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Buying a Bookstore?



 
 
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  #1  
Old December 20th 03, 06:40 PM
John Pelan
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Default Buying a Bookstore?

On Sat, 20 Dec 2003 15:26:06 GMT, John A. Stovall
wrote:

I've bought collections in the past but now I have the opportunity to
by a book store in the town where I work. It is a general used
bookstore. The present owner a University professor (not at mine but
one 70 miles away) and his wife have run it for 7 years but only
opened it 3 days a week and closed it all summer. I don't plan to
quit my day job but have a wife to run it and the building is included
with the stock of some 40,000+ volumes (80/20 hb/pb). The store has
never listed on line.

What questions should I be asking and considering when thinking about
this possible purchase?



1. Is the business successful now?
2. If it isn't, why would it be in the future?

However, these two paramount questions are mitigated by advantages
that you have that the previous owner may not have shared... And these
would the questions to ask of yourself:

1. Am I now successful selling on-line and by mail-order?
2. Will this store augment or detract from my current business?

A general used bookstore that seemingly depends upon the student body
is a chancey thing, on the other hand, said student body is probably a
good source of cheap re-stock. Certainly if the cost is low enough and
the store is anyway near self-sustaining now, you could make a go of
it as you have considerable expertise in what to buy in terms of
collections. I may be wrong, but I'm of the opinion that unless you're
on the busiest street of a major city, the only real benefit of a
storefront is that you will get collections brought in by people
unwilling to put in the time and energy to sell their books on eBay.
The caveat here is "Is the store in a population center sufficient to
have such occurences take place on a regular basis and can you
establish your store as THE place to sell books?"

Our own paghat has also written a wonderful essay on the subject,
which I believe is still up at www.violetbooks.com


Cheers,

John
Ads
  #2  
Old December 20th 03, 07:47 PM
paghat
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Posts: n/a
Default

In article , John A. Stovall
wrote:

I've bought collections in the past but now I have the opportunity to
by a book store in the town where I work. It is a general used
bookstore. The present owner a University professor (not at mine but
one 70 miles away) and his wife have run it for 7 years but only
opened it 3 days a week and closed it all summer. I don't plan to
quit my day job but have a wife to run it and the building is included
with the stock of some 40,000+ volumes (80/20 hb/pb). The store has
never listed on line.

What questions should I be asking and considering when thinking about
this possible purchase?



Hang out for a couple of hours & count the walk-ins & the sales. If it's
six people walk-in (four of those merely with boxes of books they hoped to
sell) & zero sales, extrapolate from there.

You need to see complete & uncooked bookkeeping on income & expenditure &
especially tax returns which nearly always paint an uglier picture than
the eager business-sellers will otherwise confess. A three-day-a-week
closed-all-summer shop is actually just a storage unit with storefront
windows, often in economically depressed areas where storefronts are so
difficult to keep rented that they can be used as though they were
windowless mini-storage rentals.

There are a great many "how to buy an existing business" type books, & it
should be worth reading a couple of them. After weeding out any such books
that are poorly disguised pump-pamphlets for companies that are actually
in the business of selling businesses, you'll likely find most of their
advice when applied to use bookstores will "prove" a used book store is
worth minus dollars. It might be worth hiring a completely independent
business valuation analyst who will run some quick figures that 99 times
out of ten for a used book store will prove it to be worth little or
nothing even if has a bit of noticeable action. Or at least get business
evaluation formulas from the Small Business Administration so you can run
some realistic figures yourself (some companies selling business valuation
services, books, & software, are oriented toward appraisals for business
sellers rather than buyers; or will provide sales pitches rather than
formulas; or have formulas to maximize the illusion of value even where
there is none, all for the sellers' benefits or to maximize an owner's
leverage or loan possibilities or for insurance purposes, which will not
inform buyers honestly; but the SBA doesn't monkey around with the truth).

As a generality, a used bookstore is worth not one penny more as an open
shop than it would be as a buy-out of the entire stock to haul off
elsewhere. Indeed, having to take the open shop with the stock cold
subtract from the value. If only 20% of the stock is actually apt to be
salable (tas an optomistic percentage), that'd be the percentage to base
the value on -- the rest is worth nothing unless to a paper recycler.

Part-time bookshops are nearly always subsidized in some way & not
carrying any of their weight. And never underestimate how being trapped as
an owner in a low-foot-traffic few-sales shop, unable to afford even one
worker, can be an endless nightmare of tedium even if you can afford the
store-like storage unit. It could easily become an endless data-entry job
to keep stock updated on the web.

If there have been any emergency-fund "sales" at the shop, or the owner
careless in aquisitions, 40,000 books could mean two or three hundred
actually salable books, so assess the stock brutally. If you couldn't find
lots & lots of the sorts of books you'd personally buy to take home for
your own book shelves, don't imagine anyone else will either.

-paghat the ratgirl

--
"Of what are you afraid, my child?" inquired the kindly teacher.
"Oh, sir! The flowers, they are wild," replied the timid creature.
-from Peter Newell's "Wild Flowers"
See the Garden of Paghat the Ratgirl: http://www.paghat.com/
  #3  
Old December 20th 03, 11:14 PM
John F. Kuenzig
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Default

John -
Why should you buy it is the first question. As a sideline hobby?
Viable business? Something for the wife to do? A tax writeoff? (all
of these are the background reasons for stores within an hour of where I
sit). There are 3 things of value in a bookstore when you're buying it:
stock, real estate, and customers. Also community goodwill which is
harder to measure but can affect your business in a substantial way.

Paghat dealt mostly with the first - the value of the stock. The value
of the real estate is fairly simple - get three local appraisers to give
you an opinion, and look at trendlines for real estate values over the
last 5 years to get a sense of which way the real estate values are
going. The third is harder - the customers and the value of the good
will in the community. This is the place to focus, and the one that
Paghat didn't talk much about - it is also the driving factor behind
what brings sales in the door. If you are buying the business as a
"going concern" rather than a storefront to rent and a stock to pick and
list online, this is what you have to focus on since it is hardest to
quantify.

There is a great book by Dale Gilbert called "Complete Guide to Starting
a Used Bookstore" with lots of practical advice. One of the biggest
things he talks about is location, location, location. Is the location
of the current store good? Good parking? You can only have as many
customers as you have places to park unless you're in a high traffic
walking area. Look at the fixed overheads you can't get around (and
which might not be listed on tax returns either) like heat, electric,
permits, insurance, etc. Those are fixed costs you can't get around.
It is really pre-internet so there are many things that are different.

Be VERY skeptical of the value of the stock. Has the owner picked it,
or allowed one or two dealers to do so? If so there probably isn't much
really saleable stuff left. I've bought 2 stores towards the end of
this process and DONT recommend it. 10% useful at best, most slow
sellers. Don't let them run a sale to bring in cash unless you've been
allowed to store the good stuff away and the sale is to clear the
shelves of "Stuff".

Lastly be VERY hard on your evaluation of how vibrant the customer
community is at the existing store - these will be the people that keep
you afloat as you learn the local business (every used bookstore has a
local population they cater to and you have to learn that group and what
their needs are). Many bookstores have died in the last few years. The
internet has changed the walkin traffic substantially, and also affected
the number of dealers coming through. Be smart if you do buy it and put
stuff on the shelves that are real bargains for the dealers etc who come
through - don't price everything at net prices or you'll lose whatever
dealer population you do have quickly. The best local stores here leave
stuff on the shelves that is not listed online at better prices even if
they do list some of the store stock online. Keeps people coming back.

Good luck, hope some of these thoughts are useful. David Gregor in
Seattle Washington teaches a course for booksellers that is practical as
well and you might want to see if he's running a program near you or
would be willing to talk by phone - very practical guy, strong marketing
sense, and runs his own open shop quite successfully too.

Best,
John Kuenzig
Bookseller

John A. Stovall wrote:

I've bought collections in the past but now I have the opportunity to
by a book store in the town where I work. It is a general used
bookstore. The present owner a University professor (not at mine but
one 70 miles away) and his wife have run it for 7 years but only
opened it 3 days a week and closed it all summer. I don't plan to
quit my day job but have a wife to run it and the building is included
with the stock of some 40,000+ volumes (80/20 hb/pb). The store has
never listed on line.

What questions should I be asking and considering when thinking about
this possible purchase?


************************************************* ******

""Lord!" he said, "when you sell a man a book you don't
sell him twelve ounces of paper and ink and glue - you
sell him a whole new life....""

"Parnassus on Wheels"
by Christopher Morley



--
Sincerely,

John Kuenzig, Bookseller

Kuenzig Books
PO Box 452, Topsfield, MA 01983
978-887-4053 9am-7pm Eastern Standard Time
(orders or inquiries)

Important Books in Science, Technology and Speculative Fiction

Secure, direct ordering at
http://www.kuenzigbooks.com
Save time, money and earn other exclusive benefits.

We are proud members of:
MARIAB http://www.mariab.org
IOBA http://www.ioba.org

and graduates of the Book Seminars International Programs:
http://www.bookseminarsinternational.com

Buying 18th-21st century books, manuscripts, ephemera,
scientific instruments, artifacts, and related material in
our fields of interest


  #4  
Old December 21st 03, 04:41 PM
Hardy-Boys.net
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Posts: n/a
Default

"John A. Stovall" wonders:
What questions should I be asking and considering when thinking about this

possible purchase?

1: Why is the business being sold?
2: What is the purchase price vs the value of the stock?
3: What do the tax returns reveal?
4: Is it in a location where you are liable to get considerable walk-in
traffic?
5: Are you willing to subsidize what will probably be, at best, a break-even
proposition?
--
Bob Finnan
The Hardy Boys Unofficial Home Page
http://users.arczip.com/fwdixon
New & Out Of Print Books, Books-On-Tape, Videos, DVDs, CD-ROMs For Sale
http://users.arczip.com/fwdixon/hbsale.htm
To reply: replace nospam with fwdixon
.................................................. ....................


  #5  
Old December 23rd 03, 03:35 PM
Norm Clerman
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Posts: n/a
Default

As Mr. Adams notes, Paghat's observations are excellent, and I'd add so
are Mr. Kuenzig's. However, based on what's contained in all the
comments, one almost has to wonder that there are any used bookstores at
all; it seems such a losing business proposition.

Norm Clerman

John A. Stovall wrote:
I've bought collections in the past but now I have the opportunity to
by a book store in the town where I work. It is a general used
bookstore. The present owner a University professor (not at mine but
one 70 miles away) and his wife have run it for 7 years but only
opened it 3 days a week and closed it all summer. I don't plan to
quit my day job but have a wife to run it and the building is included
with the stock of some 40,000+ volumes (80/20 hb/pb). The store has
never listed on line.

What questions should I be asking and considering when thinking about
this possible purchase?


************************************************** *****

""Lord!" he said, "when you sell a man a book you don't
sell him twelve ounces of paper and ink and glue - you
sell him a whole new life....""

"Parnassus on Wheels"
by Christopher Morley


  #6  
Old December 23rd 03, 04:04 PM
John F. Kuenzig
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Posts: n/a
Default

Norm -
A book business is just like any other business, if you run it like one.
Problem is the vast majority of booksellers are booklovers and have
little or no business background. So they figure if they can buy a book
for $7 and sell it for $10 they just "made" $3. No accounting for
overhead, changes in market conditions, value of their own time, etc.
They overstock what they love whether or not there is a local market
for it. They buy based on price rather than on quality. And lots of
other common "failure" modes. Many use this as a retirement business.
If you run it like a business and study it you can make enough to pay
the mortgage and some besides. But unless you're very well funded,
expecting to net over 5 figures annually as a one person operation is
unlikely - I can count on one hand the number of stores around here that
can likely claim that. I do this business because I love it, and have
fun with it. I was well funded when I started, but (due to economic
climate changes etc) decided to run it like a business and not a hobby
starting about 4 years ago. I've had to change what I did radically to
survive. I did, and now that I've cut off the savings account, and am
running it like a business, I look at each purchase much differently.
But you don't want to know what I've done, just whether you should do
it perhaps.

So don't despair, it can be done and done well with lots of fun and
excitement. If you love it, and approach it with some business common
sense, you can have a great time of it. Join the crowd! There's always
room for one more. If you're interested in starting a store, contact me
offlist and I'll suggest some resources you can use to study the
business and make a more informed decision.

Best,
John Kuenzig
Bookseller

Norm Clerman wrote:

As Mr. Adams notes, Paghat's observations are excellent, and I'd add
so are Mr. Kuenzig's. However, based on what's contained in all the
comments, one almost has to wonder that there are any used bookstores
at all; it seems such a losing business proposition.

Norm Clerman

John A. Stovall wrote:

I've bought collections in the past but now I have the opportunity to
by a book store in the town where I work. It is a general used
bookstore. The present owner a University professor (not at mine but
one 70 miles away) and his wife have run it for 7 years but only
opened it 3 days a week and closed it all summer. I don't plan to
quit my day job but have a wife to run it and the building is included
with the stock of some 40,000+ volumes (80/20 hb/pb). The store has
never listed on line.

What questions should I be asking and considering when thinking about
this possible purchase?


************************************************** *****

""Lord!" he said, "when you sell a man a book you don't
sell him twelve ounces of paper and ink and glue - you sell him a
whole new life....""

"Parnassus on Wheels"
by Christopher Morley




--
Sincerely,

John Kuenzig, Bookseller

Kuenzig Books
PO Box 452, Topsfield, MA 01983
978-887-4053 9am-7pm Eastern Standard Time
(orders or inquiries)

Important Books in Science, Technology and Speculative Fiction

Secure, direct ordering at
http://www.kuenzigbooks.com
Save time, money and earn other exclusive benefits.

We are proud members of:
MARIAB http://www.mariab.org
IOBA http://www.ioba.org

and graduates of the Book Seminars International Programs:
http://www.bookseminarsinternational.com

Buying 18th-21st century books, manuscripts, ephemera,
scientific instruments, artifacts, and related material in
our fields of interest


  #7  
Old December 23rd 03, 10:01 PM
my-wings
external usenet poster
 
Posts: n/a
Default


"John F. Kuenzig" wrote in message
...

I've had to change what I did radically to
survive. I did, and now that I've cut off the savings account, and am
running it like a business, I look at each purchase much differently.
But you don't want to know what I've done .....


I don't know about the original poster, but I would love to know what you've
done.

It's always been my dream to own a bookstore, or at least to be a seller of
books. I don't know if I'll ever get there...it may eventually be what you
characterize as a "retirement business"...., but I figure I will have a much
better chance if I learn to run things more like a business.

Some of my lessons learned so far:

1. Condition is everything, especially in fiction. I can't tell the number
of fiction first editions I've got taking up space that will probably wind
up being donated or combined into lots because they are less than fine, and
there were just too many printed for them ever to be worth more than the
dollar I paid at some rummage sale or thrift store. I felt that I had
reached some sort of milestone the first time I discarded a book because of
condition.

2. When describing condition, be hyper-critical, and use as many pictures as
necessary so the buyer can make an informed decision. The buyer of a book
that I had listed as Near Fine in a Very Good jacket gave me some of the
most glowing feedback I've ever received for his "mint condition" book. He
obviously didn't feel that the flaws I pointed out were significant.

3. Good book with a less than perfect jacket? Slap an archival Mylar jacket
protector on the thing without delay. It improves the appearance of even a
heavily tattered jacket substantially, and you will get more than your small
investment out of it when you sell the book.

4. Think about what else you've got that would thrill existing customers. It
was another milestone for me when I offered an eBay winner an extra book on
the same subject, and she was delighted to snap it up. Yet another related
but slightly different milestone was the time I bought a book "on spec" with
an existing customer in mind, and he also was delighted to purchase it. I
didn't charge enough in either case, but...one lesson at a time!

5. In non-fiction, snap up the weird titles. There will be a customer, no
matter how esoteric the subject. Ideally, there will be two such customers
who both find you the week you decide to list it on eBay.

6. When listing non-fiction, sometimes the best thing you can do is type
the table of contents. It's a natural and perfectly acceptable way to
include keywords your customers will use to search for books in their
specialty.

7. Don't discard your descriptions. It's amazing how often you see the same
book again and again, especially if you're developing a specialty.

8. Pack every book as if it were a treasure. It's possible that I don't know
what I've got, and some buyer just made his buy of the year on my eBay
auction. I don't want to ruin somebody's great "brag" with rotten packing
just because he didn't pay much for the book. Karma, after all.

As you can see, most of my experience is in selling on eBay. I've got a few
titles on my website, but the site needs a lot more work before it's really
a selling vehicle for me. So, the above are just things I've picked up from
this group, or from experience, that I'm trying to incorporate into my way
of doing business.

I'm wondering about others' "rules of thumb" or sage advice.

Alice

  #8  
Old December 25th 03, 08:26 AM
Brian
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Posts: n/a
Default



my-wings wrote:
....

3. Good book with a less than perfect jacket? Slap an archival Mylar jacket
protector on the thing without delay. It improves the appearance of even a
heavily tattered jacket substantially, and you will get more than your small
investment out of it when you sell the book.


Also, it protects the jacket (and book) from shelfwear, handling damage,
shipping scuffing, and even damage during unpacking by the customer.
This is essential for a brick and morter shop and good policy for
an e-shop. [I've seen customers rip dust jackets pulling the book off
the shelf.]



5. In non-fiction, snap up the weird titles. There will be a customer, no
matter how esoteric the subject. Ideally, there will be two such customers
who both find you the week you decide to list it on eBay.


For a shop with browsers, the weird titles give the shop character and
makes browsing fun - even if the odd books take years to sell at a low
price, they are worth having around. This is one of the things that
a financial analysis will say not to do, but there is a benefit
that cannot easily be represented on a balance sheet (except in that
nebulous asset called "goodwill.")

....

8. Pack every book as if it were a treasure. It's possible that I don't know
what I've got, and some buyer just made his buy of the year on my eBay
auction. I don't want to ruin somebody's great "brag" with rotten packing
just because he didn't pay much for the book. Karma, after all.


Even if a customer paid two dollars for the book, they bought the
book in the condition you described and you have an obligation to
deliver it in the same condition. If you ship a book in poor
packing and it arrives in lesser condition, you have cheated the
customer. [Of course there is shipping mangling that will destroy
anything, but you should make the package able to withstand the normal
shipping abuse. The fact that it was a cheap book is not an excuse to
ship it unprotected.]

Brian

  #9  
Old December 25th 03, 03:39 PM
my-wings
external usenet poster
 
Posts: n/a
Default


"Brian" wrote in message
...


my-wings wrote:
...

3. Good book with a less than perfect jacket? Slap an archival Mylar

jacket
protector on the thing without delay. It improves the appearance of even

a
heavily tattered jacket substantially, and you will get more than your

small
investment out of it when you sell the book.


Also, it protects the jacket (and book) from shelfwear, handling damage,
shipping scuffing, and even damage during unpacking by the customer.
This is essential for a brick and morter shop and good policy for
an e-shop. [I've seen customers rip dust jackets pulling the book off
the shelf.]


Heh. I never even thought about the hazards of having live customers
handling stock in a B&M shop. Good point.



5. In non-fiction, snap up the weird titles. There will be a customer,

no
matter how esoteric the subject. Ideally, there will be two such

customers
who both find you the week you decide to list it on eBay.


For a shop with browsers, the weird titles give the shop character and
makes browsing fun - even if the odd books take years to sell at a low
price, they are worth having around. This is one of the things that
a financial analysis will say not to do, but there is a benefit
that cannot easily be represented on a balance sheet (except in that
nebulous asset called "goodwill.")


Another good point. I remember this fabulous bookshop in (what was, at least
20 years ago) Milwaukee's east side arty district. It was just a small shop,
next to a coffee shop, and it had entrances that connected to both the
street and the coffee shop. This was before coffee lattes were even a
twinkle in the B&N eye. The store was open until midnight, or some such
fabulous hour, but the best thing about it was that it was filled with
titles I'd never seen anywhere else. It was a new book store, but by far the
best I'd ever been in. I was only able to go to it a few times, because I
was a visitor in the city by the time I appeared, but I still remember it
for the variety of its selection..


...

8. Pack every book as if it were a treasure. It's possible that I don't

know
what I've got, and some buyer just made his buy of the year on my eBay
auction. I don't want to ruin somebody's great "brag" with rotten

packing
just because he didn't pay much for the book. Karma, after all.


Even if a customer paid two dollars for the book, they bought the
book in the condition you described and you have an obligation to
deliver it in the same condition. If you ship a book in poor
packing and it arrives in lesser condition, you have cheated the
customer. [Of course there is shipping mangling that will destroy
anything, but you should make the package able to withstand the normal
shipping abuse. The fact that it was a cheap book is not an excuse to
ship it unprotected.]


You're right of course, and the result is the same, but I still like the
idea of someone making a great "find" in one of my auctions. I
mean....theoretically I like the idea, leaving aside the fact that I would
probably want to kick myself for not researching what I had better. Still,
it's what keeps the game exciting, and all. Besides...I like all parts of
selling (with the possible exception of standing in line at the post
office), and that includes doing a professional wrapping job, even on a $2
item.


Happy Holidays!

Alice




  #10  
Old January 5th 04, 05:02 AM
William M. Klimon
external usenet poster
 
Posts: n/a
Default

In article , John A. Stovall
wrote:

I've bought collections in the past but now I have the opportunity to
by a book store in the town where I work. It is a general used
bookstore. The present owner a University professor (not at mine but
one 70 miles away) and his wife have run it for 7 years but only
opened it 3 days a week and closed it all summer. I don't plan to
quit my day job but have a wife to run it and the building is included
with the stock of some 40,000+ volumes (80/20 hb/pb). The store has
never listed on line.

What questions should I be asking and considering when thinking about
this possible purchase?




So, John, what was the verdict? I thought seriously 3-4 years ago about
opening a store--or a book nook in a tea house. Glad I didn't do it, but a
part of me regrets it.



William M. Klimon
http://www.gateofbliss.com


 




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