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Old books'
dot-com burst
Paradoxically that new
media, the Internet,
has rejuvenated trade
in a media bound in
tradition Ten years on,
the Victoria used-book
store that got in early
now turns over $165
million in titles a year
Jul. 17, 2006. 08:24 AM
ELLEN ROSEMAN
BUSINESS COLUMNIST
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VICTORIA,
B.C.—Abebooks.com is one
of the world's largest
marketplaces for used
books, with 80 million books
in its virtual inventory.
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All transactions take place between buyer and seller. Abebooks acts as an
intermediary, but never sees or handles the books sold at its website.
The low-profile company — now celebrating 10 years in business — has made
money from day one. And unlike many Internet ventures, it has never used
venture capital to finance its growth.
How did this online bookseller establish roots in Victoria? And how did it help
transform the business model of bricks-and-mortar used bookstores?
Cathy Waters was running a used bookstore in Victoria in 1994. She was
frustrated not to have all the titles that people wanted.
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She put an ad in a trade magazine, listing 100 books she wanted to buy, and
was flooded with mail from other booksellers.
Her husband Keith worked in information technology for the B.C. provincial
government. He began to consider how Internet technology could solve his
wife's dilemma.
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Working with long-time friend and technology contractor, Rick Pura, Keith
Waters developed an online database that listed dealers and their books in an
easy-to-search format.
"Originally, we imagined it would be a database just for booksellers in Victoria,
but it soon occurred to us that we had to go international in order to make it
work," said Cathy Waters in a company history posted at the website.
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The couple wanted to call it Antiquarian Book Exchange, but figured that not
enough people knew what antiquarian meant. So, they called it Advanced Book
Exchange or ABE.
"We always liked the idea of `Honest Abe' and everything it stood for," she
added.
Abebooks acquired JustBooks, a German online marketplace for used books, in
2001. It now runs a German-language website, as well as other websites in
France, the United Kingdom and Spain.
All four original founders of Abebooks — Cathy and Keith Waters, Rick and
Vivian Pura — are now out of the business.
The company's majority shareholder is a German media company (Burda). And
German-born Hannes Blum is the chief executive since 2003.
Blum, who started JustBooks.com, has a Ph.D. in science and engineering from
a German university and worked in strategy consulting for three years with the
Boston Consulting Group.
Just 37, he was named as one of Vancouver Island's top 40 under-40 business
leaders this year by Caldwell Partners. This is a program that honours people
who have achieved significant success at a young age.
Abebooks occupies two buildings in an industrial park, a five-minute drive from
the harbour and downtown Victoria, which house about 90 of the firm's 120
employees.
Maclean's magazine named Abebooks one of Canada's top employers in 2004,
2005 and 2006.
Blum points to research by the Book Industry Study Group that shows used
book sales amounted to $2.2 billion (U.S.) in 2004. While overall sales of used
books increased 11.1 per cent from 2003, online sales were fuelling the
industry with a 33 per cent increase.
Online sales of used books were worth $604 million (U.S.) in 2004. They
represent 8.4 per cent of total consumer spending on books.
Blum points out that online bookselling helps bricks-and-mortar bookstores stay
in business. They can use the added revenue from online sales to keep their
doors open or move to a better location.
"The Internet is not to blame for bookstores closing," he says.
Just over half of the dealers listed at Abebooks don't have a bookstore. They
sell either from home or from industrial spaces they may open to the public by
appointment.
Abebooks charges monthly subscription fees to list books at its websites. A
bookseller with up to 500 titles, for example, would pay $25 (U.S.) a month.
It also charges a commission of 8 per cent on each book sold, plus credit card
processing fees for Visa and MasterCard transactions.
The company has two online rivals, both smaller in size. Biblio.com uses the
same "low touch" business model as Abebooks, while Alibris.com has its own
warehouse (and sells movies and music, as well as books).
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British Columbia.
"We have 91 booksellers in Toronto, so it's clearly a bookselling town," says
Richard Davies, publicity manager for Abebooks.
Al Navis, owner of Almark & Co., has a collection of 125,000 books in a
basement in Thornhill. About 38,000 of them are listed at Abebooks.
For a decade in the 1980s, he ran the Handy Book Exchange on Avenue Road
in North Toronto. Then, he discovered the Internet.
"I was one of the first to sell books online," Navis says.
He started at the end of 1992, well before the advent of the World Wide Web.
By 1995, well over half his sales were online. And by 1997, everything was
online. He specializes in 20th century fiction and mystery novels,
The Handy Book Exchange, still in business, was operated until recently by his
mother.
Navis likes the freedom of not keeping retail hours. He may play golf in the
afternoon and work late into the evening on his listings.
He finds it time-consuming to enter new titles every day, making sure they're
described accurately.
"Still, if I had a bookstore," he says, "I couldn't play a round of golf and work
till 2 a.m."
Navis has an edition of Kurt Vonnegut's Sirens of Titan, a science fiction novel
that is listed at $4,000 (U.S.). However, most of his books are in the $25 to
$100 range.
As a long-time customer of Abebooks, he's outspoken about the company's
new management. "The original owners would never charge commissions to
booksellers," he says. "It was only when the business was sold that
commissions came in."
Where booksellers used to pay only the monthly fee, but the new owners
brought in commissions — and raised them recently to 8 per cent on each book
(from 5 per cent before).
Abebooks plans to stay on the same path in the future — selling only used
books, along with some authors' manuscripts and autographed items. Blum
sees lots of potential in existing markets.
"Textbooks are growing tremendously," he says. "We offer a very convincing
value proposition for both buyers and sellers."
As part of its 10th anniversary celebrations, Abebooks is running print
advertising for the first time.
Building on its slogan, "If you can't find it here, it doesn't exist," the company
has concocted a list of non-books that would never be written.
Titles include Whoops, I was Wrong, by G.W. Bush; Chicken or Beef? The
World's Best Loved Airline Recipes; Everything You? Wanted to Know about
North Korea but Were Afraid to Ask by Kim Jong Il; and Making Marriage Work
by Henry VIII.
Additional articles by Ellen Roseman
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