I think e-readers will get better and cheaper and largely replace physical books in a decade or two. However there will still be a demand for high-quality illustrated books and some people will still use bookstores to browse and buy such books. That will be the core of the bookstore business but it will be much smaller than today.
Another possibility is customized book making which is a good way of getting people to buy physical books. Basically you design a book including the fonts, illustrations, covers etc. and it’s sent to you. This could include both copyrighted books as well as personal books. Bookstores would provide work areas with access to high-quality design software and hardware. You can check out different types of papers and covers and print out sample pages on high quality printers. You could have staff providing advice on designing the book. Then you order the book and it’s sent to your place with the bookstore getting a cut. Again it’s possible to do these things online but the idea is that the bookstore will provide a better experience and some people will pay for this.
In addition even in a digital world people will still want a place to hang around and bookstores can serve that need for book lovers through book clubs, lectures etc. and monetize that through food and drink as well as promotion services which publishers pay for.
Yes, Kramerbooks and Afterwords is doing fine. They tried a couple times to expand to other locations, but it never worked and the new locations closed. However, the original location on Dupont Circle is doing quite well. The other independent bookstore in D.C. that is thriving is Politics and Prose on Connecticut Avenue. Both of these places found their niche and hung on to it. On the other hand, Vertigo Books in College Park (and formerly in Dupont Circle) has just closed. While the market for bookstores has decreased lately, it hasn’t disappeared by any means.
I think the simple thing bookstores in Australia need to do (no E-readers available here yet) is this: Charge A LOT less.
Right now, a “general” paperback novel is about $25 here. I can order the same book from the UK for $14, including shipping. OK, I have to wait a fortnight for it, but for a $10 saving, it’s worth it.
Also, bookshop staff here have no idea what they’re selling. I thought electronics retail was bad, but at least we had a rough idea what was in the store and what it did. I’ve yet to find significant numbers of bookshop staff here who really knew anything about what was on the shelves beyond the Latest Promotion or Vampire Romance du Jour.
OK, there are probably 10,000 separate titles in any given bookshop and I don’t expect the staff to know all of them off the top of their heads and be able to provide a precis of the salient plot points, but the fact is that by purchasing online I can search for titles, get reviews from various industry sources, compare prices, etc.
Because of the massive price difference, the only reason to buy books from a physical store anymore is A) Becasuse they’re really, really cheap (like the copy of Empire of the Sand that I picked up last week for $3 because the cover was slightly damaged), B) As a gift (and thus comparatively time-critical) or C) Because you need a particular book now and not in a fortnight’s time.
If Amazon ever open an Australian subsidiary, most of the bookshops here are completely doomed.
I’ll tell you this much - if e-books ever make it so big that print is on its way out, you can find a niche market for paper versions amongst Orthodox Jews who’d love to read on the Sabbath.
How profitable it would be I don’t know, but the customer base will certainly be there.
I bought a couple of books there last week in Campbell, that’s the one you mean, right?
To be fair, both stores are in little shopping districts with cafes and coffee shops abounding.
On the whole, I don’t find the selection that great there though I can usually find something. I long for stores with academic books. To me the dividing line is somewhere around if they have books from MIT Press or not, not matter the age
I don’t think the paper book will be completely obsolete in a decade. There are plenty of places and times when people want to read, where carrying an electronic device is not practical. On the beach or anytime you’re near water - boating, bathing, etc (gets damaged), while traveling (gets stolen), in a place where you’re not likely to have plenty of convenient batteries and chargers (rural locations,war zones, 3rd world nations).
Perhaps ebook readers will someday be equally durable and cheap as a a book. All I know is, I left my copy of Les Miserables out in a rainstorm overnight and its still just as readable as it was before. Not everyone wants to worry about an electronic device getting knocked around, scratched up, and generally destroyed.
BTW to Martini Enfield In the US a standard paperback (aka mass market paperback), is about $8.
Yes, Campbell is the expansion store. Yes, there is plenty of coffee shops around but the point is Recycle is making its profits off books, not coffee and snaks.
I dunno about “plenty of money” - that is relative. I also noted that:
the best books to me all had notes in them saying thay are for sale on abelibros.com (or whatever that used book site is) indicating they do their high end sales online
the clerk in the store (this is maybe a 2000 square foot store folks, small as bookstores go) was not busy enough to not be able to snooze and surf the net the entire time I was there. I was in the corner with a view of him virtually the whole time I was there (Saturday late afternoon) for about 1 hour or so, and he did not ring up a single sale other than me.
Aside - next door to BooksInc is a used bookstore that is 4 times the size at least. It is very busy and they draw the same crowd. I think the used bookstore is non-profit, owned by what locals know to be a cult that also runs the “East West Bookstore” across the street (and which has less books and more knickknacks that it used to. Next door to the used bookstore is a recruiting station for Scientology, so this is a very very interesting 1/3 of a block or retail indeed!
OTOH, BooksInc in Mountain View, which sells new books exclusive, and is part of a larger local chain, focuses on the interests of the neighborhood where the store is, so each is different. They always have someone at the cash register buying, but they work hard to keep from getting creamed by Amazon - I used to go there daily for years as I lived nearby during dotcom when I bought tons of books, I have observed their changes over the years. It is tough, but if any bookstore would go heavily into e-books if there was money to be made, this is the one.
BTW, Arnold, this one does have a cafe, on a mezzanine overlooking the store. I believe that the space is rented out and run as a separate business, so keep that in mind as a business model too.
From when I worked for Borders Group, the profit margin on a new book is only around 15-30%, and that’s before any discounting. Traditional new bookstores make little profit from the actual sales of their books - which is why they associate with high-margin business like coffee shops. In fact, at Borders, the only quarter in which any profit is made at all was the Christmas season, when people buy a lot more doo-dads and clip lights and Godiva chocolates and special bonus extravaganza editions. For the rest of the year it was a break-even business.
It seems to me that IF you are a clever buyer, you can actually make way more off used books than new. In terms of profit, I mean.
I agree, but only in a place where there is a very highly educated population.
I contrast these parts of the Bay Area (booksInc is immediately down the street from google hq for instance, and around the corner more or less from where netscape itself started, just to give some recent history of the neighborhood, it goes back way further than that with more of the same ) with rural BFE in teh Central Valley where I am now.
The nearest bookstore is 30 miles away, a crappy borders (more like one you would find at an airport). We recently had a book fair for kids to promote love of reading. This is an annual event. Most kids will not see another book until next year, other than a Bible. In no cases were the books over a 5th grade level. so older than that, you are screwed.
Recently, there was a local craigslist ad, some guy said he had a garage full of books, “enough to open a used bookstore”. I went to take a look. It was about 200 cubic feet of rotting mildewed old (as in 60s) paperbacks.
More digging with people in town led me to find out here was a used book store that closed a few years ago (I have been here 2 years) from lack of interest. This is what happened to the books.
~80% of the population here as hs education or less, nearly 50% 8th grade or less. This Valley is maybe 30,000 square MILES of the same except for Sacramento and its suburbs.
I think it highly unlikely a bookstore of any sort can make money for 100 miles around at least, sad to say.
Hell, even the local coffee shop closes 4PM every day and is not open on weekends.
On the positive note, our brand spanking new Carl’s Jr, anxiously awaited by the local chubbies, set a corporate record for largest gross sales in a week (no pun intended).
Maybe instead of making a bookstore and renting out space to a coffee shop, instead renting space from Carl’s Jr. might be the best way to build traffic.
*Would you like a ebook to go with that 6 dollar burger? You can use our device for free since you are getting the super combo! it comes with one free book for an hour!
*
That might fly here, and elsewhere, to be frank. McD’s already has wireless in every rest, others might too, but they need to compete electronically somehow moving forward.
Arnold, you have to think about who you could really partner with creatively and make sure you are not looking at a bookstore as a cool noble way to make a living and a “statement”.
Actually, Apple’s retail stores earn the highest revenue per square foot out of any major retailer in the world. $4000 / square foot in 2006, compared to something like $362 / square foot for Saks, $600 for Neiman Marcus, $900 for Best Buy, and $2600 for Tiffany’s.
Apple Stores produced about $1.3 billion in operating income (profit before tax) in 2008. Definitely not a loss leader.
Revenue does not equal profit. Apple stores are in very high cost locations on a product where there is almost no margin. Where Apple has margin, it tends to be in services and software - not what is being sold in an Apple Store.
I’ve only been to the Campbell store once, and it is tiny compared to the main store in San Jose (on the Alameda) which also has a much wider selection. There are always plenty of people there when I go, both on Saturday and in the evening. They’ve gotten more expensive since I started going there, (just when it moved from downtown San Jose) and they seem to spend the time to price books on a per item basis. The clerk has even justified some of the prices to me.
Book Traders has an even larger selection and is a bit cheaper, maybe going on volume more. There were also plenty of people there when I went on a Saturday a week ago.
Sure it makes sense to sell higher value books on-line, since that increases the number of people in the market for them.
When there is a specific book I’m looking for, on-line is great. But bookstores encourage serendipity. You might want to discount my opinion since I think the ability to buy an entire season of baseball cards in a box instead of buying packs over time a crime against humanity.
Think so? This cite estimates iPod margins at between 45% and 50%. Apple sells the same old stuff for higher prices, so they have higher margins. Another cite I found says they have better margins than HP and Dell, which I believe since PCs are commodities, unlike Apple products.
Read my second sentence (and the link) again. Your statement is simply incorrect - that number came right out of their SEC filing. $1.3 billion in operating income before tax from retail stores alone - essentially, profit before tax. Not revenue. Profit.
Apple sells their entire product line (except Xserves and other commercial stuff) in the Apple Store, at their own MSRP. They also sell a bunch of other manufacturer’s stuff, largely at their MSRP. Apple’s profit margin in 2008 was approximately 20% - if you say all the stuff in the Apple Stores sells for “almost no margin”, where is that 20% profit coming from? .Mac subscriptions or something?
Apple doesn’t really have “services”, and how much software do they sell, really? Sure, they make some money on professional apps like Final Cut Pro and Aperture, and some people pay $80 for the iWork suite instead of Microsoft Office, but the majority of their profits (and sales) come from hardware sales - iPods, iPhones and Macs. This is not just pulled out of my ass - just read their financial reports.
Been there, used to live right by Santa Clara Univeristy nearby. I find the selection there dreck. Too many used San Jose State text books (why neer the good stuff from Santa Clara I wonder? - I used to frequent the bookstore on SCU campus frequently too, having lived a block away. Always headed straight for the text book section downstairs.
I don’t think that store is that much larger, it has 2.5 rooms where Cambell has one, right? It is still small as these things go, compared to Cult Books in MV, or any used bookstore in Berkeley, green Apple in SF, or the half-price books in Fremont, or god forbid Gray Wolf books in San Leandro (huge trash dump).
If you want a solid and apparently growing used store in the area, may I recommend Lee’s in Sunnyvale on Murphy? Leave me some good stuff OK?
I kinda think all used bookstores are essentially online businesses now (unless they are dime store novels only). Storefronts exists just to generate new books coming in, to gather inventory more than to generate profitable revenue. That part probably comes from online.
I agree that store seems busier, but still relative. Despite recent improvements, that neighborhood is still dead as a doornail retail-wise.
Not surprised. In the Campbell store I was looking at a book which I decided against getting, maybe priced ~ $9. At the register were boxes of books on sale for 50 or a buck or so cents and what was there but the same book, in the same condition! I saw a few other books that were duplicates with separate prices. Makes me wonder if the prices are negotiable.
Hey, jsut remembered, I have had some good times and finds at the Rasputins in MV (used to be Tower Records). They seem to specialize in offbeat stuff and have excellent remainders in a variety of subjects.
All for serendipity in a bookstore, and why, if you are a true collector you would even open those packs of cards is beyond me Sounds like we travel the same bookstore circuit, so please share if there are more, I get to the Bay Area about once a month.
Regardless of margin, that is still ~5.something mill incme before taxes per store.
Not nothing, and more than I thought, but still the stores are nothing mroe than marketing vehicles.
I didn’t realize how many stores there are now though.
All this just confirms the revenue is gravy, but Apple would surely take at least a small loss jut for the marketing value.
And maybe outside the Bay Area, this is the only way to get stuff retail? What other channels are there, Best Buy maybe? Would they have everything and let you play endlessly?
Agree with your post in general - not trying to say a used bookstore can succeed in ANY location - but the problems selling used books in your area are not “fixed” by a totally ebook/on demand model as proposed by the OP. So, basically, regardless of format, “a demand for books” is an obvious predicate for a bookstore to be “a real money making business.”
I didn’t say it couldn’t work here, I just said ti would take clever thinking about how to partner. And bookstores rarely partner in my experience, especially indie ones, in large part because they are undercapitalized, and have whatever capital they do have tied up in inventory. Solve those issues, and you have a chance anywhere.
