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Bookstores are struggling; is a new E-commerce site the answer?

NEW YORK TIMES / 2010
                                A visitor at Politics & Prose in Washington.
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NEW YORK TIMES / 2010

A visitor at Politics & Prose in Washington.

In January, when Andy Hunter, the publisher of a small press, started an online bookstore that he pitched as the indie alternative to Amazon, many in the book business had their doubts. Earlier efforts to create a portal for independent booksellers had done little to chip away at Amazon’s market share, and even retailers like Barnes & Noble have struggled to compete.

Hunter felt there was an unexploited opportunity. Seizing even a fraction of Amazon’s sales would be a windfall for independent stores, which would receive a cut of the site’s profits. Hunter told investors that within two years, his site, Bookshop, could reach $30 million in annual sales, a projection that struck some as wildly optimistic.

Then, in March, the coronavirus pandemic forced bookstores across the United States to shut their doors. Hundreds of bookstore owners, many of whom couldn’t enter their stores to fulfill online or phone orders, joined the new site.

Now Bookshop is on track to exceed $40 million in sales this year, blowing past the sum that Hunter initially hoped to reach by 2022. The site sold some $4.5 million of books in May, and more than $7 million in the first two weeks of June. More than 750 bookstores have joined, and Bookshop has generated more than $3.6 million for stores. The company is preparing to expand its operations to Britain later this year, where it plans to partner with the book wholesaler Gardners.

“There were a number of skeptics about whether this would work,” said Bradley Graham, co-owner of Politics & Prose in Washington. “Bookshop has certainly worked better than anybody anticipated, because nobody anticipated a pandemic.”

Some wonder whether Bookshop will remain a viable player in the online retail ecosystem as stores begin to reopen, and customers who turned to the site during the shutdown revert to in-store and curbside shopping. Meanwhile, Amazon, which accounts for some 70% of online book sales, has strengthened its position as the world’s largest online retailer. The company reported $75.5 billion in sales during its most recent fiscal quarter, a 26% increase from the year-ago quarter.

Hunter is bullish about the potential for post-pandemic growth. The American Booksellers Association has more than 1,880 member stores, and about 40% of them have started using Bookshop. There’s also more ground to gain with customers: Just 21% of book buyers who shop at independent stores had heard of Bookshop, according to a survey of more than 4,000 people conducted by the Codex Group in late April.

“If it’s sticky and it lasts beyond this COVID crisis, it’s going to really help bookstores thrive,” Hunter said.

Not everyone sees Bookshop’s growth as a boon for independents. Last week, at a virtual town hall organized by the American Booksellers Association, some members questioned whether Bookshop was poaching business at a moment when stores need every sale. Hunter said that the site was created to capture book sales from Amazon, not independents.

“If we ever felt we were damaging indie bookstore sales in any way, we would change course,” he said, according to a report in Publishers Weekly.

Some bookstore owners have bristled at the way that the site has been held up as their industry’s savior.

“There’s a significant danger to people thinking that this is saving bookstores,” said Brad Johnson, the owner of East Bay Booksellers in Oakland, Calif. “If people have any idea that they want to help bookstores, they should order directly from bookstores.”

Johnson, who has a page on Bookshop but mainly sells directly to customers through his store’s website, says he’s unlikely to stay on Bookshop. He worries that it will become “another large centralized competitor for us.”

Some bookstores have avoided the platform. Riffraff, a bookstore and bar in Providence, Rhode Island, quickly redesigned its website to make online orders easier when it closed in March, rather than using Bookshop.

“We didn’t want to risk losing our customers to this Amazon alternative that is very convenient and easy to use,” said Emma Ramadan, the store’s co-owner.

Orders are fulfilled through Ingram, a large book distributor, and mailed directly to customers, so stores don’t have to have the books in stock or process inventory. Bookstores get 30% of the list price — less than they would typically make from a direct sale — but don’t have to pay for inventory or shipping.

Bookshop doesn’t profit from the sales that go through particular stores. Instead, it makes money through its direct sales and from affiliate sales, when media organizations, book clubs and social media sites feature links to Bookshop in book reviews or other coverage. The site now has more than 8,000 affiliates, including The New York Times, The New York Review of Books, BuzzFeed and New York magazine. IndieBound, which runs a similar affiliate sales program, is merging its operation with Bookshop’s. (For books that are sold directly by Bookshop, or through media affiliates, 10% of the list price goes into a profit pool that gets distributed to independent bookstores; so far, the site has funneled about $1 million into the pool.)

Danielle Mullen, the owner of Semicolon, a year-old bookstore in Chicago, joined Bookshop in mid-March. During April and May, Bookshop accounted for around 70% of the store’s roughly 1,800 orders. “It meant we could stay in business, and that’s all we’re trying to do,” she said.

More recently, Mullen has seen a spike in sales through Bookshop as readers sought out books about race and racism and wanted to support black-owned businesses. This month, Semicolon sold some 30,000 books on the subject through the site over just a few days, a crush of orders that would have been difficult for her to process on her own, she said.

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