Monday, October 28, 2013

Most business advice is wrong -- it seems to me.

The previous post about location, location, location,  got me to thinking about what I read everyday in the business news -- especially about bookstores.

I'd say, in order of importance, the things that are emphasized in most discussions about business are these.

1.)  Promotion and identity.  What events do you offer?  How do you make yourself cool?

2.)  Location amenities -- what do you offer in the way of amenities to draw people to your store?  Coffee or booze or lounging?

3.)  Service.  All the extra things you do to make the customer happy.

4.)  Price.   What discounts do you give?  What incentives can you use?

5.)  Displays.  How do you arrange your product?

6.)  Location.

7.)  Inventory.  What inventory do you choose to carry?  In what proportions?

So I would reverse that list -- in exact order of importance.  In my opinion, the advice bookstores are getting is backward, opposite of what it should be.

1.)  Above all -- Inventory, inventory, inventory.

Yet, I can't remember the last business article about bookstores that I read that even mentioned inventory, much less made it the focus of the story.

By FAR the most important thing about bookstores is inventory.  Do you have the book the customer wants?  Do you have the book they didn't even know they wanted?  Do you have a good selection of what you carry?

It astounds me when I visit other bookstores and I see how limited their inventory is.  How often they duplicate books. 

This duplicate book thing drives me nuts.

Here's the thing.  You can get books, minimal postage, in one or two days from the book distributors.  You only have to order 10 books, mix or match.  So any book you sell is only two to three days from being replaced.

But almost every bookstore I go into has multiple copies of every book.  Not just the best-sellers where it might make some sense (and even here, two or three copies ought to suffice) but mid-list books.

When I ask why, it's because they get a better margin ordering direct from the publisher.

OK.  What's the extra margin?  Maybe 3 or 4 or 5%.  For this, they have to buy up to 10 copies.

So you can have 10 copies of 20 books for an extra 5%.

The customer walks in and if he or she isn't interested in those 20 books, no sale.

By foregoing the 5% you could have 200 single copies of books!!!  You up your chance of catching a customer by 10 times!!!

This is just one example.  There seems to me that there is NO EXCUSE not to have more books in your store, as many books as you can fit in.  There should be no blank space whatsoever.  This should be your everyday focus.  What is selling?   What is something like what is selling?  Is there something selling that I should be carrying? 

How can I get more books?

My selection is limited only by space -- which is maddening.  Especially when I see larger stores that look sparse.

It isn't even a question of price -- you can pick up very good books from wholesalers at very good prices -- if you know your books....

2.) Location.   See previous post.

In addition, what I see are people picking too fancy a store in a bad location.  That is, they like the space so much they locate non-bypasser location.  Why do they do that?  Because they've been told they must have location amenities and promotional flourishes.

I'd much rather accept a smaller, less shiny location in a much more visible part of town -- even if it is more expensive.  Saving money on a location is stupid.  Your business should handle the costs of a location or don't open in the first place.

By being in a more expensive and possibly smaller location, and by focusing on inventory, inventory, inventory -- you won't have the amenities, the promotional events.

Big deal.  I think people waste way, way too much time on those things -- they don't pay off, as far as I can see.  They only distract you from what should be your main job -- SELLING BOOKS.

3.)  Display.

Again, almost never mentioned in most article about bookstores.  But again, I see a lot of wasted space in stores.  Every inch should have a book, every place you can place a book with the cover displayed, you should do that. 

But if you can't, then have stacks of books.  But most of all, display your books.

Not your couch.  Not your coffee counter.


4.)  Price.  

Personally, I think if you are doing a good job you should be able to charge full retail price.  Yes, you'll not make as many sales, but the sales you make will count.  Again -- INVENTORY!

You have the book they want -- the book they've been looking for.  You have that book because you make enough money selling books for full price that you can buy more books.  Which means the next customer in the door is more likely to find the book they've been looking for.

It's a virtuous cycle.

But again, most advice is the opposite.  Sell stuff cheap.  Have sales.

5.)  Service.

Again, books.  You have a register and you make sure you greet every customer and talk friendly to them and are knowledgeable and helpful.  You offer to order the book they are looking for.  You Google their questions.
You know, bookselling.

That's all the service you need.

6.) Location amenities.

Only one -- books, books, books.  No couches, no coffee, no events.  All are counter-productive and not worth the space, time or energy. 

Just books.

7.)  Promotion.

Screw it.  If you can get some free publicity, by all means.  Otherwise, screw it.  Advertising is a total waste of money. 

1 comment:

Duncan McGeary said...

About the expensive location -- I should mention, Within Reason. But cheap rent is usually a mistake. Rent is usually a little more because it's a better location.

But not always. Be sure and price comparison.