Not all businesses do badly in a recession; one segment of the book market that appears to be holding up fairly well is used books. “People are looking for bargains,” said Kathy Doyle Thomas, executive v-p at the used bookstore chain Half-Price Books, “and Half-Price is a bargain hunter's paradise.” Brian Elliott, president of the online marketplace Alibris, said sales rose about 18% in 2008, slower than in previous years but still a solid gain in difficult times. Sales at Alibris slowed in September, but bounced back enough at the end of the year for holiday sales to increase 8%. Sales continued strong in January, slowed in February, but came back again in March, Elliott said. At Half-Price, sales in the July through February period were up 9% and the company is optimistic it will finish fiscal 2009 on an up note.
The recession has not only increased consumers' interest in looking for inexpensive items but also increased interest in selling old books to raise cash, which has bolstered used book dealers' inventory and lowered purchase prices. “We're paying less for our used books because we're seeing more of the same titles,” Thomas said. While the online marketplaces don't buy books, Hannes Blum, president of Abebooks, said many of the sellers who use its service have increased their inventory. Elliott noted that part of Alibris's growth has come from expanding its partnerships with retailers such as Barnes & Noble and Borders.
The higher inventory has helped slow what had been one of the industry's biggest concerns, sliding prices. “Prices have stabilized a bit,” Elliott said. “The enormous downward pressure on prices seems to have worked its way through the system.” Still, a key component of the success of the online marketplaces has been the tools they provide, which give sellers and buyers information on pricing trends. And not all parts of the online market have been immune to the economic downturn; high-end antiquarian and rare book sales have suffered from the same lack of discretionary income affecting other book segments. “Collectors have become more cost conscious,” Blum said. Elliott noted, however, that Alibris had strong gains in its rare and collectible segment after it revamped that section on its Web site. At Half-Price, cooking titles have been in strong demand, along with young adult fiction. “People underestimate that section,” Thomas said.
Half-Price just opened its 103rd store last month and plans to open two more outlets by Memorial Day. With so many great real estate opportunities available, Doyle said, the challenge now is to not overexpand. After a failed experiment with online sales in the late 1990s, Half-Price has been using Amazon to sell online and is beginning to use the other online marketplaces. Since its launch, Half-Price has had a strong environmentalist bent, and Thomas believes the chain is now benefiting from heightened interest in the environment. “The green movement has helped used books become a little more acceptable,” Thomas said, adding that Half-Price alone has “kept millions and millions of books out of landfills.”
Even though the used book market is still enjoying a growth spurt, no one is complacent. “Our job is to keep demand growing faster than supply,” Elliott said.
