In a variation of "the good old days" ("I walked 10 miles to school every day in the freezing cold—and then 10 miles home"), bargain book companies look back nostalgically to the ways they bought and sold books before technology saturated every aspect of their business. In those simpler times, just a handful of years ago, inventories were smaller, the Internet was a sleeping behemoth and the competition for sourcing—and placing—books was comparatively relaxed.
It used to be easy. There'd be a bookstore or a chain, and we'd come along and tell them our books, and they'd say yes or no," says Marty Cutler, president of Fairmount Books in Buffalo, N.Y.
"You would get product, inventory it, and it would sell itself out the door," says Bill Van Vliet, managing partner at Book Depot in Thorold, Ontario. "We didn't have to do much. Today, that's not the case. People can go to 20 suppliers online."
Or they can go to Amazon Marketplace. "On Amazon Marketplace we might have been one of 10, now we're one of 500 selling the same book," says Van Vliet.
The Texas Bookman in Dallas works with databases and scanners that tell them whether they've bought a title before, how many, at what price and from whom. "We didn't have this before," says general manager Robert Wilkie. "It was all pretty much done by memory."
The benefit now, Wilkie notes, is that they are much more aware of what they are selling and what they want to go back to in terms of specific titles, subject areas and trends. Also the technology helps them not buy the same books from different vendors at different prices.
At Book Country Clearing House in McKeesport, Pa., they used to keep track of inventory on a spreadsheet, says executive v-p Ben Archer. "Before that we used index cards. We needed more people in the back office. It used to be you had a sales rep and one or two people behind them. Now you scan a UPC code, and it puts in the ISBN code and everything else. You have laptops and computers all over the place." A huge challenge, he says, was going wireless in a 250,000-square-foot warehouse filled with steel.
Like other remainder houses, Book Country has recently expanded, upping the number of titles it carries to 22,000 from about 6,000. "The technology has certainly helped us along," Archer says. It has also, he adds, made the business more fun. "You can do so many more things now. I know where I can sell certain books, and I can go with a tailor-made list using tools from my database. They're looking for dog books? I can look for all the dog books. They want 17th-century France? I can tailor a list." His customers love getting their order in a format they can deal with right away, he says.
Marty Cutler says he "quaintly" remembers when Fairmount bought its first computer 24 years ago, then its first fax. "I look at the technology we use now—people can get movies on their telephones! Internally, we ask ourselves if we're doing the best, the fastest. But then stepping back, we ask how are we competing for people's entertainment dollars. We have to be sharp and intuitive and smart and grow in so many ways."
Another remainder company in the process of rapid expansion, Strictly-By-The-Book in Fall River, Mass., has a new distribution contract with Hachette under its belt and projects moving 80 million units in the next fiscal year, up from 50 million. "Technology will help us not miss a beat," says CEO and president Erez Bredmehl, boasting that turnaround time for orders is now two to three days, instead of three to four weeks.
"The challenge is providing the same level of customer service and providing the same level of professionalism to customers," he says. "We have to make sure we are still efficient and error-free." He describes the company's challenge as more internal—maintaining standards—than external—where to find product or the cost of the product. And his personal challenge, he says, is courting a new publisher for an exclusive contract, since the benefits are so large.
Daedalus Books in Columbia, Md., also has expanded its title base, in an effort to compensate for the shrinking number of independent bookstores, its historical focus, says president Robin Moody. "The bargain book industry is challenged by the fact that so many publishers are selling large quantities of books as hurts," says Moody. In the past, publishers would reshelve books that were returned to them. Now they put them into mixed pallets and sell them as hurts. "It's become a large-volume business and is affecting vendors who still ferret out good titles one by one by bidding on them. Now almost every book you want as a remainder has had some life on the street as a hurt."
Half the sales at Daedalus come via catalogue or the Internet. "We've been told we have the best Web site in the bargain business," says Moody, extolling the reach and turnover it adds to the company. The site, he says, allows information to be sorted in myriad ways, including when customers last placed an order and what they ordered. Books can sort by markdown, by price, by publisher, by subject, by book code. You can ask to see pictures, or, if you're on a slow computer, you can ask not to see pictures. "We have customers who basically camp on our site," he says.
While the Daedalus site draws customers, it's not everyone's cup of tea, and the company still uses sales reps, catalogues, book fairs, and phone and fax contacts to pursue customers. "We've always felt that different people have different ways they like being kept up with, and we try to accommodate them. But a lot of people do like the Web site," says Moody.
A Downside to the Technology?
On the technical end, keeping customer information safe from hackers is a huge challenge, says Bill Van Vliet. Also, the Internet is flattening the field. "It gave us a competitive advantage in the beginning," he says, but today sales are flat as more remainder companies have caught up and the early advantage is gone. Instead, now, "It's made more product available from many, many sources, not just what we usually think of as the competition," he says. There is "upward pressure" on the buying side, he says—prices have gotten steeper—coupled with "downward pressure" on the selling side—too many people selling their books online, and too many companies using repricing programs that automatically undercut the lowest price a book is being offered at, until another repricer undercuts that price, and so on in a rapid descent.
"Within hours a book is selling for 50 cents where millions of people shop," says Ben Archer. "It's a problem how our end of the business is perceived by publishers. It will hurt us eventually. Publishers will say, 'We're sick of this,' and pull the plug. Some publishers already destroy their hurts. They say, 'We don't have to sell our books to people who are selling them for pennies.' "
If, Archer says, a publisher sells all its hurts to one bargain house, the price on those titles begins to climb immediately. "So we look for contracts where we can control the stock," he says. "The benefit to the publisher is enormous, once the penny sellers and reprogrammers are gone."
One fallout of technology that is more elusive to pin down is what Robin Moody describes as the changing way people think about books, especially fiction. "You used to get a book that seemed like a really good book, had a good feel, and we would take a risk on it, but now people don't buy based on subjective observations. They go to the Internet and look at a book's ranking. If it's popular they buy it, if not they don't. It limits a book that's not been successful yet in the marketplace. The percentage of fiction we buy is way down."
The impact on nonfiction has changed too, Moody says, with their inventory becoming more general interest. "We have more visual books than we used to, partly because of changes in the American market but also as a function of the fact that our sales are becoming more international and that's the kind of book we can sell overseas."
Other changes in the nonfiction market are a new specificity—obscure topics that might find an avid audience. Marty Cutler at Fairmount imagines a book about Asian mosquitoes as an example. "It will find a market on the Internet, whereas it might flounder at a traditional bricks-and-mortar store," he says. "The Internet broadens what we go after, but there are risks as well. When we get it wrong, there's nowhere else to go."
In his view, technology has given everyone resources to do better and opened up access to new markets, especially international ones, though it's also opened the same doors to everyone else. It has made bargain companies sharper, and the consumer has been the beneficiary.
