For the past two decades, my husband and I have run a bookstore in our town. Between Borders and Barnes & Noble both opening outlets in our area within the past five years, we’ve seen our customers slowly dwindling away and we’ve decided to call it quits when our lease expires. What’s the best way to go about handling a ‘going out of business’ sale?”
There is a right way and a wrong way for a business like this to shut up shop. Let’s start with the wrong way: The biggest mistake you could make is to advertise a “going out of business” sale a month or two before the lease expires. If you do, all of the local “used book” dealers (many of whom sell exclusively on eBay and Amazon) would show up at your door on Day One of the sale, clean out all of the good stuff for pennies on the dollar and leave you with a half-empty store and inventory you can’t even give away.
Here’s the right way to run a liquidation sale. First, let the landlord know you won’t be renewing the lease. Many retail leases require at least 90 to 180 days prior notice of nonrenewal so the landlord has sufficient time to find a new tenant for the space. Fail to give notice in a timely fashion and you may end up paying penalties to the landlord. Second, post a notice on your business Web site (if you have one) that the business will shut down on such-and-such date and offer a “progressive” going-out-of-business sale as follows: 10 percent off retail during the first month; 25 percent off retail during the second month; 50 percent off retail thereafter. This will encourage a more even distribution of customers during the sale — some will show up early to grab the best stuff, while others will wait until later on to get the better bargains.
You can also send e-mail or “snail mail” messages to your most frequent and loyal customers offering them an additional 10 percent off if they bring a copy of the message with them. That will guarantee your “best stuff” ends up with the people who have supported you all this time.
Third, remove some of your best merchandise from the shelf. Take some of your most popular titles and put them in a storage area somewhere. Many people will assume that the good stuff will be “cherry-picked” during the first week of your sale. Prove them wrong. Every week, take a few items from your “hidden goodies” pile and sprinkle them randomly throughout the store in places where customers can easily see them. People will soon realize that you are spreading out your merchandise throughout the sale and that will bring them back time after time to check out the new stuff you’ve put out.
When people make offers to buy your bookshelves, racks and other “trade fixtures,” don’t let them carry these items off the premises when they pay for them. Instead, put a “sold” sticker on the shelves and racks they buy and leave them in place until the sale is over. Each night, spread your remaining books evenly throughout the shelves — that will entice customers to shop longer and make your store look more “full,” giving the appearance that there are still great bargains to be had.
When there’s only a week or two left in the sale:
• Run an ad in your local newspaper announcing your “going-out-of-business” sale for the first time — that will alert the local used book dealers, bulk purchasers and other “bottom feeders” and they will come by with their boxes and pickup trucks and clean out most of your remaining inventory (you can even offer an extreme discount, such as “$25 per box, no questions asked”).
• Alert the people who bought your bookshelves, racks and trade fixtures that it’s time for them to pick up their purchases.
• Ask your local library to send volunteers to your store on the last day of the sale to pick up whatever’s left over for their annual used book sale — be sure to get a receipt for these so you can take a charitable deduction on your final business tax return.
• Have your local newspaper send out a photographer to document your last day in business. It’s important to let your community know that yet another small family business has bitten the dust and an era come to an end.