Friday, July 26, 2013

The Anti Best Seller

Best sellers are in the trade news again, with Amazon and Overstock announcing new discounts of 51% to 65% off list price, so I called a few buyers to see what they thought. Most were unperturbed, saying they had given up on so-called best sellers years ago.

Then again, most of my buyers are bargain buyers. In remainders and bargain, a best seller is a very different and more interesting animal, not effected so much by popular delusions and the madness of crowds (a little bargain reference*). 

The daily best seller page is one of the most viewed pages on this blog. Each day I post the title that sold the most on the previous day and, while some make sense in a New York Times sort of way, most are interesting just because they are so far off the usual top ten. Many are probably not in the top million.

I don't think it generates more sales, though I think it does get some people to request my lists. One day it's an advanced test prep title, the next it's Curious George, the next it's a history of the oil industry. What my daily bestseller list does do, or at least I hope it does, is help to show how diverse and healthy this market is, how bargain is a part of a successful business plan, no matter what area of the industry you're in.

All of my best sellers are sold by me to my customers, which is to say, mostly bookstores. They don't necessarily reflect what my customer's customers are buying at the moment, only what my customers have confidence will sell in the not-too-long run. So, while there is the occasional Mitch Albom or Nora Roberts (Eric Carle, Hannah Arendt, James Joyce... Matthew Quick), most come from my customers' best market niches, whether or not my customers or I previously knew about those niches.

This is not to say my best sellers are not the product of my customers' businesses. I sell to a number of larger customers whose buys definitely skew the numbers their way. More interesting to me are the best sellers for the days those larger customers are not buying. 

And the list reflects other aspects of my business. Many of my customers rely heavily on children's and young adult for their bargain sales. A few of my customers order much more frequently and in greater quantities than others. Some customers only order a few titles in heavy quantities a few times per year. Some days I have many orders, many titles per order, some as many as 1000 titles, but all in small quantities: 2s, 3s, 5s. On those days the best seller might sell as few as 25 copies. Some days I get very few orders, with a few titles per order, in high quantities per title.

Full disclosure: Most (about 80%) of my daily bestsellers are generated when one customer buys one title, and the quantity ordered is just, or much, higher than any other quantity ordered, combined or otherwise, of any other title that day.

Some lists contain one or more titles that everybody wants, the problem being there might be only a few copies. So, while I might get orders for a few hundred copies of that title, I really only sell the few copies on the list. I still make that title my best seller for that day. On the other hand, I had one title that never shipped, and this was one of the very odd titles I describe elsewhere, which I had never seen before and thought nothing of it when I saw it on the list. Unfortunately, when the supplier went to ship the books, they all turned out to be defective. So I sold about 800 copies, all of which were actually in inventory, and the sale was zero after all was said and done. I couldn't bear to put that one on the best seller list. Too depressing.

One of the keys, if not the key, to best sellers in bargain is that you, the buyer, build them. They often don't happen all at once the way frontlist or even backlist best sellers do. You generally know what those are when you first buy them, before you see the numbers. Not necessarily so with bargain.

You will probably know which books are going to be good, solid sellers. These are usually from hurts sorters (see glossary page here) and are in your back list stock or your used bookstore has customers asking for them regularly.

Bargain best sellers, on the other hand, frequently will surprise you. A bargain priced book is often not the same book as it was at full price. You merchandise it differently, your customers see it differently. The book may have simply been overpriced by the publisher to start with, or aimed at the wrong market. Now it might become an impulse buy near the register, whereas it was previously shelved in the wrong section. A front- or backlist young adult nonfiction book about addiction and recovery, shelved spine-out in the young adult section, priced at $16.95, is not going to sell anywhere near as well as the same book, stacked near checkout, priced at $5.95.

The building begins as you get to know what your bargain bestsellers are. First you buy a few copies and, when they sell out quickly, you buy a bit heavier. You might have started with 5 and then bought 10. When that 10 sells out quickly again, you buy 20. They sell out even faster and you buy 50. By now you might have discovered why they are selling so well. The author, previously unknown to you, is local, or the subject has relevance to your community that you were not aware of. Maybe a teacher at a local community college is surprisingly popular and recommends this book to all students. Or it might just be that pictures of kittens and monkeys hanging out together in strange places while playing musical instruments with their.... oh never mind. There is no predicting some of these. Just rock and roll with them, make your customers happy.

The fear, especially if you have a small store without a lot of traffic, is that you will get stuck with your last buy. Just as you receive the last shipment, your customers lose interest and you are making a new desk out of the cartons of books. In fact you can almost always make that last buy sell. It was your bargain best seller; you just need to push a little harder to make the last buy sell out. If you have seasonal sidewalk sales, it will sell then, or at an expo sale, or just during the holidays.

More often than not, the supplier sells out long before you run into an overstock situation, and you end up thinking you should have bought heavier on your second-to-last buy. Then you start building the next best seller. 

Extraordinary Popular Delusions and the Madness of Crowds, by Charles Mackay, first published in 1841, was a huge best seller as a bargain reprint in the 1980s, and probably would be again for many years to come if, say, Wordsworth Classics would bring it back (oh wait, they did! Order some now, this book sells).

Wednesday, July 17, 2013

Book Business Your Way

I've been a manager and a buyer for bookstores and wholesalers, managed a buying group, owned a bookstore and two wholesale companies. One thing I discovered over the years is that, if you own or manage a business, you tend to think of your customers as fitting within fairly easy to define boundaries. There are these customers here that do business this way, there are those over there that do business that way. This is a perception problem.

Entrepreneurs who buy into the bargain book wholesale business run into this problem early on. They see a particularly successful customer that buys large and often, and they ask why the sales team can't go find all the other customers in the world that match that profile; there must be so many. After all, one casual dining restaurant is duplicated with another name right next door and within a few years you have dozens of them, all successful. 

Even after years of trying, these recently-new book wholesalers will still sometimes wonder aloud why there is only one huge successful stand-alone surplus store that buys lots of books, or why they have only the one customer with the big mail order business that only sells bargain books, or how there can be only one regional chain of used bookstores that knows how to buy bargain. The thing is, all of these are actually the only ones doing it just the way they do it.

When I travel to visit customers, I will stop in at other bookstores in the area and see if I can meet the owner or the buyer, say hello, and do my best to convince them to buy bargain. I am struck, even at the smallest store level, by how unique each of these businesses is. There is the store with the maze of small rooms in an old apartment building they have gradually expanded to fill, or the stall in a hospital that has turned into a full service bookstore. A few stores are members of franchises, but seem to fit the corporate mold in signage only, being unique in how they buy, merchandise, and promote. 

If there's a formula for (or symptom of) success, it is that these businesses do everything they can to do business. They have internet sales, sidewalk sales, warehouse sales, and direct sales, school fairs, craft fairs, job fairs, health fairs, birthday parties, wine tastings, coffee shops, and date nights. 10% of their sales might be sidelines, or 90% non-book merchandise, and books, though sales have increased, have become one of many sidelines. The ever-present owners work harder than anybody else, and they seem to love it most of the time.

I was sitting with the owner of a medium sized bookstore and coffee shop as he was placing an order with me. As I was entering his order quantities in my spreadsheet, I saw that I had just received an email from another "books & coffee" business of about the same size, a customer who orders from me once every few weeks. The message was that the list I had sent that morning had nothing of interest, better luck next time. Same list, similar businesses, one buying, the other not.

Many of these differences can be chalked up to location. You can have two towns with 2 bookstores run by the same company, bought for by the same buyer, and stocking very different books, especially in the bargain area, because of location. But I think it's more because of the individuals buying the books, the hard working people who pay attention to what their customers need and want.

There are bookstore neighborhoods and bookstore towns. Hay-on-Wye, a town in Wales, is pretty much all bookstores. The only way this is possible is because of the individuals who own and manage those bookstores and supply them with their own unique mix of books. Customers can wander from store to store, never growing tired of the variety in selection and the bookstores themselves.

Physical books and the venues in which we sell them draw us in and they hold us, as they do our customers. This is certainly not the most financially rewarding career in the world, yet so many very smart people are still doing it. According to the ABA, 41 new bookstores opened last year. This does not include used and bargain stores that opened during the same period, some of which I know. This is quite a number for a business model and industry the prognosticators had deemed done for. 

There are stores going out of business. Part of the time I spent writing this post I was in the office of a fellow sales guy who was cold calling a store only to discover they were most likely closing their doors soon. This is a hard business, otherwise we would not need to work so hard, and yes, sometimes all that smart, hard work is not enough. But overall, looking at the whole experience of I and others in my line of work, it seems that the ones who do continue to make it, who see sales increase and businesses expand, are doing it in their own, unique ways.