Starting a Book Store in India

India has a strong and growing print and bookstore industry backed by a population that is becoming more educated and affluent. Though the internet and the advent of e-readers have transformed the print and book industry, there still exists good opportunity to start and grow a successful bookstore business in India. In this article, we look at the process for starting a book store in India.

Industry Overview

India has a growing and vibrant print book industry in India that is estimated at about 26000 crores including imports. The industry is mainly unorganised with small book stores garnering the largest market share. In recent years, ecommerce, book store chains and e-readers has began to make strong in-roads into this market by providing a larger selection of books and instant availability.

Investment Requirement

A book store can be setup in India with minimal investment. Two of the major areas where the capital will be applied are infrastructure and stocking of books. Usually about 10 - 20 lakhs is spent on infrastructure like rental deposit, interior, etc., while Rs. 40 to Rs. 80 lakhs is spent on stocking the book store with a wide selection of books. Hence, a book store can be setup in India with an investment of about Rs.50 lakhs.

Business Registration

The following are registrations and licenses that maybe required while starting and managing a book store in India.

Company Registration

A typical book store started with an investment in stock of books valued at Rs.1 crore usually achieves an annual revenue of about Rs.2 crores, based on location and other factors. Further, most book stores have investment in books of more than Rs.25 lakhs. Hence, its best to start a private limited company for conducting the business of book store.

VAT Registration

VAT rates and regulations differ from state to state. Hence, its important to know about the relevant State VAT regulations before setting up a book store. Though VAT registration may not be required in most states for selling books, it is recommended that VAT registration be obtained and nil VAT return be periodically filed to stay compliant. Having a VAT registration will enable the book store to easily sell online through platforms like Flipkart, Snapdeal, Amazon, etc., or obtain a payment gateway to sell online.

IE Code

Customers of a book store may at often times request books from foreign press and it may be required for the book store to carry books from foreign press. In such cases, the book store would import goods from abroad. For such instances, an import export code or IE code would be required for the book store to clear customs. Hence, its recommended that book store obtain IE code after commencing operations.

Trademark Registration

Book stores having unique names or those establishing a chain of book stores can trademark the book store name. Trademarking the book store name early on can help protect the brand and set the stage for franchising or opening of multiple outlets in the future.