“A lot of bookstores have closed in the past 10 years for various reasons,” says Denny Magers, owner of Magers & Quinn Booksellers in Uptown. “First were the big-box stores, then along came the Internet, and there’s electronic books now.” Despite this trend, Magers & Quinn’s sales have grown for the past several years.
According to Magers, the secret of the store’s success is its ability to adapt. It started as a used bookstore and morphed into a hybrid, offering used and new books, plus a third category of new books that the store can purchase at a discount—for example, out-of-print books. “It’s a broad category that we can buy at advantageous prices that we can then resell at advantageous prices,” he says. These categories account for roughly equal proportions of revenue, with a small percentage of sales coming from rare and collectible books.
Magers & Quinn buys used books from the public and new books directly from the publisher or one of two national distributors. Bookstores get a slightly better margin when buying from a publisher; generally speaking, stores pay about 40 to 45 percent of the retail price for a book. While used and discounted new books cost less and have slightly better margins, only new books have a window when they can be returned to the publisher for a partial refund if they aren’t selling.
Competing against Amazon is an uphill battle, but M&Q sells online nonetheless. “Almost immediately, when a book comes out you can buy it heavily discounted on the Internet for about what a bookstore pays for it,” laments Magers. As with other retail items, online bookselling is extremely price-conscious and competitive.
Magers & Quinn By the Numbers
1994 – Opens on Hennepin Avenue (an earlier incarnation, All Books, opened near the University of Minnesota in 1991)
30 – Employees
18,000 – Square feet (8,000 retail floor space, 10,000 basement warehouse)
250,000 – Books in inventory
120,000 – Unique titles in inventory
50,000-60,000 – Books listed online
30% – Online sales
70% – In-store
“It’s a race to the bottom in many cases, but it’s also given us an opportunity to sell books all over the world,” he notes. Today, online sales make up roughly 30 percent of Magers & Quinn’s sales—both from its own e-commerce website, as well as partnerships with other online sites, including Amazon, whose cutthroat pricing deters independent stores from listing full-price books. (Magers sells books on its own website at 25 percent off list price, plus shipping; in store it offers new books at a 10 percent discount.)
Magers banks on the fact that bookstores offer a more tactile experience than shopping online can, and some customers value knowledgeable staff who can make informed recommendations. “People say that they’ve got to make it a point to support [bookstores]. But if they jump online to buy it for $1.19 less, then we won’t be there.”
This article is reprinted in partnership with Twin Cities Business.