Bricks-and-mortar bookstores have long struggled to find a way to compete with Amazon and other mega e-tailers. But rather than go up against them, many stores that carry used books have found success by partnering with Amazon, eBay, AbeBooks (an Amazon subsidiary), Alibris, Biblio, and Half.com (which is owned by eBay), to name just a few. While the practice is not new, bookstores have revived these partnerships and found they can get significantly more visibility for their inventory by teaming with the larger online retailers.
“You can look at [third-party bookselling] in a way as a sideline,” said Scott Brown, who co-owns 28-year-old Eureka Books in Eureka, Calif., with his wife, writer Amy Stewart (Girl Waits with Gun). “I view it as a way of diversifying. For whatever reason, we had a slow summer online, but the store had a good summer.” When in-store sales slow down, Brown looks online to offset them.
Despite the expenses associated with third-party sales, including shipping commissions and listing fees for many of the most popular sites, Brown ran the numbers last year and determined that he still comes out ahead. Total fees were about 23% of the list price, which is lower than the cost of selling a book in a store, he said.
When Brown first purchased the store at the end of 2007, he decided to stop selling through third-party websites. “I felt we needed to make the [physical] store work,” he said. Three years later, when Eureka was on more solid financial footing, Brown began selling on Amazon, AbeBooks, Biblio, and Alibris, with Amazon and Abe now accounting for 77% of Eureka’s third-party sales.
Kent Hedtke, the online sales manager of the 129-store independent chain Half Price Books, headquartered in Dallas, considers it worthwhile to “pay rent” for virtual space on Amazon, which includes a monthly fee, a 15% commission (or referral fee), and a $1.35-per-book closing fee. The e-tailer accounts for 73% of Half Price’s third-party sales, and it maintains 130 Amazon accounts.
Like most booksellers that sell through other sites, Half Price works with a handful of partners. For those new to third-party e-tailers, he recommends beginning with Half.com. “What’s nice about Half,” he said, “is you don’t have to pay a monthly fee. You just pay your commission, [which] is only about 5% of your sales.”
Fees or not, third-party selling can be labor intensive. At Half Price, 80 staffers work on online efforts, including 14 customer service representatives. The chain also has four warehouses that sell high-end textbooks and technical books exclusively online. Each individual store buys used books and uses software to determine if a book should go directly to one of the warehouse locations.
Despite the costs, Hedtke said, “[third-party bookselling] is definitely profitable for us.” It constitutes 5%–6% of Half Price’s sales. But the chain, which has stores in 16 states and plans to add a 17th (Georgia) next year, intends to continue selling directly to consumers online. It is in the midst of transitioning from a website in partnership with Alibris to its own site, which will launch in 2016.
Sean Feeney, president of 39-year-old Bookmans—which operates six 25,000-sq.-ft. bookstore/entertainment stores throughout Arizona under the Bookmans Entertainment Exchange name, as well as one Sports Exchange in Tucson—characterized third-party selling as a symbiotic relationship. Bookmans began selling books through other websites nine years ago, when it needed to liquidate 100,000–150,000 volumes that were leftover from a store opening. Since then, the bookstore has found it to be a good source of revenue, one that represents 25% of all book sales.
Five years ago, Bookmans invested substantially to develop its own sales-driven website. But with Amazon having such a grip on third-party sales, Feeney said that “we punted” and decided to focus on other areas; Amazon now represents 90% of Bookmans’s online sales. Bookmans sells rare and unusual books only online.
The Book Bin, with three stores in Oregon (one in Corvallis and two in Salem), was one of the first indies to sell used books through third-party websites. Obadiah Baird, who is transitioning to full ownership of the stores, started doing online listings in the late 1990s, when he was a teenager and AbeBooks launched. Baird views online selling as one more thing that bookstores can do to boost sales. “[It] isn’t a replacement for putting books in front of people,” he cautioned.
Despite offering direct links to two of Book Bin’s online stores, AbeBooks and eBay, on the home page of its website, the Book Bin has seen a dip in online sales over the past five years. Even so, they constitute 15% of sales. “It’s still an important part of what we do,” said Baird, who is looking for ways to streamline the process.
Like Baird, Catherine Weller, co-owner of Weller Book Works in Salt Lake City, views buying books as an art. but her store relies on FillZ software to determine pricing, and it’s one of the few stores to sell low-priced books online—as low as $3 (many indies prefer not to go below $15). “We just put everything [there],” said Weller, who is an advocate for “open” shops that don’t set aside online-only books. Weller Book Works store, which ramped up its third-party selling nearly a decade ago, does the majority of its business through AbeBooks and sells through several other sites, including the International League of Antiquarian Booksellers (ILAB).
“We consider [online sales] to be important to our financial viability,” said Weller, who encourages other stores to try third-party selling. “It really can be an add-on for the stores that have used books.” Her one caveat is to be careful to account for the amount of time it takes and to be aware of shipping costs. “We can’t be underwriting shipping,” she said. “That’s a sale we have to lose.”
A few booksellers have turned to online selling to find customers for unwanted inventory. John Hugo, owner of three HugoBooks stores in Massachusetts, began selling on Amazon nearly 10 years ago, when he joined his father, Bob Hugo, in the family business—which is “still clearing out inventory this way and making money,” he said. Although it’s not enough to build a business on, he’s pleased to bring in an additional $4,000–$5,000 a year with “barely any work.”
Not every store has been successful. Anna Ehrenfeucht launched Booknook in Louisville, Colo., as an online store on Amazon and eBay six years ago and opened a bricks-and-mortar bookstore in 2011. She used the online store to subsidize her physical store, which she was forced to close late last month, after her online fees rose from $500–$600 a month to $1,600. At the same time, her sales dropped by 50% in mid-August and continue to be down.
As a small seller, Ehrenfeucht has found it difficult to pay the fees and to keep up with rising shipping costs. The $3.99 reimbursement from Amazon to cover shipping has stayed the same for the past six years despite higher overall shipping expenses. After giving away much of her inventory and putting the rest in a storage locker, Ehrenfeucht plans to continue operating online, at least for the near future. “It’s been a source of income for me,” Ehrenfeucht said, adding, “it is what it is.”
For some stores, signed books help them stand out on third-party sites as well as on their own websites. AbeBooks’s Richard Davies pointed to a strong demand for signed copies of bestsellers such as Andy Weir’s The Martian, Jonathan Franzen’s Purity, and Marlon James’s A Brief History of Seven Killings. A copy of Career of Evil by Robert Galbraith (a pseudonym of J.K. Rowling) sold on Abe for $1,385 four days after it was published.
Alibris, which lists and sells books on its own marketplace and makes them available to 30 B2B partners, including Barnes & Noble and Waterstones, keeps a minimum book price of $0.99. It also offers sellers 100% protection from fraud and up to $500 for their own errors. For now, these policies, coupled with strong traffic, could continue to make online selling a profitable add-on for booksellers.
