STRATEGY

Network: September 1990

Network reader-to-reader advice.
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Book Value

Christopher Phillips believes that a small, independent bookstore in the right location could compete with the large chains and their discount prices (The Literary Life, June, [Article link]). He also thinks he's found just the spot -- near two elementary schools and a high school, and surrounded by upscale shops and restaurants. Phillips has no experience in bookselling but is a "voracious reader"; should he take the plunge? Network readers provided plenty of advice -- and also tried to temper his enthusiasm.

Some of Mr. Phillips's optimism may be misplaced. Being a voracious reader no more guarantees bookselling success than being a voracious eater guarantees success as a restaurateur.

In general, the "excellent location" he cites won't guarantee sales. In Berkeley, Calif., a city with a world-class university and several public and private schools, three small booksellers in similar upscale locations have gone out of business in the last five years. Larger chains, with their volume discounts, were probably one factor in those three stores' demise. But another independent bookstore nearby is thriving. That store is open from 10:00 a.m. to 10:00 p.m. every day, it offers a wide selection of both new and used books, and it presents readings by well-known authors two to four times a week. This bookstore also features a small but recognized rare-book collection and a special section for children. It is a local outlet for The New York Times, and its staff is large and knowledgeable.

Mr. Phillips should learn the basics of bookselling by working in someone else's store before opening his own. And he should study more closely the stores he searches out when he travels. Are they in small towns that the chains haven't yet discovered? Are they close to colleges? Are the owners retired? Do they operate more than one store? And are their revenues consistent with what Mr. Phillips would need to survive in his town?

Barbara Witte-Schmidt

Principal

Signature Events Inc.

Berkeley, Calif.

* * *

Mr. Phillips is fortunate to have the American Booksellers Association (ABA) as a resource. It offers a wealth of information, including classes especially for people in his situation. It also sponsors an excellent trade show. He can contact the organization at 137 West 25th Street, New York NY 10001, or call (212) 463-8450.

Eric Riback

Vice-President of Marketing

Delorme Mapping Co.

Freeport, Maine

Mr. Phillips's letter jumped off the page at me. I am an experienced museum bookstore manager, and I plan to open a shop of my own in a year. Despite my several years of experience, I wouldn't dream of opening a bookstore without first joining the ABA. Its classes are held several times a year in various cities. It also publishes essential references for booksellers, including a complete how-to manual, a list of basic books for a general shop, a book of publishers' information, a monthly magazine, and a newsletter.

I strongly advise Mr. Phillips to get some experience. A temporary, part-time stint in almost any small retail store will expose him to the whims and vagaries of human nature that are apparent only from the other side of the counter. Even a six-week job over Christmas will help him decide if he's cut out for retail. There's a lot more to running a shop than opening the doors and counting cash. Sandra Givens

Manassas, Va.

* * *

Several months ago I felt the same yearning as Mr. Phillips. Two of the associations I contacted were especially helpful. The ABA sent me several pounds of information, and the Christian Booksellers Association's publication Understanding the Call to Christian Bookselling is excellent, even if Mr. Phillips does not intend to sell Christian books. By the way, I decided against opening a bookstore. The profit margins are too low for me. Eric R. Voth

Speaker and Consultant

Akron

Passage to India

Minal Potnis, in Bombay, India, just received his M.B.A. and wants to start a marine sports business in India's duty-free export zone. He asked where he could find U.S. partners for such a venture (Merchant Marine, June, [Article link]).

Mr. Potnis, like entrepreneurs in many developing countries, has several options. He can contact the commercial attaché at the U.S. embassy or consulate; both should have copies of the Thomas Register of American Manufacturers. He can contact the local chapter of the Indo-U.S. Chamber of Commerce. Or he can approach a firm that specializes in arranging joint ventures and technology transfers between U.S. and Indian companies. The United States is India's largest bilateral trading partner and the largest source of joint-venture partners for Indian entrepreneurs. India is an opportunity waiting to be discovered.

Stacy Standley III

Managing Director in India

InnerAsia Consulting Group

San Francisco

Give the People What They Want
Since it opened a year and a half ago, Stephen Castorino's pharmaceuticals distribution company has been supplying only government contractors. Now he wants to expand his business to pharmacies, but he doesn't know what he should stock or in what quantities. He asked where he could get market analysis information (Business Prescription, June, [Article link]).

Mr. Castorino is overlooking a useful resource: his prospective customers. He should approach customers, explain that he is expanding his business and wants to establish a unique customer stocking system designed to accommodate their needs. Then he should ask them to begin the process by allowing him to quote their top 100 requirements.

He can then quote the high-volume items and decide whether he can price them competitively before he invests his money. Prospective customers might also provide Mr. Castorino with monthly forecasts, from which he could determine patterns of demand.

David Mowrey

Materials Manager

Pacific Scientific

Yorba Linda, Calif.

Last updated: Sep 1, 1990




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