Fair’s Fair “For Book Lovers”

If you are considering opening a store please be aware - this is a difficult business!

I write this not to discourage you - because the book business in North America needs, and can support, thousands of hard working operators. Unfortunately, most people who get into this business never overcome their passion for books to reach the point where serving customers’ needs becomes their primary goal.

#1. Only 10% of the population reads. About 50% of the people in North America are functionally illiterate.

#2. Only 10% of the reading population will ever buy books from a store identified as a used books store. Many of our predecessors have given our business a bad reputation and some of our contemporaries still  sit in their shops reading and smoking and ignoring all the work that is piling up all around them continuing a stereotype that will take many years to overcome.

#3. Our average book sells for under $7.00

#4. Our average customer spends $15 each and every time they make a purchase.

#5. We estimate the average customer returns 4 times a year … but a recent spot check kicks those numbers all out of whack (on the surface). In our recent check we had 8300 customers for the year – 5900 of them came in only once while only 109 of them came in 12 times or more during the year. The customers who either refused to sign up on our database or who were pressed for time constituted about 1/3 of our gross sales.  We counted those customers as one customer so that means only 2400 of our customers came in more than once.

#6. Therefore if the population of your buying area is 50,000 you should estimate you will have 500 customers spending about $60 each per year for a gross sales figure of $30,000. If you are in an area which draws tourists that can make a positive difference. I know of one relatively small store in a tourist area with annual sales in excess of $300,000. The fact that the operator is a workaholic probably plays a big part in his success.

#7. In order to sell $30,000 in books the sales value of your inventory should be $150,000 (about 21,000 books).

#8. The 80/20 rule (Pareto’s Law) applies to almost everything – if you have $100,000 in inventory only about $20,000 will be saleable. If you don’t understand the implication that that means you must continually buy books and upgrade your inventory – then there is little anyone can do or say to help you.

#9.  A small retail location is unlikely to ever generate a livable income for anyone – to sell $100,000 in books you need $500,000 in inventory or about 72,000 books. It is true they do not have to be all on display but they do have to be available to replenish your inventory every day

#10. Most of your present inventory is never going to sell – getting your book cases full of books is the easiest part – culling inventory takes experience, judgment and expertise.

#11. The first time you find any reason not to look through another batch of books is the day you should start considering getting out of the book business.

All these points consider the fact you will probably choose a store with low rent for your first location. To be of any real service to your customers you should continue buying as many books as you can and then move to a better location and start over. A store in a very good location will cost you 2-3 times as much rent but its gross sales should be 3-4 times higher.

I don’t really understand how someone can fail in this business but, obviously, it is a lot more difficult than it appears on the surface.