The state of the bargain books business is strong -- so say many of the people selling them in independent shops, large retail chains and online. Profits are up, more space is being devoted to bargain books, and the fears of yesterday -- the Internet, huge national retail chains, overseas economic tumult -- have by and large evaporated, leaving a sense of seeming euphoria, for the moment at least. "There are a lot of great books out there that just didn't do well at $19.98, and at $5.98 their greatness can come out," says Brad Jonas, co-owner of Powell's in Chicago and cofounder, with Marshall Smith, of CIROBE.

The signs of success are everywhere. When Unabridged Books in Chicago is finished with its current expansion, its bargain books section will have doubled in size. Owner Ed Devereux finds that when he stocks up on such titles and worries about space availability, his fears are allayed at the end of the following weekend, when those shelves and tables have been picked bare. At New York City's Strand, the staffing level has increased about 10% over the past year, to nearly 200 staff members at two stores, and large demand has led managers of the store's various departments to compete over space. The Brookline Booksmith in suburban Boston is opening a new store in nearby Wellesley, Mass., with a strong presence of remainders in it. And at Denver's Tattered Cover, remainder buyer John Cronan is approached by three or four new vendors every month. Tattered Cover's first bargain buyer started with only three vendors about 20 years ago, and Cronan now buys from more than 300, supplying Tattered Cover's two stores with 15,000 bargain titles and 50,000 to 150,000 books at any given time. "It's the place to be as a bookstore," Cronan says of the bargain books business. "It generates a lot of sales in the other sections of our stores as well."

Last year, the Asian currency crisis was on the minds -- and affecting the profits -- of many bargain-book sellers who have large overseas sales. This year, notes Arun Shanbhag, owner of Rising Sun in Port Jefferson, N.Y., the crisis seems to have "retreated into the distance," and demand from overseas is back up.

Domestically, storeowners report that the books flying off their bargain shelves are not those published and packaged as gift books, but those mainstream titles, generally hardcover, that can be had for huge discounts several months after they were large sellers or even bestsellers. "I think it's the titles [that account for this category's popularity]. People are constantly amazed at what they can find," says Michael Gosselin, the remainder buyer at The Brookline Booksmith. "People tend not to buy bargain books that are the gifty stuff." He adds, though, "Of course, at Christmastime, all bets are off."

The Remainder Cycle Speeds Up

Cronan points out that hardcover fiction titles are often available as remainders within a couple of months after they were published, sometimes even before they are published in paperback. Bob Phillips, manager of remainders and bargain books at New England Mobile Book Fair, notes, "Publishers are letting stuff go a lot earlier." He, too, finds that the true remainders sell considerably better than the gift-oriented bargain books. There is no consensus yet on the effects of large retailers on independent bargain-book sellers, but nevertheless, these smaller retailers do not seem as concerned about a prospect that terrified them only a few years ago. Several independent retailers say that bargain books are a niche in which they are generally more effective than the national chains because they know their clientele better and can tailor their stock to meet the needs of their customers. "We can handpick remainders much better than a chain store could," declares Devereux at Unabridged Books. Tattered Cover's Cronan agrees: "They [retail chains] are not competing with us in any way in remainders. They don't have nearly the selection, the depth or the title variety." According to Arun Shanbhag, "retail chains are bidding more aggressively and more actively," driving prices higher. But even so, he says, "The economy in the U.S. has been so strong, it hasn't affected business very much." A. David Schwartz, president of Harry W. Schwartz Bookshops in Milwaukee, says that prices have been reduced substantially, down a $1 or $2 from three or four years ago. The increase in bargain-book business overall makes up for the price reductions, he says -- remainder sales were up more than 7% in the past year, while the book business as a whole remained flat. "It d s mean you have to do a lot of work to get those dollars, because you're moving around a lot of books," Schwartz says.

Strand owner Fred Bass says it would be impossible not to think of, and be nervous about, the retail chains. "Barnes & Noble has a 60,000-sq.-ft. store five blocks north of us and a 45,000-sq.-ft. store five blocks south," he notes. Still, Bass says, "Sales are up despite rough competition. Prices are good and selection is great, incredible." And even as he casts a wary eye on those nearby giants, Bass believes the large retail chain stores have done mostly good for the industry, including independent booksellers. "They've created more book buyers, and as the book buyers become more sophisticated, they look to places like Strand." On the other hand, Schwartz admits that he feels "significant pressure" from national chain stores. He notes that there are four Barnes & Nobles and a new Borders near his stores, all of which eat into his profits.

Bargain Books vs. the Internet

Independent booksellers are less concerned about e-commerce when it comes to bargain books. CIROBE's Brad Jonas believes that it is today a "non-issue in bargain books." Internet companies would rather sell the more expensive merchandise, he says, because "there's so much labor involved in the Internet, but it's still a staccato, single sale." Devereux likewise reports no visible effect from the Net: revenue is up, Internet or not, so there is no reason to believe it is cutting into his business, he says. The tendency of the bargain business to rely on impulse buying works in favor of bricks-and-mortar stores over the Internet. The quality of bargain books "sometimes d sn't come through electronically as much as when you're standing there saying, 'Wow, this is a great book for $5.95,' " Devereux declares.

Some independent stores are embracing the Internet as well. Strand is developing a Web site, which should be operational in about six months. The Brookline Booksmith sells remainders on its Web site and is seeing sales increasing. Harry W. Schwartz has a brand-new Web site that will soon carry remainders as well.

Online booksellers face their own challenges in offering bargain books to their customers. "Because bargain books are often available in limited quantities, projecting our sales by title can sometimes be a challenge," says Donna M. Sepkowski, director of bargain and specialty businesses at barnesandnoble.com. "It's very important that we plan our promotions and sales estimates carefully so we don't disappoint our customers." Barnesandnoble.com also tries to gear its bargain book section more toward impulse buying, in part by changing the featured titles every day. "We feature 17 different Bargain Bookshelves, each of which includes a search option to let our customers view all our Bargain titles by topic, listed in bestselling order. And we recently added a 'Bargain-Only Search' function on the site that allows customers to browse our entire catalogue of available Bargain titles by title, author and/or keyword," Sepkowski explains. The site also has a function allowing users to search for books in specific bargain-price categories, such as titles under $10 or those under $5. And despite the challenges of selling bargain books online, Sepkowski declares, "We're delighted with the growth of our Bargain Store this year and have similarly high expectations for next year."

At Amazon.com, however, the story is different. Spokesman Bill Curry says that bargain books are an insignificant portion of the company's book sales, adding there is "nothing to talk about" as far as that category g s, and that Amazon chooses to put its energies elsewhere.

Business Strong All Over

National retail chains, like the independent stores, report strong bargain book years. Jeff McLaughlin, director of the mall division of B. Dalton and Scribners, says "the bargain business is increasing all the time." Barnes & Noble sees elevated sales in the mind/body, history, reference, humor, business and remainder-fiction categories, although sales are weaker in the cooking, crafts, and house and home categories, according to Mo Stewart, director of bargain books for the chain. She credits the good year to "stronger and stronger lists." Colleen Manno, a bargain book buyer for Barnes & Noble, says she has worked with a number of new suppliers over the past few years, which has helped the chain maintain strong and diverse lists. Among the company's challenges, Manno says, is to help customers understand the savings they are receiving when they buy bargain art books. With fiction and other remainders, she said, the consumer can compare directly and see the savings. But with art books, produced specifically as bargain books, "It d sn't have that $75 price point on it," Manno notes.

Even with such challenges, it seems that bargain book sellers large and small are content with their business -- and are hoping next year is as good and smooth as the last.