After having been in the book business for nearly 40 years and having written for years about book collecting, this is the first time we have been asked to write something that is just for dealers. It is our pleasure to do this for IOBA members.
We realize there are many members of varying levels of experience in our association, but this is tailored for the new dealer who is looking for some guidance in how to set up and run a successful on-line book business. Over time, we hope to have included enough information to make it useful for all our members. If it isnt, tell us and well try to include your requests in the future.
Being a bookseller is not just finding books and putting them up for sale. We all assume well be able to sell the books weve bought at a profit or at the very least, get our money back to buy others. After all, if we liked them and wanted to own them, then there must be other people that will want them. A good theory and it usually works. Being a bookseller is also about running a business that grows each year. Our key advice is to keep your day job until your business has proven it can support you. This way you wont drain your small business of needed growth capital by spending the profits on mundane items such as food.
As an Internet dealer without an open store it is important to try to understand the entire book market and how it works because we are all part of the book selling community.
Used Book Dealers
In the old days (pre 1998) a lot of the used book dealers with open stores did not care what edition a book was. Most of their customers were interested in the subject matter and not the edition. This type of dealer buys books in all subject areas and sells them at relatively low prices. The average hardcover fiction title might be priced at $5 to $7.50 and the dealer probably only pays 25 to 50 cents for such books. The dealer has a high turnover. In order to have gross yearly sales of $100,000 this dealer would have to sell nearly 14,000 $7.50 books a year and must have an inventory of 25,000 to 50,000 books at all times to make a living. A large percentage of the common books never sell but still take up space and may eventually be culled and sold at a loss. The dealer must not only cover his rent and other expenses out of the gross receipts, but new inventory must constantly be purchased to keep customers interested in the stock. Salaries also have to be covered if the dealer has any employees. Most have only part-time help. This doesnt leave a lot left over to live on. Many of these dealers have closed their open stores and are now selling their books on the Internet to a wider market and with a lower overhead.
The larger used book stores maintain inventories of at least 100,000 (or more) and have gross sales of approximately $500,000 or more. Their clients not only are buying “reading copies” but they have collectors and specialist dealers as customers because they are looking for “sleepers” (books that are really worth a lot more). Shops have the advantage of serendipitous browsing because customers can actually handle the books and save shipping charges. These stores also have to be open for long hours in order to satisfy the public. Some used book dealers eventually separate their better books and take time to research them bibliographically before pricing them. Many of these stores are now also offering part of their inventory on the Internet and have hired additional staff to catalog their books and maintain their sites. There are dealers that have 75,000 or more books up on the Net. Some dealers have grown to the point of having more than one location and, of course, their stock needs and number of employees grow right along with their gross sales.
Specialist Dealers
The specialist dealer may have an open store or be open only by appointment and operate from an office or their home. These dealers are generally very knowledgeable in their field of interest. Most have not only invested in the necessary bibliographies they need but constantly add to their shelves any bibliography that comes on the market that will help them. It is the knowledge that the dealer has, as well as the books and the customer service the dealer offers, that builds a clientele that is enviable. This kind of knowledge cannot be casually learned by only browsing other dealers listings on the Net. Many collectors have so much trust in particular dealers that they rarely will buy books from anyone else. The largest of these dealers have yearly gross retail sales of $750,000 and up (with some of them regularly grossing more than a million or more yearly).
Before the Internet, the book buyer, collector or dealer had some insight into a particular stores stock only if they were local or on the mailing list for catalogs that most specialists issued (and continue to issue). Now, the stock of most of the specialist dealers is on the Internet in its entirety for all to see.
Book Scouts (also known as Book Finders or Pickers)
As long as there have been book dealers, there have been book scouts. A book scout is a person that finds books and generally only offers them to dealers and at a price where the dealer can make a profit. The book scout goes to yard sales, estate sales, used book stores, school book sales, library book sales, local auctions, flea markets, Goodwill Industry outlets, Lighthouse for the Blind outlets, etc. Many pay very little for their stock and since they have a low overhead, they can make a good profit by selling to dealers at 50% of retail or by asking the dealer to make an offer instead of pricing the books themselves. No dealer will spend time after time making offers to a scout only to have the scout turn them down frequently. The dealer will quickly see that the scout needs to price their own books and the dealer say “yea” or “nay.” The scout expects to be paid immediately for any books they sell. With the advent of the Internet, the scout now also has the option to put them on the Internet at a slightly marked up price from what they need to sell them for in direct competition with the dealers they used to sell to. Before the Internet, the book buyer, collector and most dealers would never have known about these books until they were listed in a dealers catalog. The scout needs to sell quickly. This is a crucial point to understand as a bookseller. Do you want to turn your stock over at a profit, any profit; or, do you want to hold out for a full retail price. The scout never wants to wait and the specialist may wait forever, but the specialist is usually in the business for the long run and is normally patient. This is an important point because many dealers on the Internet expect to put up a book valued at $1,000 and sell it the next day.
On-line Booksellers
Not very many years ago booksellers began putting some of their books on-line on one of the first search engines that were available, Interloc run by Dick Wetherford. You used his 800 number to upload your inventory and to do searches or to use the books of other dealers as a research tool. Each month you received a bill for the time you were on his line. Some monthly bills ran $100 and more. Amazon.com was one of the major buyers of books on Interloc and we were all happy to have their orders. In 1998, the critical mass of books came on-line when thousands of dealers put their books on such sites as Advanced Book Exchange (ABE), Bibliofind, Bibliocity, etc. Interloc couldnt compete with this with the computer system they had and although by this time they were moving onto the World Wide Web, it was too late – the other search engines had taken hold. Interloc ceased to be and Wetherford began Alibris with financial backing. The largest of the services, ABE, had over 16,000,000 books and over 5,500 dealers when we last checked. Their largest competitor seems to be Amazon.com which owns Bibliofind and is pushing harder to establish its own “zShops” approach, with Alibris making their move to take the lead by investing huge amounts of money in advertising.
With the combination of the above dealers, book scouts, and the general public all listing books on the Internet and competing for salespricing differences were amazing. The sheer volume of books that had suddenly become available allowed the public and other dealers to see for the first time books that were being offered from around the world. A new era in book selling had begun.
Copies of books that regularly sold in mail order catalogs for $25 to $75 were on the Internet for $7.50 to $50 with supply and demand driving prices. Where the “old-time” bookseller only saw books that were offered in nearby bookstores, book fairs, scouting trips, or other dealers catalogs and priced their stock according to the knowledge they had accumulated, now books could instantly be compared on the Internet by dealers around the world. It was (and still is) a collectors dream. Why then are some of the collectors becoming disenchanted? It is because they were used to the condition of the books they bought from a dealer they knew being described in such a way that they knew what they were getting. They could count on the seller knowing and checking the bibliographic points of the book they were buying. They were also used to being able to return books within ten days of receipt for any reason and getting a refund for books for which they had prepaid. Now this doesnt always happen, now some dealers wont take a book back even if the book isnt as described or isnt the edition it is supposed to be.
99.9% of all the dealers (before the Internet) extended to each other a dealer discount of from 10 to 20%. This has changed.Now, many Internet dealers refuse to honor this tradition. Yet these same dealers do not seem to understand that for many dealers, 80% of their sales are to other dealers and many times the discount is the deciding factor as to whether or not to buy a book. Some dealers give dealer discounts only in their stores but not on the Internet if they do not know the dealer. But, when you are in business for yourself, it is your choice how you run your business. We recommend, however, that your policies be plainly stated so that the customer will not be disappointed (or in some cases, outraged) by finding out your policies later. Your reputation will follow you good or bad.
Pricing Books Using the Net
If youre trying to price a book and go onto ABE or Bibliofind or one of the many other search engines and search for a particular title and there are a lot of copies listed in both similar condition and edition to the book you have in hand, that book is not scarce in any sense of the word. But, if you find that there are only five copies and one of them is in the UK, one in Australia, one in Canada, one in New York, one in California, and your copy is in better condition, youve got a hard to find book and it should be priced accordingly.
Suppose there are no copies of your book on the Internet then you may have a scarce book and you need to do some research before you price it. Check the various reference books you have. Try our Collected Books and our Author Price Guide series, McGraths Bookmans Price Index, Zemples Book Prices: Used and Rare, etc. to see if it is listed in there, check the auction price records, if you dont own them, call your local library and see if they have them and go down and check your book out. Lets say that you find that there are no copies in the book guides, and only one copy of your book has been auctioned in the last 22 years and it sold for $2,000 in 1979. While youre in the auction records, look to see if this same author has other titles that have been auctioned lately so you can see what kind of prices that author brings. Did the auction record show a bibliographic citation or state the number of plates, pages, etc.? If it did, try to track down that bibliography and check the citation, count your plates, collate the pages, compare the binding, etc. Make sure your book has all the points called for in the bibliography.
Price guides also have an important place in your research but always remember that they are guides and that some are better than others. Some have issue points, some combine the research the compiler has found in bibliographies along with the points found in other dealers catalogs, and some merely list catalog entries with no other research. All can be helpful. But they are not a substitute for owning detailed bibliographies of the authors in your specialties. There is a growing market in secondary material such as books with introductions or edited by the author; and magazine appearances. The price of the latter will depend a great deal on whether it is the first appearance in print. The easiest, if not the only, place to find this information is in full detailed bibliographies. It is an investment you will never regret.
Pat and Allen Ahearn are uniquely well known in the bookselling community to both book dealers and collectors. They have been in the business for nearly forty years and are the proprietors of Quill and Brush in Dickerson, MD. They are the authors of Collected Books A Guide to Values (Putnam 1997) and Book Collecting 2000 (Putnam, 2000) as well as a series of author price guides. Pat is an IOBA board member and Chair of the Education Committee.