Secondhand booksellers are ideal when it comes to discovery for anyone who's willing to browse the aisles (and maybe the piles on the floor) and take a chance with what's there. If you do find something, you can have it for a fraction of its original cost — especially if you don't mind the note penned by the original owner's Aunt Martha, wishing him happy birthday in black ink.
But it's hard to go to a used bookstore with a particular title in mind because inventory is dependent on the quirks of its sources, including people who've just watched Marie Kondo's Netflix show, or who are moving or renovating houses, or whose children have outgrown their copies of Dr. Seuss or Harry Potter.
As it has with so much of retail, e-commerce has altered that limitation, and one Amazon seller has seized the opportunity to elevate its operations well beyond the Marketplace. ThriftBooks, which launched in 2003 around the time Amazon first opened its site to third party sellers, has seen double digit sales growth each year since its founding as a stand-alone site in 2007 and has been "consistently profitable every year," according to CEO Mike Ward.
"Amazon sells books, certainly, but for the last maybe seven or eight years they're more widely known as 'the everything store,'" Ward told Retail Dive in an interview. "We've got books, we cater to readers in a way that others don't. Barnes and Noble, their new CEO is all about trying to revitalize the brick-and-mortar business. Our value proposition is really amazing — customers can get a book delivered to their door for $4."
A thrifty supply chain
ThriftBooks has mastered its supply chain, and scaled it so that it's not a victim to the factors that limit the inventory of most used-book sellers.
The company buys books in bulk from the likes of Goodwill, Salvation Army and other thrift stores, paying by the pound. Laden with whatever those outlets have to unload, 150 trucks distribute items to eight fulfillment centers around the country to be sorted.
It wouldn't be e-commerce without tech, and ThriftBooks' algorithms, aided by AI and machine learning, decide which books can be sold. Humans pitch in, too, grading quality. Once in ThriftBooks' inventory, each item is dynamically priced and listed across all sites where it sells, including Amazon and eBay.
"Prices may change as often as every few minutes as the department demands it — millions of price changes a day — on a SKU count of 9 million," Ward says.
Is there life outside of Amazon?
A question for ThriftBooks now is what comes next in its evolution from a third-party Amazon seller to a retailer in its own right.
Many sellers that initially launched on Amazon's Marketplace are interested in stoking volume rather than building their own brand or running their own site, according to John Ghiorso, founder and CEO of Orca Pacific, a full-service Amazon agency.
That was fine with ThriftBooks' founders at first. But now Ward says the company is probably the largest online seller of used books in the world, and more than half of its sales come through its own site. Customers are pleased: the company boasts a net promoter score of 77, a calculation of how many customers say they would recommend a brand, which he says beats the likes of Target, Apple and Amazon itself.
Still, there may be a limit to how far ThriftBooks can go on its own because it can be difficult to get out from under Amazon and the advantages it provides, above all its Prime membership, Ghiorso said. Many of the seller's customers will head back to Amazon to check prices, and ultimately will buy the used book they want through the e-commerce giant (from ThriftBooks or another seller).
"There are ways to compete but it's tough, especially when you're selling commoditized products like used books."
Founder and CEO of Orca Pacific
"There are ways to compete but it's tough, especially when you're selling commoditized products like used books," he told Retail Dive in an interview. "You'd better be able to beat Amazon on one of those things — price or selection or user experience. Wayfair does it with user experience, Walmart sometimes price. The majority of Americans have a Prime account, the scale is so massive. But there are always incremental ways to add value and interest."
That's exactly what ThriftBooks has done, according to Ward. The site has built a community of readers, most of whom are in income brackets that would allow them to buy new books at full price. Despite that, the company's research shows that Thriftbook customers tend to buy a third of their books new and two-thirds of them used, while for other book consumers that's flipped.
"There are lots of places online to buy a used book," Ward acknowledged. "Amazon is one of the most well-known, but there are also quite a few being sold on eBay, Abebooks.com, and BarnesAndNoble.com. Customers may have their favorite site and for whatever reason prefer one over the other, which is fine. We want to make customers happy and offer books in as many places as we can. But the big fundamental difference is that all those other sites are marketplaces, aggregating items from lots of sellers into one location, like a flea market, often making it difficult for customers to know which sellers to trust and which to avoid. At ThriftBooks.com that problem goes away. They know with confidence that every book we sell them has been graded by and is sold by us directly."
Customers also come for the site's content, aimed at book lovers, and its recommendations. "We've got a good suggestion engine, but I think that it's absolutely true that the majority of people come in knowing what they want to get," Ward said.
That's the disruption that ThriftBooks has brought to the secondhand book space. But, while Ward says "The experience on ThriftBooks.com is completely different than the Amazon experience," that doesn't mean that the company is going to move away from Amazon any time soon. And that means putting up with Amazon's Marketplace rules.
"I do think of Amazon as a partner of ours, and Amazon has been a good partner for us," he said. "The way to succeed on Amazon is, really, do what Amazon is asking you to do and do it very, very well. Amazon's rules can sometimes appear heavy handed, but it's usually Amazon looking out for the customer. They're less focused on the seller community — they don't have a lot of tolerance of bad actors, bad sellers. Their challenge is that they're so big and there's so many third-party exchanges that you stamp one out and another will pop up very quickly. As long as they're convinced that you are serving the customer you'll succeed and that means actually serving the customer."