ABACUS Survey Works to Increase Participation: How Bookstores Benefit

With data gathering for the 2009 ABACUS Survey now underway, BTW talked to ABA's industry consultant, David Walker, about the value of participating in the survey, last year's ABACUS results, and the need for a greater number of stores to participate.

BTW: We reported recently that participation in ABACUS has declined for two years in a row. What would you say to booksellers who want to know why they should participate?

David Walker: ABACUS tells you which areas you need to focus on to improve your bottom line. For example, how do you know whether your gross profit margin is good unless you have something to compare it with? How do you know whether your rent is too high, or you're spending too much on payroll? I think [former ABA president] Russ Lawrence put it best when he said, "Running a store without the ABACUS data is like driving at night without headlights."

Aside from using the data as a roadmap to improve your business, you can also use it to negotiate with your landlord if you think you're paying too much rent. And you can use it to show your bank how your business compares to industry averages when you apply for financing. As a bookseller recently told me, banks love benchmarks.

But perhaps the best argument for participating is last year's survey results: The core group of stores that participate every year reported an average net income that was almost one percent higher than the overall average. That's a significant difference, but not nearly as significant as the difference between the core group and the stores that only participated in last year's survey, which was close to three percent.

Of course, I'm not suggesting that simply participating in ABACUS makes a store more profitable. I think it's reasonable to assume that the bookstores in the core group pay close attention to their financial performance in general. Participating in ABACUS is part of that process.

BTW: Why do you think that participation in ABACUS has declined?

DW: I can only assume that not enough booksellers see the value in the survey. To be fair, the past couple of years have been difficult for many stores; so, some booksellers may think that they can't spare the time to participate. But it's during the difficult times that ABACUS has the most value.

I spoke recently with a bookseller who has been through some very difficult times, including bankruptcy, and he said that when his store was struggling to survive ABACUS gave him a picture of what a profitable bookstore looked like. In other words, it told him what areas he needed to focus on. By the way, his store is now profitable.

BTW: How has the decline in bookstore participation affected the survey results?

DW: It's had an enormous impact. As Avin [Mark Domnitz, ABA CEO] said in a recent BTW article, the reliability of the survey results and ABA's ability to provide in-depth analysis depend entirely on the number of participants.

Unfortunately, last year the number of participants was so low that we were unable to give participating stores the type of analysis that we usually provide, such as comparisons by sales level, store size, years in business, etc.

BTW: Does the low participation mean that the 2008 survey results are unreliable?

DW: The results are statistically reliable for the year that the 2008 survey covered, which was fiscal year 2007. But comparisons with previous years' survey results are likely to be misleading.

BTW: Why are comparisons with previous years' results not valid?

DW: There is a group of about 80 stores that participate in the ABACUS survey every year, the core group that I referred to. The results for these stores tend to vary from survey averages. Because of the low participation last year, the core group represented an unusually high percentage of the overall sample, which skewed the survey results.

BTW: What do you mean when you say that results for stores in the core group vary from the survey averages?

DW: The most significant difference is that they tend to be more profitable.

BTW: If bookstores want to participate in this year's survey, what should they do?

DW: Bookstore members of ABA can now submit their 2008 financial data to the 2009 ABACUS Survey via a secure and confidential electronic survey form on BookWeb.org.

BTW: What's the deadline for submissions?

DW: This year's deadline is Friday, August 15.

BTW: If booksellers have questions about ABACUS, whom should they contact?

DW: They should feel free to contact either me or Avin Domnitz.