Business Overview

For a time, it looked like non-chain bookstores were dead. Electronic reading devices put e-books near at hand, even the big-box retailers went out of business or scaled back their venture, and Amazon gobbled up the lion’s share of the reading public. Then smaller, independent bookstores closed shop one after another.

But all of that’s changed as avid readers have gone too long without access to brick and mortar bookstores, craving to get their hands on the print version of their favorite titles. Indie bookstores are opening up or regaining new popularity across America. In addition, the “buy local” movement has brought new energy to the little bookstore down the street. This article showcases some of the industry’s new dynamics.

Who is this business right for?

The ideal bookstore owner has a skill set that includes enthusiasm for books and reading, retail sales, customer service, and business excellence. Since book lovers tend to enjoy their privacy, and those who are good at sales are often more outgoing and eager to meet the public, you must be adept at what many would consider to be clashing personal characteristics. Do your unique skills strike this balance? Can you create not just a store, but a community of customers who share your passion for books and reading? This is your challenge.

What happens during a typical day at a bookstore?

  • Reading book industry publications such as Publishers Weekly and Book Business to stay abreast of upcoming releases and industry trends.
  • Interacting with social media to communicate with followers, and mentioning new product offerings, sales events, and upcoming author signings.
  • Opening your store, meeting customers, and keeping shelves tidy and properly organized.
  • Scheduling staff work shifts, if you have employees.
  • Ordering new releases (or buy from your public if you’re a used book retailer).
  • Communicating with authors, musicians, or others who schedule visits.
  • Planning new promotions.

What is the target market?

Your market niche will define your audience. For example, children’s literature appeals to parents, travel writing draws in readers with wanderlust, etc. Regardless of theme, your customers will be eager readers, or at least curious enough to want to know about your topic of choice. If you’ve chosen your primary genre wisely, it’s an area you know much about, so you’ll probably have an innate understanding of your audience and their preferences.

How does a bookstore make money?

Publishers will typically grant small retailers a 40% discount on their books’ cover prices, so that’s your maximum profit margin on new releases. If you buy and sell used books, you might have much higher margins. Perhaps you’ll buy a paperback in decent shape for fifty cents and sell it for $2.50. It’s also possible to buy large collections of books on eBay, Amazon, or other sites at a low per-unit cost for resale.

In addition to books, you might sell additional items that at least loosely tie in with your bookstore theme. This might be coffee, postcards, stationery, music, posters, mugs or muffins—whatever might fit your space and your customers’ tastes at a reasonable profit margin.

What is the growth potential for a bookstore?

According to the U.S. Census Bureau, bookstore sales increased 2.5% between 2014 and 2015. That might not seem like a dramatic increase, but considering the long downward trend that had seemingly consumed the industry, the year-to-year growth rate is promising. 

Your single-store sales might be limited by floor space, but you might also increase revenue through your ancillary product sales. Physical growth can come from expansion of your existing space into adjoining territory, or even an additional location if your business continues to thrive.