IOBA: Alibris recently launched a new pricing service for online booksellers that has caused quite a stir. What is the service and why are you doing this?
Weatherford: The Alibris Pricing Service is the beginning of a revolution in used bookselling. For the past four centuries, booksellers set the price of their book based on their personal knowledge and on conditions in their local market. In some cases, we charged almost whatever we wanted.
The Internet is creating a real market for used books – and in real markets, the laws of supply and demand set prices. Our pricing service simply lets booksellers apply current market information to their prices. As a result, their sales go up – a lot. That is good for them, good for book buyers, and good for Alibris.
IOBA: Many booksellers are concerned that this will simply accelerate the “race to the bottom” with online prices.
Weatherford: At Alibris, we have had a running joke about the book Bridges of Madison County – the best-selling fiction book in1995. Alibris, Amazon, Barnes and Noble, and ABE all have thousands of copies for sale. You can get them for a penny on Amazon – and you can get a new copy for nine cents! Obviously nobody makes any money selling this book, unless you charge sellers a listing fee, which Alibris doesn’t.
What should sellers do? Simple – STOP LISTING THIS BOOK! The Internet has a lifetime supply, thank you very much. When supply overwhelms demand, prices collapse – in books, just like in anything else.
Falling prices are a concern – a big concern – for all online booksellers. But prices are just information from the market – and if the market is telling you that it already has too many copies of a certain book, we think that booksellers need to know this, even if it is bad news. Any bookseller who pretends they can charge above-market prices or pretends that we are still living in the good old days when anybody could charge almost anything for any book is a bookseller with a hobby, not a business.
IOBA: But isn’t Alibris concerned that book prices are falling – and in some cases, collapsing?
Weatherford: You bet we are concerned. Heck, we are the only service left that doesn’t charge a listing fee, so if prices fall, our income falls with it. But the weatherman does not create the weather: We report current market conditions to our booksellers whether we like what we see or not.
IOBA: But doesn’t a pricing service like this amount to price fixing?
Weatherford: The previous question about falling prices presumed that we are causing prices to fall – and we aren’t doing that. This question suggests that we are somehow holding prices up artificially – and we aren’t doing that either.
Believe me, if there were a legal way for Alibris to fix prices, we would be more than happy to do it. But Alibris does not set prices – and neither does any one bookseller. Prices are the result of supply and demand. In the old days, customers did not have a lot of choices, so booksellers could charge more. Online, they have a lot of choices, so prices fall if there are more books than customers.
Our service simply helps booksellers keep up with all of this – which is impossible to do without technology. Some sellers compare it to the Kelly Blue Book, which tells you how much your used car is worth.
IOBA: How are booksellers going to survive if the market keeps shrinking like this?
Weatherford: The market isn’t shrinking – it’s exploding. Used books are by far the fastest growing and most profitable part of the book business. Sellers who are pricing books accurately are enjoying the results of this growth. Sellers who insist on doing it the old way will see their sales continue to fall. So far, the Alibris Pricing Service is the best way for a seller to keep up with market changes. Personally, I would hate to be a bookseller without this service competing with sellers who use it.
IOBA: We hear from sellers that your service doesn’t help re-price every book – usually only more common books. Why is that?
Weatherford: It’s true that the Alibris Pricing Service really is oriented mainly around common books – but that’s more than 80% of the demand out there, so it tackles the vast majority of the market.
Three things need to be true before we can provide you with a market-based price. First, your book needs to be in our catalog. Our catalog is enormous and global – but it doesn’t have pamphlets from the 1930s and other obscure items.
Second, we need to be able to recognize your book. This means we need to be able to match your record to the catalog. If you have entered the information carefully or if the book has an ISBN, there is a good chance we will recognize it. If your record has typos, then our systems may not recognize it. Our systems accurately recognize about 75% of the records we get, which is outstanding compared with any other bookseller.
Third, we need to have market information about the item. We may recognize it but not know about any sales or other items like it for sale, or the seller may have indicated that the item is collectible (signed, for example). In these cases, we do not make recommendations because the bookseller knows as much or more about the item as we do. Statistically, we are able to recommend a price most of the time – and our recommendation is based on recent selling prices and recent sales.
IOBA: The market prices in the pricing service do not seem to account for books that are collectible either as first editions or as signed copies. Why not?
Weatherford: Because we are not smart enough to do that. Pricing collectible books is still more art than science. The reputation of the seller matters a lot – established sellers can charge more for the same book in the same condition. I would be very cautious of anybody who claimed they could automate the pricing of collectible books.
IOBA: Also, your service does not vary the market price according to the condition of the book. Why not?
Weatherford: One of our next enhancements will help on this front – allowing sellers to create “filters” for condition, binding and other elements.
But more importantly, condition doesn’t matter to most customers if the book is in very good or better condition. As John Adams famously said, “facts are stubborn things”. We know who buys books online – and it is overwhelmingly readers, not collectors. We know which copy they pick – usually the lowest priced one that is not torn, broken, or marked up. If you have a book that is in mint condition and you want to charge more for it, go right ahead – but there is no factual basis for our service recommending a higher price.
By the way, at least one bookselling pioneer figured this out ten years before the rest of us. Michael Powell has a million books for sale and none of them have condition descriptions. As best we can tell, it hasn’t hurt his sales much.
IOBA: Are you saying that if I am an antiquarian or specialized bookseller your service won’t work for me?
Weatherford: It won’t help with your antiquarian or highly specialized books – your expertise will be more accurate than our market data. But most antiquarian or specialized booksellers acquire enormous amounts of out-of-field material or simply common used books. Smart sellers liquidate this material at prices that pay for the entire collection. Our service is excellent for this task, which is something many antiquarian sellers are grateful for.
IOBA: Dick, you used to own a well-respected store in Seattle. Would you have used a service like this?
Weatherford: I would have killed for this service. Pricing a book sometimes took longer than cataloging it. And we never had the time to re-price books – it simply took too long, so we never bothered with it. Think about it this way: I could easily go back and re-price books I have that were cataloged years ago and never sold – without having to check them one at a time.
By the way, this tool is designed for online pricing. If you run a store in a major metropolitan area, like I did, you can and should charge higher prices in the store. Customers do not pay shipping and they get the convenience, shopping pleasure, and expertise that only a good bookstore can offer. These things cost money, and a bookseller should price accordingly.
IOBA: Are many sellers using the service? If so, are they selling more books?
Weatherford: We are astonished at the response this service has received, and our early indication is that our sellers are very happy with the results. Most of them figured that old listings were dead stock. Using this service, they are repricing and selling these books. Many feel like it is found money – and some have told us that they paid for the service with sales increases the day after they used it.
IOBA: Speaking of which, how much do you charge for the service?
Weatherford: It’s a six month subscription based on a monthly fee that ranges from $9.95-$49.95 depending on how many books you have. We deduct it from our payments to you. Sellers who want to learn more or sign up can do so at http://sellers.alibris.com.
IOBA: Can you tell me how many of my books are over- and under-priced before I sign up for the service?
Weatherford: Yes – and this will also give you a sense of how many of your books we can help you to re-price. Just go to the seller hub at http://sellers.alibris.com and select “Pricing Analysis Report” from the Account Management menu.
IOBA: What kind of feedback have you received about the service from sellers and what changes are you planning to make as a result?
Weatherford: As noted earlier, we’re planning to add new features designed to enhance how sellers can search on their inventory. Also, a small number of our price recommendations turn out to be dumb. This is a minor problem, but occasionally it makes sellers think that we are silly. Turns out that if one or two people are charging $300 for a book that most folks charge $50 for, our system doesn’t yet adjust for this very well. It’s a small problem that affects relatively few books – and we can fix it, but it is the kind of thing you discover when hundreds of sellers use a tool that you don’t pick up when a couple dozen sellers are helping test it. Sellers should expect that we will regularly add new capabilities to the Pricing Service as we go forward – and look for continued integration into other Alibris services in 2004.