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Starting a Bookstore Business Online – A Complete Guide

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Do you want to start a bookstore business online? If YES, here is a complete guide to starting a bookstore
business with NO money and no experience.

Okay, so we have provided you an in-depth sample bookstore business plan (http://www.profitableventure.com/online-
bookstore-business-plan/) template. We also took it further by analyzing and drafting a sample bookstore marketing
plan backed up by actionable guerrilla marketing ideas for bookstore businesses. In this article, we will be considering
all the requirements for starting a bookstore business. So put on your entrepreneurial hat and let’s proceed.

Starting a Bookstore Business Online – A Complete Guide

If you have a passion for books and are thinking of how to make money from this passion, then starting a bookstore
business might be just what you need. Before starting this business however, it is important that you conduct a
thorough research on the industry as there are many traditional bookstores in the United States, with several online
bookstores starting to take over the industry as well. Conducting a research will not only help you identify the niche
you intend going into but will also allow you know if you should open a traditional bookstore or an online bookstore.

Stocking your bookstore is very important as you will not only need to stock your personal favorites but also include
books that will appeal to your target market. There are several ways to stock your bookstore, and you can either order
books from a distributor’s catalog or buy out the inventory of bookstores that are closing so as to add their books to
your collection.

Also, you might need to contact local libraries that are looking to get rid of duplicate book inventories. Ensure that you
have an agreement with them where you can even offer to donate a percentage of your earnings. You should bear in
mind that books that are rare or specialized are often sold at higher prices.

If you still need more convincing about starting a bookstore business, then reading through this article will definitely
help you.

Starting a Bookstore Business – A Complete Guide

Industry Overview

The bookstore industry is one that is segmented into general, college as well as specialty bookstores. Bookstores that
sell general books are ones that mostly deal in trade books such as fiction, adult, nonfiction as well as children books.
College bookstores are those that sell mostly textbooks; while specialty bookstores sell self-help books, religious
books, financial books and others like it.

General and college books account for about 30 percent of the industry’s revenue, while revenue from religious books
account for 5 percent of the entire industry’s revenue. This is one of the reasons why bookstores usually sell other
stuffs such as CDs, music, toys, mugs, magazines, tee shirts and gifts.

According to Pricewaterhouse Coopers’ Global Entertainment and Media Outlook for the periods of 2015 to 2019; sale
of books globally generated revenue $120 billion annually. The growth in the bookstore industry is expected to come
from India and this is due to their growing middle class. However, countries like the United States, the United
Kingdom, South Korea as well as Singapore have gone a step further by penetrating the ‘e’ market and are expected
to earn high revenue from its sales of e-books.

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In the United States of America, there are about 19,700 bookstores in existence that have employed more than
109,000 people. These bookstores have brought in a combined revenue of $14 billion; however, for the period of 2011
and 2016, there has been a decline in the industry and growth has been hampered and this has been projected to
-3.1%.

The reason is due to changes in the behaviour of consumers as well as an increase in competition from alternative
retailers and online retailers. This declining trend is expected to continue till 2022, however, some proactive operators
who have exploited new technologies like e-readers will benefit despite the decline the industry is experiencing.

The bookstores of today are different from those of the past, as modern bookstores of today do not have the luxury of
just selling books as the marketplace has changed which is exerting pressure on independent and chain bookstores;
this is because consumers now shop at any stores – not necessarily bookstores – that carry the books they love out
of convenience.

This has caused small scale bookstores to close up because of low traffic from customers. Large scale bookstores
and large independent stores have therefore had to rev up their publicity and marketing, selling via the internet and
other such measures as well as engage in other activities in order to attract customers and retain customers.

The number of independent bookstores has continued to decrease against large chain stores. Between the periods of
1993 to 2004, independent bookstores have decreased from 4,700 to 2,000. Part of the decline can be attributed to
the fact that large chain stores have a price advantage to independent stores. Surviving independent bookstores have
had to choose specialized niches and also focus on customer service. Knowing what their customers want and
providing more personalized services has proven to be one element of success for independent bookstores.

Reading periods between 2004 and 2008 showed a decline by 3 hours compared to an increase of 120 hours spent
on other media in the same time period. According to indicators, the bookstore industry is one that is highly
competitive and aggressive with a serious decline in the number of independent bookstores.

Starting a Bookstore Business Online – Market Research and Feasibility Studies

Demographics and Psychographics

The demographic and psychographic composition of those that constitute the market for bookstores are those within
the ages of 45 to 64. They include;

Those that are married but with no children

Those that earn high incomes
College graduates
Those that reside in the western side of the United States of America
Those that are married but have children that are of school age or even older.

From the above demographics for the bookstore industry, it shows that this is not something that can be restricted to a
particular group or race of people. Those that spend more in buying books are those that have a college degree and
baby boomers who need a new leisure due to their empty nests.

List of Niche ideas Within the Bookstore Business That You Can Specialize in

There are different varieties of books which has made some bookstores to specialize in one or several niche markets
so as to concentrate on particular groups in their target market. However, while it is more convenient for larger
bookstores to be able to stock as many niches and book titles as possible, smaller bookstores do not have that luxury
due to majorly, the size of the facility and capital base.

However, niches are one way by which a bookstore can stand out from others and be able to compete favorably in the
industry. If you are thinking of what niches are available in the bookstore industry, here are some;

Religious books
Children books
Science Fiction
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Fiction
Autobiographies
Self-help books
Mystery books
Romance books
History books
Educational books
Health books
Financial books

The Level of Competition in Bookstore Industry

Before the advent of the internet, competition in the bookstore industry was dependent on the location of a bookstore,
which made large scale bookstores who had facilities in more than one location to have a large share of the market.
However, with the advent of the internet that has led to the cropping up of online bookstores, competition is no more
solely dependent on the location of the book store.

Demand in the bookstore industry is one that is driven solely by what the consumer earns. This is to say that those
with middle to high incomes had money to buy more books than those with low incomes. Also, the profitability of a
bookstore is dependent on their inventory as well as marketing strategies.

Large scale bookstores for instance are able to provide more books to customers at a cheaper rate due to the
economies of scale. However, smaller bookstores can on the other hand compete by offering selected niches or
concentrating on the needs of their target market.

The bookstore industry in the United States of America is one that is highly concentrated as the 50 largest companies
account for 85 percent of the revenue. Also, the competition in the industry has been redefined as there is stiff
competition amongst mass merchandisers and between the former and online customers.

List of Well – Known Brands in the Bookstore Industry

Every industry has brands that are regarded as the front runners due to several factors – marketing, large scale of
operation, customer care attitude and publicity – which might have worked in their favor to make them so popular. The
bookstore industry is no different from other industries and has several well-known brands as well.

Therefore, below are the lists of well-known bookstores in the United States of America;

Barnes and Noble

Amazon.com
Borders
Books-A-Million
Follett
Bn.com
Apple iBookstore

Economic Analysis

The bookstore business industry is one that has seen major buyouts and consolidation trends as well as an increase
in internet sales. The competition is very intense in the industry amongst different levels such as, between
independent bookstores and large chain stores and also between traditional brick and mortar bookstores against
online bookstores.

However, even though the marketplace is quite stiff with competition, the industry has continued to grow modestly by
implementing new technology in order to attract new and retain old customers. This industry with its modest growth is
one that still faces challenges.

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Out of the three kinds of bookstore organizations in the industry – independent, big chain stores and online
bookstores – the independent bookstore is the one that has the most challenges because unlike the big chain stores
that can be found everywhere, and the online bookstore that can be reached by a wider market, the independent
bookstore has to make do with one or two locations, which is why most independent bookstores are turning to the
internet.

Also, smaller bookstores have carved a niche for themselves and in this way are still able to exist and compete in the
industry. These smaller bookstores are offering their customers personalized service in order to retain them, a feat
that the large chain bookstores cannot accomplish.

Starting Your Bookstore Company from Scratch versus Buying a Franchise

Starting your bookstore as an independent or being part of a chain store should be highly dependent on what vision
and goals you have for your bookstore. It is highly difficult to operate as an independent bookstore as you would need
to deal with price competition from large chain stores; however, there are still independent stores still in existence who
have learnt to be proactive while also having a strong relationship with their customers. Also, most independent stores
engage in selling niche books and this has helped them stand out from their competitors.

Being part of a large chain store can lead to starting the business smoothly without experiencing any hiccups that an
independent is likely to experience, as marketing, inventory and publicity will likely be taken care of, leaving you with
less aspects of the business to bother about. Whatever decision you intend making as regards starting from the
scratch or buying a franchise solely depends on you.

Possible Threats and Challenges You Will Face When Starting a Bookstore Business

Threats and challenges are not new to any business; as an entrepreneur, you should be prepared to face any threats
and challenges that will arise during the course of starting or running your bookstore business. How well you prepare
for these challenges will show if your business will succeed or fail.

Therefore some of the threats and challenges that you are likely to face are dwindling revenue from lack of reading
customers, intense competition from large scale bookstores and online bookstores, improving technology and
economic downturn.
Starting a Bookstore Business Online – Legal Matters
Best legal entity to use for a bookstore

One very important decision that you will need to make for your business is the decision of what legal structure would
be best for your business. This is because whatever legal entity you decide to choose for your business comes with
consequences.

If you are however confused about what legal entity is best for your bookstore business, then you might need to
approach an attorney or a certified public accountant, who has a good knowledge of the industry to give you the best
advice on what would suit your bookstore business in the short and long run.

There are mostly four legal entities that you can choose from for your bookstore business and they are sole
proprietorship, partnership, corporation and Limited Liability Company. The sole proprietorship is the simplest form of
legal entity and is quite popular for small business owners.

The partnership kind of legal entity is usually divided into two types; the general partnership and the limited
partnership. In a general partnership, all the partners share everything, from rewards to risks, while in the limited
partnership; the limited partner has limited liability in the company. This kind of legal entity is also easy to start up as
the costs for start-up is quite low. Also, in the partnership legal entity, there are tax benefits.

A corporation is a form of legal entity where the business is regarded as a separate entity from the owner (s) and so in
case of any liability, the business will be held liable and not the owners. This means that the owners are only liable to
the extent of their investment in the corporation. There are two types of corporations, the S-corporation and the C

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Corporation. The S Corporation is more common, while the C Corporation is used mostly to set up ventures that are
of high profile.

Catchy Business Name Ideas Suitable for a Bookstore Business

Choosing the right business name for your bookstore business is very important as you would need to satisfy certain
criteria such as unique, innovative, creative and memorable, as this will create a perception in the minds of the
industry’s stakeholders. Also, the name you pick should indicate to your target market what business you intend
doing.

If you are therefore considering starting your own bookstore business and are wondering what name you can choose,
then here are some;

Jilly Children and Teen Bookstores

Bookworm Inc
Wordsmith Bookstores
Script edge Bookstores
Doves Bookstores

Insurance Policies

No matter what kind of business you intend to open in the United States of America, you are required to have at least
basic insurance policies. Having an insurance policy would allow you to be protected should any sort of incident occur
to or around your business. You would need to approach an insurance agent or broker to advise you on the most
appropriate insurance policies to choose for your bookstore business.

Therefore, some of the basic insurance policies that you should consider purchasing if you intend starting your own
bookstore business in the United States of America are;

General Insurance
Property Insurance
Liability Insurance
Workers’ Compensation Insurance
Payment protection Insurance
Business Owner’s Policy Group Insurance

Intellectual Property Protection/Trademark

Even though the bookstore industry is one that involves the sale of physical products, applying for intellectual property
protection is something that is not usually considered by those in this industry and this is because what is involved is
the sale of the intellectual properties of others, and so no other bookstore can be stopped from selling the same books
as another bookstore. There are however other aspects that you can consider applying for intellectual property
protection for.

If however you are considering applying for an intellectual property protection, you can do so for your company logo,
media production concept or any other property that you feel is unique to your company. To apply for an intellectual
property protection, you will need to approach an attorney to help you out by filing for an IPP with the USPTO.
However, most entrepreneurs in this industry do not always consider applying for an intellectual property protection a
priority.
Is Professional Certification Needed to Run a Bookstore?
The bookstore business is not one that requires any sort of professional certification before one can start the
business. What is usually required is that one is able to meet the needs of the target market that it has decided to
focus on.

One needs to however be knowledgeable about certain books in order to be able to engage several customers. Also,
joining associations might be required, not for only networking purposes, but in order to have a covering.

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List of Legal Documents You Need to Run a Bookstore Business

Having legal documentations in place before starting your bookstore business is a legal requirement by the authorities
in the United States, and you stand a risk of being banned from running that business and losing money through fine,
if you do not have the required documents.

Therefore, it is vital that you conduct proper research before starting your bookstore business in order to determine
what documentations you will need to run your business. Some of the basic legal documents that you will therefore
need in order to run your bookstore business successfully in the United States of America are;

Certificate of Incorporation
Operating Agreement
Business License
Business Plan
Employment Agreement
Insurance policy
Online Terms of Use
Contract Documents
Federal Tax Identification Number
Employee Identification Number (EIN)

Financing Your Bookstore Business

Even though you have a love for books, making money from starting a bookstore business is a different ballgame all
together. This is why it is important to write a business plan where you will be able to determine where you will get
money from to start your bookstore business.

The business plan will help you formulate a plan on how not to only get your capital but also convince your intended
investors on your seriousness in starting your bookstore business, and how you intend to pay them back. Below are
some of the financing options that that you can explore when sourcing for capital for your bookstore business;

Raising money from your personal savings

Source for soft loans from friends and family members
Approach venture capitalists and convince them to invest in your business
Apply for loan from the bank

Choosing a Suitable Location for your Bookstore Business

Before starting your bookstore business, it is absolutely necessary that you know what location would best suit your
business. If you intend to run a traditional brick and mortar bookstore, then you would need to ensure that it is in an
area where there is high foot traffic as opposed to vehicular traffic.

If you prefer to run an online bookstore, then you must ensure that you have certain strategies in place that will allow
you pull enough traffic to your site. This is why it is important that you conduct a research on what location would be
best for your bookstore.

Several factors have to be put into consideration when selecting the right location for your bookstore business asides
foot traffic. You would need to find out if there are any laws as regards the location you intend to locate your business.
Some cities zone out locations to certain businesses and so you would not want to locate your bookstore close to a
meat factory except your bookstore’s niche is on meat, which even at that, would be better off close to a restaurant or
grocery store than a meat mart.

If you are going to be running an online bookstore, then you have no need to look for a facility for your business as
you can clearly run this kind of business from home. All you need to do is employ a Search Engine Consultant (SEO)
to drive the traffic you would need to your website.
Starting a Bookstore Business Online – Technical & Manpower Details

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A bookstore’s primary mission is to sell books depending on the niche it intends to run the business in. The cropping
up of online bookstores hasn’t changed this perspective even though it has brought in virtual books to be sold.

A bookstore often requires a large amount of book titles either new or fairly old in order to be able to meet the needs
of its customers. The equipment that you would need to run your bookstore successfully includes shelves, cabinets,
ladders, tables, chairs, computers, printers and phones.

Equally, the number of employees you would need to help kick start your bookstore business and run it successfully
will depend on the scale with which you intend to run your business. However, the basic staff you will need are; Chief
Executive Officer (owner), general manager, supervisor, cashier, front desk officer, cleaner, book handlers, marketing
executive and business development officer.

From the above, you will likely need a total of at least 8 employees to help you run your bookstore to success.

The Service Delivery Process of a Bookstore Business

The service process is very vital for a bookstore because in order to give the right service to your customers, certain
things have to be in place, especially as a bookstore business basically means selling printed books or e-books. Any
successful bookstore invests heavily in the kind of staff they have because they are the ones who would engage and
sell physically to the customers.

Another process that has to be managed in order to have a successful bookstore business is the efficient
management of the book inventory. This simply means that you would need to stock different books, and then
constantly have them analyzed as regards their sales rate so as to keep turning the stock.

Other things you would need to look into are managing inventory especially against shoplifting. Also, when getting the
books, ensure that the ones the customers can easily pick are in heavy paperbacks that cannot be usually hidden.

Starting a Bookstore Business Online – The Marketing Plan

Marketing ideas and strategies

Before creating a marketing budget, it is important that a market research be conducted so as to determine what the
target market is expecting from you and also what you expect from the target market. Also, conducting a market
research will allow you know what marketing strategies are mostly effective and would most likely work for your
bookstore depending on your location.

After conducting a marketing survey, you can then start to create your marketing strategies. Some bookstores usually
hire a marketing consultant who understands the industry thoroughly and who have long and successful portfolios to
help them draft effective marketing strategies that will not only allow them stand out but also enable them to compete
favorably against competitors in the industry.

The internet has made it easy for bookstores to be able to reach more of their target market whilst also not making
a huge strain on their budget, and so bookstores have incorporated the use of the internet, such as their websites and
social media platforms in order to market their services to their target market.

Therefore, below are some of the platforms that can be utilized to market your bookstore business;

Place adverts for your bookstore business in local newspapers and magazines as well as on radio and
television stations
Use social media platforms such as Facebook, Twitter, Linkedin, Google plus and your official website to market
your bookstore
Distribute fliers and handbills in strategic locations
Ensure that your bookstore is listed in Yellow Pages as well as in online directories
Engage in book signings and reading clubs so as to bring in potential customers into your bookstore
Place flexi banners in strategic locations in order to increase awareness about your bookstore to potential
customers

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Strategies to Boost Your Bookstore Brand Awareness and Create Your Corporate Identity

It is important that you have strategies that will help you boost the brand of your bookstore and allow you create a
unique identity that would make you stand out from your competitors. You should note that there is stiff competition in
this industry not only from major traditional bookstore retailers but also from online bookstores; as such it is important
that you craft the right strategies that will help communicate and boost your business brand.

One secret of popular bookstores is that they engage in publicity constantly so as to keep remaining in the minds of
their target market. If you therefore intend to grow your business from becoming a local bookstore to becoming a
national brand, then you must be ready to budget a certain amount of money towards promoting your brand and
ensuring that you bring it to the awareness of not only your target market but also that of your competitors and other
stakeholders in the industry.

Nowadays, promotion and publicity have been made easier for businesses due to the internet. This means that
businesses can make use of a combination of physical and online means of promoting and creating awareness for
their products and or services. If you are on a tight budget, then you can use make more use of online and social
media platforms to promote your bookstore. Not only is this means cheap, it is also effective and reaches more of
your audience faster.

If you are stumped about how best to promote your bookstore business, then you might need to hire the services of a
publicity consultant who understands your industry well to help you draft out effective publicity strategies that will not
only communicate the brand of your bookstore to your target market but also allow you generate enough revenue to
grow and sustain your business.

Below are the platforms that you can leverage on in order to boost your brand and also promote your bookstore
business;

Engaging in book readings and signings for best sellers

Leverage on social media platforms such as Facebook, Twitter, Instagram, Linkedin, Google Plus to promote
your bookstore
Distribute handbills and paste fliers in different strategic locations in and around where you are located
Engage in and sponsor relevant programs in the community especially those that are book related
Encourage your local customers to help spread the word about your bookstore business
Place adverts in local newspapers and magazines as well as on radio and television stations

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