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TO be in a book retailing business has its own highs and lows. To sail smoothly, you need to acquire few skills and basic business acumen.
TO be in a book retailing business has its own highs and lows. To sail smoothly, you need to acquire few skills and basic business acumen. If owning a bookstore has been your long cherished dream, here is a list of few guidelines that you need to mull over when you make up your mind to initiate the book retail business.
As per Oxford Bookstore, there is no official data on the book industry size but they put it at a tentative figure of Rs 14,500 crore. The entire industry is reportedly growing at a rate of 12 per cent. Of this, the organised retail, which is growing at a rate of 20 per cent, contributes around 10 per cent. To get started, all you need is a right location, capital investment and availability of suppliers in your area. Once you overcome these, the rest becomes easier.
Traditionally, serious book-buyers used to buy books in a tedious and browser-unfriendly atmosphere. With the rise of organised players on the block, traditional book sellers suffered losses. Brands started retailing books in spacious stores with vibrant colours and user-friendly ambience that actually persuaded people to browse and read books in a peaceful environment. Finding out a right spot with economical real estate price and ease of accessibility for public is also a challenge faced by many bookstore franchisees.
With the emergence of organised book retailers such as Crossword, Oxford Bookstore, The Corner Bookstore, Book Café and Books and Beyond, book retailing in India started gaining prominence as these brands mainly focused on franchising to expand. Opening your own business may cost you more than owning a franchised business because of the fact that it requires good investment, location, and the franchisee has to be financially sound to bear the cost of store interiors, visual mercandising, promotional activities and an entrepreneurial streak to get started.
Believing that starting a franchised business can bring in high returns in few months' time, S.N. Mishra, COO of Apeejay Oxford Bookstores Private Limited, says, “Franchise is just the replication of successful business model and brand. Franchise gives lot of ease to the person who wants to start his own business but doesn't have the knowledge and experience of this particular trade. While offering Oxford franchise, we provide system support, software, share technical know-how, training and stock maintaining, which is very difficult for an individual to execute.” Hiring skilled manpower with good knowledge about the book retail sector is a major challenge.
While associating with any franchise brand, the franchisor provides proper training and support to the franchisee. For instance, Oxford Bookstore provides extensive training to the franchisees' staff at its own store to give them a hands-on experience of running a book business. From time to time, it also conducts training sessions to re-emphasise company's system, processes and procedures. It also provides lot of support in the form of merchandising, events, tie-up and different promotional activities.
Be it a book retail business or any other business, attracting new customers and retaining the old ones should be the key strategy that every retailer must focus on. Create a strategy that in turn promotes your business and fetches maximum profits.
Highlighting his company's strategy, Mishra states, “In case of Oxford, we support them through our national marketing plan and provide them our expertise for conducting BTL activity, which is mainly store-centric. Our major focus is to promote a store, whether it's owned or franchised by conducting store-level activity. Therein, we try to connect the store with the customer via various event and promotion.”
Talking about location selection criteria, Mishra clarifies, “While selecting any new store location, we are very selective. We open few stores but with greater amount of success ratio. For financial year 20102011, we are planning to open six stores mainly in tier I cities.”
To recover the initial capital expenditure (capex), the average timeframe to recover CAPEX is 28 months,” says Mishra. As per the government rulebook, sale is completely tax free, so book business is very much hassle-free. However, non-book products like CD, gifts, stationery are taxable. For that one needs to have VAT registration, CST, PFA, trade, sky sign and fire licence. Apart from this, local municipal licence is required to do any business.
Bookstore should always be opened near educational institutions such as schools, colleges and universities or inside the cafés to target youth. While selecting store location, Oxford Bookstore stresses on catchment, which has a mix of residential and commercial premises and traffic flow.
Book retailing is considered recession-free. Presence of few organised franchise brands provides lucrative opportunity to the investors. In case a franchisee does not get the expected returns and wishes to terminate the franchise deal, then s(he) must consult the franchisor.