ABACUS Helps Improve Bookstores' Bottom Line

In mid-February, ABA began collecting 2003 financial data from member booksellers for the second year of the new ABACUS study. For Carol Chittenden of Eight Cousins bookstore in Falmouth, Massachusetts, the simplified, online incarnation of ABACUS -- which launched last year -- prompted her to ask the question: "Why would anybody not [participate in] the ABACUS survey if you are serious about your business?" Chittenden explained that she was motivated to participate because she wanted to know how her expenses compared with other independent booksellers. With ABACUS, "I found out exactly that," she said.

Other booksellers echoed Chittenden's sentiments. Willard Williams of The Toadstool Bookshop in Peterborough, New Hampshire, said he participated in ABACUS in its first incarnation. "I always felt it was very useful back then," he said, "so when [ABA] re-launched it, I wanted to be a part of it."

Williams continued, "The percentage breakdowns that show what stores are spending on certain things, such as advertising, rent, and wages -- those numbers are helpful when it comes to doing a budget. We are all pretty much in the same boat. This helps to manage costs."

By using the ABACUS study, Chittenden said, "I found out that I was spending more on bank card processing charges than most places do." Moreover, the ABACUS figures helped her in negotiations when the store's lease was up. "It was helpful to know where other bookstores stood. I knew from seeing ABACUS that our rent was pretty reasonable … but I used it as leverage for improvements. It's a great tool for knowing what's going on."

Bob Sommer of Changing Hands Bookstore in Tempe, Arizona, explained that he used the old ABACUS study to negotiate a lease on a new space in 1997. "ABACUS was instrumental in showing bankers that our business plan made sense," he said. As such, when the study was re-launched last year, deciding to participate was a no-brainer. Filling out the online form, "takes a tenth of the time [it used to take]," he said.

"I might have spent two hours [filling out the form]," Chittenden reported. "If you think about the return per hour [provided by ABACUS data], what else could you do that would earn you that much per hour?"

Chittenden, Sommers, and Williams all expressed hope that the number of bookstores participating in ABACUS will continue to grow. "The more people that participate in the ABACUS survey, the more valuable the data," Sommer noted.

"I hope participation continues to grow, because the data will mean more -- that's why I always encourage people to participate," said Williams.

Last year, 197 bookstores participated in the study, which, in addition to the general report, provided each store with an individualized analysis of their store's performance in relation to the group as a whole. As the study enters its second year, ABA will use the data to begin studying trends within the universe of all reporting stores and for individual bookstores. Allowing booksellers to see trends in the larger data set and to compare their store's performance to like businesses will provide a clearer picture of the success of their efforts to increase profitability. (To view last year's study results, click here. In addition, an example of the personalized comparisons that booksellers can expect to receive if they participate in the 2004 study can be viewed by clicking here.)

All data submitted to ABACUS by bookstores is kept strictly confidential. Worksheets, instructions, and an online form to submit data are available at www.bookweb.org/docs/abacusform/. The ABACUS form itself is largely unchanged from last year. ABA is asking for only one or two new pieces of information in an effort to make the study more valuable and to reduce the need to ask for supplemental data later.

Booksellers planning to attend this year's BookExpo America in Chicago are strongly encouraged to attend the ABA educational session "The 2% Solution," moderated by ABA CEO Avin Mark Domnitz, on Saturday, June 5, from 10:00 a.m. - noon. This seminar will examine the drivers of profitability and will explain how they can be improved to move a bookstore to profitability. Sales, gross margin, compensation, and occupancy expense will all be examined. While moving from negative profitability to a positive two percent is a long journey, this seminar will help booksellers to begin drawing a roadmap. --David Grogan