A small bookstore pilots a new business model to stay afloat. Will it work?
Photo courtesy of Borderlands Books
By Katrina Woznicki
Alan Beatts, 48, knows how to fire a Glock model 19 9 mm pistol, can strip a 1983 Kawasaki KZ1100 down to the frame, likes to quote T.S. Eliot and may be found reading in the bathtub.
And those aren’t even the most interesting things about him.
Earlier this year, Beatts found himself in the national media spotlight for announcing he would close the bookstore he had owned for eighteen years after his home turf of San Francisco voted to increase the minimum wage to fifteen dollars an hour. Suddenly, the focus shifted from a popular municipal measure to the alleged battle between small businesses versus fair wages. Anger came from all sides, and Beatts, who supports workers’ rights, took fire from social conservatives, liberals, and Internet trolls alike. Beatts found himself becoming a voice for struggling entrepreneurs trying to carve out a modest living and make the math work in the land of Twitter, Facebook, Apple and Google—companies all based in the Bay Area or northern California. Journalists called. Television studios sent cars for Beatts to talk on camera. Emails flew.
Beatts earned 28,000 dollars in 2014, a year spent working more than fifty hours a week, not taking any vacation time and earning less than the proposed minimum wage.
“It was so polarizing,” Beatts said of the coverage. He spoke to me recently in an office he maintains with his trusted right hand and general manager, Jude Feldman, 39.
If Beatts is the voice, Feldman is operations, quietly and very effectively ensuring the show goes on every day. She has a background in theater tech and sees herself as the store’s stage manager: supervising staff, planning events, overseeing payroll, among a litany of other duties. Feldman nodded in agreement as Beatts recounted the media attention. “I told him, ‘Don’t do Fox News, they’ll just twist what you say,'” she said, “but Alan has integrity.”
Borderlands Books is an independent shop dedicated to science fiction and fantasy, which, like many other small businesses, has paper-thin margins. Borderlands’ profits in 2014 were 3,000 dollars down from 4,600 dollars in 2013. Beatts earned 28,000 dollars in 2014, a year spent working more than fifty hours a week, not taking any vacation time and earning less than the proposed minimum wage. Aside from Beatts, the bookstore employs five others; Feldman is the only full-time employee and puts in long days to earn hourly wages. On February 1, 2015, Borderlands’ posted on its blog that it would close March 31st. Staff cried. Plans were made to sell off the store’s inventory. Commemorative hoodies with the store’s logo and the years “1997-2015” were stitched and sold. Beatts laid down the numbers on the
Fans wouldn’t have it.
They corralled, as fans do, to brainstorm ways to stop what Beatts had pretty much presented as inevitable. Ideas were volleyed online and at town hall-like meetings—everything from the practical to the crazy including selling the store, becoming a nonprofit, increasing sales while decreasing expenses, and fundraisers on Kickstarter. Beatts and his team eventually agreed to a sponsorship model—thinking they had nothing to lose—and announced on February 19th, that fans could purchase 100 dollar sponsorships that would need to be renewed once a year. Only living individuals could buy single sponsorships. Multiple purchases from a single buyer, corporation sponsorships and anything in the name of a beloved, deceased pet were prohibited. If Borderlands could reach 300 sponsors, they explained, the bookstore would remain open until the end of 2015. Within forty-two hours, they hit their goal and eventually garnered a total of about 800 sponsors—500 of them in the zip code area—bringing in 80,000 dollars to stay in business for at least another year or more. Beatts estimates about 20,000 dollars of this will go toward staff pay with the rest in the bank.
They now saw themselves as part of something. They were now part of this, whatever this ended up becoming.
Beatts and Feldman were overwhelmed by the response. Authors were too. John Scalzi and Chuck Wendig, both best-selling authors with significant social media platforms, made online appeals to keep Borderlands open, and their efforts had an impact. My husband, Michael J. Martinez, an up-and-coming science fiction novelist, did the same and added his own support. Thanks to this twenty-first century barn-raising, my husband was invited to give a reading there in August because there was still a bookstore to go to. We happened to be in town for a sponsor-only wine-tasting event where Beatts, appearing very comfortable with a microphone in one hand and a bottle of Corona in the other, addressed the crowd with aplomb, speaking completely unscripted yet never fumbling for words, as if we were all seated around a big dinner table together. Guests loved it. They now saw themselves as part of something. They were now part of this, whatever this ended up becoming.
Yet Beatts still quietly questions how long sponsor enthusiasm will last. Interest always wanes.
“No one has tried this,” he said. “We were willing to take a chance. From a business standpoint, it’s nuts. We’re not a public library. We’re not the March of Dimes. Is this sustainable? I don’t know.”
Beatts and Feldman could’ve walked away, taken vacations, gone somewhere else to earn some real money, but neither wanted to. “This is the best job,” Beatts said. “Without exception.”
No Single Formula
Booksellers are watching to see if this socialist approach to capitalism helps Beatts and Feldman keep their beloved jobs. News headlines reporting the death of the independent bookstore were premature, just as Beatts is finding he was also premature in announcing Borderlands’ end. Big chains such as Barnes & Noble and Borders were predicted to wipe bookstores out in 1990s, and while many closed, several held on and even weathered the 2008-2009 economic downturn. Currently, Amazon
Oren Teicher, chief executive officer of the American Booksellers Association, followed Borderlands’ turnaround. “What works for Alan might not work for another bookstore,” he said. Teicher explained that each store is unique, often reflective of the person or team managing it, and regionalism as well as any kind of localism movement can influence a business’s ability to remain viable.
“There isn’t a formula here. I don’t know any two bookstores that do things alike. We’ve seen a multiplicity of models. Like anything in retail, you gotta keep working at it, keep mixing it up. It’s about connecting to your customers,” he said.
Andrew Wimer, a spokesman for the National Federation of Independent Business, agrees, saying small business owners today “aren’t confident in the economy” and often face “government regulations and red tape” to keep going.
“We haven’t heard yet of many businesses who have adopted the sponsorship model to try to generate alternative revenue,” Wimer said. “It’s likely that it would only work for a limited number of businesses that are offering a rather specialized product and have a dedicated customer base.”
Small business owners, Wimer added, have to “nimble, creative, and hardworking” to stay in business. Beatts’ previous jobs in law enforcement and motorcycle repair appear to have prepared him to be quick-thinking while simultaneously being patient enough to work through long, arduous problems that require piecing together. He epitomizes the qualities Wimer notes, constantly deep-diving into inventory, finances and customer and vendor relationships near and far, all while staying on top of the day-to-day details and keeping the big picture, such as municipal politics, in sight. Add 800 sponsors into that mix—Borderlands’ dedicated customer base—who you hope renew their support and it becomes a more complicated juggle. Sponsors aren’t like shareholders of a company; those who paid 100 dollars do not get to tell Beatts how to run his business. And it’s not like a membership loyalty program where members get material perks.
What sponsors do get for their 100 dollars is community, which includes invitations to special events, such as wine tastings, as well as opportunities to meet their favorite authors and rent out the store’s adjoining cafe space, which has its own financial operations separate from the bookstore, for their own private parties. Sponsors may also receive, as Beatts puts it, “favors that don’t cost any money” such as having UPS deliver the sponsor’s packages directly to the store, allowing sponsors to pick up packages when its convenient, a real benefit for urban apartment dwellers with tiny mailboxes.
“We’re more like bartenders than salespeople,” Feldman said. “We listen to people.”
The sponsorship model may just work at Borderlands because of the type of community Beatts and Feldman have hand-built over the years. Beatts is modest in this regard, acknowledging the “totality of the staff” in creating this warm, inviting vibe that Borderlands exudes, but the truth is the bookstore reflects his values, and his passions. The staff he and Feldman hire executes on these qualities, engaging with customers in the way Beatts wants them to be engaged with by demonstrating an encyclopedic knowledge of the 14,000 titles the store carries, and ensuring that any interactions and transactions don’t feel like sales pitches. Even though he’s in retail, Beatts hates the very idea of salesmanship. Instead, he sees himself and the staff as problem solvers.
“We’re more like bartenders than salespeople,” Feldman said. “We listen to people.” A customer may walk in saying she wants to read something in fantasy, but isn’t sure what’s out there, so Feldman or Beatts or the handful of others that work there will ask the individual what she’s read lately, what kind of movies she likes or other questions related to pop culture and personal taste, to develop a sense of what to recommend. Beatts says he will talk people out of certain books if he doesn’t think they are a fit for them, caring more about the customer experiencing a great story than closing a sale.
Chatting up customers and finding a book that fits them is one of the biggest highlights of the job, said Scott Cox, a local actor who used to volunteer at Borderlands and then started working there last September thinking he’d just be stocking shelves. Instead, he found himself serving as a sponsor liaison. “It’s like a continuous book club,” he said. “It doesn’t even feel like a job. I love introducing readers to new authors. We’re just all big book nerds coming together.”
Nerds of All Stripes
These book nerds are as diverse as San Francisco itself. Located in the city’s vibrant Mission District neighborhood, Borderlands attracts all kinds, young and old, male and female, straight and gay, and of all ethnicities and socioeconomic backgrounds. While I hung out at the bookstore, I saw youthful hipsters with tattoos and dyed hair browsing titles alongside senior citizens in khakis.
Michelle Rapp, who held her wedding at Borderlands as well as her 28th birthday party there, described the bookstore as an anchor in a gentrifying community:
“We got this email that said they were closing and I was devastated,” Rapp said. She and her husband called immediately. “We were sponsors eight and nine. We totally understand the socioeconomic conditions stacked against small businesses. Even if we move away, we’re going to keep supporting them.”
Bookstore browsing is a tactile experience, one that can’t be replaced with clicks, and book lovers are innately drawn to the smell and feel of bound paper, myself included. As I walked past Borderlands’ shelves looking at some names I recognized and some I didn’t, from Neil Gaiman and George R. R. Martin to Paolo Bacigalupi and Seanan McGuire, I found myself enthralled by the covers. Science fiction and fantasy are all about stretching the imagination, and just reading the book jacket blurbs alone is an exercise in letting go of reality and considering alternate worlds.
“None of us are getting rich doing this.”
“Visiting a bookstore is like going to a gallery,” said Alvin Orloff, a manager at Dog Eared Books located half a block away from Borderlands on Valencia Street. While Dog Eared wasn’t threatened by the minimum wage hike, the staff there rooted for Borderlands, knowing that the way small businesses work together affects the entire community. “Bookstores are as much an environment as they are a way of distributing commodities. I say any model that works. Profits are very slim. None of us are getting rich doing this.”
Corporate homogeny is everywhere and independent bookstores offer a reprieve. Having someone guide you through new titles, ask you about your bedtime reading habits, show an interest in who you are, and welcome you into a circle of fellow book enthusiasts all while not pressuring you to actually buy anything is hard to find. Sustainability of sponsoring a for-profit retail business will involve keeping current sponsors engaged, attracting potential new sponsors and avoiding any appearances of being pushy with sales or asking for a handout, a word Beatts strongly dislikes. Whether this model is replicable at other bookstores or businesses remains unknown. Feldman noted she would have gladly donated to some of her favorite restaurants had she known they were about to go under.
At the Borderlands’ wine tasting, as Beatts stood up there at the microphone talking about a raffle the store was holding, I couldn’t help but look around and wonder who would be coming to such parties next year, or if there would even be a party. This was not a roomful of Silicon Valley techies but a mishmash of everyday people with nose piercings and eclectic-vintage style clothing and beat-up looking backpacks. San Francisco is not a cheap place to live and some sponsors likely live on a budget; 100 dollars is meaningful and could buy someone a week’s worth of groceries or help pay for the commute to work. Borderlands’ future depends on the generosity of those not rolling in large amounts of disposable income. Beatts and Feldman know this. But the night I was there drinking some California red and hoping to make my way to the cheese plate, the staff and sponsors were talking books, sipping wine and toasting Borderlands’ success. Whatever happens this spring when it comes time to renew sponsorships—and who among this crowd will come back—are anyone’s guess.
Katrina Woznicki is a freelance writer in the New York City area. Follow her on Twitter at @katrinawoz or read about her serial vacationing habits at