The Business: Sundance Bookstore Inc., an independent bookseller in the Keystone Square Shopping Center in Reno at the intersection of Keystone Avenue and Fourth Street.
The Players: Dan Earl, who started the business 16 years ago, and Christine Kelly, who joined Earl as a partner in 1989. The Background: Earl moved to Reno about 20 years ago from Los Angeles, where he was a chemist. He worked in the casino industry before deciding to turn his love of books into a new career in 1984. He and his wife, Sun Ja, researched the book market carefully, looking at cities comparable in size to Reno. The research showed that Reno could support a mid-sized, independent bookstore offering a wide variety of fiction and nonfiction. Kelly, who grew up in Las Vegas and earned a master’s degree in nursing from the University of Nevada, Reno, began working for the store part time in the late 1980s to supplement her income. “I found I enjoyed working at the store more than I enjoyed nursing,” she said of her decision to join Earl as a partner.
The Problem: Competition in the Reno book market heated up eight years ago when Barnes & Noble opened a store, and Borders entered the market six years later with a new outlet in Reno. In addition, the Internet created a whole new game in the book industry when Amazon.com began selling books online at a discount, and chain stores followed suit by launching their own book sites. Retailers such as Costco and Price Club also discounted books. “It’s a very hard marketplace for any independent [bookstore],” Kelly said. Struggling independent bookstores all over the nation closed in the 1990s because of the competition. However, Sundance managed to stay profitable because the bookstore industry in Reno was small. The Reno store experienced flat sales in 1999 as it competed against two chain stores and Internet book sales.
The Solution: Surviving in an increasingly competitive market is an ongoing challenge for Sundance. Kelly said the store rebounded in 2000 and held its own. The owners worked harder than ever before to hold down overhead costs. “There is no room for fat in what we are doing,” Kelly said. However, the partners did not cut back on their staff of nine people. By paying higher wages than the chains and providing good benefits, they were able to keep a motivated, trained staff to serve the public. The partners cut costs through their knowledge of the book market. They kept track of trends in fiction and nonfiction and stocked their store accordingly. “We really watch our inventory,” Kelly said. “We can’t afford to keep books that aren’t producing[selling].”
Sundance continues to offer a large selection of books of regional interest and books written by local authors. Although chain stores also offer regional titles, Kelly said Sundance has an edge in this category. The store also keeps its customers happy by having a strong selection of classics, especially 20th Century authors, such as John Steinbeck and Ernest Hemingway.
The Reno store reached out to its local customers two years ago by sending newsletters about industry trends and new titles available at the store. Sundance emulated the major book chains by starting a book-buying club; customers who buy $100 worth of books receive a $10 credit toward their next purchase. The store featured special events, such as book signings by authors, to attract more customers. Unlike the chains, Sundance does not feature non-book events, such as musical performances, at the store. The Reno store benefits by staying heavily involved in the community. It donates books to libraries and schools, and sponsors a Classroom on Wheels program that busses books to rural schools. It is also a sponsor of the Great Basin Book Festival, a one-day event in the summer featuring a wide variety of new and old books, which attracts authors to Reno.
Despite the emphasis on cutting costs and relating to the community, Sundance still has a difficult time competing with the discounts offered online and by chain operations. “Philosophically, I believe in competition,” Kelly said. “But the chain stores and Internet sites can’t be profitable doing what they are doing [selling at big discounts]. The people making out in this situation are the publishers who are aligning themselves with whoever gives them the best deal.” Kelly doesn’t believe the competition can continue discounting at the expense of profits. She is confident that Sundance will continue to appeal to the public, despite the problems faced by independents. “There is an esthetic about books,” she said. “There is a special atmosphere in a bookstore. People love the smell of books and the feel of them.”