Source: Hedgehog Commune
The business formula and industry concerns behind bookstore chaining.
Perhaps never had a product founder openly and honestly stated that he never used his own product. But Jin Weizhu, the founder of Sisyphus Bookstore, is an exception.
A few years ago, Jin Weizhu said in an interview with Titanium Media that he never went to Sisyphus to buy books, and if he wanted to buy books, he would rather go to the Halloween Book Park. It was an independent bookstore opened between Peking University and Tsinghua University, never selling bestsellers, even novels hidden at the end of the deep aisle, and the best-placed shelves were lined with theoretical monographs on humanities and social sciences.
Sisyphus is the opposite. What best-selling sells what, what popular sells what, in more than a decade, opened more than 300 branches in shopping malls in major cities across the country. Jin Weizhu, who loves to visit independent bookstores, opened a successful commercial chain bookstore.
In the eyes of businessmen, the core of the bookstore is not the book, but the store. It is first and foremost a store, paying attention to revenue, cost, profit, and efficiency, and the book is only a means rather than an end. So admitting that it is nothing to buy books in his own store, Jin Weizhu is selling books to people who are different from himself.
Original price books + high-priced coffee, people who read books are best to cheat?
Sisyphus's expansion seemed to have gone somewhat against the current. According to the store information provided by Sisyphus public account, it has more than 340 chain stores in the country, and the official website shows that the number of active members of Sisyphus is 5 million.
Source: Sisyphus public account | Statistics &; Charting: Chen Meixi
Correspondingly, with the exception of the 12% discount on membership days, almost all books sold at Sisyphus Bookstore are not discounted. The most conspicuous bookshelf at the door is stacked with several of Haruki Murakami's latest novel collections, "First Person Singular", priced at 56 yuan, and standing at the shelf to open JD.com, you can immediately find that this new book can be bought online at a 30% discount.
The impact of e-commerce on physical bookstores is a clichéd topic, and the new question is that consumers can quickly open their mobile phones and buy the same books at a lower price, why are they willing to spend money to buy books at the original price in bookstores?
Compared with a traditional bookstore with books as the core, Sisyphus is more like a bookstore product spawned under the Internet product model. Triggering user consumption is the core goal, and all actions revolve around the core goal, and the books that are the core in the traditional bookstore model are only the means to serve this core goal.
The first is to build a consumption scenario. Bookstores, like all other products, rely on users for revenue growth, and the number of people entering the store is equivalent to the concept of daily life in C-end products. Store display is the starting point of a series of transformation behaviors, and opening bookstores in large shopping malls can ensure that a large number of display crowds are used as the base for consumption conversion.
The main function of large shopping malls is shopping and dining, and most people walk into bookstores in shopping malls based on hanging out after tea and dinner, rather than a strong initiative with the goal of buying a specific book. In other words, from the beginning of the site selection, Sisyphus did not intend to make heavy reading enthusiasts the main target group, and it was creating a bookstore scene for users who would not usually go to the bookstore.
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The second is the selection and display of products around the needs of the target users.
Sisyphus's consumption scenario is to hang out after tea and dinner and on weekends, and the target users in the corresponding scene are young and middle-aged groups living in the city, with certain economic conditions and consumption capacity, and have needs for cultural life. You rarely see serious academic books in the store, either the author is familiar with it, or the work itself is easy to understand, best-selling and popular, which is the primary consideration of Sisyphus's selection.
At the literary booth, Mo Yan's "Life and Death Fatigue" and the online novel "Forensic Qin Ming" are closely next to each other. Perhaps in the eyes of literature lovers, they have nothing in common, but the author of the former is a Nobel Prize winner in literature, and the latter has been adapted into a hit web series. - In Sisyphus's selection logic, they are very famous, and that is enough.
Every weekend, Sisyphus also becomes a mecca for some parents to bring their babies. Not far from home, books to flip through, and convenient dining nearby are all reasons why Sisyphus occupies the time of the whole family.
From the display of various types of books, you can even regurgitate the portraits of the target group. A row of bookshelves is placed with "Comic Version of 300 Years of the Ming Dynasty", "Comic Universe Big Bang", "Comic Chinese History", "Comic Party History", for primary school students who are curious about history; on the back of the same row of bookshelves are "Making Explosive Videos", "Turtle Trading Rules", "Self-Driving Force", and "Meta-universe Revolution and Matrix Trap", obviously there will be many middle-aged and young people who feel intellectual anxiety in the workplace; next to the row of bookshelves are placed "Her Strength", "Be Cruel to Yourself", "My Break Away" and "The Matrix Trap"; next to the row of bookshelves are placed "Her Strength", "Be Cruel to Yourself", "My Break Away" and "The Matrix Trap"; Fight Anxiety and Accept Yourself", many books have covers featuring women in professional suits who look elegant and confident, which is for young mothers.
The recommendation strategy based on the portrait of the target group is close to the short video information flow that we are familiar with.
In addition to selling books, inside each Sisyphus bookstore, there will be a vector coffee, equipped with sofas, tables and chairs, power supplies, WiFi and even table lamps, the space is no less than a genuine coffee shop. If you want to take a seat in the store, consumers need to go to the bar to spend.
Even on weekday afternoons, the Vector Cafe is overcrowded. There's almost a cup of coffee on every small round table, with a laptop or a stack of books, depending on the bookstore's location.
If it is in Xizhimen or Chaoyang, the small tables in the café are mostly stacked with a few books, and the young people and middle-aged people in the shop are half open. Some people are buried in books, and some people are writing papers in the pile of books.
If it is in the Surrounding Internet companies densely packed Shangdi Hualian store, the small table in the café is mostly placed on a laptop, and the guests silently type the keyboard or move the mouse, and take a sip of the coffee cup very occasionally. It's hard to say that you are alone, or if you are in a group in some sense.
Different groups of people give the same chain different functions based on regional characteristics, but few people talk here, whether in the North Fifth Ring Road or the East Third Ring Road. Cafes in bookstores seem to be automatically muting silencers, and everyone tacitly maintains a low decibel, which is very different from the shopping malls across the wall.
The menu at Vector Café is as monotonous as the sound in the shop. A regular latte costs between $37 and $40, punched out of an ordinary fully automatic coffee machine and packed in a disposable takeaway cup; if you order a tea for $38, you'll get a drink made from disposable tea bags, dried fruits and hot water.
But in bookstore cafes, the least important thing is coffee. No one comes here for coffee, and users mainly consume space, spend 40 yuan, and buy a comfortable, warm and quiet afternoon alone or coexistence. Compared to competitors who are riveted for specialty coffee beans or find ways to develop iconic new products, the café in the bookstore is more like a study room selling time and space.
Of course, opening it in a bookstore gives it a natural sense of unspeakable atmosphere. This sense of ambience is constructed by walls in red-blue-green tones, ubiquitous English slogans and looping jazz, and this disguise of being overseas would have been more successful if it had not been for the slogan "keep calm and make coffee" being blocked by the phrase "how to use the fire hydrant".
Quiet, relaxed, with books and coffee, retro décor, soothing music, assembled into a café that fits the imagination of the middle class for cultural life.
So consumers buy books at the original price and spend high prices on ordinary quality coffee in bookstore coffee shops, not because they are deceitful, but because they happen to have such a demand. A delicate but not so difficult to understand list of books, a space with a sense of atmosphere but not so serious, a spiritual world and cultural life that can be constructed after tea and dinner.
What do bookstore chains make money on?
Since the development of the e-commerce economy, bookstores are considered to be one of the most affected businesses. Selling books online will save store rental costs and greatly reduce inventory pressure. The step between the publisher and the consumer is reduced, and with it the profit margins of the intermediate links are reduced.
Sisyphus's profit formula does not seem to be anything special, but around the positioning of its own target customer base, it is trying to maximize both revenue and cost, and this extreme will even bring criticism to it.
The first is cost control. This includes site costs, labor costs, and inventory costs.
1) Venue cost
In order to enrich and diversify their business formats, many large shopping malls will take the initiative to seek cooperation with chain bookstores and rent their venues to bookstores at lower prices. Taking Beijing as an example, almost all of the 31 Sisyphus bookstores in the city are opened inside large shopping malls, and CapitaMal, Longhu Tianjie, and Vientiane Hui are common "haunting places" for Sisyphus bookstores.
For shopping malls, bookstores are a place with both cultural and functional value, on the one hand, it is used to enhance the tone of the mall itself, on the other hand, it also provides the crowd with the choice of rest and leisure, and increases the length of time consumers stay in the mall. Many shopping malls are willing to rent out shops to chain bookstores at low prices, and in 2014, Shenzhen Vientiane Hui even rented the venue to Sisyphus Bookstore for free.
For bookstore chains, opening stores in large shopping malls has a natural crowd advantage and is a transaction that benefits both parties. In addition to the reduction of rent in shopping malls, Sisyphus's throttling of site costs is also reflected in the control of single store area. Compared with the Internet celebrity bookstore with thousands of square meters, Sisyphus is lighter, and the single store is controlled at about 500 square meters.
This strategy has two implications. The first is to significantly save venue costs; the second is to make bookstores highly replicable in major shopping malls and reduce the entry threshold. Of course, this also means that it will not become a hot Internet celebrity punch card, compared to those larger and more exquisitely decorated bookstores, it seems less stylish and personal. A few years ago, the names that appeared on the list of chain bookstore punch cards were Yan Ji You and Zhong Shu Ge, not Sisyphus.
2) Labor costs
Sisyphus's store area is mostly about 500 square meters, and it has been observed that the number of clerks in the bookstore at the same time (including cashiers) is 4-6 people, and the number of clerks in the same period of the vector café is 1-2. These clerks only need to complete the prescribed actions according to the unified instructions, and do not need to organize the bookshelves according to experience, consider the selection of products, or place the books. The company's product department, commodity operation department and channel management department will take on more functions and then issue a single task to each store.
This corresponds to the low salary of the clerk. According to the recruitment information released by Sisyphus, the monthly salary standard for book specialists and baristas in first-tier cities such as Beijing is 4001-6000 yuan; in other cities, the monthly salary standard for store clerks is 2001-4000 yuan. As a contrast, the chain coffee brand Manner announced that the monthly salary standard of barista is more than 8,000 yuan.
Recruitment notice, picture source Sisyphus public number
On multiple Q&A platforms, the reviews left by the clerks who worked in Sisyphus were relatively negative, and the main problems included lower salaries, busy work, no room for growth, and deduction of bonuses. This is a negative factor brought about by Sisyphus's compression of labor costs.
3) Inventory costs
In April 2021, when the Sisyphus Headquarters in Chongqing opened its Wenwen Bookstore, Cao Jinrui, vice president of Sisyphus Group, said in an interview that the store could accommodate nearly 50,000 SKUs, about three times that of a standard store. According to this calculation, the SKU of each Sisyphus standard store is about 16,000.
16,000 SKUs in other retail industries seem to be a big number, covering an area of more than 6,000 square meters of Hema Fresh Fuzhou Tea Pavilion Store, SKU is only 6,000+. But in the extremely fragmented demand of the book market, this number is not too large. Zhang Wei, head of JD Books, said that JD.com's self-operated book SKU is in the order of millions; the Halloween, the founder of Sisyphus, loves to visit, has about 70,000 books (according to curiosity daily in 2017). Sisyphus's selection is pinched, only the best-selling tip, the shorter the inventory cycle, the lower the inventory cost.
This is followed by structured revenue.
Like many physical bookstores, Sisyphus's commercial income mainly comes from book sales, coffee, and surrounding cultural creation. As stated in the first part, books sold in stores are generally sold at the list price, and the cost of purchasing books is much lower than the list price. Whether it is purchased from a publishing house, a wholesale market or an online channel, the discount is 50% to 30% off the list price (different publishing houses are different), and the minimum can even be about 20%.
In the Beijing Sweetwater Garden Book Wholesale Market, major publishing houses have their own quotation systems. Sanlian Publishing House and Peking University Publishing House have the least discount, with wholesale prices at 68% off; the People's Literature Publishing House has its own directly operated shop, and most books are sold at a 65% discount; the discount given by Guangxi Normal University Press is 63% off, and some small publishing houses can hit up to 52% off. The so-called wholesale, only need to buy more than 2 books of the same kind at a time, is obviously an offer for individual customers.
Chain bookstores like Sisyphus have their own purchase channels, and a large number of purchases can further reduce the purchase price and increase the profitability of individual book sales. According to the data that Sisyphus has released many times before, the bookstore's book sales revenue has always remained at 75% to 80% of the total revenue, and selling books is not as unprofitable as many people speculate.
Coffee is a more profitable business than traditional book sales.
Taking the unit price of 40 yuan as an example, the number of people in the café is about 25 people at the same time, even if the number of times the user stays is higher, the number of flips is calculated according to less than 3 times, and the annual revenue of the single store is close to 1 million. The daily operating costs include only the labor costs of about 3 baristas, the lower cost of raw materials, and the cost of the venue together with the bookstore to get preferential treatment.
According to the "2019-2020 Physical Bookstore Industry Report", Sisyphus Bookstore's revenue in the first ten months of 2019 was 1.2 billion yuan. Among them, book sales accounted for 79.2%, coffee and other catering revenue accounted for 15%, and other income accounted for 5.8%. The revenue of paid food and beverages such as coffee is 180 million, and according to the number of stores in the current year, the actual revenue of a single store is in line with our estimates.
Sisyphus's profit formula is based on many premises, and each link in the formula serves Sisyphus's own positioning. Selling books to people who can read them or not, Jin Weizhu did exactly what he envisioned at the beginning. As he once said, in the bookstore business, understanding books is not the most important, understanding the market is the most important. But as Sisyphus expanded, the hidden worries behind bookstore chains were gradually exposed.
The hidden concerns of bookstore chaining
Cutting scenes and crowds, standardization, scale, rapid occupation of the market... Many of Jin Weizhu's actions are in line with the pace of development of Internet products and new consumer brands in recent years. The only difference is that as the benchmark brand of private bookstores throughout China, according to the public information of Tianyancha, Sisyphus has never made external financing.
It is not because the capital market is not optimistic about the bookstore business. From 2014 to 2018, the net red bookstore brand Yanji raised four consecutive rounds of financing, with a public financing amount of more than 246 million yuan, and opened a number of large bookstores with an area of more than 2,000 square meters under the blessing of capital.
According to multiple sources, a number of investment institutions have thrown olive branches to Sisyphus, but they have all been rejected by Jin Weizhu. This means that Sisyphus's expansion over the past 30 years has relied on its own cash flow, rather than choosing to use financing to speed up the expansion and make money at a loss. The model chosen by Jin Weizhu made Sisyphus the lucky one in the bookstore chain in the era of the epidemic. Although the pace of opening stores has slowed down, at least it has not experienced large-scale store closures like Yan Jiyou.
Not everyone likes the business model of Sisyphus Bookstore. For some book lovers, Sisyphus as a bookstore has the biggest problem with the books themselves.
The bookstore was originally the first scene of the reader's encounter with an unfamiliar author, and the selector acted as the introducer of these encounters. Different selectors, due to their own cultural background, aesthetic preferences, and reading interests, will create different appearances of different bookstores. Readers visit bookstores at the same time, but also close to the reader's reading experience, picking up surprises or disgusts from them.
The charm of independent bookstores lies in individuality, and readers wander through it, and surprises come from the unknown, not from their liking. Sisyphus-style chain bookstores, the selection is more like accurate feeding, through big data analysis to determine which books are better to sell, accurately placed in a position that is easy to arouse the desire to buy.
This set of methods is familiar to contemporaries, such as casting news, short videos and Internet advertisements. It's efficient and effective, and the caveat is that the information cocoon problem will recur in the book market.
The same decoration, open in the same shopping mall, in the same café, looking at the same best-selling books. Chinese there is no shortage of bookstore chain experience, just thirty years ago, most of the bookstores in the country were chain Xinhua bookstores, selling similar textbooks, teaching aids and classic masterpieces marked as required reading for primary and secondary school students. For decades, private bookstores have blossomed, and eventually it seems that they will go to the chain under the choice of the market.
It seems that the target audience of Sisyphus and The Independent Bookstore does not overlap, but you can take your Yangguan Road and I will cross my canoe bridge. But in the actual commercial market, the two sides have never been able to avoid competing for space, time, potential reading crowds, and even the definition of the concept of bookstore in the public's mind.
It is not only the commercial chain bookstore that needs the flow of people, all bookstores want to maintain their operations, and the flow of people is the basic element. However, due to the consideration of rent stability, brand attractiveness and business maturity, in cooperation, commercial real estate will obviously be more inclined to choose chain bookstores.
Not only in first- and second-tier cities, but also in commercial real estate across the country is opening its doors to Sisyphus. In Yinchuan, Xuzhou, Wuhu, Leshan, Liupanshui, Ordos, Sisyphus occupies an entrance in the commercial squares with the largest local population. It is reshaping the imagination of bookstores in many areas in a replicable chain way. And this kind of imagination may make people across the country re-read similar books, after Xinhua Bookstore.
Not all cities have a Halloween. The fate of more independent bookstores is to be unable to afford high rents, move into increasingly remote alleys, rely on the support of some die-hard consumers, or eventually inevitably die out.
Talking about this kind of worry is even a little arrogant, because in the process, everyone is making decisions that seem to be right. Commercial real estate needs to ensure stable income, chain bookstores use their own strategies to sell books to more people, people who would not have visited bookstores have even begun to read because of the existence of Sisyphus, all links are in line with market laws and user needs.
The difficult situation of independent bookstores is not caused by any commercial bookstore chain, but by complex factors intertwined like vines, squeezing them into narrower and narrower alleys. If, one day, an independent bookstore loses its last alley, it will be an ending, not an outcome.