5.3 Advertising Strategy
Fiction Addiction's advertising budget will be concentrated on reaching local customers. Online customers will typically find us through our listings on Alibris, Amazon, and the other aggregators.
We plan to use the following advertising and sales channels:
[Advertising is extremely expensive. Usually it's too expensive for used bookstores to do much more than a Yellow Pages ad on an ongoing basis, but you'll probably want to do some initial Grand Opening advertising. Please say no to every high school kid trying to sell you a yearbook ad and every small local advertising idea that someone comes to you with. You are better off saving your money and committing to an expensive long-run newspaper buy than dribbling it away here and there. Long-term, your best marketing is going to be word of mouth from satisfied customers.
As soon as you've signed your lease, make sure to put up some sort of sign that says "Bookstore Coming Soon." As you get closer to your opening date, put that info up on your door.
If you're in a small town, then you'll probably find it a lot easier to get free publicity, but even if you're in big city it doesn't hurt to try. Put together a press release about your grand opening with photos of yourself and your shop and send it to any one who might be interested.]
5.4 Distribution Strategy
Customers will buy our merchandise directly from the store, in the store.
We will also generate sales through the Internet via our own website and listings with online aggregators such as Alibris and Amazon. Such aggregators typically charge a monthly fee of $40-60 and take 15-20% of the sale in exchange for creating the online marketplace.
We will ship all products ordered online from our proposed Patchwork Plaza store. We will take telephone orders via our local number and will either hold the items for in-store pickup or will ship orders to non-local residents.
All sales transactions, including online and telephone sales, will be tracked through the inventory control system.
[I don't recommend it, but if you're planning to drop-ship new books via Baker & Taylor, mention that here, or if you're going to do school book fairs or any other off-premises sales.]
5.5 Sales Strategy
Fiction Addiction's sales strategy is to identify and fill a customer's need, not to pressure the sale. We recognize that many shoppers prefer to help themselves and thus we will use shelf-talkers and focused promotional areas (i.e., for Award Winners or Store Picks) to aid busy customers with their selections.
Our goal is to have our customers take home a product they will enjoy, and thus any Store Pick or employee recommended book can be returned if the customer is not satisfied.
We will unobtrusively track customer sales history (getting names from checks and trade credit accounts) so that we can call customers when books we think they'll like come in. We will also use this information to inform our buying decisions.
[I think one of the best things you can do is get to know your customers by name and track all their purchases. It's helpful with customers who are hesitating - "I can't decide if I've read this or not" - if you can look up their past sales history for them. If you're nervous about contacting a customer without prior permission to tell them about a new arrival, then just set aside the book with their name on it and whip it out the next time they walk in, saying "I set this aside in case you might want it. I know this is an author that you read." Pretty soon you will have them trained to buy anything you've picked out for them.]
5.5.1 Sales Forecast
The following chart gives a run down of forecasted sales. Most used bookstores have fairly even sales throughout the calendar year, with the summer months and the winter holiday season being somewhat stronger.
Table 5.5.1: Projected Sales
Fiscal Year& Projected Net Sales
1 - $85,000.00
[Sales are usually projected based on industry turn figures and the retail value of your inventory. If your store plans to have an inventory of 10,000 books, a 'turn' is simply how long it will take you to sell your entire inventory. If you sell 10,000 books in one year, then you have a turn of 1; if you sell 20,000, then you have a turn of 2, etc. New bookstores usually have a turn of 3-4. Used bookstores may only have a turn of 1-2. And unless you are religious about marking down inventory that doesn't sell and moving it out at bargain basement prices, then your turns may decrease over time as your best books sell and your inventory grows stale.
To come up with the Projected Sales, I took the initial inventory of 15,000 books and multiplied by my projected average sales price of $5.50 and then by a turn of 1.05. This gave me projected sales of $86,6250.00, which I rounded down to $85,000.
The increased sales in years 2 and 3 can be gained by increasing the amount of inventory and/or increasing turns as you get to know your customers and their interests.]
6.0 Management Summary
The owner, Jill Hendrix, is also the President, Secretary, Treasurer and only full-time employee of Fiction Addiction. The owner's desired yearly profit, to cover her living expenses, is $30,000.00
In the case of sickness or vacation, the owner's mother, Nancy McFarlane, will fill in at a rate of $7.00 per hour.
The company does not envision hiring any other full-time employees within the first 3 years.
[This section is fairly self-explanatory. Who's going to be running the business and how much will they get paid. If you are providing benefits, you should mention that here as well.]
If you have any comments or questions about this article please email me at firstname.lastname@example.org. Stay tuned next week for Part IV of Writing a Used Bookstore Business Plan. It will include the next three sections of the sample business plan - covering market and competitive analysis, advertising, and sales projections.
Questions or comments?