I started Merritt Bookstore in 1984 with two tables and no money. I now have two stores and no money," Scott Meyer told PW wryly. Meyer may not be a wealthy man, but he does seem to thrive on the challenges of running two bookstores, located in the towns of Millbrook and Red Hook in the beautiful mid-Hudson Valley area of New York State.

In 1983, Meyer retired from teaching and began selling books from his home in Millbrook through magazine advertisements. The business soon progressed to the two aforementioned tables outside a store, then moved indoors to rented space in local establishments, such as Taylor Oil and Village Department Store. "In the beginning, the only people buying my books were my family and friends," admitted Meyer, who named the business after his father, Schuyler Merritt Meyer.

By 1987, Merritt Bookstore was doing well enough to move into its own space in Millbrook. In 1995, it expanded the space to 2,500 square feet, allowing the inventory to grow to its current level of 45,000 titles. There is additional space in the upstairs art gallery for exhibits, author signings and book club meetings. The store serves a community of 1,300 residents (plus 4,000 in the surrounding area), ranging from "scientists to sheet metal workers," according to Meyer.

For years, out-of-town visitors were so captivated by Merritt Bookstore that they asked Meyer to open stores in their own towns. The town that won out was Red Hook, 35 minutes north of Millbrook, with a population of 10,000. In 1999, after a 10-year courtship, Meyer's desire to expand melded with deep community support, the availability of a 2,200-sq.-ft. space at the intersection of two thoroughfares and financing from the Bank of Millbrook. On June 1, 1999, Merritt Bookstore Vol. II was born in Red Hook.

Like other dedicated retailers, Meyer and his staff have developed relationships with customers and the community. But what seems to differentiate the Merritt Bookstores is the quality and intimacy of these relationships. Meyer has extended his original concept of selling to family and friends to reach the residents of Millbrook and Red Hook. He and his staff have taken the time to get to know their customers. "We call ourselves 'bibliotherapists.' We help customers solve problems," Meyer said.

In addition to taking special orders—Merritt Bookstore's biggest sales category—Meyer sometimes orders books for specific customers by recalling their interests and tastes. Customer favorites and interests are also tracked in his computer system.

He encourages a process he calls "customized impulse buying," in which he leaves a book on the counter for a particular customer; when she comes in, she realizes it's for her, and she makes a purchase. In Red Hook, manager Paula Hocek has enticed customers by stacking books in the large display windows with personalized notes such as "John, you will like this book." The customer inevitably stops in and buys the book.

Customers admire Meyer's deep and wide-ranging knowledge of books. One big fan is Suzanne Cole, former chairman of illustration at Parsons School of Design, now retired on a farm in Salt Point, N.Y. "Scott is an amazing book man. He has incredible taste in books," she told PW. "If you see a review of a book in the New York Times—something esoteric like a biography of John Fielding—you call Scott and ask him, 'would you order it for me?' He says, 'I think we already have it.' "

Local institutions and interests also determine orders and inventory. For instance, to serve Bard College, renowned for its literature and fine arts programs, and the village of Tivoli, an artists' community, the Red Hook store carries a broad selection of books on contemporary art and literary criticism. Millbrook is home to the Institute for Ecological Studies; thus the Millbrook store stocks many titles on nature and science.

"Bookstores need to be living in the community," stated Meyer emphatically, carrying out his belief by inviting women's groups, stock clubs and book groups to meet at the stores. On the night that Harry Potter and the Goblet of Fire was released last summer, 16 Girl Scouts and two mother-chaperones had a sleepover at the Millbrook store. Every August, the stores host a Kindergarten Social, during which every local kindergartner-to-be attends a reading given by Meyer, a librarian and the school principal. Meyer encourages the children to get library cards and then to read as many books as possible. He also visits schools often to read aloud to students.

By developing relationships with publishers and writers, Meyer has maintained an active author-event calendar. Many customers and visitors have been drawn to readings by authors such as Michael Korda (who lives in nearby Pleasant Valley), William Least Heat-Moon, Dava Sobel, Kurt Andersen, Christina Chiu, Deborah Blumenthal, Will Moses and Annie Leibowitz.

Beyond bookstore-related activities, Meyer has deepened his community involvement through participation in local organizations such as the Millbrook Historical Society, the Rotary and Interact, the high school arm of Rotary, which has sponsored blood drives, collected canned goods and provided Christmas gifts to migrant families.

Meyer also works closely with other merchants in Millbrook and Red Hook. "In a small town, no store is an island," observed Meyer. Before the holidays each year, Meyer invites other Millbrook retailers to gather at the bookstore for Merchant's Night. Store representatives bring 10 items from each shop to familiarize other shopkeepers with merchandise, which in turn facilitates customer referrals. He plans to introduce the concept to Red Hook this fall.

Competition can spring from unexpected quarters, such as the pharmacy, grocery and hardware shops, which now sell bestsellers or how-to books. The bookstores also compete with Barnes & Noble, which is 25 miles away in Poughkeepsie, as well as Internet sellers.

Nevertheless, business has grown at the Millbrook store almost every year, and sales at the Red Hook location have also increased steadily since its opening in 1999, according to Meyer. Sales reflect Merritt Bookstores' relationships and activities in the community: 25% are school-related, and 10% derive from off-site events like conferences and author readings.

A key part of the Merritt Bookstores' growth has been Meyer's relationship with the Bank of Millbrook. "We have a credit line with the bank, which is very important to survive. The bank will probably never bounce one of our checks," Meyer told PW. The bank also approved a second mortgage on his home to finance the opening of the second store.

Meyer is able to manage two stores in large part because of a loyal staff and intelligent use of technology.

The Merritt Bookstores have approximately 30 full- and part-time employees, many of whom have been part of the Merritt family for years. A rich source of staffing has been the local high schools. According to Meyer, some students work part-time during high school and then return to work in the summer when in college. Even parents get into the act. "We have three mother/daughter teams," said Meyer, whose own family is involved: his wife, Alison, works full-time with him, and sons Lawton, age eight, and Schuyler, age four, are "great little booksellers."

Meyer is active in the bookseller community, too, serving on the advisory board of the New England Booksellers Association. He has been involved in defining positions on issues such as sales tax and the Internet and runs workshops to help others improve their bookselling skills. "NEBA has really helped me to grow as a bookseller," he told PW.

As for the future, "We hope to stay in business. I'll never be able to retire. Last year, I gave myself my first paycheck in 18 years," said Meyer with a chuckle.