4 ms·

They cleared $3k in profit for 2013 (read down a couple posts on the blog) while paying themselves next-to-nothing - and that out of the cafe profits and not th

by al2o3cr 12y ago

They cleared $3k in profit for 2013 (read down a couple posts on the blog) while paying themselves next-to-nothing - and that out of the cafe profits and not the bookstore. I think the term "successful" is very questionable here.

TheOtherHobbes 12y ago
This has nothing to do with minimum wage, and everything to do with running an unsuccessful business in the first place. If you're clearing $3k in profit a year you have a very expensive hobby, not a viable business. We can all be sad that a bookshop is closing, but the real culprit was a lack of sales and marketing savvy, and a lack of customer interest in the product/experience being offered. Minimum wage may have thrown a few rocks onto the coffin, but it certainly didn't dig the grave. There a lot of new booksellers making a living on Amazon. Some of them trade internationally. (I buy a steady stream of specialist titles from US sellers.) If I wanted to buy from Borderlands, not only would I be paying far too much for every book in their list, I'd also be charged $25 for shipping. Somehow everyone else in the world can ship me a book for less than half that. But Borderlands hasn't figured out how to. That's where the fail is. Not in hand-wringing about having to pay staff an amount that still isn't close to a fair wage.
- smackfu 12y ago
  >If you're clearing $3k in profit a year you have a very expensive hobby, not a viable business. Depends on whether you pay yourself before the profit or not.
- shadowflit 12y ago
  Also, while this store sounds like a great place and one that I would visit... this article is the first time I have seen the name. I live in SF, I could have been going here, and yet I did not know it existed (and close enough that I could have combined it with Tartine visits to boot). Sure, it's partially my failure, but it's also a marketing failure.
gaius 12y ago
Viable, then.
ryana 12y ago
They were nice enough to provide some numbers, so I tried to figure out what's going on with Borderlands. First thing, they say that a move from $10.74 to $15.00/hr will cost them $28,000 (from +$3k to -$25k), which implies they're paying over 6,000 hours worth of hourly labor. Another option to make up that $28k would be to increase sales by 20%, which means their current annual gross margin is somewhere around $150k. "[R]ent, payroll, and credit card processing represent 68% of all [their] expenses" and since they're basically breakeven let's say that merchandise costs are 30% with 2% miscellaneous costs (utility bills, etc). So their gross margin is probably something around 65% as CC fees should never be more than 5% and merch is around 30%. With $150k of gross margin at 65%, it looks like this store, employing 3 FTEs worth of part-time labor, is grossing about $225,000 per year. If the average book in that store costs $15 (they say they're limited on what they can charge based on the sticker price, so this may even be low) they're staffing 3 people in the store at all times, all year round, to sell 42 books per day. I think I found why you're having to pay yourselves out of the cafe money, sirs.

by al2o3cr 12y ago

TheOtherHobbes 12y ago

This has nothing to do with minimum wage, and everything to do with running an unsuccessful business in the first place. If you're clearing $3k in profit a year you have a very expensive hobby, not a viable business. We can all be sad that a bookshop is closing, but the real culprit was a lack of sales and marketing savvy, and a lack of customer interest in the product/experience being offered. Minimum wage may have thrown a few rocks onto the coffin, but it certainly didn't dig the grave. There a lot of new booksellers making a living on Amazon. Some of them trade internationally. (I buy a steady stream of specialist titles from US sellers.) If I wanted to buy from Borderlands, not only would I be paying far too much for every book in their list, I'd also be charged $25 for shipping. Somehow everyone else in the world can ship me a book for less than half that. But Borderlands hasn't figured out how to. That's where the fail is. Not in hand-wringing about having to pay staff an amount that still isn't close to a fair wage.

smackfu 12y ago
>If you're clearing $3k in profit a year you have a very expensive hobby, not a viable business. Depends on whether you pay yourself before the profit or not.
shadowflit 12y ago
Also, while this store sounds like a great place and one that I would visit... this article is the first time I have seen the name. I live in SF, I could have been going here, and yet I did not know it existed (and close enough that I could have combined it with Tartine visits to boot). Sure, it's partially my failure, but it's also a marketing failure.

gaius 12y ago

Viable, then.

ryana 12y ago

They were nice enough to provide some numbers, so I tried to figure out what's going on with Borderlands. First thing, they say that a move from $10.74 to $15.00/hr will cost them $28,000 (from +$3k to -$25k), which implies they're paying over 6,000 hours worth of hourly labor. Another option to make up that $28k would be to increase sales by 20%, which means their current annual gross margin is somewhere around $150k. "[R]ent, payroll, and credit card processing represent 68% of all [their] expenses" and since they're basically breakeven let's say that merchandise costs are 30% with 2% miscellaneous costs (utility bills, etc). So their gross margin is probably something around 65% as CC fees should never be more than 5% and merch is around 30%. With $150k of gross margin at 65%, it looks like this store, employing 3 FTEs worth of part-time labor, is grossing about $225,000 per year. If the average book in that store costs $15 (they say they're limited on what they can charge based on the sticker price, so this may even be low) they're staffing 3 people in the store at all times, all year round, to sell 42 books per day. I think I found why you're having to pay yourselves out of the cafe money, sirs.