Changing Hands Bookstore began as a dream on the porch steps of an alternative school for kids where Tom Brodersen, Gayle Shanks and Bob Sommer met each other as volunteers. In a recent conversation with Bargain Book News, Sommer talked about what it took to turn that dream into reality and explained the special connection between books and freshly baked bread. Read On!

1. How did you get started in the book business?

One day we talked about what we'd really like to do with our lives and the idea hatched was a little socially responsible bookstore and community gathering place. A few years later, Tom bought a small bookstore for $500, all he had at the time! The store was losing its lease and the books were packed up until a new location could be found.

2. What is your background – hometown, education, and career(s) before the book business?

All of us grew up in Phoenix. Gayle and I did our undergrad work at ASU. I went to grad school at Iowa State and taught for a couple of years at ASU just prior to opening the bookstore. Gayle did her student teaching at the junior high level shortly before Changing Hands came into being.

3. When did you open your first bookstore?

Changing Hands opened on April Fool's Day, 1974 with a big interest in books and community service. We had an eye toward books not readily available elsewhere. Over the first few years we listened to suggestions made by customers, many of whom became friends. Some of those friends became employees at the store, which was originally set up as a worker-owned business where decisions were made by consensus.

4. The original store was on 5th St. in Tempe, Arizona. How long did you stay at that location and where did the store grow to from there?

We outgrew our original 500' space on 5th St. and moved in 1978 with the help of a human book brigade of customers and friends to Mill Avenue where we had an amazing 1728' of space on two levels. Within a few years that space was too small and we broke through the wall ending up with three levels of books and greeting cards. Seven years later, another hole in the wall, another expansion and the store was up to 5,000 square feet.

The worker-owned collective also evolved over the years. As the business grew, making decisions with a large group became unwieldy. We reduced to a core group and started hiring workers as employees. We still maintain a commitment to fairness and involvement with all our employees. In 1998 we opened a 15,667-square-foot second location on the SW corner of McClintock and Guadalupe. We share this beautiful new space with The Wildflower Bread Co. In early 2000, conditions at our Mill Avenue location forced us to close that store, but we continue our commitment to community service at our new location.

5. How many Changing Hands Bookstores are there currently and where are they located?

Just one, at 6428 S McClintock Drive in Tempe, AZ . Tempe, the home of Arizona State University, is part of the greater Phoenix metropolitan area, population 3.1 million.

6. Can you describe the store – size, nature, look and feel, customer base, etc. – for those of us who have never had the pleasure of browsing there?

The current store is in the suburbs and is now 12,667 square feet. There are 100,000 new, remaindered and used books in a store that is a work of art--soft curves, beautiful murals, interesting nooks filled with books and gifts for all tastes and budgets; a community gathering place sharing space with a neighborhood bakery and cafe.

7. Could you describe how you share the space with a bakery? What inspired that arrangement and what has it added to your store?

We knew we needed a café/coffee component when we were planning the new location but didn't want the traditional coffee shop with mediocre pastries. Gayle had grown up as the daughter of bakery owning parents and was determined to find a good bakery to share our space. She drove the city for two days, visiting every bakery until locating the right one, invited the owner to consider the opportunity we were offering, and the rest is history. Our good neighbor is the Wildflower Bread Company, an upscale combination bakery-sandwich shop serving gourmet sandwiches, homemade soups, pastas and salads in addition to offering a wide selection of bakery items. Their space is separated from ours by an 8’ wide grating which is opened during common business hours.

8. Do you plan to open any additional stores?

For almost two years at the end of the 90's we had two locations, but found it very difficult to give both the kind of energy and leadership required to maintain the high standards we had set for ourselves. When we reduced to one location in 2000, we were very relieved and have no intention of opening another store.

9. It takes a while for most independent bookstores to become profitable. Were the early days of Changing Hands a struggle for you?

We took no money out of the store during the first year and didn't get up to minimum wage until the fourth year. The most profitable years were 15-20 years after opening, in the early 90s before the chains and internet competition became intense.

10. How many titles do you carry and do you specialize in any particular category?

Thirty to forty thousand. We feature children’s, modern fiction, spiritual/metaphysical, southwest regional, mystery, science fiction, etc.

11. How many categories do you feature?

Several hundred.

12. You sell used books. Can you describe how that process works? For example, do you buy everything that comes in or do books have to meet a certain standard? Do you give credit or cash or both? Do you donate surplus books to charities, etc.?

We buy only what we feel reasonably certain we can sell in the next three months – only clean, unmarked, carefully read books. Based on our selling price, we offer 50% in trade credit or 30% in cash. Trade credit can be spent on anything in the store. Surplus books are put on a free cart outside the store. Surplus children's books are collected for local donations.

13. Where is the used book store station located within the store?

The used book trading desk is just to the left of the front entrance as you enter the store. The used books are shelved side-by-side with the new books and remainders throughout the store. They are identified on the spine by a small stick-on colored dot. These dots not only help the customer spot the used books, but the color, changed 3 times a year, allows us to remove used books that have not sold in over 8 months.

14. What percentage of your sales is used books?

It varies between 12% and 15%.

15. Obviously used books come to you, but what is the buying process for the other books in your store? How do you find remainders, front list, etc.?

Front list from catalogs and sales reps. Remainders from sales reps, e-mail, websites, CIROBE, BEA and occasional visits to remainder vendors.

16. Are trade shows important to the buying process?

Yes, very.

17. How many do you attend annually and which ones do you consider a priority?

CIROBE and BEA.

18. What do you look for when buying remainders? As a used bookstore, you probably don’t need novels, so do you look mainly for hardbacks, trade paper? Do you concentrate on any specific categories?

We look for pretty much the same type of books and often the same titles we sell as new books. We buy and sell hundreds of remaindered fiction titles some of which we sell in excess of 100 copies per year. Trade paper outsells hardbacks even when the paper costs more. Best selling remainders are fiction, children's, cookbooks and regional titles.

19. When you purchase remainders, how deep do you buy?

One copy to two hundred depending on anticipated demand and gross margin.

20. Do you travel to the remainder district in New York City to buy books? Why or why not?

No. Right now we seem to have more than enough buying opportunities without scheduling expensive trips to the East Coast
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21. Do you buy from distributors or publishers or both?

Both.

22. Are special orders an important part of your business?

We take thousands of special orders each year. They bring back the customers and, on the majority of special orders, which are filled by distributors, we make a good margin.

23. Can you estimate your cost of goods in used books, remainders, and new?

Used thirty-percent, remainders fifty-percent, and new, fifty-eight percent.

24. What percentage of space do these categories occupy in your store?

Used, ten-percent; remainders, twenty-percent; and new, forty percent; with sidelines at thirty percent.

25. What percentage of sales is sidelines and what kinds of items do you carry?

Sidelines account for twenty-five to thirty-percent of sales. We carry gifts, candles, incense, windchimes, toys, journals, and much more. Gayle has given workshops at SEBA, MPBA, SCA, NCIBA, and NAIBA on sidelines buying and selling.


26. On your front list product, do you make use of the advertising co-op program? If so, please explain how that works.

Yes, we get thousands of dollars in co-op each year, but that's not my area so I don’t know the details.

27. On front list, do you end up returning much?

Maybe fifteen-percent.

28. Is everything computerized? Do you inventory books and remainders with a point of sale system?

Everything except the used (non-collectible) books is computerized.

29. If so, what POS system do you use? Can you share with us the advantages and challenges of using that particular system?

Books in Store - DOS version. Computer systems are like religions -- you only know the one you grew up with -- and if you like it, then you can't imagine converting to another. When we made the transition from 10,000 index cards to our computer system, it was like the Shoemaker and the Elves -- magic!

30. What is your local competition?

Borders, BookStar, Costco, and Barnes & Noble.

31. How have you held your own among the big chains and discount stores?

Used books, remainders and sidelines help, plus community involvement, great author events, a great staff, and dumb luck.

32. Do you think that the used book business is somewhat immune to the chain competition?

Somewhat.

33. How long have you had a website, www.changinghands.com [ http://www.changinghands.com/ ] ?

Three years. Sales are negligible and affiliate link sales are even less.

34. Why did you decide to join the Book Sense network for independent booksellers and has that been a good partnership for you? Can you explain how that works?

It's been great for us. Sales off our Book Sense bestseller case and our Book Sense 76 case are very strong. We sell only Book Sense national gift certificates and will soon migrate to their gift card program.

35. How do you market your stores – newspaper, radio, TV, Internet, etc.?

All the above except TV. Many events yield low cost or free media exposure. On radio, we're long-time heavy supporters of two local NPR stations.

36. What have been some of your most successful promotions? Is there any special promotion running now?

Remainders are a continual promotion as is our crowded calendar of events.

37. Can you share with us some of the greatest challenges faced by independent booksellers?

Borders, B&N, amazon.com, Costco, staff turnover.

38. What about the unique challenges faced by those running a used bookstore?

I don't think of Changing Hands as a used bookstore.

39. You and your wife, Gayle, are active in the American Booksellers Association (ABA). Can you tell us when and why you became involved with the ABA?

We joined about 25 years ago and have always believed in the benefits of working together with like-minded folks to share solutions to common problems.

40. In your opinion, what is the greatest service/advantage that the ABA offers to booksellers?

Opportunities to interact with other booksellers, educational seminars, discounted shipping and insurance programs, Abacus, Book Sense and booksense.com.

41. How difficult is it to retain quality employees? Do you have any special training or retention programs or philosophies you could share with readers?

It's nearly impossible to pay our employees a "living" wage. Some stay for many years because, like us, they're hooked on books and bookselling. But others leave and we have no special insight or successful retention programs.

42. Is there a management philosophy that you try to follow in your business? Can you tell us about it and explain when/where/how this philosophy developed?

We are committed to:

1. Doing business in an honest manner and generating profits without exploiting our customers, suppliers, or co-workers.

2. Sharing our profits with our employees and our community.

3. Resolving our conflicts through discussion and compromise.

4. Supporting efforts to achieve peace, environmental quality & human dignity.

5. Supporting and promoting education and the arts.

6. Being open to change and flexible in our everyday interactions and in conducting our business.

7. Being of service to our customers, our community & to each other.


43. What do you see as Changing Hands’ greatest challenge in the next five years?

Increasing productivity.


44. Who is your favorite author and what is your favorite book and why?

I just read Jhumpa Lahiri's The Namesake, a beautifully written novel about two generation of Bengali-Americans facing the challenges of assimilation and identity that have confronted immigrants from many countries who have come here seeking the "good life." Also, Bring Me Your Saddest Arizona by Ron Harty, whose characters seem to appear fully developed within the first two paragraphs of each story. After that, the reader is carried along on a wave of good writing, treated to sparkling dialog and deposited lightly in the sand at the end of a well-told tale.

45. So independent booksellers actually find some spare time to read their favorite books?

Yes. Hundreds are being nominated for each of the six annual Book Sense 76 lists by independent booksellers. And at board meetings and BEA dinners we continually share our favorites of the last few months with each other.

43. Is there anything you would like to add about Changing Hands, your background, your business or your future goals and plans?

At Changing Hands Bookstore we have a passion for the written word and believe that books can change lives. We are locally owned and independent and we support other locally owned independent businesses. We take pleasure in providing quality books, gifts and services to enrich the lives of people in our community.

Maryellen Duckett is a Tennessee-based freelance writer for National Geographic Traveler, Family Fun, and On the Road with Hampton magazines. She and her husband, Randall, are co-authors of the family travel books 100 Secrets of the Smokies and 100 Secrets of the Carolina Coast (Rutledge Hill Press).