How to Start a Bookstore

Written by Dave Lavinsky

brick and mortar bookstores

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Bookstores are an excellent opportunity for anyone interested in becoming self-employed. They can also be very profitable. In this article, you’ll learn the key steps to launching your bookstore and things to keep in mind when doing so.

Importantly, a critical step in starting a bookstore is to complete your business plan. To help you out, you should download Growthink’s Ultimate Bookstore Business Plan Template here.

How to Open a Bookstore

Here are the key steps to starting your bookstore.

Write a Business Plan

Before opening your store, do market research for your target audience and write your bookstore business plan. This will help you determine how much money you need to open your store and  potential risks to avoid.  Without a business plan, it’s very easy for things to go awry rather quickly—you may not be thinking about certain important factors when you are getting started and it could create a poor reputation for your business from the start.

To enhance your planning process, incorporating insights from a sample bookstore business plan can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

How Much Does it Cost to Open a Bookstore?

One thing that can really change when considering how to start a bookstore is the amount of money needed in order for the whole process—opening and running—to be successful. The number varies depending on what type of bookstore you want to open.

The average independent bookstore requires a minimum of $60,000, especially during the first month with all the startup costs involved. This includes expenses such as general liability insurance, shelving, register and counter space for check outs, tables, displays, etc. To track these expenses and incoming revenue, you need to open a business bank account.

Marketing Plan

Odds are that you’re already aware of how hard it can be to get people into a bookstore, even if they live directly next door. Think about what you plan on doing in order to drive foot traffic into your bookstore—do you have upcoming events at specific times? Will there be book signings? Advertise these events on your Facebook page and other Social Media accounts to increase your reach. Even candy samples can make a difference.

Location, Location, Location…

Where will your bookstore be located? Think about logistics more than anything else—it doesn matter how good your store is if people never find out about it. Think about how you’re going to get people in the door and, more importantly, how they can get back to your store again for future purchases.

Determine Initial Inventory

Once you’ve finalized the business plan, start contacting local distributors about getting inventory. Inventory management is one of the most important things to think about when opening a bookstore—will you buy new or used books? While it may be tempting to get up and running quickly by buying used books, you’ll find that something like half the cost of every book will need to go straight back into restocking. This can really change how much money you’re making per year so it’s something worth thinking about before starting out.

One thing that isn’t changing anytime soon is people’s love for books. Think about what kind of bookstore will succeed in your area—it’s unlikely there’s a need for yet another small independent bookstore in the world so you’ll really be standing out if you open up something unique and exciting.

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If you’d like to quickly and easily complete your Bookstore business plan, download Growthink’s Ultimate Bookstore Business Plan Template and complete your plan and financial model in hours.

How Big is the Bookstore Industry?

If you’re thinking about how to start a bookstore, consider the size of the book industry first. Consider the following statistics related to bookstores and the book retailer market as a whole:

  • Measured by revenue, the bookstore industry’s current market size is $9.3 billion.
  • In the coming years, consumer spending on discretionary items such as books is expected to increase which provides bookstores a potential opportunity for growth. 

The market is strong but it’s increasingly moving online. If you want to start a bookstore, don’t be discouraged. There are plenty of book retailers who are still managing to do well despite these changes.

Furthermore, many new ways of marketing books have opened up opportunities for small businesses that didn’t exist ten or twenty years ago.

What are the Key Segments of the Bookstore Industry?

Bookstore chains are the biggest segment of the bookstore industry by far—in fact, if you took away all independent bookstores and accounted for both e-books and other sales, stores like Walmart wouldn’t even appear on this list.

Other segments of the industry include:

  • Independent Bookstores
  • Mass Merchandisers 
  • E-book Sales
  • Textbook Bookstores
  • Used Bookstores


What External Factors Affect the Bookstore Industry?

If you’re thinking about starting a bookstore, here are some things to keep in mind:

  • Consumer spending is always very closely monitored. If the market for consumer goods starts to feel risky or unstable, businesses will likely respond by limiting their investments until demand stabilizes again.
  • Competition with online retailers is increasing due to how easy it has become in the past few years to shop online in comparison to making in-person purchases.
  • The increasing popularity of electronic reading devices including tablets is leading more people away from physical books—this isn’t necessarily detrimental since many still prefer reading hard copies, but it’s something worth considering when trying to figure out how much revenue your bookstore will bring in each year.
If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Bookstore Business Plan Template and complete your business plan and financial model in hours.

Who are the Key Competitors in the Bookstore Market?

Competition in the bookstore industry is very stiff, and there are a wide variety of different types of bookstores that all aim to attract customers in slightly different ways.

Large Chains 

The biggest competitor in the market is still physical stores like Barnes & Noble and Books A Million, although Amazon’s growing presence is making more consumers have second thoughts about whether or not they should continue shopping at brick-and-mortar stores.

Independently Owned Stores

There are still plenty of independently owned stores out there trying to compete with large chains. If you offer something new, it might be easier for you to stand out against larger competitors since many of them have become so similar over the years.

Online Retailers

Amazon has become one of the biggest competitors in this market—many consumers would rather pay a bit more to buy through Amazon instead of going to a brick-and-mortar storefront. Not only that, but they’ve started selling used books which has put a huge strain on independent bookstores.

Wholesale Clubs

This isn’t necessarily a place where you can purchase books from, but wholesale clubs have been growing rapidly in recent years due to how affordable they are compared to traditional stores so it’s worth keeping them in mind when starting your business plan.


What are the Key Customer Segments in the Bookstore Market?

Customer segments are groups of customers who have a similar group of demands. For example, the upscale-connoisseur segment is a customer segment that can be found in many bookstore markets. They often have a high level of income and want to purchase books from well-known authors as opposed to those from up-and-coming writers.

In order to have success in this type of business, you should consider how different types of potential customers will react to what you’re offering. You’ll need to do some research beforehand so you know whether or not what you plan on selling will appeal to your target audience. If it doesn’t, it might be time for you to rethink your plans and figure out something else—for example if someone wanted books about how to knit, they’d likely be very disappointed in your selection if you only had books about painting.

You should also consider how well other bookstores are selling the books that you plan on selling. If another nearby business has a good selection of what you’re planning on selling, then you should consider lowering your prices in order to attract more customers. This will help increase bookstore sales and make sure that more people end up buying from you instead. However, this might not be an option for everyone so it’s important to think about whether or not it makes sense for your business first.

What are the Typical Startup Costs for a New Bookstore?

The startup cost for a bookstore will vary depending on what you intend to sell. To start this type of business, you’ll need to consider the price of buying books in bulk (this includes purchasing at least 50 copies of each book), hiring employees, and renting out commercial space.

To get an estimate for how much money you might have to spend when starting your business, there are many different questions you should ask yourself beforehand. You should think about which items you want to sell—how much do these types of books typically cost? Do I need to buy them new or can I purchase them used? How much does it cost if I decide to purchase these materials online versus in-person?

Other startup costs to consider include:

  • Renting commercial space
  • Buying books in bulk
  • Labor costs
  • Inventory storage/display units
  • Signs for your retail business

In addition, here are some of the key costs to launching a bookstore:

  • Building Out Your Retail Space – Customizing your bookstore could be very expensive in terms of costs for designers and contractors, although sometimes landlords will bear this expense if you sign a long-term lease.
  • Rent – Whether you plan on being in a mall or going into a stand-alone store, rent is always one of the primary expenses every time you start a new business.
  • Inventory – First and foremost, your customers want products–and lots of them. Before you think about hiring employees and paying for other services, inventory must be paid for by the owner. This means purchasing all of your books at once (which can get pricey) or establishing plans to create your own inventory.
  • Employees – You can’t run a business all by yourself, so hiring employees is one of the most essential costs to starting up your bookstore. This includes full-time, part-time and even seasonal employees that you need for each season (such as summer camps or winter skiing trips).
  • Marketing – How do you get people into your door? Ads in magazines, posters around town and apps on tablets are just some of the methods used by bookstore owners today to attract customers. There are also services like BookBub which send potential buyers emails every day about recent books they might enjoy.
  • Technology – Bookstore ownership doesn’t mean flipping through pages anymore; it requires using computer software programs like Intuit’s QuickBooks in order to track costs, inventory and employee hours. This is a key tool for any bookstore owner that requires an upfront purchase of about $200 before you even launch your business.
  • Events – One of the most exciting parts of owning a bookstore is hosting events with local authors. This usually brings in customers but also means more expenses for potential food, travel and hotel stays when bringing people in from out of town for big releases.
  • Licensing Fees – Every state has different rules when it comes to opening up new business licenses or permits. You might need to get zoning approval, agree to certain conditions (such as only using designated parking spaces) or provide employment history for all staff members.
  • Security – A bookstore is a place for books, not fistfights! Protecting the inventory and staff from theft or violence should be your number one priority when opening any business today. This means paying upfront licensing fees for security systems (such as safes) in addition to ongoing costs associated with maintaining them (such as regular updates).

The above list provides just some of the key costs to opening a bookstore. When creating your own list, be sure to include other factors such as:

  • an Internet presence (such as a website and social media accounts)
  • shipping costs for Internet orders
  • advertising in magazines, newspapers and other media outlets
  • promotions such as contests or giveaways for new customers.

These are just a few examples of the key costs, so using it as a starting point will give you a better idea of what you should do now and what might be able to wait until you are more established.

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Bookstore Business Plan Template and complete your business plan and financial model in hours.

Are Bookstores Profitable?

Yes, owning a bookstore can be profitable if you have a business plan and some capital up front to launch your bookstore. To improve the success and profitability of your bookstore, here are some factors you should consider:

  • Location – finding the right spot for your bookstore is just as important as selecting good inventory. Bookstores need to be in busy areas so customers can easily stop by and one of the best ways to do this is by leasing space in malls or strip malls near other popular stores.
  • Inventory – this is one of the most important factors in the success of any bookstore, large or small. Always carry what your customers want and you won’t go wrong.
  • Customer Service – another essential factor to the success of any bookstore is great customer service. This means hiring experienced employees who have a passion for books and enjoy talking about them with potential buyers.
  • Staff – select your employees carefully because they are one of the most important factors in the success of your bookstore business. Hire people who are passionate about books and enjoy talking to potential buyers.
  • Marketing – last but not least, marketing is essential for the success of any business, including bookstores. Make sure you advertise your bookstore in magazines and newspapers as well as through digital efforts.


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How to Start a Bookstore FAQs

If you've ever walked into a bookstore and thought about how nice it would be to pack up, head off on a road trip and see the country selling books in roadside shops you're not alone. Many people dream of opening their bookstore but how do you know if yours will be successful?

  • Retail location is key. Don't rely on online sales or they'll cut into your profits significantly.
  • Establish an online presence including social media platforms. Many independent bookstores are doing well by hosting events like author signings and meet-and-greets that bring in droves of new customers.

If done right, bookstores can be incredibly lucrative even if they don't stay afloat for years at a time. Just look at what Amazon did when it started out; this retail giant is thriving although they sold very few products at the beginning.

There are many risk factors that go into starting a business, but here are some of the most common ones when it comes to opening up your bookstore:

  • Not having the right amount of startup capital to get started
  • Being unable to get books at wholesale prices
  • Having large amounts of debt you're not able to pay back

As we mentioned above, there's also one other risk factor and that's how well your type of book will sell in your specific target market. It doesn't matter how cheap you are able to buy them, if there is no demand for books about knitting in your area, you'll most likely have a difficult time staying afloat. This risk factor is something that isn't easy to estimate either so it's often best to simply do your research beforehand and keep this potential pitfall in mind whenever making any decisions about the business.

There are many different factors involved with starting any type of retail business, however it's important to consider some more than others depending on the type of store you're trying to open.


There are many different things that need to be taken into account when starting any sort of business, however the biggest concern for most independent booksellers is what kind of inventory they'll have in stock. You can either purchase used or new books depending on your target market, though it's important to weigh the pros and cons of both before making a final decision. If possible, try to aim for a mixture instead since both options can appeal to different customers and will keep them coming back again and again.

Physical Location

Another thing that should be considered is where your bookstore will be located—you'll need to make sure it has good visibility from the street so people know where it is and how easy it is to access. If people can't find it or they know it's hidden, then your business is going to struggle from the beginning due to lack of funds and poor word-of-mouth advertising. Once you've decided on a retail location, you'll need to do some research in order to make sure there aren't any similar local businesses that might take away from your profits.

Pricing Strategy

Another factor that plays a role when starting any bookstore is how much everything will cost—some bookstore genres sell for more than others while some have a higher demand than others. You'll want to be careful when figuring out what types of books you're going to sell, however since not every potential customer likes reading the same things. 

Hire Employees

Lastly, it's crucial to consider how many employees you're going to need when starting this type of business. This might seem like something that can just be figured out later on, but the truth is that most retail businesses struggle due to lack of staff members—if everyone who works there is overloaded with too much work and not enough time, they'll become stressed and potential customers may not enjoy their experience. Finding an efficient way to organize these workers so things run smoothly will help increase profits in the long term.

With all of this in mind, you should now have a better idea about how to start a bookstore. These are just some factors you should think about before you get started, and they're not the only ones to be considered either—there are many different things that go into starting a business, however these are some of the most important.

If you want to start your own bookstore, whether it's physical or online you'll need to be able to compete with bigger companies who have many different ways to bring in customers. The best way to do this is by offering something unique or otherwise special that helps you stand out from the rest of the pack.

What’s your competitive advantage? What makes your bookstore unique? When starting your own bookstore, you need to figure out how to make it unique to help it remain successful. Here are some ideas:

  • Being Part of a Community: If you can become part of the local community it will be easier for people to remember your bookstore and come back again since they'll have a sense of pride for supporting their community members.
  • Offering Unique Products: You don't necessarily have to sell books that are used if there are already quite a few independent bookstores doing that already, but you should consider what makes your bookstore unique compared to all the others in your area.
  • Classes, Book Clubs & Workshops: People love coming together with like minded individuals so offering classes related to literature will help you build a community and will likely help you earn more money.
  • Having a Unique Layout: If your bookstore has an interesting layout it might be easier for people to remember how fun it was the last time they were there. This can be achieved in countless ways so consider what would work best for your store before getting started.
  • Customer Service: Along with selling unique items you should also focus on offering great customer service—people will want to come back if they feel like their concerns are being heard and any issues they might have can be easily solved.

The bottom line is that you'll need to find a way to separate yourself from the other bookstores in your area so customers stick with you, rather than going elsewhere. If there's already a bookstore nearby however it's likely that this won't be as easy as it could be otherwise, and it may take some time before people start to notice and appreciate what you're doing differently.

No matter how unique your bookstore is, you'll need to consider what the other bookstores in your area are doing so you can figure out a way to make yourself more successful. If there aren't a large number of bookstores close by however, it may be better to simply try and become as successful as possible without worrying too much about similar stores since they likely won't be applying too much pressure either.

Here are some things you'll want to pay attention to:

  • The Way They Display Their Products: This is often one of the most important parts of any store so you'll want to put lots of time into making sure your displays look extremely attractive—this will encourage people to buy something.
  • Customer Reviews: Read through all of the customer reviews you can find so you have a better idea about what your customers want and expect from a bookstore. You can then alter your bookstore to meet their needs.
  • Their Pricing: In order to keep up with the stores around you, take a look at how they price their products—this will help you figure out which types of books are popular in your area and also whether or not people want to buy used books (which aren't as expensive).
  • What They're Recommending: If there's one thing that bookstores like doing it's recommending books based on previous purchases/what's popular at the moment—if other stores in your area do this too, try finding similar ways to increase your book sales.
  • How They Handle Returns: If customers are concerned about whether or not they can return certain books then this will likely cause them to avoid buying anything at all—take a look through customer reviews to see if people are mentioning anything negative about the way your bookstore handles returns.
  • How They Handle Delays/Holds: It's important that customers know exactly when their items will arrive so be sure everything is clearly labeled and easy to find. Also let customers know what you do with holds (if you offer this service) so they feel like their requests aren't being ignored.
  • Whether or Not They Have Offer Online Ordering: This is becoming more and more common with most bookstores, so if yours doesn't have this feature it might be worth looking into adding it.
  • What They're Selling: Besides books, does your bookstore offer any other products or services? Be sure to take a look and determine whether the extra items could bring customers back more often—even if they don't buy anything.

You can download our bookstore business plan PDF template here. This is a business plan template you can use in PDF format.


Helpful Videos

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Additional Resources

American Booksellers Association

Factors for Success in the Bookselling Industry

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