Richard Weatherford & Marty Manley – ALIBRIS


alibris1Recently Alibris has announced some major changes in how you work with sellers. What are they and what do they mean for booksellers?

Manley: As of mid-March, we no longer mark-up the books of our U.S. and Canadian booksellers. We also reduced the mark-up on all other books. This April, we started displaying seller names and reliability ratings with book listings on our Web site, and enabled potential customers to ask sellers questions about their books. Sellers also started to ship books directly to the customer.

These changes are great for our booksellers and book sales have skyrocketed as a result.

We also announced a suite of optional tools that we’re developing for our sellers. One tool will enable you to easily list books on multiple Web sites. Another will help you to purchase and set prices for books based on current market data. These tools will be valuable if you list on multiple sites and want to keep your prices competitive.

Have the changes that you recently announced been in the pipeline for some time? What caused you to rethink your approach?

Manley: We decided to stop marking up books and enable you to ship directly to customers because the market changed. Most of these changes occurred following the launch of Half.com followed by Amazon.com Marketplace in March of last year. Along with Half.com, Amazon brought a flood of inventory onto the market, and as a result, prices have dropped across the board. We have been planning the change since last October.

Do sellers have to “churn” their inventory to get display preference on Alibris? If so, will you increase your technical support and capacity?

Weatherford: Alibris displays books according to seller reliability, not according to how recently a book was uploaded, so sellers who “churn” inventory do not receive a display preference.

I assume the $0.05 price reductions in booksellers’ listings are a sales tactic to get listings noticed. Does Alibris intend to continue with this expense, or is this a temporary measure?

Manley: It is a tactic to sell more books. So as long as it works, we’ll pay for it.

Does Alibris intend to continue to be searched by the mega-site search engines?

Manley: The management of traffic from search engines is more of a continually evolving art than an exact science. Fortunately we have some terrific artists who continue to ply their trade to the benefit of our booksellers.

Editor’s Note : These mega-site search services actually do the choosing of which databases they will search, and so far as we know, there is no preference given to any database based on whether or not a database advertises with them—it is a level playing field.)

If Alibris experiences an influx of new booksellers, will sales keep up or will booksellers all simply sell less?

Manley: We are committed to growing the market – meaning that we work to attract both new booksellers and new customers. We understand the balance between growing listings and growing demand for books, which is why we continue to invest in building a brand, commercial partnerships, technology, and specialized logistics needed to grow the used and OP book market. We used to be a listing service that charged you money to list books, but not enough money to attract new customers. Even four years ago, we could see that this approach would not grow the market and in some cases would make it much worse. We decided that if we were serious about building a true partnership with our booksellers, it meant that we could only get paid if our sellers do.

Alibris is only one part of the market however. At the moment much more inventory than customers are coming online. The result is that book prices continue to fall. Most booksellers are only vaguely aware of this and are shocked to learn how far prices for most of their books have fallen. That’s why we’re launching a service to help sellers set their prices to the current market price. Despite the number of listings there are on Alibris or elsewhere, appropriately priced books will always sell.

Will Alibris continue to advertise?

Weatherford: Remember, we only get paid when we sell your books, so we have a great incentive to advertise and increase your sales. In addition to advertising, we also work closely with more than a dozen business partners to make our sellers’ books available in places like Indigo.Chapters.ca (Canada’s largest bookseller), through Books-A-Million stores or via Ingram’s iPage, which is used by thousands of independent booksellers. Your books can be ordered by Barnes and Noble or by Kinokunea, Japan’s largest retailer. We also have the OP trade’s only library field sales team which works closely with thousands of the world’s leading libraries.

How will Alibris “police” quality of descriptions and book condition now that it won’t be inspecting these books? Will you guarantee quality and accuracy to buyers?

Weatherford: We respect the professionalism and judgment of our member booksellers. When a seller ships directly to a customer, the customer will be the judge – and if they don’t like it, Alibris will accept the return. We will continue to inspect books shipped to libraries and retailers through our distribution center. So we will continue to guarantee the quality of your books and the accuracy of your descriptions – and customers will be the final judges.

Will you develop a customer feedback program and, if so, will sellers alone be given feedback or will there be provisions for feedback on buyers?

Manley: The initial feedback will be 1 to 5 stars that reflect your fill rate, not customer comments. We have no plans to enable our booksellers to comment on our customers.

Alibris requires that titles entered using Alibris Inventory Manager be listed with Alibris exclusively for 12 months. Do you have any plans to drop this requirement? Will BookMate software remain available?

Manley: Alibris Inventory Manager is a terrific tool and it is about to become much better. In a version to be released in the near future, it will be both free and non-exclusive. It uses only your browser, so there is no software to install or maintain and if your files get corrupted or lost, you just download a new copy of your files from our server.

We have booksellers who have cataloged more than 1,000 books per day and created high-quality records with Alibris Inventory Manager. When we re-launch Inventory Manager it will be backed by the finest commercial catalog in bookselling. The odds that you find a complete record of your book–with or without an ISBN–will be very high.

We do take upload files via BookMate, HomeBase, and various other software applications, and very likely always will. However, we no longer offer technical support for our BookMate product and will not be releasing any further versions.

What shipping options will customers have and how will you reimburse sellers for their shipping costs? On low-end books it seems that booksellers may refuse many sales as there won’t be enough profit to absorb the additional mailing costs, so they’ll cancel the order and run afoul of the feedback of orders filled.

Weatherford : Customers within the U.S. will have the choice of standard shipping and expedited shipping. The solution for standard shipping is USPS Media Mail, for which we reimburse sellers $2.25 per book (which is above the USPS cost of $1.78 for a two-pound package). We understand that a handful of packages may weigh more and therefore cost more, however, most will weigh less and cost less. We analyzed all the books sold by our booksellers and determined that the average book weighs 12 ounces and over 75% weighed under 1 pound and eight ounces. Our solution for expedited shipping is USPS Priority Mail or UPS Ground, and we’ll reimburse sellers $4.35 per book which is above the USPS cost of $3.95 for shipping a two-pound book.

U.S. sellers shipping to Canadian customers will ship via USPS Air Letter Post, which costs U.S.$5.00 for a 1.5-pound package, and we’ll reimburse $6.35. Canadian sellers shipping to U.S. customers will ship via CanadaPost Small Packets USA and will be reimbursed US$5.50 for a package that on average costs just over C$7.40 or about US$4.66 for a one to two pound package.

The reason booksellers in our network receive so many orders is because we have created one of the best shopping experiences for hard-to-find books online. Customers want a simple shopping experience and as it relates to shipping, customers want a broad variety of options at competitive prices.

In the event that a customer orders a multi-volume set or an extremely large volume, the seller can request additional shipping from the customer using the ‘Report an Issue’ link on the Seller Hub.

Will ISBN numbers be required for listings on Alibris after these changes become effective? If so, what happens with older books having no ISBN numbers? Or ephemera?

Manley: ISBN numbers are helpful because they enable us to merchandise books more effectively and to distribute them more widely. But in fact only books published during the past 30 years have ISBNs — so they are not required on Alibris.

Does Alibris intend to continue to maintain inventory of its own? Will you continue to catalog and warehouse books for other booksellers?

Weatherford: We do maintain our own inventory, but we have decided to limit our consignment program to the booksellers currently consigning with us.

What is Alibris’ viewpoint on sales tax liability? Does it lie with the bookseller or with Alibris? Will Alibris collect sales tax on same-state shipments and either pay the tax for the bookseller or remit it to the bookseller?

Manley: We don’t give tax advice, but the key distinction is whether we buy your book from you or sell your book for you.

When Alibris buys a book from you, we receive it into our distribution center. Title to the book passes from you to us before we pass title to the end customer. Because of this, we assume liability for paying sales tax because we, not you, sell the book to the end customer.

When we sell your book for you under our new approach and you ship it directly to the customer, we never take title. We arrange for you to ship the book, so you have liability for sales tax – just as you would if you sold the book on Half.com or Amazon.com’s Marketplace. Like Amazon and Half, we do not try to collect state, local, and city sales taxes for every worldwide combination of buyers and sellers on our system.

As a practical matter, this is a very small problem. If 5% of your Alibris sales are within your state and your sales tax rate is 8%, then the problem of state sales tax amounts to less than one-half of one percent of your sales.

Editor’s Note : If an issue of sales tax arises on the same-state sale of a very expensive book, contact your Alibris dealer representative about it immediately to see if there is a workable solution.)

Alibris absorbs the cost of a returned book if the book is priced under $100, but forces individual booksellers to absorb the cost of returns that are higher than this. Why is this fair, since Alibris allows returns for any reason and the bookseller has no control over the situation?

Weatherford: None of us likes returns, but in the overall scheme of things, this too is a very small problem.

Many customers are reluctant to purchase items online, sight unseen, so to encourage sales, we guarantee that a customer will like his or her book or we will refund their money. This guarantee helps reluctant customers get over their concerns and it grows sales for everybody. It works and most sellers do the same thing if they have stores. Thankfully, almost nobody abuses this policy, (although I do remember one customer whose reason for returning a book was that “it was boring”!)

Generally it is easier and cheaper for us to just resell returned books than to deal with returning them to the original seller. And in the case of expensive books, experienced sellers factor in the small risk of a return when they price the book. We return high-value books to sellers not only because we do not want to absorb the cost of the book, but because we often lack the expertise to describe specialized books appropriately.

Has Alibris considered paying for the cost of insurance for books over $100 since booksellers are now liable for lost shipments?

Manley: Alibris has shipped hundreds of thousands of books – and the percentage that is lost by USPS or UPS is very, very small. Given the shipping reimbursements we provide, sellers will come out ahead.

Editor’s Note : If the issue of insurance arises on the sale of a very expensive book, contact your Alibris dealer representative immediately to see if there is a workable solution.

What does the future hold? Will you get big and lower your standards, or will you take Internet bookselling in an entirely different direction?

Manley: The question is not what will happen to Alibris, but what will happen to all of us as the Internet continues to reshape bookselling. It is naturally tempting to assume that the future will be like the past, but with the Internet, this assumption is often wrong.

At first the Internet was lovely – what was not to like? Online bookselling made books easier to find and it brought in new orders. The future looked great, and for specialized booksellers it still does. But the climate is changing very quickly and you can see it in prices. Most professional booksellers who compare their prices with those on Amazon or Half are shocked. Then they compare prices a month later and are terrified. How can prices drop 15-20% month after month? These sellers may feel betrayed or may want to find a scapegoat, but the world has changed around us all.

Successful booksellers will use technology to do much more with much less. That is why we are developing essential tools. Our pricing tools will help booksellers buy and price more effectively given current market conditions, and our selling tools will enable you to easily list and manage your inventory on many Web sites.

But Alibris is the weatherman – we are not the weather. Alibris will not decide which booksellers succeed and which do not. The people who do that are our customers – and they are the ones we should all be very focused on.

Dr. Richard M. Weatherford, Chairman and Founder. Dick is a leading writer, speaker, and consultant on the computerization of the out-of-print book trade with over 27 years in the industry. He has owned and operated out-of-print and antiquarian book businesses and was a partner in Seattle’s largest antiquarian bookstore. In 1993, he created an electronic marketplace for books and in 1994 launched Interloc, the predecessor to Alibris. Dick holds a Ph.D. from UCLA and taught at the university level for 15 years.
Martin Manley, President and CEO. Marty is responsible for the strategic focus, overall direction, and performance of the company. Prior to founding Alibris with Dick Weatherford, Marty served as Managing Director of Strategy and Business Services for Kaiser Permanente, where he led a major restructuring of hospital services. Before Kaiser, Marty was named by President Clinton to serve as U.S. Assistant Secretary of Labor, responsible for creating a federal agency to promote workplace innovation. Marty has also advised executives of technology, service, and manufacturing companies as a consultant with McKinsey & Co. and Waterman & Company. Marty graduated with honors from the University of California and Harvard Business School.

Interview by Shirley Bryant.

The Standard: The Journal of the Independent Online Booksellers Association

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