Bookselling in Tough Times: Remainders

Effective inventory management can mean the difference between having a profitable or unprofitable store. And that's why, in both good times and bad, many booksellers turn to remainders as a way to supplement and complement their inventory without breaking the bank. The benefits of selling remainders are simple but significant: They cost less and offer a higher markup.

As Bob Sommer of Changing Hands Bookstore in Tempe, Arizona, explained: "Remainders increase our ability to be a full-line bookseller with less investment than if we only carried new books." Moreover, said Mitch Gaslin of Food for Thought Books Collective in Amherst, Massachusetts, "[remainders] allow us to offer bargains on good books to customers who may not be able to afford the prices on some new books."

"Our remainder buying is based mainly on sales history," said Jay Peterson of Magers & Quinn Booksellers in Minneapolis, Minnesota. "If something has sold well for us as a new book, we hope to maintain those sales with a stack of remainders. For instance, we're selling remaindered hardcover copies of Jonathan Safran Foer's Extremely Loud and Incredibly Close at less than the cost of the new paperback edition. And we're selling lots of them."

Gaslin concurred. "I think it is important to buy remainders that match the feel of the new books in your store, and not try to become something completely different," he said. "You've still got the same customers coming in."

And at Changing Hands, Sommer added, "We buy titles that we have sold new, and by authors that we know and love."

"We particularly seek out remainders for sections with higher pricepoints, such as cooking, crafts, art, photography, and reference," said Peterson. "Over the years, we've sold loads of foreign language dictionaries at, or near, half price."

"Sections that are slower sellers and where the books tend to be more expensive, such as art, photography, home design and interiors, crafts, etc., can be filled with bargain books at half the cost of new books," Sommer told BTW. "Customers love seeing the bargain books next to their full-price companions and feel like they are getting a great deal at our store. They often buy several books rather than picking just one, which is doubly great since the margin on remainders is much better than on new books."

If you reduce inventory to cut costs, it's still essential to make the store feel full and vibrant to customers.

"Our merchandising strategy is plain and simple -- stacks and face-outs sell books," said Peterson. "Remainders offer an affordable alternative, filling tables and shelves with nice looking stacks. However, in a store such as ours (which stocks new and used books as well), it's important for the customer to see just how much of a discount they're receiving on the price sticker."

For the store's philosophy, theology, and military history sections, Peterson continued, "we buy more twos and threes in an effort to fill sections with a broad variety of titles. Vendors such as Powell's Wholesale of Chicago, for instance, offer unusual academic and scholarly books, which really enhance our sections and appeal to our store's demographic."

Arsen Kashkashian told BTW that Colorado's Boulder Book Store buys remainders because "it's nice to stack things up in big impressive piles and not have a ton of cash invested in them. When the economy turns bad like now, the remainders are critical. It's important to offer customers a low-price alternative. Even though books are already relatively cheap, it's great to give the customers the impression that tons of books are on sale. We will be highlighting the remainders in an ad campaign this holiday season."

Changing Hands buys enough remainders for a face-out stack or one or two to slot into a section. "We price the books to give us a good margin plus a bit extra for shipping, so we are looking for books with low net prices," Sommer reported. "If they are hardbacks, we want to be able to sell them for less than the new paperback book at full price."

At Food for Thought Books, Gaslin will buy larger quantities of a few titles he thinks will sell really well and a smaller quantity of everything else. "The larger quantities get displayed in bigger stacks closer to the front of the store; the smaller quantities get displayed on tables further back in the store."

While remainders have much to offer, there are nonetheless some downsides, most notably freight costs and their nonreturnable status.

"Freight costs can be expensive, so you have to factor that into your pricing," said Gaslin. "Occasionally you will think something will sell that doesn't, and you can't return remainders, so you are stuck with it."

Because remainders are nonreturnable, Sommer stressed that booksellers must do their best to ensure their sell-through. "Sale labels with original and sale prices on the fronts of the books really help," he said.

Staff training is also crucial. "You have to get your frontline booksellers to 'enjoy' the remainders and the bargain they offer the customers so that they don't become second-class books in the store," said Sommer. "There is a certain amount of training that must go on with these booksellers, much like that which is needed for selling gift items in our stores."

For booksellers just starting out in the remainder game, Kashkashian recommended, "Begin with a few of the established vendors, like Daedalus, Book Depot, or A-1, that have websites you can order from. You won't get pressured by a website, and you have all the time you want to make a decision. I'd make my initial decisions based on what has already been successful in the store. Allocate a table for display and bring in enough books to fill that table. Play it safe and build from there."

Gaslin suggested contacting booksellers whose stores are similar to yours to see what vendors they buy from, "and then have a rep from those companies visit. If you are close enough to a remainder dealer's warehouse, make a visit in person." He added, "I find it much easier to browse remainders when I can see the actual books in front of me, as opposed to jackets or online."

Peterson attends remainders trade shows, such as the recent Chicago International Remainder and Overstock Book Exposition (CIROBE) in Chicago, Illinois. "We bring a database that contains our store's inventory and sales history to trade shows such as CIROBE," he said. "We wouldn't think of going without it at this point."

"We bought more books at this year's CIROBE than we probably have in the past," said Sommer. "There were better books, and we think they will be the factor this season that keeps us profitable." --David Grogan