Are you in search of a good business opportunity to invest your money? Do you want to learn the intricacies of starting and running a used bookstore business? Then read on as I reveal the exact steps to starting a used bookstore business from scratch successfully.
Before I divulge the step by step approach to starting a used bookstore business; I want to make it clear that the principles of building a business remains the same globally and to succeed in business, you must obey its principles.
And one of such principles of starting a business is carrying out a detailed research on your business idea and drawing up a business plan based of your feasibility study. Once these two keys are in place; you have got a head start. The following articles below will provide with the necessary information needed to conduct a feasibility study and write a business plan.
5 Reasons Why You Must Conduct Feasibility Study before Starting a business
3 Differences between a Feasibility Study and a Business Plan.
How to Carryout Feasibility Study on Any Business Idea
Business Plan Outline: How to Write a Business Plan That Attracts Investors
A Complete Sample Business Plan Format and Outline You Can Use As a Guide
How to Start a Used Bookstore Business from Scratch and Succeed
Why You Should Start a Used Bookstore Business
Operating a used book store is a like owning a recycling center; not too glamorous until you take a look at the owner’s bank account.
This is an ideal “absentee-owner” type of business, or a small investment type business for someone to start part-time while holding down a regular, full time job. The type of person “best-suited” to run a successful used book store, is a man or woman who loves to read, has collected books over the years and enjoys associating with people of similar interests.
Start-up business risks average high, with the average time period needed to become firmly established, about 3 years. After that “becoming established” stage however, you should be able to enjoy ownership of a business without extreme market fluctuations, plus an income close to $50,000 per year or more.
Market and Location Analysis for a Used Bookstore Business
Ideally, a used bookstore business will need a market population of at least 50,000 persons to support it. Try to locate your used bookstore in a high traffic area, as near as possible to a college or university campus. Something to bear in mind is the shopping habits of the average used book buyer: First, he is a browser. He notices your shop, drops in and begins looking around to see what kind of books you have available. If he spots something that really interests him, he’ll probably buy then and there. If not, he’ll be back-dropping in to browse whenever he’s in the area; provided you made him feel comfortable the first time he was in your bookstore.
Shopping Malls are excellent locations for used bookstores. Location near other or “new” bookstores is also very good because if the buyer doesn’t find what he wants in the “other” bookstores, he’ll check your store. Grocery store shopping centers are generally poor locations for bookstores of any kind.
It’s important that there be a lot of casual strollers in your location area, and that you encourage these people to drop in and browse around.
How to Promote your Used Bookstore Business
If you want the entire front of your store to be a show window; take pains to arrange your window display in an uncluttered manner, showing the kinds of books you have. However, a window display is not really necessary; more important is a window for the passersby to see into your bookstore.
At any rate, if you do go with a window display, keep it low; never more than 36 inches high leaving a lot of room for people passing to see in your bookstore and notice the people browsing through your books. I know of one successful owner of a used bookstore who had members of his family, relatives and friends, purposely “browsing” through his bookstore, just to project that kind of image for the store.
How to Brand your Used Bookstore
Once you have your store location selected; paint the entire interior in a dark, warm color, such as mahogany. Install a lighter shade of indoor/outdoor carpet throughout. The lighting should be indirect, and somewhat subdued to give the store a warm feeling.
Locate your checkout counter parallel to one of the side walls. You don’t want it blocking or guarding the easy entry or exit from your bookstore. You want your customers to feel comfortable just visiting your store. In other words, do everything you can to encourage the browser because it’s proven time and time again that the browsers are the book buyers. Allow the people to come and do generally as they please; to pick up thumb through the books that interest them; to read them and “fall in love” with them. These will be your real book buyers.
Your book shelves should run along each side wall and across the back of the store. Don’t build them more than six feet high. Partition these shelves into sections about four feet wide and at the top of each section; place a sign indicating the general subject matter of the books to be found in that section.
Paper the walls of your store, from the top of your book shelves to the ceiling with posters, colorful and descriptive travel posters, broad way show billboards, concert posters and full color dust jackets from books that are perennially popular.
How to Arrange Books in your Bookstore
The next thing is to build or buy half shelves, tables and revolving racks for more books. The half shelves about 4 feet wide by 4 feet high and similar to book cases in your home; should be located at right angles to your wall shelves, and in the rear of your store. The tables should be about 3 feet wide by 4 feet long, and about 30 inches high. These also should be located at right angles to your wall shelves, but closer to the front of your store. A revolving wire rack, to hold currently popular or specially featured books, and located at the front of your bookstore, will be a special extra merchandising effort that’ll really pay off in sales of your books.
In locating your half shelves and tables down the middle of your bookstore, stagger them; one 3 feet from the wall shelves, the next one 6 feet out, then 4 feet and so on. This will allow people to be “seen” in your bookstore; cut down on the appearance of a formal or military layout, and project a more casual atmosphere for browsing and this is precisely what you want. This kind of arrangement will cost you some space, but it will be worth it with increased traffic.
Another merchandising idea that works very well is a couple of revolving wire racks on wheels. These you push outside and position near the entrance to your bookstore. You can feature popular paperbacks, and a few oversize hard cover books with bright, flashy colors in these racks.
How to Run a Used Bookstore Successfully
Your store hours should match those of your neighbors. In fact, you can jump off to a quick start by opening a half hour earlier than your neighbors. Use his opening half hour to take care of paperwork and get yourself organized for the day. When the early shoppers see you’re open early, they’ll begin coming into your bookstore to “browse and kill time” while they wait for the other stores to open.
How to Hire Employees for your Used Bookstore Business
If you cannot be there to “open the store,” then hire part time help. The best arrangement is house wives or college students in 4 hour shifts at the minimum wage. First off, write out a list of duties you want each clerk to perform while he’s on shift. In addition to taking care of sales transactions, you might want him to do some stocking, dusting, cleaning, sorting and pricing.
Regardless, you’ll have fewer problems and enjoy bigger profits if you formally write these shift duties out, post them as job requirements, and explain them when you interview for hired help. Look for, and try to hire only book lovers who are personable, outgoing, and have some sort of business aptitude. You can then train these people in all phases of your operation, with the thought in mind that they will run the store in your absence, and eventually be your store manager. The best way to find such people is by talking with your customers, observing which might be willing to work for you, and which of them might best fulfill your needs.
How to Market your Used Bookstore Business
You’ll need an outside sign for your bookstore; preferably one that hangs right angles to the flow of traffic in front of your store. Many successful used bookstores utilize hand-carved wooden signs, while others display painted signs with calligraphic lettering. By all means, spend the extra hundred dollars or so to have spotlights installed on your bookstore front; focusing on your bookstore signs. Backlit plastic signs just don’t create the comfortable image necessary for the success of a good used bookstore.
How to Advertise your Used Bookstore
Newspaper or broadcast advertising will be much more expensive than it’s worth. Your best bet is to create a comfortable feeling and open invitation for browsers, price your stock fairly, concentrate on personal service; and let word of mouth advertising and time do the rest.
Even so, you should run an ad in the yellow pages and in the college paper, and from time to time, special sales ads in your local shopping papers. Inexpensive flyers inviting people in to exchange books, or to just browse, can be printed at your local quick print shop and handed out or placed under the windshields of cars in the larger shopping center parking lots. Advertising and special sales during holiday periods such as Christmas, Mother’s Day and Father’s Day are generally quite effective in bringing new customers into your store.
More Tips for Successfully Starting a Used Bookstore
How to find used books for your bookstore
Most used book store entrepreneurs use their own book collections as start-up inventory base. In addition, talk to as many neighbors, friends and relatives as possible for the donation of books. Then start making the rounds of all the garage sales and flea markets. You should have at least 10,000 books in stock when you open for business and that’s a lot of books. Search for books to sell; those you can buy for 25 cents or less in all thrift shops, Goodwill stores and Salvation Army outlets. Church bazaars and estate sales also sometimes provide you with almost “complete” libraries.
You might place a small ad in your newspaper announcing that you’re looking for good used books to buy. Generally, you evaluate a book according to the price you think you can get it for in your store. Then you subtract two thirds of that total and offer that as your buying price. Always separate the books you feel certain you can sell from those you aren’t sure about.
It’s going to take awhile for you to become proficient as a book buyer but with practice and some experience, you’ll quickly develop the intuition you need to realize a profit on every book you buy. Always flip through the pages of each individual book and be sure of its condition before you quote a price. In many instances you’ll also find that out of a box of 25 books, you’re only interested in buying 10. The seller will generally want to get rid of his books now and for a couple of dollars more than your bid price on the 10 books you want, he will let you have all 25 of them. This is like a windfall to you because you can always use the unwanted books as leader items or extras to generate traffic during two-for-one sales; all books on a certain table for just a nickel each; or your choice of free books for everyone coming in to browse on certain days.
You should carry hardcover as well as paperback books. Pay no more than 25% of new price for a mint condition hardcover book and buy only those you are certain can be sold in your store. Pay no more than 10% of the new price for a mint condition used paperback and steer clear of the hard-core sexually oriented books.
Visit the libraries and book stores in your area. Observe what people are interested in reading and what they’re checking out or buying. Stock your store with these kinds of books. Below is a listing of the kinds or types of books you should consider stocking in your used books store:
Types of Books you should stock in your Used Bookstore
Business books: These should include books on leadership, marketing, entrepreneurship, career advancement, time management and people management.
How-to-Books: These should include all the self-help and self improvement manuals you can find; mail order, auto repair, carpentry, business opportunities, metalwork, home building, gardening, and small business startup.
Cook Books: You’ll probably be surprised at how many people buy books relating to the culinary arts. A well stocked cookbook section will mean definite profits for you. Forget about books on dieting, home economics, and etiquette; these just don’t do well in used book stores.
Special interest books: Watch and listen to the people of your area. Be on the lookout for people into World War, history, aviation, sports perfection, movies and just plain old book collectors.
Paperbacks: Women’s romance, science fiction, mysteries, and historical novels are all good movers currently enjoying an upsurge in popularity and sales. These will be the “best movers” in your inventory, so develop good sources of supply, and price them for fast sales.
Building and maintaining your inventory, while continuing to rapidly turn that inventory over, can be handled in a number of different ways. It’s not a good idea for you to exchange two or three of your customer’s books for one of yours. There’s always a variance in price, plus you may not want the type of books your customer is offering to trade.
The most feasible plan seems to be to give the customer a credit line for each book you buy from him. Simply have a supply of business cards promoting your store, printed at your local quick print shop. On the back of the card, have them print something along these lines:
“The bearer of this card is entitled to _______________ cents credit on 50% of the listed price of any book at Ye Olden Book Store/s/ Your Signature.“
Then when someone brings in a couple of books to sell, you pay him in credit, marking in the amount and signing your name on the card. An easier way might be to have your signature printed on the cards when you order them; you or your clerk would simply fill in the credit amount, and emboss the card with a notary-type embosser.
Usually, you allow 20 to 25 cents for mint condition paperbacks and about one quarter of your selling price for hardbacks. Always make sure the customer understands that regardless of how many ”credit chits” he has, the credit chits can only pay for half the purchase price. This of course, is to protect your cash-flow from running out.
Many used book stores add to their income potential by adding tape cassette lending libraries. These are real money makers with a kind of service tat lends out “books on tape” and special learning programs where portion of the rental fee applies to the purchase of the original tape cassette.
Many great used bookstores add to their income by running mail order book selling operations in addition to the retail business. This is natural, either for a retail operator wanting to expand his market or a mail order operator wanting to increase his income.
Startup Investment for starting a used bookstore business
1,000 to 1,500 square foot bookstore
Rent (1st and last month’s) $1,000 – $2,000
Utility and deposits…………. $50 – $300
Insurance (1st Quarter Payment)……. $100 – $200
Licenses and permits………………. $50 – $250
Inventory………………………. $2,500 – $5,000
Shelving and remodeling……………. $2,000 – $5,000
Misc (Decorating, checkout counter, cash register, supplies……..$1,000 – $1,500
Legal and Accounting………………. $600 – $1,200
Advertising and signs………………. $1,000 – $3,500
TOTAL………………………….. $8,250 – $18,950
OPERATING CAPITAL……………….. $5,000 – $12,000
Entrepreneur should have enough operating capital in reserve to not only keep the store operating for the first year, without counting on anticipated profit but also enough for unseen emergencies without having to count upon income from the store to see him through.
Monthly Operating Costs for a Used Bookstore
Payroll……………………….. $1,500 – $2,500
Owner/manager salary………. $1,000 – $2,000
Rent/lease…………………….. $ 600 – $1,000
Advertising…………………… $ 500 to $ 1,000
Depreciation…………………… $ 100 – $150
Utilities and phone………………. $ 150 – $300
Printing and stationery………….$ 100 – $200
Shipping costs…………………. $ 100 – $150
Insurance……………………… $50 – $100
Maintenance……………………. $50 – $100
Miscellaneous………………….. $100 – $150
Total Operating Costs………………………….$4,200 – $7,650
ANTICIPATED SALES……………….$5,000 – $8,500
NET PROFIT BEFORE TAXES………….$800 – $850
PROFORMA ANNUAL INCOME (B/T)…….$9,600 – $30,000
A word of caution: Though you must project an open, comfortable invitation to browsers and would-be book buyers, you must also inconspicuously guard against shoplifters and outright thieves. The best is to place mirrors strategically throughout the store so you can see your customers from the checkout desk at all times.
Smaller and more expensive books should be kept up front so that you can see them and what your customers are doing with them, without seeming to be guarding them. There are a number of theft prevention gadgets and devices available but even more important is alert hired help that can keep an eye on the customers without making them feel they’re being watched.
The risks of starting a used book store are high for the dreamer unaware that it’s just another retail business and should be handled as such. Well organized and intelligently-operated used book stores are very stable and they provide a very comfortable income for the owner-operator willing to persist through the start-up period.
This can be the kind of business you’ve always dreamed of owning but you’ll have to have the patience to let it grow and the perseverance to see it through to its ultimate success. With these thoughts in mind, the sky will be your starting point.