From the January 1999 issue of Startups

Q: I would like to start a gift-catalog business. How can I find wholesale sources without hopping on a plane to Portugal or France to find what I have in mind?

A: Andrea Lawson Gray, president of Aesthetics Marketing in San Francisco, frequently speaks and writes on topics related to catalog marketing. Her advice:

Entrepreneurs should be aware that as direct importers selling their products through a catalog, they're starting two businesses at once: an import business and a catalog business.

According to Lawson Gray, craftspeople throughout the United States can supply interesting items for a start-up catalog and may be easier to deal with than their foreign counterparts. A case in point: Local craftspeople were a prime source for the successful Sundance catalog when it started.

Another strategy: Compare different catalogs and their merchandise strategies, then define what you want to sell and to whom. If you still want to import, she says, here are five places to start:

1. Domestic trade shows often have foreign contingencies. The New York Gift Show, for example, has British handicraft and manufacturer sections as well as products grouped by country of origin.

2. Network with other catalog buyers to determine the most important trade shows for your niche. An excellent source of information is the Annual Catalog Conference; call the Direct Marketing Association at (212) 768-7277 for more information. Or try the Northern California Catalog Club, at (415) 479-8554, which holds seminars and can provide information.

3. Shop your competition--both catalogs and traditional retail stores--and look at product labels to find out where they're from.

4. Read trade publications in the merchandise arena you plan to enter.

5. Retail magazines contain trend information, advertisements from manufacturers and direct-response offers that can put you on track to interesting products from lesser-known distributors.

One For The Books

Q: I am interested in opening a specialty bookstore at a location that already has a coffeehouse/gift store selling unique items. This would fit well with the type of books I'd like to carry, but I'm not sure where to start. I need to find out more about small bookstores and start-up costs.

A: We asked Dave Brennan, owner of Athens Book Center in Athens, Ohio, for some tips.

Ironically, a great place to find information about starting your own bookstore is in a bookstore. Brennan started by reading a business book that gave him the information he needed. The Manual on Bookselling, published by the American Booksellers Association (ABA), a national trade organization for independent booksellers, covers everything from how to get started to resources and tools. The ABA's Web site (http://www.bookweb.org) has an edited excerpt that provides a brief overview of what you need to know. The site also provides links to regional booksellers' associations and related associations, research and statistics about the bookstore industry, resources for professional development and more.

Another good resource is bookstore owners. To gain more insight into the bookselling business, Brennan decided to work at a friend's bookstore. Shortly afterwards, he opened Athens Book Center with a $3,000 loan from his bank and sold books he had acquired from garage sales and auctions. Eight years later, his business has grown to be a general bookstore that sells new and used books (plus puppets) and generates more than $400,000 a year.

Brennan estimates start-up costs for a new bookstore today would be about $60,000 to $75,000. That's not peanuts, so how can you make sure you succeed in a market dominated by bookstore giants? Brennan's tips: Ask customers and book reps for advice and opinions. Know your product. Provide a clean, friendly environment. And keep up with the big guys: Brennan, for example, recently purchased a coffee cart for the store, hoping people will come for the coffee and stay for the books.

He also stresses "location, location, location." Consider foot traffic, neighboring businesses and how close you are to competitors before choosing your site.

Contact Sources

Aesthetics Marketing, (415) 648-4495, andrea@aesmarke.com

Athens Book Center, 747 E. State St., Athens, OH 45701, (740) 592-4865.