Staying Independent: Marketing your Store to Administartors
Presented by:
Tom Bauer
Vice Chancellor, Auxiliary & Enterprise Operations
San Mateo County Community College District
CACS Meeting
Ontario, CA
November 5, 2014
THE REALITY…
*James Keller, Vice Chancellor for Business Affairs, San Mateo County Community College District
The best defense is a strong offense
YOU AND YOUR STAFF ARE THE BEST DEFENSE TO OUTSOURCING
What is my role in this offense?
What meetings should I and my staff be attending?
Board Meetings
President Cabinets
Finance Meetings
Dean’s Councils
Department Meetings
Faculty Training Sessions
Faculty Senates
Academic Senates
Student Governments
Sporting Events
What More Can I Do?
What Services do you provide?
Make a list of the services you provide. Think about it, share it with others. How many of these services would be provided by a lease operated store given the fact that many of the services are low revenue generators if at all?
Here is a list of services provided by the San Mateo District Bookstores:
Services of the SMCCCD Bookstores
Services of the SMCCCD Bookstores
Services of the SMCCCD Bookstores
Services of the SMCCCD Bookstores
The Point
You do far more than you realize! Once you put it all on paper, share it with everyone. The self-op, independent store does many things for a campus that generate little revenue but provide exceptional service. You have to be your biggest cheerleader.
Ten Common Misconceptions about Outsourcing
Common Misconceptions about Outsourcing
Misconception #1:
Lease operators will offer the community better prices on textbooks, supplies, clothing and convenience items than the self-operated, independent campus bookstore.
Misconception #1-The Fact
Independent Bookstores operate as non-profit auxiliaries that are intended only to cover their costs. Lease operated stores are for-profit; they need to pay the university AND they need to make a profit. Numerous pricing surveys have shown that textbook prices at the vast majority of leased stores are significantly HIGHER than the self operated, independent store. The self-op store and the college make the final decision about margins. Leased stores observe margins on textbooks up to 30%.
Common Misconceptions about Outsourcing
Misconception #2:
A lease operator will provide better customer service than the self operated, independent store because they are focused on customer service.
Misconception #2-The Fact
The self-op, independent store has college employees devoted to the college success. Service should be infinitely better in the self-op, independent bookstore. Leased stores have an incredibly high turnover rate in management and an even higher turnover rate in bookstore assistants. The majority of their labor force are part time, lower wage employees.
Common Misconceptions about Outsourcing
Misconception #3:
Self-op, independent bookstores cost the university more money than they bring in; they are not self supporting and are a financial drain on the university.
Misconception #3-The Fact
Self-op, independent bookstores are cost covering auxiliaries. They pay for all costs related to operation and support college activities. Most self-op bookstores actually contribute to the college's discretionary funds or cover expenditures that the college would otherwise have to cover. Whatever financial surplus that remains goes back into the campus community; a lease operator pays the rent and meets its contractual obligations. Their surplus goes back to the bottom line of the company.
Common Misconceptions about Outsourcing
Misconception #4:
A lease operated bookstore will provide more used books than the self-op, independent college bookstore.
Misconception #4-The Fact
Barnes & Noble, Follett and Nebraska Bookstores each own wholesalers that are the primary and in many cases the only source of used textbooks for the bookstore. The self-op, independent store sources from as many wholesale companies as they deem appropriate. Self-op, independent stores have more access to used books and oftentimes, higher used book sales and inventory.
Common Misconceptions about Outsourcing
Misconception #5:
Lease operated bookstores have expertise in textbook management. They do a better job at procuring and managing a textbook department and invest in educating their staff in textbook management.
Misconception #5-The Fact
Self-op, independents stores have numerous educational resources for the staff; NACS, CACS, Regional Associations, C2O, ICBA, Context. Self-op, independent stores invest a great deal in educating their staff. The stability of the independent store staff insures the knowledge of the campus, the faculty, the booklist…you have the history; they don’t.
Common Misconceptions about Outsourcing
Misconception #6:
A lease operator will provide better buyback prices for students.
Misconception #6-The Fact
As with the procurement of used books, lease operated stores buy books for their own wholesale company. Wholesale prices at a leased store are often LOWER than at the self-op store for the same wholesaler. One has to wonder… why? The self-op, independent store can use multiple guides for buyback to offer students the best prices for non adopted textbooks.
Common Misconceptions about Outsourcing
Misconception #7:
The variety and quality of general merchandise will be improved with a leased store.
Misconception #7: The Fact
Self-op stores buy from vendors that offer the best price and quality. They often buy from local vendors. Leased stores buy from vendors that are corporately approved based on a variety of factors; savings to students not being the primary factor in that choice. Pricing comparisons are noted in both RFP’s. The comparisons consistently show the self-op store has lower prices than the leased store.
Common Misconceptions about Outsourcing
Misconception #8:
Lease operated stores have unique, independent websites that are interactive and provide the students with state of the art web ordering capabilities.
Misconception #8-The Fact
Leased stores all have the same basic template for their websites, they are not unique or innovative. Many provide only textbook reservation capabilities and have very limited merchandise offerings. Self-op, independent stores have a number of choices in providing e-commerce and have much more interactive websites that are managed by the store and not by a corporate office.
Common Misconceptions about Outsourcing
Myth #9:
If a store is leased and the community is unhappy after a period of time, they can always return to self-op status.
Misconception #9-The Fact
Once a university sells all the inventory to the lease operator, sheds the staff salaries and benefits, reapportions the financial reserves and assets the bookstore owns and accepts the cash of a lease operator at signing, it is almost impossible to go back to self-op status. The amount of money required is oftentimes more than a university can spend on any auxiliary. The only remedy is to lease to one of the other two operators and hope for the best.
Common Misconceptions about Outsourcing
Misconception #10:
A lease operator will provide the campus with a brand new bookstore at no cost to the college.
Misconception #10-The Truth
Nothing is free! Renovations are routinely depreciated over the term of the contract as a yearly expense. The store staff is required to manage their sales and expenses so that it optimizes profit for the company. In order to do so, the store will have to cut salaries and essential expenses in times of declining enrollment or increased competition resulting in reduced service to the campus community.
Ten Reasons for Keeping your Store Self-Operated and Independent
Top Ten Reasons to Stay Self-Op
Top Ten Reasons to Stay Self-Op
Top Ten Reasons to Stay Self-Op
Top Ten Reasons to Stay Self-Op
Remember...loyalty cannot be contracted!
The Ball is in Your Court
Three Things to Remember
Stop Blaming Outside Forces
Quit Ignoring the Obvious
Don’t Take your Customers or Administrators for Granted
Did you say Annual Report?
Wrap Up
Q&A