How to Start an Online Bookstore

By Roger Bryan

In December of 2008 I decided to start Thrift It and online bookstore based on my discovery of software that could be used to manage the store. I had been throwing around the idea for about two years after meeting a 22 year old from Detroit who was processing 60,000 books a year out of his parent’s basement. I though if he could do then so could I. I laid out my plan and launched the business. In 2009 I sold over 100,000 books with ever growing revenues. Profitability was elusive because of infrastructure start-up costs but 2010 appears to be making up for that. This post will outline the five key elements that I’ve learned over the past year in starting an online bookstore.

1- Planning: They say that when you write a business plan and you estimate that you need $X to get the business going that you then need to multiply that by 5. Well my experience with this business is that you’ll need to do more then that.

The key elements of my underestimations were based on my lack of knowledge of how much space books can take up. You can envision how much space it takes to hold 10,000 books but until you actually have them inventory you have no idea how much shelving is actually needed. I currently have 55,000 books online and I have a goal of having 75,000 online by the end of 2010. I believe that I will max out my 9000sqft facility at that point. Plan ahead or you’ll end up paying for it in the end.

2- Supply: People always ask me where I get all my books from. The reality is that there are so many used books out there that you can find them a ton of places such as Bookstores, Libraries, Schools, Universities, Charities, and Private Individuals. The key here is to understand your local market in order to find and profitably buy the inventory you need. If you remember the guy from Detroit I mentioned earlier well he got all his books for FREE! He found a few libraries in Detroit that were paying to get rid of their old books. He offered to pick them up for free… Next thing you know he’s picking up 60,000 a year! The books are out there you just need to go find them.

3- Facility: The key here is room to grow. The hardest thing to do is to find a few months in that your facility is too small and that you need to completely move your inventory. I started out in a 1200sqft office and then moved to a 3000sqft warehouse and again (all in the first six months) I had to again move into my current 9000sqft facility. I wasted countless amounts of money have to continually move and redesign my facilities. Plan ahead and you will avoid many of the problems I encountered.

4- Software: There are two major players in this industry Monsoon, Inc and Indaba, Inc. While I started out with Monsoon’s Pro-warehouse Edition I had numerous problems with their software and their support team. This led me after a few months to switch to Indaba Inc’s Program. Since switching I’ve been in close contact with the company’s owner Gary Jones and his whiz software designer Shin Yu. These two are the reason that I would recommend Indaba over Monsoon 10 to 1. Finding the right software provider is a key element to profitability in this industry.

*Software note* – You’re also going to need shipping software! I’ll write about this again later.

5- Logistics: Once you have your supply, your facility, and your software you then need to find a way to pick-up and/or have your inventory delivered. You then also need to be able to get your sales to the post office and/or to get them picked up by your shipping broker. This is a very complicated task at first. Making a decision as to whether you want to have your own truck or if you want to outsource your transportation is mostly dependent on where you inventory is coming from. If the inventory is local then you it may be cost efficient to have a box truck for local pick-ups. If it is coming from various states then you may want to utilize a trucking or logistics company.

This is a very basic overview of what it takes to sell books online. I’d be happy to answer any more specific questions you may have!

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6 Comments to “How to Start an Online Bookstore”

  1. bookseller says:

    Hello Roger,

    I am a fairly new book seller.
    Thank you for posting this informative video!
    I am recently unemployed and trying to earn enough money to keep my family afloat.
    How is it that you come across the bulk book gaylords that are not picked over first?
    I’m from S. Carolina and I currently shop at my local thrift stores.
    I’ll never get as big as you. I want to keep a fairly small operation, but could use some advice on how to increase my book supply resources so as not to have to compete with so many scanners out there.

    Any help will be much appreciated.

    Thanks

    • admin says:

      Hello, thanks for the comment. Actually you can get your supply from us. We stock about 170,000 wholesale items that are for sale at different prices. You just need to let me know what types of books you are looking for and we’ll see what we can do. Some of our best sellers right now are gaylords (1000lbs boxes w/ 600-1000 books each) of novels, kids books, hardbacks, text books, mixed bins, and our retail sort. We have trucks coming in and our of our warehouse every day and can even help arrange shipping. If you would like to talk more about this please give me a call 1-800-506-0172 Roger.

  2. Fred says:

    Hi,

    Thanks for the insights, however, my question is a tough one (maybe!). I am researching the opportunity to open an online resource for a niche market and wish to include books primarily. From my research, it seem that one either sets up a website within an affiliate program or literally stores and distributes titles oneself. Is there a middle road? In other words, is it possible to offer books and have them bought and paid for through one’s own website and have them delivered directly from publisher to end buyer? Is there a president for this? Any comments gladly accepted!

    Thanks, Fred

    • admin says:

      Fred,

      Good question. What you are talking about is drop shipping and the answer is yes you can do that. The key here is 1-Supply and 2-Marketing. If you are going to create your own site to sell someone else’s product (ie.. you are going to have someone else stock and ship the product) then you need to make sure you have proper margins on the items you sell in order to support profitability. You also need to know a little about online marketing. It isn’t easy to get a site up and running that people can find to buy from it. There is a lot of competition out there these days.

      Let me know if you have any other questions!

  3. laure says:

    Hi
    I am also interested in starting an online bookstores.
    I am studying the business plan right now.
    The cost of the books will be a major issue.Do you have Chinese (mainland,taiwan,and hongkong) books translated in english in store?
    Can you please send me a file with the prices?
    Best
    Laure

    • Roger Bryan says:

      The cost of books will always be a major issue just as inventory is for any start up business. Speciality books like you are talking about are hard to come by in volume and are typically very expensive. These are not the typical inventory of a second hand book store.

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