How About a Book with that Scone?

My accountant told me I was crazy. “This is not a way people make money,” he told me. Likewise, my financial advisor said that if I blithely ignored her advice that my wife and I would probably jeopardize our retirement plans. The lawyer—who represented the other side, not me—said that the investment on offer was probably not a smart move for most people.

Just what was this crazy thing I was about to do that everyone else seemed to think was moronic?

My wife and I were contemplating buying a bookstore. It made sense to us. We were writers, after all. We wrote books. We liked books. What more did we need to know?

We planned to partner with a friend of ours, a business dude, who dreamed of being a writer. (You know the type.) His wife was obsessed with books, and planned to play a hands-on role in the business. Which was good, because we didn’t. If we went ahead with the deal, we would attend a few bookstore schools—yes, there are such things—with our new partners, but we planned to keep writing. And to our partners’ credit, they wanted us to do so, thinking it would good for “our” mutual brand. He was thinking of the well-known authors who are or were part-owners in bookstores. But I don’t think anyone has ever thought of me in the same sentence as author-proprietors such as Anne Patchett or Judy Blume.

Ultimately, though, we never went through it. Mostly because the seller got cold feet, not us. (I dunno—maybe our questions about the store’s current financials sounded too business-y?)

When the deal didn’t go through, my accountant heaved a sigh of relief that I could hear all the way from Staten Island.

And you know what? Nowadays I’m glad that we didn’t take the plunge because there is a lot I know now—about employees, about business, about myself—that I didn’t know then. Interestingly, I became a better analyst of the bookstore business after the fact.

We have since moved to a small city that has eight brick-and-mortar stores, half selling used/rare books. And there are two online bookstores based in town that also sell used and rare books.

Whenever we are in a new city, I like to visit indie stores. Almost without thinking, I find myself ticking off a silent checklist that I have internalized. Is the store downtown in the middle of the action? Do they have good foot traffic? Are their patrons likely to be locals or tourists? Is parking great—or a challenge? Do they have a decent event space, or would they need to partner with a school, university, church, or some other obliging venue? If there’s ever another pandemic, are they well-positioned for contactless pickups?

The biggest question is unknowable unless I am willing to be impertinent: How much is your rent? Another biggie is typically more visible: what’s your overall business model beyond selling books to people who just happen to walk in off the street?

The most obvious gravy train are events with visiting authors on book tours. The more of these you can drum up in the course of a week or month, the more transactions you are likely to make. When people enter the store to hear an author speak, they are likely to buy something. Even if they skip the book on offer, they will buy a picture book or a finger puppet for a grandchild...or just a cup of coffee.

I used to think all bookstores did tons of events—until I met a woman who ran a teensy hospital bookstore. In her case, her “sideline” business model was selling fresh flowers and magazines to people visiting patients. See? To stay viable, stores often offer a little something extra besides the books.

Recently, when an author friend told me that he and his wife were partnering with their business dude in their cute city in the American South, I naturally started asking questions about their business model.

There are six or so models that I have seen over the years:

The For-Profit Bookstore That Sells New Books, Holds Regular Events, and Offers a Food & Drink Venue.
I worked in New York City in the 1990s when Barnes & Noble rolled out stores that featured overstuffed club chairs and Starbucks coffee. The press ate it up for years! Now even the indie bookstores are doing coffee, with little fanfare. Although, these days, if you aren’t selling coffee and scones that are better than Starbucks I don’t know why a customer would bother. Denise and I did a book event at an adorable bookstore in Alabama one year that offered a full bakery by day, and a bar with music venue by night. (In two separate rooms!)

The For-Profit Bookstore With the Unexpected Extra Wacky Thing. I’m thinking of the tiny bookstore in Charleston that nails its nut doing ghost and history walking tours. In fact, their first iteration of the bookstore was a small space in which walking tour patrons gathered to wait for their tours to start. Naturally, while waiting, they shopped.

The For-Profit Pop-Up. I have met young authors who double as booksellers, peddling a variety of brand-new books by themselves and their author friends from rolling carts that they set up at farmer’s markets and breweries. Overhead is minimal. I have known bookstores to set up satellite shops in different cities during summers, or right after the holidays when Main Street shops go vacant and landlords are willing to strike a decent three-month deal on rent. Just recently, I heard of a used bookstore setting up racks of highly curated books inside a cocktail bar. All the books are $8, and all are chosen to “pair” with cleverly named drinks on the bar’s menu. I guess a patron who chooses a beverage called the LeGuin & Tonic just might buy a hardcover copy of Ursula’s books.

The For-Profit Upscale Tippling Used Bookstore. There’s one of these in our town. They sell high-end bubbly, wine, cocktails, coffee, baked goods, and snacks in an extensive maze of shelves stocked with tons of used books, many of them in locked cases. It is as cute as all get-out, folks! Old books have tendency to look...picturesque, shall was say, especially when paired with attractive lamps and artwork. So picturesque, in fact, that the bane of the owners’ existence are Instagramming nabobs who clutter the aisles shooting footage for their social media feeds but who never buy a thing! The copious booze and sidewalk cafe tables offset the cost of rent, but once, I happened to walk in on a particularly happy day when alcohol took a back seat to print. “We just sold a signed, first edition of Watership Down!” the owner told me. The book’s $750 price-tag was a reminder that sometimes a single sale can bring in more revenue than a $50 bottle of champagne.

The Nonprofit With Side Hustles. I specified “for-profit” stores above because I occasionally encounter nonprofit bookstores. They ensure profitability by soliciting annual donations from their community. If patrons are willing to support local theaters, museums, symphonies, and news organizations, why not local bookstores? As one owner pointed out, bookstores may often be the only public venues in a community to host authors. If you are not lucky enough to live near a local university, or in a municipality with a robust library system or a “town hall” speaker’s program, your local bookstore fulfills that function. One of the nonprofits I encountered used the strength of their endowment to lock in a decent lease in a Main Street building and run a small indie publishing house in the back. They augmented their bottom line by subletting their extra space to a bakery. (This model is different from the Alabama store I mentioned above, which operates their own bakery and bar.)

The Nonprofit Sugar Daddy. I’m being facetious, but this model occurred to me when my author friend told me that a wealthy patron was bankrolling his bookstore. Said Daddy, who hails from a family with money to burn, bought an entire Main Street building with the intention of setting up a nonprofit bookstore, event space, and co-working space for the community. For every million their family foundation spends, they can deduct $100K off their income. This does not sound like a deal to me, but what the hell do I know? In another model I was privy to, a family foundation that owned a lot of real estate struck an unbeatable rental arrangement with the local bookstore. Instead of charging market rate for the store’s downtown space, they asked for a percentage of the store’s monthly revenue. It fluctuated monthly, but they didn’t care. They were writing the whole thing off as a deduction. In the Sugar Daddy model, you have to hope that Daddy never changes his mind, or drops dead and his greedy scions quash the good times.

I love bookstores, as I’m sure many of you do. But increasingly, we (Americans) live in a nation where citizens aspire to read more but just don’t. (Link and link.) It saddens me when the existence of bookstores must be associated with alcohol, coffee, baked goods, or else rely on the kindness of deep-pocketed strangers for survival. Then again, I laugh when I think of the longtime merchant who chided me when I called her place of business a bookstore. Like I made it seem cheap and tawdry.

“It’s not,” she said. “It’s a community center!” I was leaving town, and did not have time to ask her accountant if he agreed with her assessment.

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See you in three weeks!

Joe

josephdagnese.com