
Borderlands' sponsorships came about as an alternative to closing the store - quickfox
http://borderlands-sponsors.blogspot.com/p/why-sponsorships.html
======
quickfox
This was a way to save a much-loved bookstore. It's interesting that it's
still holding up after 2 years.

~~~
sparky_z
Not just hanging on, it appears to be stabilizing. At the end of March, they
had actually sold a handful of more sponsorships in year 3 than they had by
the same time in year 2. The goal now is to use the additional funds to
purchase a building in SF to be a permanent home for the store once the
current lease runs out.

~~~
milesvp
I love this. It's both the epitome of anti capitalism, while being so
completely fundamental free trade, that it almost makes my head explode (as a
university trained economist). I especially love that many who espouse
capitalistic ideals will have a hard time wrapping their minds around this
too. It's so easy to forget that any time money changes hands without
extortion involved that's capitalism at it's finest. And the fact that the
store is looking to the future, and using the patronage (in it's most
classical sense) to increase it's capital to help stabilize itself in the long
term just really makes me smile from all the dichotomous ideas at play.

~~~
cstross
It's an interesting example of the value of customer goodwill.

In addition to being a bookshop, Borderlands is a cultural hub for SF/F
readers in the Bay Area. As such, it's not simply selling SKUs at the cheapest
viable price, it's providing an intangible curatorial service. Amazon may
crowdsource reader reviews but they're unlikely to be as insightful as
suggestions by enthusiastic staff who know what they're selling, and the usual
recommendations engines are less effective than one of those staff engaging in
Q&A with a customer to find something new that they might like.

(And this is before we get into things like the cafe side of the business, or
the author readings/signings. Disclaimer: I am an author and I occasionally do
events there.)

~~~
thln666
This is why I signed up.

------
hsod
A beloved cafe closed in Seattle recently for the same reason (no crowdfunding
campaign was forthcoming).

I still support raising the minimum wage, but we shouldn't expect to have our
cake and eat it too. Making labor more expensive will make goods and services
more expensive, and it will make some businesses non-viable.

Now that I'm thinking about it, is the minimum wage a regressive tax in
disguise? In low margin businesses, one would expect the additional labor
costs to be passed along to the consumer in the form of higher prices.

Therefore, the extent to which a minimum wage raises your "tax" burden is
proportional to the % of your income spent on low-margin consumer goods and
services.

~~~
revicon
One of the issues Borderlands talked about when they first started the
sponsorship program was that each book they sold had the price printed on the
book cover (printed by the publisher), so they were unable to raise prices
when wages increased. I suppose you could just put a new pricetag over the old
one but it's so easy for someone to open up amazon's app and check prices
online that it wouldn't make much difference.

~~~
TaylorAlexander
Amazon already sells books for below the cover price (often, at least) so it's
already the case that people buy from brick and mortar because of something
other than price.

------
IMTDb
This bookstore is now basically selling an new additional "premium service"
(Private Wi-Fi, preferred seatings etc) for a yearly fee. It's really cool
that they found a new way to make money, and that it works. But lots of
businesses offer premium membership services. My local club has been doing
this for year with some success. What's so new about this besides changing the
name from "Premium Membership" to "Sponsorship" ?

~~~
leggomylibro
I'd definitely pay for a place to go and sit with a laptop or book for
awhile...you know, I wonder if something like olde London's "social clubs"
could work today, but cheaper.

They were basically buildings or floors rented out to simply be a place to
relax, kick back, do some quiet work, play pool, drink/smoke in what I can
only imagine were velour jackets, etc. In practice though, they were very
expensive and mostly an upper-class affair.

I feel like we could do better these days with say, 4000 sqft. of mixed-use
space on the border between an industrial and residential neighborhood where
rent is reasonable.

~~~
troymc
What you're describing sounds a lot like some kind of coworking space. Maybe
something like betahaus in Berlin [1]. When you enter, it looks like a big
cafe with lots of tables and many people with open laptops, but that place has
_layers_ : separate meeting rooms, a big events space (several floors up),
"office hours" (one-on-one, free 30-minute consultancy sessions with experts
from their community), group runs through the city, ... There's a monthly
membership fee, but anyone can get stuff at the cafe or attend the public
events.

[1] [https://www.betahaus.com/berlin/](https://www.betahaus.com/berlin/)

~~~
SyneRyder
> _What you 're describing sounds a lot like some kind of coworking space._

In my city a hotdesk at a co-working space starts at $250/month for just 2
days a week. So I go to cafes, partly because of cost, but mostly I prefer the
ambience and staff there (much friendlier, better music, coffee on demand). If
my local cafe chain had a $300/yr gold membership/sponsorship, I'd buy that in
a heartbeat.

On the other hand my cafe doesn't sell Club Mate or Mate Mate, so betahaus
definitely/easily beats Perth there! :)

------
andrewguenther
I know a lot of small business owners in SF, and Borderlands' story is one
that I've heard before. The minimum wage hike is killing a lot of coffee shops
who had previously been able to offer quality coffee at not much more cost
that what you'd find at Starbucks. With the wage hike, Starbucks takes the
hit, keeps prices the same, and the smaller shops are forced to hike prices
and turn away customers.

I'm guessing I'll see a lot of commentary about paying a living wage and how
these businesses must be mismanaged and that this is just the way the market
"works." I won't necessarily disagree, but what is happening in practice still
feels wrong.

~~~
jtmcmc
The flipside is of course that they were doing so by paying their employees a
terrible salary.

~~~
jmcdiesel
When you can explain to me why you SHOULD be able to make a full living wage
putting books on a shelf, or pouring coffee, or putting hamburgers in a bag,
you can claim it as a terrible salary.

~~~
tehwebguy
I don't think anyone needs to defend the idea that working 2,000 hours per
year "should" earn someone a living wage.

How about this: If your business can't afford to pay a "full living wage" for
a full time job you "shouldn't" be in business.

~~~
khedoros1
Sounds good. Then eliminate welfare of any kind for anyone who's working a
full-time job, because, by definition, they're making a "full living wage",
and don't need additional assistance. I'm legitimately curious what things
would look like when a new equilibrium is established. Which industries were
destroyed, which arose, and which pivoted? What happened to the people who
worked for the unsustainable businesses?

------
revicon
Borderlands has always been a great place to go and discover new sci-fi
authors and books, their staff is great and it sucks that the books business
is so tough these days.

I joined their sponsorship program as soon as they started it, it feels great
to walk in and see your name printed on the printout on the wall by the
coffeeshop door.

------
cyborgx7
Do they really sell through all their stock? One of the prime arguments in
support of a livable minimum wage, is that is also increases purchasing power
of people, increasing the revenue. More people could have bought books and
made up for the difference in wages they had to pay.

They obviously wouldn't have ever seen that happen, had they shut down
immediately before giving it a chance. And I have to assume that higher
purchasing power in the book budget of people has been used up by the 300+
100$ sponsorships a year.

------
hxta98596
Glad to see they came up a creative solution to stay open and it's working.

If my local bookstore needed sponsorship to stay open I would be first in line
to donate. With that said, something feels off-putting when I read these
stories of requests for sponsors and donors to failing businesses. Seems
increasingly common story too. I understand there's multiple sides to this
debate, and what the trend may or may not lead to. I have no idea. Maybe it is
market efficiency or maybe it's serious market failure. I see comments on both
those sides. Either way I don't think relying on sponsors and donors for
failing businesses is a good or long term way for an economic system and
market to function. Two more examples of this trend toward needing donations
to band-aid the bullshit we created:

Noah Smith's recent tweet: "I swear to God, the sight of people with deadly
diseases crowdfunding their health care is the most dystopian thing about
America right now" [1]

Walmart asking for donations of food for its own employees who do not earn
enough in wages to support themselves:
[http://www.cleveland.com/business/index.ssf/2013/11/is_walma...](http://www.cleveland.com/business/index.ssf/2013/11/is_walmarts_request_of_associa.html)

Speaking of, an increase in the minimum wage was blamed by Borderlands and
others for having to close down and/or ask for donations. (Side note, I was
surprised to read of these book store employees they have who "cheerfully"
worked for minimum wage. in San Francisco. for a ten-plus years! Amazing! but
whatever). Wages are not the full story here...The cost of rent for good
retail locations in these cities (SF, LA, NYC, etc.) is a major _major_ issue.
Nuts. I'm not suggesting we federalize major cities' downtown storefront real
estate spaces. I think if someone bought or inherited real estate in a great
city location and makes a fortune then congrats to them, smart move, happy for
them.

 _But fundamentally it is economics 202 that a local B &M business model and
employee wages will never keep up with the monopoly that is big city real
estate and their pricing power to rent seek._ The numbers don't work long
term. Period. A regular business can't beat a monopoly like real estate but
it's especially difficult when there are flocks of new, overconfident fools
for tenants waiting in the wings with a shark-tank-quality-biz idea and fresh
capital they got from who knows and they are ready to sign a lease they can't
afford. Look at NYC restaurant spaces, why do they cycle so often and so
quickly? Or come visit Los Angeles (I'll buy you a beer) and then go to Rodeo
drive in Beverly Hills. Rent is so expensive on Rodeo now (+$1000 psf I think
these days) that landlords know their tenants are running at a loss and they
still raise rents on them every year (or sooner)...Half the shops on Rodeo Dr.
are major luxury brands renting at loss but there for marketing purposes, the
other half of shops belong to these weird little overconfident new luxury
brands no one has ever heard of but think they will hyper grow and cover Rodeo
rent. They never do. These little American dream, Italian leather type stores
last maybe 6 months before closing and the next overconfident fool with a pink
faux emu skin handbag is ready to roll the dice and pay an even higher rent

P.S. If your city or town still has a real bookstore, when was the last time
you went in there and asked the staff for a book recommendation and then gave
a new paper book chance? Good date idea too. Just good all around. Roll dice.

[1]
[https://twitter.com/noahpinion/status/844393961678655488?lan...](https://twitter.com/noahpinion/status/844393961678655488?lang=en)

------
hackunomatter
I never bought this "minimum wage increase destroyed us" story when it came
out. The minimum wage increased from $11.05/hr to $12.25/hr. That's an
increase of $1.20/hr.

They claim this will cost them an additional $30,000/year. Let's consider
that. Assume that their employees are all current minimum wage employees
(otherwise they would not be affected). Given that they're open for 8
hours/day (which works out to 56 hours/week), it would mean that their
additional cost would be an additional $3500/employee; so an additional cost
of $30000 means they have 9 employees working all the time. Anyone who has
been to Borderlands (and I have been a few times) can see that they do not
have 9 employees all the time. Max I've seen are about 4. It's a bookstore,
not an oil change place!

In any case: whatever floats their boat. If sponsorships help them stay
afloat, so be it. But they shouldn't blame the minuscule wage increase for
their woes.

~~~
snarf21
Or they could just impose a 10% price hike on all of their products and
services to cover the cost. The thing that becomes clear is that greatly
raising the minimum wage mostly affects poor people and the lower middle
class. It reduces their buying power. It also greatly devalues the $15/hr
woman who went to trade school to be an EMT for several years.

EITC is a much better way to redistribute this wealth and it puts money in the
people's pockets who need it most.

~~~
exolymph
> Books have the prices printed on them, and we can't raise those prices, and
> we couldn't lower our expenses, so . . . math.

From the post.

~~~
falcolas
I always have to raise a questioning eyebrow when "we couldn't lower our
expenses" comes about.

And they couldn't sell anything in addition to books? Or change their
selection to reduce their overhead? Or buy/sell used books?

I don't know, I'm not them. But "we can't raise those prices, and we couldn't
lower our expenses" always sounds like a bit of a copout.

~~~
sparky_z
> And they couldn't sell anything in addition to books?

They do that. In the bookselling business, these are called "sidelines".
Borderlands has several, including postcards, greeting cards, small gifts,
journals, local art, etc. They've tried many others as well that haven't been
profitable for whatever reason (which they then have to eat the cost of.) New
sidelines are a gamble for that reason.

> Or change their selection to reduce their overhead?

This is an oversimplification, but selection doesn't involve overhead in the
usual sense because unsold books can be returned to the publisher. Anyway,
their focus on sci-fi/fantasy and mystery books is a large part of what makes
them special and beloved, rather than just another generalist bookstore.

> Or buy/sell used books?

They do that.

> I don't know, I'm not them. But "we can't raise those prices, and we
> couldn't lower our expenses" always sounds like a bit of a copout.

I've been to several of their sponsor meetings and spoken with the owner on a
few occasions. Alan is very open and transparent about the bookstore's
finances. If I recall correctly, because of the way publishers eat of the cost
of unsold books, the store's expenses are dominated by labor and rent in that
order (with utilities and credit card processing fees a distant 3rd and 4th).
Everything else is basically rounding errors in the store budget. It's like
trying to cut the Federal Budget without touching healthcare entitlements or
defense - there's no way to make a meaningful dent. See also: Amdahl's Law.

When labor makes up about half of your costs, changes to the minimum wage
affect you disproportionately compared to many other kinds of business.

------
Oxitendwe
Everyone is going on about a "living wage", but what about the illegal aliens
who live in America who make substantially less than that, and come here
illegally with great effort to get it? Why would they do that unless it was
profitable? They seem to have no problem living on what most people would not
consider a "living wage". It seems obvious then that the goal in mind with
raising the minimum wage is to make it even more difficult to employ
Americans, leaving those jobs to illegal aliens and punishing businesses who
try to follow the law and only hire citizens. This gives those who hire
illegal aliens more leverage by the fact that doing away with illegals would
mean a substantially higher price hike for their products given that they
would have to pay their employees that much more.

~~~
kartan
> It seems obvious then that the goal in mind with raising the minimum wage is
> to make it even more difficult to employ Americans

Do you realistically think that this is the goal? Do you think that someone
thought, Let's look for ways that Americans can't get a job?

> leaving those jobs to illegal aliens and punishing businesses who try to
> follow the law and only hire citizens

If a business doesn't care about the law, why are they paying the minimum wage
in the first place? Isn't hiring illegals, illegal?

I see why you are worried. As the article says "We said that we thought the
dramatic wage increase might likely be very good for San Francisco, but it
wasn't sustainable for us.". So what is good for the majority is not always
good for all individuals. But that doesn't mean that it is a bad idea.

~~~
khedoros1
> If a business doesn't care about the law, why are they paying the minimum
> wage in the first place? Isn't hiring illegals, illegal?

I suppose if it's easier to hide illegal employment altogether, rather than
cook the books to hide underpaid employees, that would be a reason.

