-middle-class neighborhoods, boutiquey shopping areas) would be ideal, I think.

On the other hand, if I had a choice between hanging in a bookstore/coffee shop or Starbucks, I'd go with the bookstore. Unless, of course, its caramel lattes sucked.

Karen Junker · Dec 5, 2011

I have worked in two small bookstores -- under 1000 square feet. Both were used bookstores.

The first one made most of their money by selling series and single title romances -- and had a table where they sold older paperbacks for $1 apiece.

The second one focused mostly on literary fiction, SFF and mysteries, with a smaller romance section.

Both bought books from customers and estates.

I saw how much they made in a day, and I was astounded that they could pay the rent. I think they both subsidized their earnings by selling rare books online.

Let me know if you want more detail about how they charged for books and gave store credit, etc.

Good luck if you decide to do it!

Buying a bookstore- just curious

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