If Gutenberg were alive today, he would be a very busy angel investor.
With book sales booming during the COVID-19 shutdowns last year, the humble written word has suddenly drawn the spotlight from venture capitalists and founders. We’ve seen a whole parade of new products and funds, including the algorithmic recommendation engine BingeBooks, book club startups like Literati and the appropriately named BookClub, as well as the streaming service Litnerd. There have also been exits and possible exits for Glose, LitCharts, and Epic.
But the only company that has captured the imagination of many readers has been Bookshop.org, which has become the reference platform for local independent bookstores to build an online store and compete with the giant Amazon. The company, which debuted just as the COVID-19 pandemic was raging in January 2020, quickly garnered headlines and profiles from its founder Andy Hunter, a hardworking editor with a deep love for the reading ecosystem.
After a year and a half, how is everything going? The good news for the company is that even as customers are returning to retail, including bookstores, Bookshop has not experienced a recession. Hunter said that August sales this year were 10% higher than July, and that the company is on track to make as many sales in 2021 as it is in 2020. He contextualized those figures by noting that in May, sales of bookstores increased 130% annually. during the year. “That means our sales are additive,” he said.
Bookshop now houses 1,100 stores on its platform and has more than 30,000 affiliates who select book recommendations. Those lists have become a central element of the bookstore offering. “You get all these recommendation lists not only from bookstores, but also from literary magazines, literary organizations, book lovers, and librarians,” Hunter said.
Bookshop, which is a public benefit corporation, makes money like all e-commerce companies do by moving inventory. But what sets it apart is that it is quite liberal in paying money to affiliates and bookstores who join its Platform Seller program. The affiliates receive a payment of 10% for a sale, while the bookstores themselves take 30% of the cover price of the sales they generate through the platform. Additionally, 10% of direct and affiliate sales on Bookshop are put into a profit-sharing fund which is then shared with member bookstores. According to its website, Bookshop has spent $ 15.8 million on bookstores since its launch.
The company has had many developments in its first year and a half of activity, but what happens next? For Hunter, the key is to create a product that continues to appeal to both customers and bookstores in the simplest way possible. “Keep Occam’s Razor,” he says of his product philosophy. For each role, “it will add to the experience and will not confuse the customer.”
That’s easier said than done, of course. “For me, the challenge now is to create a platform that is extremely attractive to customers, that does everything booksellers want us to do, and creates the best online book buying and selling experience,” Hunter said. What that often means in practice is making the product feel “human” (like shopping at a bookstore) while helping booksellers maximize their online benefits.
For example, Hunter said the company has been working hard with bookstores to optimize its recommendation lists for search engine discovery. SEO isn’t exactly a skill you learn in the traditional retail industry, but it’s crucial online to stay competitive. “We now have stores that rank first on Google for book recommendations from their book lists,” he said. “Whereas two years ago, all those links would have been Amazon links.” He noted that the company is also applying best practices around email marketing, customer communications, and optimizing conversion rates on its platform.
For clients, a big emphasis for Bookshop going forward is avoiding the algorithmic recommendation model popular with top Silicon Valley companies rather than a much more human-curated experience. With tens of thousands of affiliates, “it feels like a hive of … institutions and retailers that make up the diverse ecosystem around books,” Hunter said. “Everyone has their own personalities [and we want to] let those personalities come through. “
There’s a lot to do, but that doesn’t mean dark clouds aren’t a threat on the horizon.
Amazon, of course, is the biggest challenge for the company. Hunter noted that the company’s Kindle devices are extremely popular, and that gives the e-commerce giant an even stronger lockdown that it cannot achieve with physical sales. “Due to DRM and publisher agreements, it is really difficult to sell an e-book and allow someone to read it on Kindle,” he said, comparing the nexus with Microsoft that includes Internet Explorer in Windows. “There will have to be a court case.” It is true that people love their Kindles, but even “if you love Amazon … then you must recognize that it is not healthy.”
I asked him if he was concerned about the number of startups being funded in the book space and if that funding might crowd out Bookshop. “Book club startups are going to be successful in putting books and book conversations in front of the largest audience,” Hunter believes. “So that will make everyone successful.” However, he is concerned about the focus on “disruption” and says “I hope they succeed in a way that partners with independent bookstores and community members out there.”
Ultimately, Hunter’s strategic concern is not directed at competitors or even the question of whether the book is dead (it isn’t), but a more specific challenge: that today’s publishing ecosystem ensures that only the best books be successful. Often referred to as “the intermediate list
problem, “Hunter is concerned about the increasingly successful nature of books these days.” One book will absorb most of the oxygen and most of the conversation or the top 20 books [while] great innovative works by young authors or diverse voices don’t get the attention they deserve, ”he said. Bookshop hopes that human curation through its lists can help maintain a more vibrant book ecosystem than recommendation algorithms, which constantly push readers towards the biggest winners.
As Bookshop enters its third year of operations, Hunter just wants to keep the focus on humans and bring the rich experience of browsing a store to the online world. Ultimately, it’s about intentionality. “I really want people to understand that we are creating the future that we live in with all these little decisions about where we shop and how we shop and we need to remain very aware of how we deliberate on them,” he said. “I want the bookstore to be fun to shop and not just a place to do your civil duty.”