David Sleeper, Encore! Books David Sleeper mined booksellers gold when he tapped into a valuable natural resource – a community filled with avid readers. Although he had never been in the book business before, Sleeper recognized the tremendous need for a local used bookstore and decided to fill it. In a recent conversation with
Bargain Book News, Sleeper talked about what it is like to run a used bookstore and shared the important lesson he learned from a line of people waiting in the rain.
How did you get started in the business? We started in 1990 as a used paperback book exchange. It was a small store about 1,200-square-feet. We did that for five years and in 1995 moved to a new space, which was almost four times as big. We also added a larger selection of used books to the mix and added remainders for the first time. It has just taken off since them.
Were you working in the book industry at the time? I had never been involved in the book business before. I liked to read and liked to shop at used and bargain bookshops. There was actually a franchise called Annie’s Bookstop that I looked into buying. She was in the process of going through involuntary bankruptcy at the time, but I ended basically copying her with her consent and cooperation under a different name.
Immediately before that I had worked as a manager at retail computer store. I had also published a newsletter on job opportunities in Vermont and worked in construction, energy conversation, and retail hardware. Basically I had tried everything but books.
So why did you decide to try books? This is a community that loves books. Dartmouth College is right nearby, so there are lots of students, faculty, professionals; plenty of people who love to read. One of the things that inspired the move to the expanded store, in fact, is a giant spring book sale held across the river in Hanover, New Hampshire. They fill two high school gymnasiums with donated books -- tens of thousands of books. It’s book-buying frenzy for the weekend. People wait in the rain to get in there first and they bring friends to help them carry the books. I’ve met people who said they bought their entire year’s worth of reading at that one sale.
The first time I went to the spring book sale I thought, “What would happen if somebody offered books at these prices year-round instead of one weekend a year?” I decided to give it a try.
How would you describe your store? We sell both used books and remainders, which has really been a successful formula. With the used books we have no control over what we have for inventory. We have to wait for somebody to bring titles in. Unfortunately that means we could never get very many popular books or titles in popular subject areas if we just dealt in used books. By combining the used with remainders, I can look for areas where we are weak and add more titles.
What kinds of remainders do you buy? We’re very selective. We do buy some assortments and skids but not as much as other stores. We buy most of our books by title. Specifically we look for regional authors, regional subject matter; anything related to New England does really well. There is also a tremendous market in kids’ books, how-to, and crafts books. Computer books are real strong for us as well.
Did it take long to get profitable? No. The beauty of used books and remainders is that there is a fairly low start-up expense. I believe in used all the way. All of the fixtures in our store were bought used. In the nineties that was very easy because there were a lot of independent book stores closing and going out of business. When we had our expansion I was able to get matching fixtures from three different stores that were closing.
Where are you located? We’re located in West Lebanon, New Hampshire, which is right on the border with Vermont about halfway up the state. Most people are familiar with Dartmouth College, which is in nearby Hanover, New Hampshire.
How big is your store? We have almost 4,000-square-feet of selling space and about 800-feet of backroom space.
What kind of competition do you face locally? There aren’t any other used bookstores in town and frankly I have never understood why. There are a few of the more traditional antiquarian and out-of-print bookstores around but they tend to be smaller. Three years ago a Borders opened almost across the street from us. Up until then there were three other independent bookstores in town. Two of them closed immediately and the other one just announced recently that it was closing.
Doesn’t having Borders as a neighbor negatively impact your business? No. We’ve been very pleased. Of course we were a little worried when Borders first opened. Then our customers kept coming in after visiting Borders saying, “I don’t see what the big deal is; nothing is very cheap.” Compared to us, the prices are high. We did see sales flatten for about two years after they first opened. But compared to other bookstores we are faring well. Traditionally bookstores can expect to see sales cut in half when a Borders opens that close. Actually, Borders helps ensure we have a steady supply of used books. After people read the new books they buy at Borders they can bring them into us as used.
What about non-traditional competition? Are there grocery stores or discount stores selling books locally? We have a B.J.’s, which is like Sam’s Wholesale Club. They actually share a parking lot with us but their book selection doesn’t amount to much. We just haven’t found much competition for the bargain books and the used books that we sell. There are places that have a few books here and there but no one has the volume we do.
How is your store organized? Is it as easy to navigate as a traditional bookstore? Yes and that is unusual in the used book business. We are organized like a traditional new bookstore. We are fully computerized. We have access to Books in Print. Everything is organized by section and alphabetized. When a customer asks for a particular book, we can look on the computer to see if we have it in stock and locate it immediately in the store. We are not a dusty backroom used bookstore.
How many trade shows do you attend each year? We go to a few each year. For the remainder buying, the importance of attending these shows is actually more for the contacts we make as opposed to the purchases we make. We get to see what other people are doing. For example, there are some people that don’t put out lists regularly and I only see them at the shows. Some publishers only put their white sales out once a year at the show. Over the seven years I have been doing this I have made a lot of friends who I only get to see at the trade shows.
The ABA says that a frontline bookstore can expect a cost of goods in the 62% to 65% range leaving a 35% to 38% operation profit. What kind of cost of goods can a used bookstore realize? We are combination used and remainder. Our overall cost of goods is almost the inverse of a frontline store. Our cost of goods is about 35% whereas our profit margin is about 65%.
Are you using the Internet or EBAY to enhance sales? Not on EBAY. We sell through Amazon and through half.com. That’s primarily remainders. We also sell used books through alibris.com. We’re doing about fifteen percent of our sales through online services. We don’t have a website of our own. It is a lot easier to let somebody else do that work.
Do you sell sidelines? We do but it’s fairly limited. We sell music on cassette and CD’s – mainly classical music and some blues and jazz. We have a few odds and ends like bookmarks and pens. We do some book-related items like journals, blank books and stationery. We also have audio books. At Christmas we add a few stuffed animals but generally we stick to books. We’ve stayed away from videos and DVDs. We want to be a bookstore.
How do you advertise the store? We’ve always advertised. The amount has varied over the years. The primary thing has been the small, local, daily paper. We’ve done a few of the weekly’s. We used to do a lot of coupons on the back of supermarket sales receipts and on placemats at local restaurants. Mostly now it is word of mouth advertising. One of the most successful things we have done and something we want to expand involves e-mail. We have an e-mail list of people who are interested in computer books. When we get a new batch of computer books in, we e-mail the list of the books and the pricing to about 300 people. Within about a half-hour we get people in the store buying the books because of the e-mail notice. I’d love to expand that to cookbooks and things like that. It’s direct marketing at its best. People are hot for books they love.
What’s the most challenging part of running a used bookstore? Dealing with the customers who bring in the books they absolutely love and don’t understand why you won’t pay more for them. Most people are realistic about what their books are worth but we do get those people who are sentimental about their books and take it as a personal insult when we don’t buy it. It may be that we have five on the shelf already or we have one and we haven’t sold it for a year.
In your opinion, what is the biggest misconception people have about running a used bookstore? That you actually get to read any of the books! If you’ve always wanted to own a bookstore or work in a bookstore to read all the books, it’s not going to happen. Actually, the biggest misconception about a used bookstore is that it is like any other retail business or bookstore. We have just hired a general manager who came to us with more than 20 years of traditional bookstore experience and he has been amazed at how much more work is involved in running a used bookstore. You are not only selling books all day long, but you are also buying books all day long so there is twice as much work. You can’t go to a publisher and order the book that you run out of. You have to hunt for the books you want.
How do you determine the amount you will offer in trade or in cash for used books? It’s not really a complicated formula. It has complicated our business in some ways but we try to look at it from the customer perspective. We offer them a choice of either cash or credit for the books. However, we do offer more for the credit value. So, for example, say we offer you $10 cash for a box of books, you would get $12.50 in store credit if you took that option instead. We would rather have people spend it in the store. To encourage people to take the credit, we allow them to change their mind at any time. That policy is pretty unusual in the industry. Most stores make you take either cash or credit and if you take the credit, you’re stuck with it. For example, if you have credit left on your slip you can bring it back to the store at any time and we’ll discount it by 20 percent and convert it to cash. So if you had $25 in store credit, you would end up with $20 cash.
But how do you determine the value of an individual book? We computerized in 1997, which helps us determine value. Before that we used to take an armload of books and run up and down the aisles to see if we had more of them on the shelves or not. With a lot of the books, particularly the most popular authors and titles, the staff out front know either “yes” we need that or “no” we don’t need that. Other titles we can look up fairly quickly on the computer and see its history. This tells us how many of that book we sold last week, last year, etc., which helps us make a decision. Basically the demand for the book and the condition of the copy determine the price.
Where does the trade-in process take place in the store? We have one central area in the middle of the store where we sell and buy the books. We have four computer terminals there and ten employees. The store is quite nice for a used bookstore. The lighting is bright, we do have some chairs scattered around and one table. Also the floor is carpeted so people can sit on the floor. We’re kind of in-between Borders and a traditional used bookstore. We don’t have the coffee and the overstuffed chairs, but we do try to make the atmosphere as nice as possible.
Have you ever thought about franchising the Encore! Books concept? I’ve thought about it but I have my hands full doing one store. The thought of doing more is pretty overwhelming.
What is your favorite cartoon character and why? That would have to be “Calvin and Hobbs” because I identify with them!
David Sleeper can be emailed at dave@encorebooks.net. 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).