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How to Make it Big with a Used-Book Store

Entrepreneurship University

College of Entrepreneurial Studies (CES)

Internet Marketing

Lesson 11:
How to Make It Big with a Used-Book Store

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The following was adapted from the now defunct mmonline.com site.

A used-book store is an ideal "absentee-owner" type of business, or a small investment type business for someone to start while holding down a regular, full time job. The type of person best suited to running a successful used-book store, is one who loves to read, has collected books over the years and enjoys associating with people of similar interests.

Start-up risks would be considered high, with the average time period needed to become firmly established about 3 years. After that however, one should be able to enjoy ownership of a business without extreme market fluctuations, plus an income close to $50,000 per year or more.

Ideally, a used-book store will need a market population of at least 50,000 persons to support it. The best location is a high traffic area, preferably near a college or university campus. Shopping malls are excellent locations for bookstores. Locations near new-book stores are also very good.

Bear in mind that the average used-book buyer is a browser. It's important that you encourage people to drop in and browse around. Encourage them to pick up and thumb through the books that interest them. Those will be your real book buyers.

If you want the entire front of your store to be a show window, 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 passers-by to see into your store. 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 the people passing to see inside the store. 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 store. You can feature popular paperbacks and a few oversize hard cover books with bright, flashy colors in these racks.

For your help, try to hire only book lovers who are personable, outgoing, and have some sort of business aptitude. 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 become store manager.

Newspaper and/or broadcast advertising is generally more expensive than it is worth. 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, run an ad in the yellow pages, perhaps one 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. Advertise and run special sales during holiday periods to bring new customers into your store.

Most used-book stores begin with their owners’ book collections as a start-up inventory base. In addition, neighbors, friends and relatives may donate books. Then one should search for books to sell, those you can buy for 25 cents or less, at garage sales and flea markets, in thrift shops, Goodwill stores, Salvation Army outlets, church bazaars and estate sales. You should have at least 10,000 books in stock when you open for business, and that’s a lot of books.

Typical Used-Book Store Costs, 1,000 To 1,500 Square Foot Store
Start-Up Low High
Rent (1st And Last Month's) $1,000 $2,000
Utility & Phone Deposits 50 300
Insurance (1st Quarter Payment) 100 200
Licenses & Permits 50 250
Inventory 2,500 5,000
Shelving & Remodeling 2,000 5,000
Misc (Decor, Cash Register, Supplies) 1,000 1,500
Legal & Accounting 600 1,200
Advertising & Signs 1,000 3,500
Total $8,300 $18,950
Suggested Operating Capital $5,000 $12,000
     
Monthly Operating Costs
Payroll $1,500 $2,500
Owner/Operator Salary 1,000 2,000
Rent/Lease 600 1,000
Advertising 500 1,000
Depreciation 100 150
Utilities & Phone 150 300
Printing & Stationery 100 200
Shipping Costs 100 150
Insurance 50 100
Maintenance 50 100
Miscellaneous 100 150
Total Operating Costs $4,250 $7,650
Anticipated Sales $5,000 $8,500
Net Profit Before Taxes, Monthly $750 $850
Net Profit Before Taxes, Annually $9,000 $10,200

How do these figures compare to your estimates in the case study of the previous lesson? Are they directly comparable? Whose do you prefer?
 

Signoff

Wishing you success,

John signature

John B. Vinturella, Ph.D.

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