Despite the rise of the internet and distractions ranging from Playstation to iPod music players, there is still nothing that has come close to replacing the humble book in the hearts of British consumers.
UK publishers sold an estimated 787m books in 2006, with an invoiced value of £2.81bn The Office of National Statistics recently found that men and women in the UK spend around 25 minutes a day reading.
Of course, a large chunk of book sales are accounted for by large chains such as Waterstones or Books Etc., but there is still a healthy demand for the competitively priced or rare publications that independent stores offer.
So, if you are going to open up a bookstore, it is important that you find a niche and exploit it fully. Although it's unlikely that you will make millions through a new store, if you set up your business in the right area, offering the right sorts of books in an efficient manner, you could conjure up a decent profit before you can say Harry Potter.
Like many businesses, having a knowledge or passion about the industry you are getting involved in is a bonus. Aidan Jenkins runs the Richmond Bookshop, after quitting his sales and marketing job.
“I decided to run my own bookstore because of my love of literature,” he explains. “I have collected second-hand books since the age of 12 and I was bought up in a book-loving family.”
There are important choices you will need to make when deciding what kind of bookseller you want to be. These decisions will dictate what kinds of books you will need, and the budget you’ll need to acquire them.
Do you want to be a general bookstore with fancy décor and brand new releases? Maybe you would like to sell second hand books that you have gathered and can sell on at a profit? Or do you want to be an antiquarian bookseller and search out rare and valuable books through auctions and collectors?
Whatever your choice, its important that you plan and budget carefully so that your business becomes a best-seller.
The most important rule change to affect bookstores in recent years was the collapse of the Net Book Agreement in 1995. Before then, publishers imposed fixed prices upon their books, but widespread discounting by booksellers ended the practice.
The changes haven’t exactly helped small bookstores, with large chains able to use their huge purchasing power to offer discounts on sought-after titles that independent sellers simply can’t match.
However, if you are selling on new books you are now, at least, able to set your own prices, rather than one set by the publisher. With careful budgeting and exploitation of areas with little competition, you can take advantage by cutting prices, much like most other retail businesses.
Apart from this rule change, no other significant laws have specifically affected booksellers in recent years, so make sure you follow all normal regulations that apply to retailers.
Make sure you have health and safety insurance, ensure that staff are paid the minimum wage and that you keep up with rent or loan payments. Working out a policy for returned or unwanted books will also prove beneficial.
First of all, you need to decide what type of bookstore you want to run. The most specialised kind of bookstore is the antiquarian type. Selling rare and valuable books, manuscripts and other publications, it is certainly advisable that you have some sort of background knowledge or passion for books, as you will often have to go to auctions or visit others in the trade to acquire your books.
As you would be dealing with expensive collectors items, you will have to command a budget that allows you to bid for items and auctions or fairs. As you may just be dealing with a few select titles, it is not essential that you have a store – many antiquarian booksellers work from home.
“About 50 per cent of our members have shops, but I suspect that a majority of the remainder of the 3,000 or so traders operate from home,” explains John Critchley of the Antiquarian Booksellers’ Association (ABA). “The turnover of ABA members is about £110 million a year, of which about 60 per cent is exported, and I certainly hope that they are making enough to live on.”
If you decide to steer clear of the specialised end of the market, you will need to concentrate on getting yourself a store, some books, possibly some staff and, most importantly of all, some customers.
Like any other retail business, it’s important that you find suitable, affordable premises, that is easily accessible to customers. If you are going to be a general bookstore, it could be more useful to locate near the high street or main shopping areas, to benefit from passing custom. If you want to be a specialist seller, you may want to use more out-of-the-way premises to cut down on rent and draw your targeted customers to you.
“When we took over and relocated the business there was a very small walk-in retail business at the previous London premises which was not a shop but a semi-basement storage area,” says Ian Knight of MilitaryHistoryBooks.com.
“We believed that walk-in retail could be substantially increased so we took a lease on a much larger retail store in Hythe. This costs us £18,000 per year and brings in a maximum of £8,000. We estimate that we can retain at least 50 per cent of this even if we don’t have a shop - most retail customers know us and travel specifically to see us.
“We are therefore looking to assign the lease and move the business to our home where we have a storage facility plus sufficient office and packing space (as well as Broadband internet).”
Find out more about getting the right premises for your store by clicking here.
Once you have got a store big enough to house your books and your customers, you need to get properly equipped. You will need a till, shelves and carrier bags, while a computer will be useful to help record your stock and keep tabs on your suppliers.
“The equipment that a bookseller uses is really up to them,” says Meryl Hall, of the Booksellers Association. “Good shelving is essential, contemporary design, a lot of bookshops incorporate cafes now and a good brightly lit, eye-catching children’s section is always good.
“We recommend that booksellers adopt good IT systems and equipment, to maximise ordering, stock control and sales information.”
If you are going to set up a specialist antiquarian booksellers, you will need to visit trade fairs, go to auctions and haggle with others in the trade to get the valuable publications that will make you money. To do this, you need good contacts with those in the know. The best place to start would be the Antiquarian Booksellers’ Association (ABA).
If you intend to set up a general bookstore with second-hand or out-of-print books, you will need to do much of the work of an antiquarian store, but at a lower cost. Visit trade fairs, car boot sales or even raid the attic – you could have some old classics that a fan has been searching high and low for. Try to get books from a wide range of sources so that you can offer customers something different and interesting when they enter the store.
If you want to have ‘new’ books, your best option is to contact publishing companies or wholesalers for books in bulk.
“There are three main wholesalers in the book trade – Bertrams, Gardners and THE, who all offer independents a huge amount of support and help, with Buyer’s Guides and other marketing collateral,” explains Meryl. “Discounts vary according to the amount of business placed, but would generally be less than discounts received from publishers direct.
“However, most indies are very close to at least one wholesaler, as they supply from a very wide range of publishers, their service levels are very high, and they allow indies to be fleet of foot, ordering and supplying customer orders often within 24 hours.
“Discounts would start at around 35 to 40 per cent and rise according to volume,” she says.
Taking on staff
Much like any other small business, you will probably want to save costs in your early stages by not employing anyone else. A small bookshop with a modest collection of books shouldn’t force you to start taking on extra workers until you have expanded. Make sure you get a good practices in place, then, as your firm grows, you will be able to take on staff to work behind the till or keep your shelves fully stocked.
One of the first decisions you will need to make when starting up your bookstore is whether or not you are going to be a specialist retailer of certain types of publication.
If you have an interest in a certain field, be it anything from the military to pets, you may be tempted to follow your instincts and open up a relevant store.
However, you must think of financial realities before opening up a specialised store. How many other stores are there like yours in the local area? Is there enough public interest in the market you would like to cover? How well are you connected to your potential audience – for example, if you want to open a religious bookstore, are you involved with your local church or mosque? Do you have lots of contacts in the community?
“There are a number of specialisms within bookselling, and you can clearly build up a very loyal clientele if you are a specialist, also in mail order, but general bookshops can also do well,” explains Meryl Halls of the Booksellers Association.
“We don’t really have a party line on this – if someone has a passion for a subject, they would probably do well, but they have to be careful that their potential audience is large enough to support the business, and that there are not too many others in the field.
“Children’s booksellers are probably the most successful sub-group, and they sell not only to children and parents, but also to schools.”
However, Ian and Gillian Knight, who run MilitaryHistoryBooks.com, are adamant that price concerns mean that specialising in a certain field is a must for new bookstores.
“A specialist book business is, in our opinion, the only viable way for individuals to exist in book retailing,” claims Ian. “Small retailers cannot compete with the large multiple, or Amazon, for general/popular titles – after all, would you pay £16 for the latest Harry Potter at a small independent versus £10 in Waterstones or £8 on Amazon?
“The specialist book business gets to know its customers, anticipates their wants and proactively presents its ware to them. They, in turn, rely on it to find what they want – large multiples only want to handle in print, easily obtainable titles.”
How to beat the chains
On almost every high street you walk down, you will see a branch of Waterstones or another large book chain. Aided by the end of fixed prices set by publishers, large chains can buy large amounts of sought-after books and sell them on at bargain prices – something that traditional stores, now tucked in side-streets or alleyways, find it hard to compete with.
However, it’s certainly not all doom and gloom. Where chains offer the warehouse approach to bookselling, independent retailers can offer the friendly, focused customer service and the specialised, unusual books that many customers look for.
Many stores have found it appealing to become specialised sellers, attracting customers with the promise that they will contain a wider range of books on a certain subject than the big chains. If the market is big enough, you can certainly steal a march on Waterstones and co. by offering discerning readers what they are looking for.
“Customers for specialist books are not particularly price sensitive so good margins can be made on scarce books – albeit with a higher overhead for the effort of finding them,” explains Ian.
Saying that, you needn’t be scared into becoming a specialised seller just through fear of the big chains. Why not offer the same kind of store but with a more intimate feel? After all, although branches Waterstones can be pretty comprehensive, you are unlikely to find anything quirky or unexpected among the bland-looking shelves.
Create a bright, spacious store with comfortable seating area for customers to flick through their finds. Consider offering drinks or snacks to help generate extra revenue and make visitors feel welcome and valued. Tea and coffee making facilities shouldn’t cost you too much and would act as a nice touch to those stepping in off the street.
Small bookstores are not only under threat from large chains such as Waterstones. The explosion in popularity of cheap, easily-accessible book websites has made the lives of independent sellers even more difficult.
“The market for specialists, especially out-of-print and second-hand, is being squeezed far more by the internet than by Waterstones,” maintains Aiden Jenkins, owner of the Richmond Bookshop.
So, if you are going to offer something different that consumers can find on the net, you need to do more than just target and establish a solid customer base from your store. You’ll need to work out how to take advantage of the internet so that it works for you, rather than against you.
The most obvious way of doing this, of course, is to set up your own website. A well-designed, informative site will not only raise your profile in general, it will attract people searching for a particular book through search engines. Hopefully, you will be able to beat Amazon and co on content, price and availability, making your store the first port of call for specialist collectors.
Another option is to take a slow, pain-staking route and gather as many rare, out-of-print books as possible. If you market your business well and become well established in your local area, you will attract many customers who have either missed out on rare books on the internet or couldn’t find them online at all.
Costs will vary hugely depending on the type of bookstore you are taking on, the premises you use and the rarity of the books that you wish to sell.
The kind of costs you need to consider include:
*Removal and relocation costs
*The cost of your lease and rent deposit
*Print and mailing costs for any catalogues you produce
*It is advisable to have the first six months' operation expenses in reserve, as you will not turn over a profit from day one