Powell's Books' steady expansion of its online business moved forward last week with the purchase of a 60,000-sq.-ft. warehouse two miles from its flagship store in Portland, Ore. Most of the new warehouse will be devoted to storing as many as one million used books, and Powell's plans to upgrade the facility's shipping and fulfillment capabilities to support online operations. Powell's current warehouse, measuring 35,000 square feet, supplies Powell's seven bricks-and-mortar stores and the Web store. The new warehouse is expected to open in spring 2003.
The expansion comes in part because the online portion of the business, powells.com, has grown nearly 22% this past year and now accounts for 40% of the company's total sales, according to Dave Weich, director of content and marketing for powells.com. Moreover, used books account for 55%— 65% of online sales. "Used books are what we've always been known for," said Weich. "The advantage of shopping from Powell's is you can buy two new books and two used books and you'll get them in the same box."
Though Weich does not consider the site competitive with Barnes & Noble.com and Amazon.com in terms of sales volume, he does believe powells.com is winning customers through superior customer experience and, in particular, online content. He added, "If a publisher wants to 'make' a title, they'll reach more people with Amazon and B&N, but I think that publishers now feel they have a third channel. I think we're big enough that we matter." The site receives about 70,000 hits daily and draws on an inventory of 1.5 million titles. Powells.com also has developed a national reach. According to Weich, only 14% of powells.com customers are in the Pacific Northwest, with significant portions on the East Coast and around Chicago. The remainder are spread evenly throughout the rest of the U.S.
One reason for the site's broad reach is the popularity of its twice-monthly e-newsletter, which reaches some 250,000 people, as well as a series of long-running ads in the Atlantic, Harper's and New Yorker magazines and ads in telephone directories. The company also offers free shipping to North American addresses on orders of more than $50.
In addition, Powells.com has succeeded in drawing an audience of e-book readers, something other sites have struggled to do. "One of the things that is clear from a recent trip to visit publishers in New York is that we're selling more e-books than anybody," Weich asserted. "Repeatedly, people were blown away by the amount."
