Bookselling in Tough Times: Inventory Management

There is an old axiom that books and booze are recession proof, and, unfortunately, that old saw is being tested. Wall Street is in turmoil, the economy looks to be heading for a recession, and Alan Greenspan went so far as to call the current credit crisis a "once in a century" event. Recession proof or not, faced with such economic uncertainty, booksellers, like all smart businesspeople, are looking for ways to weather a downturn in business.

BTW's new weekly series aims to help booksellers survive the economic crunch: Bookselling in Tough Times will share tips and insights from experienced booksellers on a single topic each week. In our inaugural column, four booksellers share their thoughts about inventory management in a tough economic climate coupled with the fast-approaching holiday season.

Here are their inventory management tips:

When it comes to frontlist buying, think quality over quantity, booksellers suggested. Don't overstock by purchasing too much of any one title. Reduce your overall inventory.

"Simply put, we're reducing the inventory," said Bill Reilly of the 2,500-square-foot River's End Bookstore in Oswego, New York. "We're buying few copies of individual titles, ordering fewer books overall. It's a challenge, given the size of our store. But we do take special orders.... Our shelves are considerably lighter and have been since the beginning of summer."

Dan Chartrand of Water Street Bookstore in Exeter, New Hampshire, concurred. "The first thing I did when it looked bad for the economy was start to cut back on merchandising quantities. Tens became fives, and fives became threes. Then you just need to figure ways to make the shelves look full. We're using smoke and mirrors to make fives look like tens." Chartrand acknowledged that he runs the risk of running out of hot titles, but he believes this purchasing philosophy is acceptable considering the current climate.

Carla Jimenez of Inkwood Books in Tampa, Florida, told BTW that, when it comes to returns, now is not the time to be sentimental. If a book is not paying its share of the rent, it's got to go. "In my first couple of years in the business, I'd look at returns, and I'd be sentimental and hold onto books I thought I had to have. But this is not a personal library, we are in a business and that is how we need to look at books. Are they paying the rent?" If a book is not, "it's time to make space for things that pay the rent. We're looking at this more carefully now."

Chuck Robinson of Village Books in Bellingham, Washington, said, "We're a little more deliberate about the returns process." Whereas books used to have a shelf life of about a year, he explained, now, if a book hasn't moved in four months, chances are it won't. "I mean, they could, but sales are random at that point," he said.

For Robinson, the key to surviving the current economic climate and maximizing holiday sales is flexibility. "We've worked hard over the last three or four years to handle inventory in a 'just-in-time' manner -- we anticipate what we need and get it in quickly, rather than stocking up in big numbers." Rather than spend your inventory dollars at the beginning of the season, it's better to order on a regular basis throughout the season -- though it's important to meet minimums, too. "This allows more flexibility," he said. "If you have a lot of money tied up, you won't have the flexibility to buy books that will move off the shelves."

Though you may be ordering fewer copies of each title, you should still do your best to create orders that minimize costs, either through free shipping or volume discounts. Jimenez noted she's more likely to place larger orders with publishers for frontlist titles to get a volume discount. It's important, she said, to buy higher quantities of those frontlist titles that "you know you can get behind." In the current economic climate, she explained, people are more cautious about what they purchase, and that means handselling is more important than ever. "People want to hear recommendations," Jimenez said. "We're finding that more and more people are coming up to the counter with five books and are asking us, If I want to buy three of these, which ones would you recommend? That puts us in a good position."

Reilly said he is waiting until he has about 15 special orders before placing an order to minimize costs. "That's not too difficult for us on most days," he said. "And we're always looking to take advantage of cash discounts." -David Grogan