Does a used bookstore location matter?

a guest post by Ed Dugan from I Need to Cook (if you love food, and who doesn’t, check out his site – pretty sweet.)

All of us have read about that wonderful little bookstore on a little used side street where
literary masterpieces can be found. In fact there was such a bookstore in my hometown of
Philadelphia called Leary’s. I don’t know if it’s still in business but I do know a friend of mine
picked up a first edition Dickens there.

Today, however, choosing a location for a bookstore is essential to its staying power. My wife
has owned 5 very successful bookstores and the locations were as follows: A main highway in
a busy shopping center in Jupiter, Florida, one caddy-corner from a campus of a large State
University, one in a busy flea market on the Emerald Coast of Florida, another in a flea market
in central Florida that, during the season has up to 20,000 visitor a day and finally the one we
own now in Mountain Home, Arkansas, on the main highway through town and in the busiest
shopping center in town. Mountain Home has been chosen as one of the top ten retirement
communities in the US.

Still, with all those incredible locations, years after we opened people would come in and ask
us how long we were in business and, without fail, had passed by the store dozens of time and
never noticed. So, where you locate your store is of vital importance and you should give it a lot
of thought. One good reason for doing so is that most of your business will eventually come by
word of mouth, customers telling their friends about you. If they have to draw a map to your
store you’re in trouble.

Most people would think that advertising might put them on the short road to a good business
and that would take the place of a good location – not so. Other than initial advertising, a
ribbon cutting by the Chamber of Commerce or a new business article in the local paper, we
never had much luck with either continuing newspaper advertising or radio ads.

Once you choose a busy location pay a lot of attention to signage. Your sign is the way you say
hello to potential customers. Obviously, if you are off the beaten path fewer people will see
your sign. And don’t try to get cute with the sign. BOOKS, in the biggest letters your sign can
accommodate is the way to go. Also, don’t clutter up your windows with a lot a small signs, just
say BOOKS BUY AND SELL and they will come.

When choosing a location for your store try to become neighbors with a very busy restaurant, a
movie theatre, anything that will increase the traffic in the vicinity of your store. In our current
store we did very well until a new, and beautiful Chinese restaurant opened up in the same
shopping strip. A month later our business had doubled!

From our experience, it is well worth the effort to get the best location you can afford and,
even if you have to pay a little more than you had budgeted, a good location is well worth it.

17 thoughts on “Does a used bookstore location matter?”

  1. Thanks Bruce, I can see how association works, good neighbours really are worth their ‘weight in gold’. I think longevity too obviously helps, a number of my favourites are in remote locations, while I can also buy online from them, I do love the fact that if I find myself in their neck of the woods there they are just where I left them. Likewise I do feel for those lovely bookshops that have to move on when an older are part of town or street of shops gets modernised (or worse – bulldozed!), usually as the new rents are beyond them, starting over would be difficult.

  2. I agree – thank you for this very well written piece restating a few of the basics of business while adding how they added to the success of your wife’s businesses.
    Locations – good ones occasionally come back on the market when whole segments of the market collapse – like new books stores, Music and Video chains. One difficulty is the rents have usually escalated if they were operated by a stock market funded conglomerate and the existing landlords will be reluctant to have the rents return to more reasonable standards.
    It is another chicken and egg question – are you prepared financially – and in possession of an inventory large enough and diversified enough to serve the customer base needed to pay your expenses – until the higher exposure makes your success inevitable?

    It is easy to pay rents in the range of $10,000 a month once your sales are $20,000 a month but how long can you and your business survive while building your sales to that level? Our average sale is under $7 a book (and has been for many years) so if, from the beginning, we don’t have the inventory or the customer traffic enabling us to sell a minimum of 2000 books every month we could get in trouble quite quickly – and from time to time we have!

    There should be good neighbors that draw customers aplenty in high rent areas – or they couldn’t afford the rents.

    Oh well, if it was easy our business could still be operated by the hobbyists and book lovers who originated it, developed it and nurtured it in the low rent neighborhoods that existed from the 1900’s through to the 1990’s. Unfortunately most of them believed the low rents, rather than their special goods and skills, were the key ingredient to their success – and they kept packing up and moving rather than staying (like the Strand in New York) and maturing with their market.

    Simple – but not easy!

    • Wow, ten thousand a month – that’s a lot of rent! The fact of the matter is that once you get beyond the fundamentals of the business (I’m about to submit an article about those) every bookstore is different. The markets are a different size, the demographics are different, customer likes and dislikes are not the same. One thing to remember is that most of your business will come to you by word of mouth. Reader’s tend to talk to each other. However, if you stray very far from the fundamentels you are not going to do well. Our experience is that we can count on 40% of gross sales as a net we can count on. Granted, that can fluctuate but if we do $8000 in any given month I know we will take home $3200 at least. Of course, there’s always the customer who inherited a bunch of books from a deceased relative and is willing to give them to you just to get them off their hands. Then the net goes way up!

  3. We’re in that situation right now, trying to decide if paying $3500 a month rent is too much, since our book price is usually $1.50; we’re a paperback exchange store. That’s 2333 books just for rent! We’d just now be opening in the area. In 5 years the rent would be up to $4175. Granted we’d be next to nice Chinese and Italian restaurants, but is that enough?

    • Your rent is WAY too high! Your prices are WAY too low. Why are you so reluctant to charge someone $4.00 for a book that millions of people paid $8 for? Don’t “exchange” books, sell them. What makes you think your are different from any other retail operation. You have a product, bought at a good price I assume, and you sell it to make a profit. After owning five VERY successful stores our markup is at least 200% and most often 300% or higher. If you can’t make that happen where you are, our store is for sale and we’ll be happy to talk to you. (we’re retiring). By the way, we pay CASH for books, only pick the ones that look like new, and are well on the way to grossing $80,000 after only three years in business. Pay attention to that last word: BUSINESS!

  4. Dana, why is your average book only $1.50? The biggest mistake I think used book dealers make is to price their books WAY TO LOW. The average price for a new mass market paperback is $8.00. Most of the new release titles will be discounted but back stock is not. Thus if someone is going to buy an older Nora Roberts title new, they will likely pay the $8.00 price. I run a clean nice store in a prime location and would price a like new copy of that book at $4.80. Now the story I hear way to often from other book dealers is that your customers would never pay $4.80 for the book. If that is the case then get new customers, like the ones who are shopping at Borders and paying $8.00 for the book. Price your books at what they are worth (compared to new, not compared to the garage sale) and you will find two types of people. The first will scream that you want $4.80 for a USED book. What they are saying is that you are no better than Goodwill and they will bitch over any price even if its 50 cents a book. The other type are those who are use to buying books new. I stock 100,000 books in my store and rarely does a day go by when someone does not walk in look around for a few minutes then come up to the counter and ask where we keep the used books. The whole store is 100% used we just make it a point not to stock junk. These people think our used books are new because that is what the store looks like. We look like a new store. We are however all used. New bookstore customers love us and are THRILLED with that $4.80 book. My guess is that I sell MORE books then my cheap competitors (I have put many out of business) but even if you were able to sell 3 books for every 1 that I sold at the end of the day I would still be more profitable.

    I guess my point to all of this is that if you are going to pay prime retail rent, you might as well run a prime retail shop.

    • Why price books “low” is also answered by ‘location location location.’ Cities with a large population can afford stores with 100,000 books and higher prices. An example of the opposite might be our county, with 1,644 square miles (Rhode Island has about 2,000 square miles, for comparison) and under 14,000 people, few of them who are going to be able to pay $4.80 for a used book. Our average household income and average level of completed education also factor in. Finding a bigger, more expensive place wouldn’t be cost effective even if it were the best spot in town because even with tourists, there just aren’t enough people to sell to on that scale.

    • After owning five bookstores I can t ell you for sure. If you don’t h ae a small percentage (5%) of your customers complaining that your prices are too high, your prices are too low.

    • Thank you, Michael. We have seen many used bookstores in San Diego, CA close in the 18 years we’ve been in business, and most of them were only charging ½ price for their used books. Ten years ago we had 12 used bookstores on only one street in SD and now there are only two.

      We chose to change our policy to ‘Bring in a book that we can use, and get a book for ½ price,’ and that has kept the customers coming in and us in business. We also chose to price most books at $3.00. In our first store a lot of people who walk in the store for the first time say that ‘This doesn’t look like a used bookstore.’

      We are now working on a second store about 45 minutes from the 1st one, where the rents are higher, and we only have the Chinese and Italian restaurants as the main draw, and I’m not sure if that will be enough. We’re going to really ‘get out there’ with free advertising. Any suggestions for that?

      I guess with us it’s the quantity of sales vs price, in our instance; the rapid changing of our stock brings our customers back often, with bags of books for our selection. BTW, last year store #1 grossed $130k and we’re looking at $140 this year, with only 1.5 people working at a time.

      • It sounds like the old Book Rack formula to me. Trade in two books for one. And when you say half price do you mean half the publishers price or half of whatever price you have set. We decided years ago that we’re no different from any other retailer. We buy for cash and sell for cash (no credit cards) Trading books for store credit doesn’t bring in a dime. We never have a shortage of people bringing in books. As a matter of fact sometimes we are overwhelmed with books. But paying cash allows us to be VERY selective and so our store looks more like a new bookstore rather than a used one. However, if whatever you are doing works, stick with it!

  5. Makes sense. As a shopper I’m more likely to visit often a store that’s not out of my way. And I LOVE used bookstores so those that are in my path, see me often!

  6. I’ve found that any signage should reflect your eagerness to attract your ideal clientelle.
    Throwing up a big-arsed sign that simply says BOOKS and only placing a single sign in your window, goes to show that you’re not willing to put any great effort into distinguishing your business.

    Your sign should include your store’s name, and be written in a clean, memorable font. Your window should be used to stimulate the imaginations of possible and exisisting customers by featuring new, popular or hard-to-find books.
    A store in my home town has set up a Banned Books shelf as part of its window display. More often than not, people will come in simply to ask the reason behind each book’s banning; many end up purchasing a book or two.

    Granted, gargantuan BOOK signs may serve to draw in people driving past on the highway, but stores located in urban areas would do well to put more thought into their signage and window merchandising.

    • We do all of the above. However, we noticed too many used bookstores clutter up their windows with little signs telling the public what they do and won’t do in terms of trade-in policy, costs, etc. The time to do that is when you are face to face with a customer and the fewer rules the better.

  7. A side note on the sign is that in my eyes it should NEVER say used books. We do have a smaller buy, sell, trade sign, but the big sign just advertises us as a book store. Someone told me years ago that many people will not stop at a used store. We try to get them through the door where they typically fall in love with the store and the realization that used does not have to mean junk.

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