How to recover from theft, fraud and poor inventory management

Why some authors are striking out on their own to publish their books even after having success with traditional publishing

It’s time to get ready practically and spiritually for the season

Employ these simple steps for handling product for your store

Are in-bound freight costs killing your store? Do you know how much it costs to cut each purchase order, receive against it and pay the invoice? How much are vendor returns costing in terms of labor to process and the cost to ship the goods back? Have I got your attention yet? If so, it’s time to examine some of the Retail Successentials of managing your supply chain.

Once upon a time, retailers talked about J.I.T. or just-in-time inventory management: Order less product more often. But for many stores, not having the right technology and replenishment logic meant that J.I.T. stood for just-isn’t-there.

There is a fine line between the two. Step too far one way and you’ll find that you cannot sell what you do not have. Wander the other direction and you drive freight costs through the roof. Move too far and you kill your inventory turn and tie up too much stock, which can starve your business of much-needed operating capital.

STEPS TO TAKE

Working toward an optimal supply chain is tedious, but remember the old adage: “Retail is detail.” Since we live on pennies of profit per dollar, remember that this will help you find another penny or two for every dollar of sales.

First, know your costs. You cannot make smart supply-chain decisions until you know how much each option will cost you. On average, in-bound freight costs will run 3-4% of retail. Creating a purchase order may only take 15 minutes of labor, but receiving it can take much longer. Processing the receiving documents and paying the vendor also creates some cost for every purchase order you cut.

With returns to the vendor, outbound freight costs can run as much as 6-8% of the retail value of the goods. The costs of hunting and finding the goods, removing price labels and processing the return are also much higher than the labor to simply receive goods.

Last, but not least, what discount and other purchasing terms—like freight, billing and co-op—does each vendor and distributor offer? Getting an additional 30 days of dating on every purchase order can add as much as 2/10 to your inventory turn, freeing up cash flow and building profits.

Estimate your costs for these functions, as this data will help you make the best possible supply chain decisions.

Next, examine where and how your products are coming in and going out. Break down your shipments by carrier. What percent of your purchase is made directly from the vendor, and what percent is made from each distributor? Be sure you also have a good handle on minimum-order thresholds from each vendor and distributor.

QUESTIONS TO ASK

With this data in hand, begin to develop your supply-chain strategy. Answer these questions:

Where is the best source for me to order each vendor’s product? Ordering directly from the vendor may or may not be the lowest-cost option. Since free freight is worth approximately 4% of retail, consider the terms each vendor offers, and think about saving by ordering from a distributor all at once versus placing multiple smaller orders from a number of vendors. A distributor order will save you money when the vendor offers you less than the 5% more than you can get from the distributor. I say 5% because you can often get free freight worth 4% from the distributor, and by consolidating your order, you certainly reduce the number of invoices you have to process, and you may even qualify for other distributor incentives such as additional dating.

When should I replenish each item? While the answer to that question varies, here are some common practices:

Stock your never-out items deep enough that you have an eight- to 10-week supply. Set your reorder point when you reach a six-week supply.

Stock your remaining core assortment in quantities of one, or two as sales permit. Reorder as soon as you sell one.

Seasonal items are best bought one time only with no replenishment. Many of these items are nonreturnable.

Promotional items should be ordered four weeks before the start of the promotion and be replenished until you are 25% through the promotion. This will help you stay in stock but not have an order arriving late.

How can I best manage returns to vendors? The best return is no return. That’s said, if you are overstocked, the worst thing you can do is keep nonproductive inventory.

Before you pull the trigger on the return, consider moving the item to your sale table. Selling at cost is better than returning it for a loss just to get your cost back. You end up paying freight, spending labor and sometimes incurring a restocking fee. Many vendors will find creative ways to help you sell through the goods rather than return them.

Going through the above process not only keeps your cash flow moving, but also can help your store grow sales and increase profitability. And who doesn’t want that?

Bill Nielsen is a 25-year Christian retail veteran having served in C-level positions with Family Christian Stores, LifeWay Christian Stores and Berean Christian Stores. Nielsen is now president of The Equation Team, a consulting firm that specializes in retail and publishing.

Naturally, bookstores are a popular gathering place for book clubs. But have you thought about inviting writers’ groups to your store?

What’s more natural than for writers to come together within the walls of a bookstore surrounded, literally, by volumes of inspiration, to critique, share and brainstorm?

Indie bookstores are fast becoming the place for writers’ groups to meet. So, how can independent Christian retailers help tomorrow’s best-selling authors by offering them the use of their stores for meetings and, by doing so, also serve as a valuable resource for their customers who wish to purchase books on the craft of writing?

ASSESS CUSTOMER INTEREST

You can assess the interest factor for in-store writers’ groups in a number of ways, including via email correspondence with your opted-in customer list, through a poll on your website, as the subject of a blog entry or Facebook post, on a sign-up sheet at the cash wrap or simply by talking casually with your customers. You also could reach out to local churches and ministries to locate potential group members.

Hit the ground running with your writers’ group(s). Have an organized plan, including a schedule and a strategy for keeping group  members engaged—and for growing the group, too.

Recruit one of your team members, a writer/customer or a local Christian author to head up the group. Don’t forget to ask potential members if they’d prefer specialized groups or just one general group. Or start small and work your way up to additional groups segmented by genre.

ORGANIZE THE GROUP(S)

If you’re getting active interest in starting—or adopting—a writers’ group, you’ll want to assess whether to start with just one general group that addresses multiple genres or offer a few smaller groups that focus on specific genres.

ABA bookstore Village Books in Bellingham, Washington, plays host to several writing groups, which the store locates strategically next to its café. The groups are free to attend and always open to newbies and drop-ins. The store has one person in charge of the groups and directs those with inquiries to that person’s email on the store’s website.

Village Books offers four writers’ groups organized by genre—Fiction, Nonfiction & Memoir, Poetry and Speculative/Science Fiction—with each group meeting twice per month. The store also hosts a special writers’ group for teens, Friday Night Writes. This group meets most every Friday from October to March in the early evening. Free to ages 15 to 18, the group is sponsored by a local young writers’ organization and includes a one-day teen writing conference in the summer. What a great way to get young people interested in writing!

MAKE SOME SPACE

Now that you’ve got a reasonable number of people interested in forming a writers’ group at your store (or an established group looking for new digs), what’s next?

First, make sure you have space for the group to meet. Perhaps you have a meeting room or a reading space already built into your store design. If not, locate an area of your store with sufficient privacy to allow the group to share and discuss without disturbing customers—or vice versa. One store in Copell, Texas, Corban Christian Store, made all of its shelving units, endcaps and most of the store’s displays mobile by installing wheels on them. Moving the displays to make space for meetings and other events in this small store is a snap—and moving everything back takes mere minutes.

You also might wish to open your doors to your writers’ groups during exclusive times or days your store is not typically open. Of course, you will incur expenses for utilities and staff time, but if you also make it a time for the groups to do some shopping, you could definitely justify the cost—which leads us to the next step.

SET UP RESOURCES

Now that you have a group of writers gathering in your store to “talk shop,” you need to be prepared to provide them with the resources they need to become even better writers. Explore the variety of books available that focus on the craft of writing. Consult with distributors and sales reps for their input on the titles that would be beneficial to your writers’ group members. Be sure to include other tools of the trade: dictionaries, thesauruses, quotation books, style guides, grammar and usage books, and so forth. You also may want to include curriculum from writers’ guilds and conferences.

Set up a display of these resources in a special section adjacent to where the group will meet. Offer special discounts to group members. Hang a bulletin board nearby to display information on upcoming writers’ conferences or college classes. Make your store a “one-stop shop” for all things writing. You could even include gift items that would appeal to writers such as mugs, pens and journals.

And if you don’t have a café, be sure to offer coffee and tea to your writers’ group members as a good host would.

USE SOCIAL MEDIA

Once your writers’ group is off the ground and meeting regularly, include its meeting information on your website. A separate tab or banner will draw more attention. Be sure to include your store’s appointed contact person’s name and email address so he or she can field inquiries. Include a picture of the group having a good time at one of their meetings!

If you have a Facebook page, share information about the group there as well. Ask members to comment on the group’s meetings, encouraging new members to join. Likewise, use Twitter and any other social media you’re tapped into.

Blog about the group, too! Invite members to talk about the group in their blogs. Since many writers have blogs, this is a natural. Employ grassroots marketing at its best!

INVITE GUEST SPEAKERS

Just as you may invite authors for in-store book signings or book club meetings, make the effort to invite authors, teachers, professors, journalists, publishers and those of similar professions to your writers’ group meetings as guest speakers. They will inspire, educate and draw new members to the group.

ARRANGE SPECIAL PROGRAMS

Think of how exciting it would be for your writers’ group members to be able to share their published books with your customers. Having an in-store writers’ group is a wonderful way to cultivate your own local authors and help build your sense of community (see last month’s column for more on that). Consider contacting a self-publisher to see if there is a way you can work with them to offer a program for your writers’ group authors once they’re ready to seek publication of their books. This will help bring the group full circle in your store—from book lover to book writer to published author.

When you think about it, isn’t it completely natural for an author to find inspiration, guidance, camaraderie and education in a bookstore? Wouldn’t it be wonderful to become a better writer surrounded by shelves of books from some amazing authors? Yes and yes.

Help make it happen in your store. Provide the location for inspiration for writers as well as readers. It just makes sense.

A publishing industry veteran, Dave Sheets is a thought leader with 1Source—a consortium that includes BelieversPress, SuzyQ Author Coaching, Bethany Press, Glass Road Media and Anchor Distributors—that provides a full range of independent publishing services for print and e-books for faith authors and publishers. Sheets has worked for Tyndale House Publishers, Multnomah Publishers, Send The Light Distribution, Harvest House Publishers and Snowfall Press. Contact him at This email address is being protected from spambots. You need JavaScript enabled to view it..

Houston’s Encouraging Word welcomes shoppers with focus on ‘ministry and love’

Churchgoers and community members regularly gather at Encouraging Word Bookstore in Houston, not only to shop, socialize and relax, but to benefit from the store’s ministry.

“Members of our church love to come in here, grab a cup of coffee and hang out while they are waiting for the next service, or they meet a friend in here,” said Jodi Jones, store manager. “It’s a connection point a lot of times.”

Complete with a Keurig drink maker in a coffee nook as well as comfortable chairs, the store provides a place to chat.

“Our assistant manager, Anne Marie Herzberg, is very outgoing,” Jones said. “This is something that has evolved and grown naturally. It’s not something we dreamed up or that was part of a business plan. We started in a room about the size of a bedroom, and we have continued to grow. We’ve more than doubled our space, and the church has provided us with a location that is right off of the sanctuary with glass windows and more visibility.”

The store serves Encourager Church where Fernando and Angie Ruata are senior pastors. With about 900 members, there are two services Sunday morning and a prayer-and-worship service Wednesday. The store is open those two days, with sales on a typical Sunday ranging from about $750 to $800.

“If you think about our priorities, it’s about ministry and love,” Jones said. “That’s the vision of the church, too. Visitors come in, and they always make comments about how friendly our church is. We know that we are often the first place they stop, and we’re the first people visitors talk to even before they get to the information desk or to a greeter. We’re a small store with a big heart.”

Herzberg agrees.

“This is a very nonthreatening place to meet people,” she said. “Guests come in and strike up conversations. It’s a good beginning to being part of this church.”

Jones and Herzberg believe the store should be more of a ministry than a retail outlet.

“Everything in our store is discounted 20%,” Jones said. “So, people know when they come in here that they are going to get something that can help them with their walk with the Lord, and we are not trying to make money off of them.”

Herzberg added: “The bottom line isn’t the bottom line for us. It’s not about the sales; it’s about the connection. The sales are a byproduct rather than it being the other way around.”