Alibris and BetterWorldBooks
Strange Bedfellows?

by Craig Stark

24 August 2009

An Interview with Alibris CEO Brian Elliott

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Nothing like a good controversy to get those bookselling forums buzzing again, and this time both the Alibris and Amazon forums were unusually active in the wake of Alibris partnering with BetterWorldBooks - a company that, let's say, isn't held in high regard among at least some members of the bookselling community, who in turn aren't thrilled with the prospect of an association with them. Earlier this week, Alibris CEO Brian Elliott agreed to discuss some of the concerns and questions booksellers have with this recent change. Before the interview, I spent several hours studying the relevant forum posts and also discussed this matter with a few booksellers. Out of this I came away with what I think are the principal issues, and I put these to Brian.

Appended to the interview are two items of interest. One, BWB co-founder Xavier Helgesen initially posted an open letter on the Alibris forum that, in my opinion, addressed the issues being raised with exceptional clarity, and he has granted us permission to re-publish it here. And two, a slightly different version of BOOKTHINK News Editor Karin Bergsagel's comments on the Alibris forum alluded to in the interview appears after Xavier's letter.

BOOKTHINK: Brian, prior to announcing your partnership with BetterWorldBooks, were you aware that many booksellers have formed less than favorable opinions about this company - or has the generally heated response in forums, etc., surprised you?

ELLIOTT: We knew that some booksellers had an unfavorable opinion of BWB. The heat generated has been higher than expected, but people with longevity in this business recognize that these events flare up from time to time. I'm glad that our team was able to listen, react and come up with a set of solutions quickly - we had one solution before the partnership launched, and the opt-out decision within 24 hours of launching this partnership and in place the next day.

We work to incorporate seller input into what we do at Alibris. A few examples: we've interviewed over 30 sellers in the past two weeks about feature upgrades to the seller Storefronts on Alibris; we have discussion boards where we regularly take the back and forth into our decision making processes; we attend shows and conventions; and not least, our CS team is in daily discussions with sellers and are integrated into our product development processes. We historically do not pre-disclose potential business partnerships, such as the four launched in the last month - Akademos, Borders UK, Coutts and BetterWorldBooks. Those are confidential relationships while in development, but we'll find a ways to do more in the future.

BOOKTHINK: Can you tell us your reasons for entering this partnership?

ELLIOTT: We believe our decision to partner with Better World Books is a good one for our sellers. In this tough economy, the number one thing we hear from sellers is that they want more sales. We've been working hard to make that happen, and we think these efforts are paying off: Our sellers are seeing sales growth over 2008; August sales are up 20% over last year. In July, we launched three new partnerships - Borders UK (a separately owned and operated company from Borders in the US), Akademos (who supplies colleges with online stores) and Coutts (an academic library distributorwholesaler).

This month week we've launched a partnership with Better World Books. Better World Books' web site generates a lot of traffic and potential customers, and they BWB realizes that they do not have the inventory to appeal to them all of those buyers. Like many other large, warehouse-based sellers they are largely selling standard "reading copy" product. BWB and Alibris have partnered so that Alibris sellers can take advantage of the traffic and customers on the BWB website, and so that BWB can turn visitors into buyers on their website by offering a broad selection. This is proving out in the initial going - in the first day we had well over 200 orders from BWB, only two of which were to sellers who had asked to "opt out" of the BWB program.

BOOKTHINK: No doubt you're all too aware of most or all of the specific concerns booksellers have about this, but I'll present what I see to be the more pressing ones and ask for your responses to each:

There's a perception among some booksellers that BWB postures itself as a charitable organization (as opposed to the for-profit corporation it actually is) and thereby exercises considerable leverage in exploiting sources of inventory that private bookselling businesses once relied heavily on. Entering into contractual agreements with FOL groups, effectively shutting down public access to locally donated books, troubles booksellers especially. Partnering with Alibris will in all likelihood help BWB strengthen this leverage, at least indirectly, and just as likely put even more booksellers out of business.

ELLIOTT: Sellers have different perceptions of BWB, different even amongst themselves. We have worked with BWB for years. They have been a good seller with a very high satisfaction rating among Alibris' buyers. We've talked with them about their business practices, donations and charitable giving. Specific questions about BWB's business should be addressed to them. They are actively involved in this discussion and have already answered many sellers' questions on our discussion board.

[EDITOR'S NOTE: Click here for the discussion.]

Sellers have also posted their own takes on the broader topic of BWB's purchasing practices - for example, Karin Bergsagel's post on our discussion board.

[EDITOR'S NOTE: See Karin's comments following Xavier Helgesen's open letter.]

Like many larger-scale warehouse based sellers, BWB price aggressively to sell a high volume of broadly available books. The world of online bookselling continues to grow and evolve. BWB themselves face a number of similar competitors. More importantly, an increasing number of FOL groups, charitable organizations (like Goodwill and Salvation Army) and others are also "cutting out everyone" by selling online themselves.

BOOKTHINK: Understood, but I think there may be a perception among some booksellers that, by partnering with BWB, Alibris would be helping them grow - and part of this growth would necessarily include a strengthening inventory-acquisition presence and, in turn, further hurt the smaller seller who once used the same sources. It's this latter seller, I presume, who feels that Alibris isn't doing them any favors.

ELLIOTT: We know inventory acquisition can be a challenge. Large scale sellers like BWB want to buy in bulk, and are looking to strike deals with large suppliers of used books such as Goodwills and large FOLs, competing with each other there and also seeing their sources starting to sell directly online themselves. If BWB customers buy Alibris sellers' books, the vast majority of the funds from those purchases go back to Alibris sellers, strengthening them. I'm sure that FOL groups, libraries and others would welcome offers from local sellers.

Alibris is working hard to help all independent sellers by exposing their inventory to the largest possible set of buyers. BWB raised money that they are using to market to book buyers, creating an opportunity for Alibris sellers to sell more books. Sellers have traditionally sold to one another, knowing that they're each buying and selling books - this is one more opportunity. But sellers now have the ability as well to decline to participate.

Alibris is working on programs that make it easier for all of our sellers to use Alibris to fulfill the demands of their buyers. More of this will be coming before the year-end.

BOOKTHINK: There's concern, especially among more advanced booksellers, that listings appearing on the BWB venue with selling IDs appended to them will be unfavorably colored by an implied association with a corporation that is, fairly or not, often perceived as a penny seller - and by this I mean a seller who effectively drives book prices ever downward by aggressively undercutting competitors, offering deeply discounted shipping rates and, among other things, achieving efficiencies by using boilerplate descriptions and minimizing buyer/seller interactions.

ELLIOTT: As you note, perceptions are "fairly or not," but this concern is why we first created the ability for sellers to not have their identity show on BWB's web site. Several sellers availed themselves of that option. For others, we've also decided to allow booksellers to opt out of the BWB program. I'd also reiterate that it's not our team's experience that BWB minimizes interactions - they seem to do quite well there.

BOOKTHINK: There's also a perceived conflict of interest. BWB isn't a listing service as such but a competing bookseller. It's one thing to compete on, say, Alibris with other sellers, each clearly independent of the other, quite another to be subsumed by a competitor. Apart from this being tantamount to dropshipping (for some, a sort of distasteful aspect of bookselling), it also sets up a situation whereby BWB necessarily has more interest in selling its own inventory than that of the vendors it's "warehousing." This may or may not affect these vendors adversely, but it's at the very least a source of unease.

ELLIOTT: BWB does have clear interest in selling its own stock first - as does any bookseller. But they also have a large number of people shopping on their web site who are looking for books that BWB does not stock, sales that are now going to Alibris sellers. As you know, there's a long history in this industry of bookseller-to-bookseller sales; if I don't have a copy of a title my customer wants, I'll see if another bookseller has it - that was, after all, the foundation of Interloc and online bookselling in the first place. In this case, a minority of sellers don't want to sell to this competing bookseller, so we've created an opt-out option.

Last, this isn't a dropshipping operation. The design is such that sellers are listed on BWB's web site (and only their web site), clearly identified individually - unless they don't want to be identifiedparticipate.

BOOKTHINK: At BOOKTHINK, for the purposes of discussion, we often make a distinction between commodity bookselling and antiquarian (or artifact) bookselling, commodity books being those which are typically purchased for content, antiquarian those purchased as collectibles, though of course this artificial division is quite blurred in reality. In any case, as BWB books expands its operation and acquires a greater share of the so-called antiquarian market, there's concern that this will to some extent have a "commoditizing" effect on antiquarian books, potentially dumbing down the profession and degrading values of an entire class of books that presently provide many booksellers with much of their profit.

ELLIOTT: This presumes that BWB, and only BWB, gets their hands on a copy or two of everything and that a warehouse-based operation, geared to sell commodities, can effectively describe and sell a rare or antiquarian book. BWB and others like them have been around for years, as have casual sellers. The truly antiquarian market is still out there - and has higher demands both on the supply side and the selling side.

Craig, how would this work anyway? If the concern is that BWB is getting the same materials that sellers have been getting from FOL sales, they are getting access to the same supply. A book is rare and valuable by definition because the item is in scarce supply and there is demand for it. BWB isn't changing supply; they're simply getting their hands on it. If sellers are concerned about the impact on price of antiquarian books, they ought to look to the print on demand scanning operations with a lot more dread. Even there, the value is more typically in the physical, collectible copy itself - and if BWB gets an antiquarian book, puts a lame description on it and sells it for a ludicrously low price, some seller ought to snatch it up!