Part 5: The Growth Model

Getting From One Store to A National Presence

Book lovers gradually accumulate their home collections over time. For most people, these collections eventually reach a critical point where "Enough is enough!". This often happens when moving from one home to another or a major home clean up. Few people want to simply throw their beloved books into the trash or even to go to the bother of trying to sell them on-line. Our stores make it easy: Pick up some heavy-weight boxes from a liquor store, fill them with your collection of unwanted books, and drop them off at your local neighborhood used book store. The store clerks put each of the book numbers into a computer database app which then produces an appraisal of the collection's potential value. An email is sent back to the original owner listing the details and giving the value as a store credit. This store credit can be applied to 50% of the price of future purchases.

Most used book stores have a similar policy but eventually they run into a big problem. There are far more people with far more books given to the stores than they can ever possibly sell in their store. Selling some of these books on-line via Amazon or other sites helps, but with shipping costs and Amazon fees, most books cannot be sold profitably enough to cover the labor involved. Anyone who has shopped Amazon has noticed that most popular books can be purchased for only a penny plus shipping. Any items that frequently drop down to that price are what we refer to as "penny" books. While it is not profitable to try to sell most penny books on-line, they comprise most of the retail sales within stores, usually at prices from $1 to $4 but, of course, without the shipping cost. However, the excess of penny books accumulate at the stores rapidly.

This accumulation causes typical book stores to eventually decline trading for new deposits, but not us. When each of our stores has an excess of more than a few thousand books, they are re-consigned to a brand new store location, usually in a new town, a new district, or even in another state. This creates not only a new sales outlet but also a new intake location for sales inventory. Each existing store accumulates such an excess every 2 to 3 months. That keeps our new store division busy finding locations and staff to potentially double the number of our affiliated stores every few months.

Anyone who has ever studied exponents in math class knows the implications of doubling every few months. Starting with 1 store but a good expansion system we could have 10 or more stores within a year, 100 or more stores in 2 years, etc. However, the viability of each stage of growth is very different from the previous stages. Beyond making the first store profitable there are at least 5 stages of growth that will each present its own challenges. For our purposes of planning herein, we will look at each of these stages as a growth factor of 10. That is, within each geographically local district there may eventually be about 10 associate stores. Within each area district, which for reasons that will be shown later are defined by the United States Postal Service's Area Distribution Centers (ADC), there may eventually be about 10 local districts, which means eventually about 100 stores in each area district. For our purposes, there are about 100 area districts within the USA which will be divided into 10 regions of approximately 10 area districts apiece.

So to recap, there can eventually be 10 regions of the country with about 10 areas (ADC's) in each. The ADC's have about 10 local districts each, and the local districts contain about 10 stores. The projected goal is thus to have 10 x 10 x 10 x 10 (10,000) affiliated stores some day. If we truly create the expansion system to multiply by 10 or more each year, we would be able to achieve that goal in 4 years. Obviously that is not a trivial goal and many things could change in the meantime but it shows the potential.