CUED
Center
for Urban Economic Development
University of Illinois at Chicago
Market and Financial Analysis for a Mail Order Book Business
Project Number: 170
Report Date: February 1983
Author(s): Edna Hamburger
Native American Educational Services, Inc. (NAES) is an independent college offering a Bachelor of Arts degree program for persons employed in American Indian programs and agencies. Established in 1974 as an affiliate of Antioch University, Yellow Springs, Ohio, NAES College has four study sites at which it offers its academic program: Chicago, Illinois (where its central administrative office is located); Northern Cheyenne Reservation, Montana; Fort Peck Reservation, Montana; and Santo Domingo Pueblo, New Mexico. NAES receives its funding from several sources. Initially, tuition and corporate/foundation support were the primary sources. In 1978, NAES became a candidate for accreditation by the North Central Association and was designated as a "developing institution" by the U.S. Dept. of Education. This status made it possible for NAES to apply for and receive federal support. In early 1979 NAES began to consider ways in which it could become more financially self-sufficient. In particular, NAES hoped to find a way to generate revenue that could be used to strengthen its Library and Resource Center (LRC). Coupled with the goal of increased self-sufficiency was the desire to provide more people with a larger selection of good books by and about Indians. With these two goals in mind came the notion of establishing a NAES College bookstore. The bookstore was established in 1979 and has, since that time, had a steady increase in sales. NAES staff are now interested in expanding the bookstore as a national mail order business. To this end, NAES sought the assistance of the University of Illinois Center for Urban Economic Development (UICUED) in studying the feasibility of such an expansion and in developing an appropriate business and marketing plan. Partial support for the feasibility study was provided by the Community Renewal Society.
This report analyzes industry trends and data on book businesses
and mail order businesses in general, the demand for and supply of Native American
books, and given an adequate market, the financial feasibility of expansion based
on information obtained from industry sources and from NAES' own historical records.
The analysis seeks to answer the following key questions:
1. Can the NAES bookstore be operated at a level which will create excess revenue
which may be used for the other programs of the college?
2. If no excess revenue
can be created, what amounts of subsidy would be required to operate the bookstore
at a break-even level while achieving its purpose of disseminating Native American
culture to as wide an audience as possible.
For the
purposes of this study, some initial assumptions were made about the nature of
the bookstore:
1. For the short-run, the focus for expansion (increased
sales) of NAES bookstore will be through mail-order.
2. The goal for the first
year of the expanded mail order business is an annual sales level of $50,000.
3. NAES wishes to continue to specialize in books about Native Americans; books
on other subjects are not being considered at this time.
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