WINSTON WEEKLY[1]

Vol. 2, No. 17

April 28, 2024

BOOKSTORE ECONOMICS

For many of you, the word “economics” likely carries scary connotations. But preface the term with “bookstore” and perhaps I can keep a small fraction of you captive. Even those who are not avid readers have likely stumbled across a memorable bookstore or two. But have you ever really considered the economics of operating a traditional brick and mortar bookstore? The margins are thin. Very thin.

One of the best articles I have read on bookstore economics is by Steve Laube of The Steve Laube Agency, www.stevelaube.com. Written on May 3, 2021, it is aptly titled Bookstore Economics 101.  Steve’s article is understandable, in part because it is not cloaked in the theoretical and statistical drudgery that defined my college economics’ class.

Steve explains the process of how a bookstore buys a book, discounting, and what expenses are covered by the profit, including: rent, salaries, utilities, advertising, shrinkage, taxes, and other considerations. If you do not know about shrinkage, it is worthwhile to understand. From theft to waste to other variances, shrinkage can significantly impact the bottom line. The December 19, 2023 podcast by McKinsey & Company, The art and science of retail shrink, is worth a listen. If you prefer, you can download the article. www.mckinsey.com

The next time you step into a bookstore, take a further look around. Beneath the colorful covers, printed pages, and oversized displays are people working hard to keep the business afloat. Some of them may be supporting only their own family, while others may be supporting multiple families.

THIS WEEK’S ACTIVITY

How many independent or chain bookstores can you find in your community? Do they host events such as author signings or book clubs? Or perhaps they have a unique gift and/or card section. With upcoming graduations and Mother’s Day, books and book-related items make meaningful gifts.

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[1] Copyright April 28, 2024. Please feel free to share with the appropriate attribute. Winston Weekly is a weekly Sunday newsletter by Alysen Bayles, Founder of Bayles and Bruce. “Learn, live, love, read.” Alysen’s views are her own.