How to Buy a Bookshop

Almost every other British High Street sector is a more lucrative option than owning a bookshop, if the bottom line is all that concerns you. Yet running an independent bookstore remains a dream for many. Books can inspire a dedication like almost no other commodity. Bookshop owners have often made big sacrifices in order to enjoy day after day surrounded by paperbacks and hardbacks. That’s not to say that money can’t still be made out of the printed word. More, perhaps, than many would initially guess. To do so, however, you must be able to deal with the more mundane aspects of running a business.


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    Combine love of books with business savvy. Your love and knowledge have to be combined with business acumen if your bookshop is to succeed. This is even truer in a High Street climate, which is less conducive than ever to the independent trader. The home computer has removed many of the reasons people might once have had to read, while a host of other electronic entertainment media are providing more options when it comes to what to do with leisure time.
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    Be aware of the sales figures for books. Nevertheless, book sales are continuing to increase at a steady 6% per annum and stood at £2.4 billion in 2003 – a figure that might surprise the casual reader.
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    Be aware of the competitors' share of the market. Unfortunately, High Street chains like Waterstones and Ottakar’s account for more and more of the market each year. In 1993, those two companies, together with Borders and WH Smith, occupied 1.3m sq ft of Britain’s retail space; that figure had grown to 5.6m sq ft by 2002. Together, they have almost a 50% share of the UK’s book market – a total sales value of £1.1 billion. The abolition of the net book agreement in 1997 was the major catalyst for the rise of the chains. Suddenly, shops could sell stock at below cover price – enabling the bigger enterprises to take advantage of economies of scale and undercut the smaller operator, often through a variety of special offers and deals.
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    Have heart in being an independent bookseller. Even when large regional booksellers such as James Thin or Foyle’s are taken into account, independent ventures still account for a substantial chunk of the market – around a quarter of all book sales. This represents a total market of just under £284m – demonstrating that the local bookshop is still a force to be reckoned with, no matter how hard the financial realities might seem. Wholesalers typically give a discount of around 35% to bookshops – but 30%-33% of the cover price is usually swallowed up by rent, rates, utilities, staff costs, shop fitting and advertising, leaving only 2-5% of that figure as actual net profit. So to earn profits of, say, £20,000, a shop would have to sell at least £400,000 worth of stock – that’s over 40,000 paperbacks.


  • Specialisation can boost sales. That’s why the vast majority of new entrants to this type of business tend to specialise in one particular area – art or education, for example. This allows you to gain extensive knowledge of one particular specialisation and trump the multiples in the one area in which they’re vulnerable – understanding the needs of a very specific customer.

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Categories: Buying & Forming a Business