We have a special guest writer today. Jill Hendrix of Fiction Addiction and regular contributor at Bookthink.com has offered us some insight on growing your business. Jill has a terrific amount of experience selling used books online.
Bruce’s recent post asking how to best grow one’s bookselling business got me to thinking. I commented on his post with a few off-the-cuff remarks, but really there’s a lot more to say about this issue.
To grow your sales, you have two basic options: You can attract new customers or you can convince your existing customers to spend more. I think the easiest tack is to start with your existing customers and try to maximize those sales. After all, you already know these customers and probably have a better idea what will appeal or not appeal than you do when trying to craft marketing material for nebulous, yet-to-be-seen customers.
The easiest way to increase sales with your existing product line and existing customer base is simply to increase your prices. For example, when I started my business I priced my mass-market paperbacks at 40% off the original cover price (with a minimum floor). Thus, even if the book was currently in print at $7.99, my copy with $5.95 on the cover would be priced at $3.57. In analyzing my customers this past year, I determined that my main competition was not other used bookstores, but chain stores like Barnes & Noble. If I didn’t have what my customer was looking for they were not going to bother driving all over town to check out other used bookstores. Instead, they were going to hop over to the chain store, whom they knew would have it in stock. So, when they were looking at the price of my used book they were thinking about it in terms of the price they’d pay at a chain. If the alternative to a $3.57 book is a $7.99 copy, then you have some room to increase your price and yet still leave the customer feeling that they are getting a deal. Our current policy is to price at 40% off the current retail price, no matter what the original book cover price is. So, a used copy of that $7.99 book now sells for me at $4.79. That’s a 34% increase in sales! So, take a look at your pricing and who your competition is and see if you have any room for growth.
If you determine that your customers are extremely price-sensitive and you can’t move your prices up, then consider what you pay for your inventory. If you take trade-ins or pay cash at a set amount, then lower what you offer. Any easy way to do this without really announcing it is to put a cap on what you pay. For example, we use to pay 20% of the original cover price for paperback books. Now, we pay 20% with a maximum of $2.00 per book. So on a trade paperback with a $14.00 cover price, our new policy means that we’re paying $2.00 for that book instead of $2.80. Thus, when the book sells at $8.40, our profit on it has increased 14%.
Another way to get your customers to spend more is to try to better meet their demand. This is hard in the used book business as you don’t have as much control over your inventory as a new book store. If you do not already have a system for taking down customer wants, then this is a great thing to start. Once you note down the wants, you also need to take some time to actively search for these wants for customers. Consider making a weekly tour of your area thrift stores or to other bookstores in town that offer you a dealer discount, or perhaps you can purchase the book online cheaply enough to still make a profit. If you can satisfy more and more of your customers needs then they are more likely to think of you first when a book purchase becomes necessary. Even if the customer has already bought a copy by the time you call, they are always glad to hear from you and it’s a friendly advertisement for your business.
Another way to better meet customer demand is to proactively try to mold that demand. Send out monthly newsletters highlighting some of your favorite inventory and explaining why it’s begging to be purchased, write book reviews, put up cards telling customers that if they like this author then they’ll also like author x and author y. Try to stockpile inventory for a few of your favorite books so that anytime someone asks you for a recommendation you have several to give them.
The final option for increasing sales from your existing customers is to find another, complimentary product that you can sell as an add-on. When choosing a complimentary product make sure that you’re not simply cannibalizing your book sales. For instance, if most of your customers consider books to be an entertainment purchase and you began carrying used DVDs then you might find that your customers are still spending the same amount with you, they’re just now splitting it between books and DVDs since they consider both of these to be entertainment purchases and they only had x amount in their budget to spend on entertainment. For our complimentary product, we decided to add gift items. Everyone needs to buy a gift at some point or other, yet most customers coming to a used bookstore were probably not planning on a gift purchase in the first place, so any gift sales are usually add-on sales to what they were planning to buy anyway. Other advantages to gifts are that many of the items are small and/or have higher price points than used books and if they are not pre-priced you can set your own margins.
Maximizing the sales and profit from your existing customer base should generate some positive cash flow that may then allow you to play the expensive game of luring in new clientele through advertising, marketing, publicity, and/or perhaps by moving to a more expensive but more heavily trafficked neighborhood.
Jill Hendrix is the owner of Fiction Addiction (http://www.fiction-addiction.com), a new-and-used bookstore in Greenville, SC. She has her own blog at http://fictionaddictionblog.com and also writes a series about selling used books online as well as in-store for BookThink (http://www.bookthink.com) on How to Start a Clicks-and-Bricks Used Bookstore.