Booksellers reviewing their ABACUS-16 reports will be able to learn new strategies for using this benchmarking survey designed to assess their store’s finances as part of an educational session at the 2018 Winter Institute.
“ABACUS 101: Improving Bookstore Operations Through Benchmarking” will be held from 9:20 a.m. to 10:20 a.m. on Wednesday, January 24.
The session will feature P.K. Sindwani, owner of Towne Book Center & Café, a longtime ABACUS participant and a member of the ABACUS Task Force, as well as Michael Becher, CPA, of Industry Insights of Dublin, Ohio, which created this year’s revamped ABACUS report with the American Booksellers Association.
Industry Insights, which compiles and analyzes the confidential bookstore data provided by participating ABA members, will provide a tutorial on the new online portal, review key survey trends and results, and demonstrate how to generate reports that will lead to greater profitability.
“It’s a good session for all members to attend,” Becher said. “If they were a participant, it’s a good way to learn more about how to use the report, and if they have questions, I will be there to answer them. If they did not participate, we can show them how valuable the information is and get them excited about participating in next year’s survey.”
Sindwani said he will explain to his fellow booksellers how ABACUS can help them identify ways to improve their financial management. “I always considered ABACUS to be my bible, so to speak, on whether my organization is doing well compared to my peers,” Sindwani said. “I will be talking about the importance of making sure your costs, your sales, and your expenses are in line with your peer group, and if they are not, how to investigate and take steps to correct that.”
ABA Senior Strategy Officer Dan Cullen said that as a result of the partnership with Industry Insights, this year’s report is easier to interpret while also containing additional features.
“Their capabilities allowed us to include more information and analysis and to provide new online tools,” Cullen said. “So, for the first time this year, we included some balance sheet information, which allowed Industry Insights to expand the range of the report, giving booksellers additional ways to review their store’s performance and engage in strategic business plans.”
A new “report card” grades a bookstore’s performance against its peers across a variety of measures, including inventory turnover, net profit margin, and sales per employee. Stores are graded weak, fair, good, or strong compared to the industry median. “It highlights with great clarity the areas that warrant immediate attention,” Cullen said. “In addition to a review of the new ABACUS features, booksellers attending the Wi13 session will hear a seasoned bookseller’s insights on how to use this data to help plan for their stores’ financial viability.”
Becher said he advises booksellers to start with the report card to get a sense of how they are doing. “If you look at it and see all strong, you know you’re doing well,” he said. “If you see a whole bunch of weaks, you know you should dig into the report a bit more to see why that’s happening.”
Booksellers, if short on time, can use the report card to quickly identify action areas. “If there are only a couple of metrics that you get a weak grade on, those are the ones you can focus on to see what needs to improve,” Becher said.
Bob Sommer, co-founder of Changing Hands Bookstores in Tempe and Phoenix, Arizona, said he has relied on ABACUS reports over the years to make important business decisions, such as selecting the location for an additional store.
ABACUS revealed that stores of 5,000 to 6,000 square feet show great potential for profitability, so Changing Hands’ second location is 6,000 square feet. In addition, data that showed his stores should pay no more than six percent of gross sales in rent to remain profitable was useful for negotiating leases. “We could say, ‘We’re not making this up, this is what we need to survive,’” Sommer said.
This year’s benchmarking revealed that the store’s payroll is an area to watch. “I know payroll as a percent of net sales is very high,” Sommer said. “We pay a lot of money to staff. It’s a choice we’ve made. Personally, I think it pays off as far as lower turnover and happier people to work with.”
Cullen said booksellers who have general questions about ABACUS may contact him via e-mail or at (800) 637-0037, ext. 7560.
They may also contact Becher at Industry Insights via e-mail or at (614) 389-2100, ext. 114.
Watch for more coverage of the ABACUS-16 survey in future issues of Bookselling This Week.
The American Booksellers Association’s 2018 Winter Institute will be held January 22–25, 2018, at the Sheraton Hotel and Memphis Cook Convention Center in downtown Memphis, Tennessee. See the full Winter Institute program here.