Used and Rare Books Go Online

How the Internet is transforming the way out-of-print and antiquarian booksellers do business.

The Internet has revolutionized the used and rare book trade over the last two years. The advent of online commerce has expanded the customer base for used and rare books and added significant incremental revenue. At the same time, it has transformed the competitive landscape from local to global, caused a downward price spiral and threatened the traditional purchasing hierarchy.

"This is the fastest-growing means of selling books," said Robert Fleck, past president of the Antiquarian Booksellers Association of America and chairman of the ABAA's Internet Committee, noting that the Internet accounts for 8% of sales at Oak Knoll Books, his Newcastle, Del., store. Most booksellers interviewed by PW reported that online sales contributed at least 8% to 10% of sales, with some attributing as much as 50% of gross revenue to the Internet. Approximately 70% of ABAA members (representing the high end of the used and rare book trade) currently do business online.

Booksellers' online forays generally involve being listed on one or more of the major book-search services, including Advanced Book Exchange (www.abebooks.com), Bibliofind (www.bibliofind. com) and Bibliocity (www.bibliocity.com), all launched in 1996, as well as newer entrants such as the Netherlands-based Antiqbook www.antiqbook.com). To be listed at some sites, booksellers pay a flat fee to each service, typically between $10 and $40 per month. Another site, Bookfinder (www.bookfinder.com), allows users to search several of these matching services, along with the Web sites of individual booksellers including Powell's Books and Amazon.com. Both Bibliofind and ABE estimate that 50%- 60% of the dealers on their sites also appear on at least one other.

Bibliocity offers 3.6 million books from 750 dealers, Bibliofind 9.5 million from 4000 dealers and ABE nearly 11 million from 4600 dealers. Customers searching by title or author (or deeper searches to include publisher, binding type, price and editions) generate a list of all results that match their criteria, along with a description of each book and its condition and information about the seller. If they find a book they want, they contact the seller directly.

Hot Customers: Amazon and B&N

Used and rare book dealers also sell to Amazon.com and Barnesandnoble.com, the leading online purveyors of books. Although figures are not available, both companies said out-of-print books are growing in importance. At Barnesandnoble.com, an alliance with ABE allows customers to simultaneously search both Barnesandnoble.com's and ABE's databases, totaling over six million books. (Booksellers on ABE can opt out of this arrangement.) Amazon.com fills customer orders for out-of-print titles through relationships with some of the matching services and through its own network of suppliers.

Alibris (www2.alibris.com/cgi-bin/texis/bookstore), known until late last year as Interloc, falls somewhere between the matching services and large new-and-used book sites. Interloc was introduced five years ago as a private network allowing dealers to buy books from one another. The service later appeared on the Web, enabling customers to order directly from listed booksellers.

Last year, the company transformed itself into what Alibris president and CEO Martin Manley termed a "managed model." Customers -- mostly large institutions such as Amazon.com, libraries, search services and, eventually, large retailers -- order directly from Alibris rather than from the listed booksellers. Alibris processes the orders and inspects the books before sending them out. The company expects to have one million books stored at its warehouse by the end of the year; the rest of the listed titles are stored with their owners and shipped to Alibris for fulfillment. The booksellers own the stock until sold, at which time Alibris takes a 20% commission. Eight hundred dealers are currently listed on Alibris (pared down from 2000 in the Interloc days), most of which have at least 4000 titles available.

Booksellers interviewed by PW had mixed feelings about the three sites. Some dealers are bothered by the fact that Amazon.com and Alibris do not identify the seller of the book. Others are concerned that Barnesandnoble.com's and Amazon.com's markups allow a book to be available through those sites at a higher price than the same book on ABE, Bibliofind or Bibliocity, which they believe angers their customers.

In some cases, the reluctance to sell to these operations is more personal. The used and antiquarian book business is dominated by independent stores, some of which have gone out of business, thanks to superstore competition. This makes some of them reluctant to deal with Barnesandnoble.com, although most said they sell to Amazon.com. Similarly, many booksellers reportedly left Interloc when it became Alibris and, in the words of one shop owner, "announced its grand plan for conquering the used book industry."

In spite of the perceived drawbacks, working with these sites can be lucrative. Ken Lopez of Ken Lopez Bookseller, Hadley, Mass., a member of the ABAA Internet Committee, said that he sells a "handful" of books each week to Amazon.com, Alibris and Barnesandnoble.com. While acknowledging that some booksellers take exception to these companies, Lopez said, "If Barnes &Noble wants to spend $20 million marketing my books, that's okay with me."

Going, Going, E-Gone

Online auctions represent another growing force in the used and rare book industry. The best-known is eBay (www.ebay. com); others include Yahoo Auctions and the upcoming Sotheby's site. Last week, even Amazon.com announced (News, April 5) its upcoming move into 100 auction sites. Bibliocity, in Brisbane, Australia, expects to add online book auctions later this year, according to founder and managing director Paul Pritchard.

Booksellers voiced a variety of opinions about eBay. Several have stayed away from it, while others say they are experimenting without much luck. Some dealers, such as Bookdales of Richfield, Minn., have found eBay to be its best online sales channel. "EBay is our salvation," said proprietor David Dale, who reported that the auction accounts for 90% of his online sales. He has had success with many titles, citing as examples two sets of leatherbound, limited-edition Brown &Bigelow books called America's Beloved Illustrators, which had been on his shelves for more than six years, priced at $75 and $60 respectively. On eBay, he sold the first set for $277 and the other for $105, each in about a week.

A few used and rare booksellers maintain their own Web sites. Most use them primarily for publicity, believing that, since consumers search for titles and authors rather than stores, ABE, Bibliofind and Bibliocity are better channels for sales.

Powell's Books, Portland, Ore., positions its Web site (www.powells.com) as a sales channel. Powell's, which also supplies books ordered through Yahoo, attracts 15,000 visitors to its site each day, according to Kanth Gopalpur, online marketing manager. The Internet accounts for about 10% of Powell's sales, with 83% of online revenues coming from used books, up from 40% in 1995. Gopalpur reported that a lot of the site's traffic is from the Portland area but few shipments are sent there, suggesting that Portland shoppers check the Web site first and then visit one of Powell's seven stores to make their purchases.

Among the used and rare booksellers that are just starting to experiment with sales over the Internet is Half Price Books, which has 61 stores in 10 states, mostly in the West. The chain is test marketing a few thousand titles, supplied by four of its stores, through ABE. Kathy Doyle Thomas, v-p, pointed out that Half Price in-store customers usually spend most of their time browsing, even if they initially come for a specific title. "It's a treasure hunt," she said. "We have to find a way to translate that experience to the Internet."

Gopalpur also believes that the Web should support the in-store experience. "We want to convey that we're a physical bookstore, not an online merchant," he said. "We're Powell's Books, we're not Powells.com."

Financial Ramifications

The Internet has forced used and rare booksellers to compete head-to-head with dealers around the world. In addition, the low cost of launching an Internet bookselling operation has led many new dealers to enter the business. Fleck, who specializes in books about books and bookselling, including price guides, said he has added many new customers and currently sends out 4500 monthly catalogues.

This intensified competition would seem to be a negative for the business, but most booksellers say that the Internet has been a boon to their operation and to the industry overall. "The Internet has infused a huge new vitality into this business," said Michael Selzer, president of Bibliofind until its recent sale to E-Niche Inc., an e-commerce company. "It has created a truly global marketplace, and it has drastically increased the number of people who buy used books."

Many individual booksellers have added incremental sales at little extra cost. "The Internet has made it possible for many to stay in the business or be in the business full time," said Selzer, noting that customers from all over the world can shop for books 24 hours a day. It also evens out sales throughout the year, especially for booksellers whose fortunes historically have depended on local buying patterns and their regional economy.

Being online also enables cost-cutting. "We stopped issuing catalogues, which was a big part of our business," said Judith Lowry, partner in New York City's Argosy Books, for which about a third of sales are now coming from the Internet.

Other stores believe that, for their business, this step is premature. "I have the impression that less than 20% of my mailing list [of 3000] has ready access to the Internet as of yet," said Lopez. He sends out his catalogues a couple weeks prior to uploading them, which gives regular customers a chance to purchase before the rest of the world has access. Lopez forecasts that in three years about 50% to 60% of his mailing list will be online, allowing him to post the catalogue directly to the Internet.

Some observers believe that the rise in online sales will cause used and rare book stores to close their shops, or will at least be an important factor in the decision. (Lawrence and Nancy Goldstone's Slightly Chipped [St. Martin's; Forecasts, Apr. 5] amplifies this concern, contending that the Internet could eventually kill book collecting altogether.) In the high-end antiquarian sector, a large percentage already conduct business without stores. Bookdales is one example. The Internet has grown to account for about half of the store's sales over the last six to eight months, according to Dale, while at the same time, in-store sales have fallen off drastically due to increased local competition. Those two facts, along with Dale's impending 65th birthday, contributed to his decision to close his shop later this summer. He will move to a smaller location and open on Saturdays and by appointment, spending the rest of his time on the Internet.

Nonetheless, several factors suggest that store closings will not be widespread. The Internet usually represents significant but incremental business that helps a shop remain open but is not enough to replace in-store sales. In addition, the industry suffered a shakeout a decade ago, which resulted in surviving stores operating at greater efficiency; therefore, not many are on the brink of closure.

Psychological elements are equally important. While customers may search for specific titles over the Internet, they still like to browse in bookstores and handle the books. At the same time, bookstore owners are in business because they want to have a bookstore. "It's possible to be in business without having a retail presence," said Lowry, "but as far as we're concerned, that's no fun."

David Meeker, proprietor of Nick Adams &Co. Rare Books in Sacramento, Calif., has been on the Internet for several months with 500 to 1000 titles, mostly as a way to bring his daughter into the business. "Everyone who's doing it seems to be moderately successful at it, but they don't always like it," he said. "I'd be bored to tears sitting in front of a computer all day."

Booksellers point out that online selling requires a fundamental change in how they do business, especially if their inventory is not already in a computer database, and may demand extra staffing. "It's added another dimension to bookselling that is incredibly time-consuming," said Helen Younger, partner in Aleph-Bet Books, a Valley Cottage, N.Y., dealer specializing in first editions of rare children's and illustrated titles.

Reliability, Pricing and Purchasing

Dealers worry about the potential threat to the industry's reputation that arises from the large number of neophytes doing business over the Internet. This is especially true in the antiquarian sector, which relies on terms such as "very good" and "fine" as precise definitions of condition. Online, it is difficult to distinguish a reputable seller from someone who found a book at a garage sale and listed it without understanding the terminology. This is a particular problem on eBay -- where many booksellers say they have ordered books that have arrived in poorer condition than described or have been damaged during shipment -- but can occur through the matching services as well. Most dealers attribute these troubles more to ignorance than malice, although scammers are not unknown.

"It's kind of a wild west show out there right now," said Fleck. "[Inexperienced dealers] just don't have the knowledge to describe the books properly."

"You don't know who you're dealing with," Lowry agreed. "They may not know a first edition from a fifth edition. 'Fine condition' may mean it only fell into the bathtub once."

The major online matching services are cognizant of the risks and take swift action against multiple complaints by bumping dealers off their sites. "If someone has a bad experience with ABE, they're going to tell 10 of their friends," said Cathy Waters, ABE's director of marketing.

The incidence of complaints is fairly rare given the traffic. Just 10 to 15 dealers have been eliminated from ABE since its May 1996 launch, while Bibliofind receives one or two complaints per month from nearly two million visitors. "By and large, people do not become antiquarian booksellers to make a lot of money," Selzer said. "Those who have the bandito instinct will probably go into another business."

The Internet's impact on pricing is another concern for retailers. "There's a homogenization of prices downward," said Lowry. An individual can buy a book at a tag sale and put it online, undercutting competitors while still making a profit. This leads to a downward spiral, especially for lower-priced items. Rare books are feeling the squeeze, too. Books that had been hard to find in a particular region do not seem as rare in an online search of dealers around the world.

The price effect seems to be most severe on relatively "ordinary" books, those priced for $50 to $100, which are amply represented online; hypermoderns (first editions by current authors) are examples. Meanwhile, prices of truly rare books -- those that are nearly as hard to find on the Internet as they were through traditional channels -- seem to be holding steady or even rising. "Special or great books still hold their value," Younger said.

The laws of supply and demand, and the fact that consumers can instantaneously compare titles from around the world, drive the pressures on price. "[The Internet] tends to produce the free flow of information by its nature," said Pritchard. "A lower price is just a click away."

The growing importance of the Internet is also disrupting the purchasing hierarchy for used and rare books. Traditionally, book scouts sell to dealers, who sell to higher-end dealers (often in other regions), who sell to collectors, with everyone along the chain making a profit. Now, the book scout or the first dealer in the chain can post the book online at the retail price, circumventing the system. "People who used to be our suppliers are our competitors," said Lopez.

The increased competition has affected dealers' buying habits. "I'm much more inclined to purchase something unique," Lopez said. "I lean much more toward unusual and interesting books rather than just a copy of a good title."

Another challenge is the fact that individuals look up prices on eBay or Bibliofind before contacting a dealer and expect to receive the retail price, without taking into account the wholesale discount the bookseller needs to make a profit. "They're using it as a gigantic price guide without understanding what they're doing," Younger explained.

Most dealers say they rarely purchase much stock online, except to pick up occasional undervalued titles and to fill customer requests. The Internet allows immediate access to thousands of dealers' stock, so retailers can special-order books for customers seeking titles they do not carry, while the customer waits.

What Sells Online?

Booksellers are still discovering what sells best, but some trends are emerging. "Sales are a function of how many titles you have [online]," said Fleck, noting that a listing of 2000 books will generate one-sixth as many sales as a roster of 12,000. Waters agreed, recommending that dealers have at least 500 to 1000 titles in computerized inventory before listing with ABE.

Used and rare books in all price ranges are available over the Internet, from one dollar to tens of thousands of dollars. While there are instances of sales at all price levels, most observers feel that the middle-range books -- those priced between $10 and $100, where the used/out-of-print and the antiquarian/rare segments intersect -- seem to account for the most activity.

Many dealers believe that consumers are leery of buying expensive, truly rare titles over the Internet. "You want to feel it and touch it and not buy it over a computer," Meeker said. Meanwhile, selling very low-priced items is not cost-effective and d s not attract much consumer interest, especially when shipping charges (which run from $3-$5.50 for the first title purchased) are more than the price of the book. "We stopped doing data entry below $5," said Gopalpur. "It just wasn't worth it."

Distinctive titles seem to do well, including books that have a limited market in a store's neighborhood but would appeal to consumers somewhere. For Half Price Books, successes include "funky, wonderful things," said Thomas. "Stuff that's been on the shelves for a couple of years."

Gopalpur pointed out that popular fiction d s not do as well for Powell's as philosophy, theology, literary criticism, physics or mathematics, noting that collectors of specialized subjects do a lot of shopping online. Some sites, such as ABE, offer a special service aimed at collectors, allowing users to store a "want list." The database runs a check on the "want list" titles every night. If a match is found, the customer is notified with an email.

The one thing about which nearly everyone agrees is that the Internet's impact on the used and rare book market will continue to grow, although the ultimate ramifications are unknown. "The market is in huge flux," Lopez concluded. "I'm still trying to understand what's going on, and as soon as I think I do, I find out my understanding is three weeks old."