Indie Bookstores' Survival Stories

Unable to beat superstore prices, they become experts on a niche topic, offer personal touches, and maybe even a Harry Potter sleepover

By Stacy Perman

Eight months after Nach Waxman opened up his Kitchen Arts & Letters bookstore on Manhattan's Upper East Side, a man from the neighborhood came inside, looked around, and said, "You're still here? I told my wife you wouldn't make it."

More than two decades later, Waxman's homage to gastronomy is still making it. Devoted exclusively to selling books on all aspects of cooking, food, and wine, Kitchen Arts & Letters was considered an oddity when it opened for business in 1983. Today, it's an even rarer creature: The successful independent bookseller.

DIFFERENTIATING TO COMPETE.

At a time when many small, independent shops have closed for good, unable to compete with the online behemoths or supersize chain stores, Waxman has remained part of a resilient group of bibliophiles that adhered to their own retailing tactics and, in many cases, not only survived but also thrived. Like successful small businesses in a number of industries, Waxman used grassroots marketing and specialization to fend off bigger rivals.

"There's almost no way that small businesses can compete on price," says Mark Rice, the dean of the graduate school at Babson College in Babson Park, Mass. Big companies "have way too much buying power. Where [small outfits] can compete, however, is by differentiating themselves. This applies to all small businesses. Offer better customer service, and if the big guys cater to the masses and miss the niches, you find the niche and deliver on product and service."

For independent bookstores, that means championing local and emerging authors, maintaining vast catalogs, forging personal ties with customers, offering expertise in niche subjects, and hosting community events. Indeed, trade bible Publisher's Weekly will crown an independent, BookPeople in Austin, Tex., as its Bookseller of the Year at this week's Book Expo America.

INDUSTRYWIDE CHALLENGE.

While some are finding ways to compete, the overall number of indie shops is dwindling -- from 4,700 in 1993 to about 2,000 last year, according to the American Booksellers Assn., based in Tarrytown, N.Y. Many blame the likes of Barnes & Noble (BKS), with $4.9 billion in sales last year, and Borders (BGP), with $3.9 billion, which critics say open locations near established independents and then undercut them on price and volume.

At the same time, the entire book industry is struggling. According to the Association of American Publishers, based in New York City, overall book sales hit $23.7 billion last year, up a slim 1.3%. And independents must also contend with new distribution channels, such as grocery stores and mass merchandisers like Costco (COST) and Wal-Mart (WMT).

To survive, Waxman says, carving a niche is "the only way to go. You know an entire subject and really have mastery of one area." With 11,000 titles in English (and other foreign languages) and thousands more out-of-print books, Kitchen Arts ranks as the nation's largest bookstore devoted to food and wine, serving a global clientele of chefs, scholars, and amateur food connoisseurs.

GLOBAL WORD OF MOUTH.

Waxman's accomplishment is impressive, considering his store has never advertised, does not sell online, and resides in a low-traffic area -- with two Barnes & Noble stores nearby. Instead, Waxman has built a reputation on his encyclopedic knowledge and ability to scour the planet for every title possible, along with a focus on customer service.

Chefs and others regularly call on Waxman, and it's not unusual for him or his pair of staffers to spend 45 minutes talking with a customer. His best marketing comes from word of mouth. "