Sometimes I see a store, or a business model, that simply doesn't add up. I look at it, and think, that just doesn't compute. I'm pretty good, though, at eventually figuring it out. At least to my own satisfaction. I mull it over, observe, try to inobtrusively gather information, and I'll usually get some kind of answer which -- right or wrong -- makes sense to me.
When Barnes and Nobles came to town, I thought it was an over-reach. I assumed that they were positioning themselves for Bend's future growth. Sure enough, within a year or two, 2 out of 3 independent bookstores in Bend went out of business, and the surviving shrank to half its size. Then I started getting reports of the sales levels that B & N was reaching, and it simply made no sense to me.
Look, I think I can pretty accurately guess what all the independent bookstores in Bend were doing: I shared the same street with one, and the same mall with another. I have similar discount structures and overhead, and so on, so I'd be willing to bet that I can get awfully close to what their likely sales were.
I've also got a pretty good idea of what B & N is doing, based on what a couple of former employees have told me, and based on the nationwide averages that are reported.
Here's the kicker. By my estimates, B & N is selling somewhere around 10 TIMES more books than all the bookstores in Bend were selling before they arrived. So if I double my estimates of sales of the indy's, and cut my estimates of B & N by half, there is still a huge, huge difference. I'd bet my own money that the higher estimate is closer to the truth.
So, logically, there are only two explanations. Either 10 times more people are buying more books, or the existing book buyers are buying 10 times more books, or somewhere in between.
That just doesn't compute with me. It simply makes no sense.
An increased population is moot, in that it should affect all the stores equally.
1.) Current customers buy more books. If you give a person a plate twice as big, he will put 25% more food on it. A sort of 'Build it they will come' scenario. It wouldn't work for my store; if I had twice as much inventory, I'd be suprised if my business picked up more than 10 or 20%. But the 'Build it they will come' seems to be the motto for Bend, these days.
2.) More customers materialize out of the air. (Where were they?) Casual customers, who buy when it is convenient and easy? Customers who will only buy from the "big" stores? A strange thought, but I know that is possible. Personally, if you told me the only store to buy books from in Central Oregon is the little grocery in Tumalo, I'd walk there, in barefeet in the snow, if I had to. Can't imagine not having books to read.
3.) Customers who were buying elsewhere, either online or in other towns. I'm not sure why they would switch to B & N, but perhaps they were unsatisfied with the selection of the indy's.
4.) A combination of the above.
I think it's the 5 to 10 times the number of books selling that has me stumped. I could accept 2 or 3 times for the above reasons.
But 10 times is just inexplicable.
When Barnes and Nobles came to town, I thought it was an over-reach. I assumed that they were positioning themselves for Bend's future growth. Sure enough, within a year or two, 2 out of 3 independent bookstores in Bend went out of business, and the surviving shrank to half its size. Then I started getting reports of the sales levels that B & N was reaching, and it simply made no sense to me.
Look, I think I can pretty accurately guess what all the independent bookstores in Bend were doing: I shared the same street with one, and the same mall with another. I have similar discount structures and overhead, and so on, so I'd be willing to bet that I can get awfully close to what their likely sales were.
I've also got a pretty good idea of what B & N is doing, based on what a couple of former employees have told me, and based on the nationwide averages that are reported.
Here's the kicker. By my estimates, B & N is selling somewhere around 10 TIMES more books than all the bookstores in Bend were selling before they arrived. So if I double my estimates of sales of the indy's, and cut my estimates of B & N by half, there is still a huge, huge difference. I'd bet my own money that the higher estimate is closer to the truth.
So, logically, there are only two explanations. Either 10 times more people are buying more books, or the existing book buyers are buying 10 times more books, or somewhere in between.
That just doesn't compute with me. It simply makes no sense.
An increased population is moot, in that it should affect all the stores equally.
1.) Current customers buy more books. If you give a person a plate twice as big, he will put 25% more food on it. A sort of 'Build it they will come' scenario. It wouldn't work for my store; if I had twice as much inventory, I'd be suprised if my business picked up more than 10 or 20%. But the 'Build it they will come' seems to be the motto for Bend, these days.
2.) More customers materialize out of the air. (Where were they?) Casual customers, who buy when it is convenient and easy? Customers who will only buy from the "big" stores? A strange thought, but I know that is possible. Personally, if you told me the only store to buy books from in Central Oregon is the little grocery in Tumalo, I'd walk there, in barefeet in the snow, if I had to. Can't imagine not having books to read.
3.) Customers who were buying elsewhere, either online or in other towns. I'm not sure why they would switch to B & N, but perhaps they were unsatisfied with the selection of the indy's.
4.) A combination of the above.
I think it's the 5 to 10 times the number of books selling that has me stumped. I could accept 2 or 3 times for the above reasons.
But 10 times is just inexplicable.