Putting a Face . . . on Faceless Venues

by Catherine Petruccione #74, 7 August 2006

[EDITOR'S NOTE: Please note that this interview was conducted in June of this year, well over a month before Alibris' recent announcement of changes in customer communication and the absorption of returns.]

Alibris, based in Emeryville, California with a warehouse in Sparks, Nevada, has long been considered one of the top three listing sites for online booksellers. Many changes have occurred at Alibris over the past few years, the most recent being their acquisition by Oak Hill Capital Partners. When I was given the opportunity to speak with A.J. Kohn, Director of Direct Marketing and Sales at Alibris, I was delighted, also eager to ask some of the many questions that have arisen in conversations with other booksellers and on bookselling forums. Although we certainly didn't get to all of them, I believe A.J. has addressed a number of important issues.

My thanks go out to A.J. for his patience with my long list of questions. He is demonstrably enthusiastic about Alibris and his job: "Books are part of the culture here. A lot of very smart people work for Alibris, passionate people. I took on the seller marketing portion of my job in May 2005. There are around 60 employees at Alibris, and at least 20 of them have been here for more than 5 years. The average stay at this point is well over 4 years, and there are quite a few people who are what we call 'boomerangs' in that they have come back to work for us a second time. It's been my goal since coming here to sort of humanize us a little bit. I think before that time, we'd done a less than stellar job in presenting what we really are about and the passion that we have for what we do here." BOOKTHINK: Some of our readers may not be familiar with its history, so can you give us a little background on the formation of Alibris? KOHN: Alibris began as a company named Interloc, which was started by Dick Weatherford, who is still with us. I believe it was in 1997 or 1998 when Marty [Martin Manley, Current Chairman and CEO] came on and purchased Interloc and changed it into Alibris. It started out as a database for professional booksellers, which gave them the ability to find books for their own customers, and gave booksellers the ability to exchange their book wants back and forth. Dick launched the website in 1996, and shortly thereafter Marty Manley came on board and figured out to take this a step further and make it a destination site for consumers and a way for sellers to market their books to a wide audience. That's essentially the history, and I think one of the strengths of Alibris has been the ability to see the twists and turns and to change as we see the market changes, to see additional needs out there - and we've been able to respond to that. It's that which has enabled us to continue to move forward as we try to help independent booksellers and publishers on our site. [If you would like to read a comprehensive story of Alibris, click here ] BOOKTHINK: Tell us about the recent acquisition of Alibris by Oak Hill Capital Partners and how it may affect Alibris sellers. KOHN: The acquisition is a big event for us here in that we have new owners, and we have owners who are very committed to this business and who have a lot of faith in what we are doing and are willing to put some backing and teeth into that. As for Alibris sellers, there's not much that would really affect them except that we are going to be able to do more marketing. Also, hopefully, we'll be able to be a little bit quicker in accelerating some of our projects which will deliver additional sales to sellers. There's not a heck of a lot that sellers are going to find much different in their day to day experience with Alibris, other than that we hope they will be coming to us more because we'll be generating more sales for them. BOOKTHINK: So you don't see any big changes that are directly related to the acquisition? KOHN: We are going to launch a U.K. platform - that is definitely something that will happen this year. For many years, and particularly within the last year, a number of U.K. sellers have come to us and said "If you had a platform that would actually work for us, we'd sign on in a heartbeat." We just don't have something right now that works terribly well for UK sellers. We still have a good deal of them who are able to succeed in our current model, but we will soon be having a model in which they will be able to send directly to other UK customers. The current situation is this: If you are a UK seller and you get an order from a UK customer, you actually send that book to Sparks, Nevada and then we send it back to the UK. It's less than optimal, to put it mildly. We are going to fix that problem. With that we will also do away with the increased price that we put into the UK inventory to offset the additional shipping costs; so what will essentially happen is that UK sellers will be able to list their inventory without a price uplift and ship directly to UK customers. And we hope within a short time after that, they will be able to ship to EU customers as well. International expansion is definitely on our mind. We feel like we've done a very good job with our US market but that we need to replicate some of our successes in the international markets. BOOKTHINK: Alibris recently announced the Weatherford Scholarship: Over $2,000 for tuition and lodging at the Colorado Antiquarian Book Seminar for the winning essay from a book seller who describes best why they should be chosen to attend the seminar and who has at least a 4-star rating on Alibris. This is a really nice idea. Can you tell us more about it? KOHN: This in line with our values regarding the professionalism of our seller network and the fact that we really do hold close to ethics and high standards. It's one thing to say that and another to police that - to actually toss out sellers who we feel aren't upholding the standards for Alibris and thus are negatively affecting other sellers in our network. But this is one way to actually put a little bit of money behind this value as well and say we believe in this strongly, and we feel like this is something that folks should take a look at. We think it's a good opportunity for booksellers, whether they are long-time booksellers or new to the business and want to learn more - continuing education and development is a great thing to work toward. In particular, Dick Weatherford was instrumental in contacting me and saying we really should do this, it's a great thing. He had been a keynote speaker and faculty member at the seminar in the past, and really highly recommended that this is an outstanding seminar and that it would benefit us to not only offer the scholarship but raise the awareness of the seminar within the bookselling community. Whether or not you are the winner of the scholarship, we hope that people will continue to take advantage of opportunities such as these and continue to gain knowledge. The more knowledgeable and professional our sellers are, the better they are able to service the customers, and we all win. BOOKTHINK: Can you give us a brief overview of how bookseller "vetting" for listing books on your site has changed over the years? Originally, I believe to become a seller on Alibris a seller had to initially list an inventory of at least 1,000 books, although consideration would be given to someone with a special smaller collection. I came in under those rules, and frankly, I thought it was a good thing. I learned a lot while I assembled my book inventory, and there was satisfaction in having reached that goal with books I felt privileged to be able to offer through Alibris. Even so, I look back and think how much I had to learn and am still learning every day in this business. Do you think sites in general are admitting people too easily, perhaps before they've had an opportunity to learn anything about the trade? KOHN: Well, there is an issue with that, clearly. We are very strict in this regard. Number one, there are some sellers that we don't work with, particularly "Spider Sellers." I don't know if that's a term that is widely known throughout the industry, but these are sellers who will essentially crawl other seller's inventories, then list other seller's books themselves for a little bit higher price. When they get an order they just send an email to the bookseller saying, "Hey, can you ship this book for me?" We know who these people are and we don't work with them. It's not something that we want to support. We are also pretty hard on International Editions of textbooks. We're happy to sell them, but you have to list them with the correct ISBN number. If you are using a U.S. number for an international textbook it's just a bait-and-switch, and we are really not interested in doing that to our customer base. Outside of that, I can't say there is a "screening process" per se. We are willing to give people a chance. Basically we say come on board, and if we don't have a history with you, generally the feeling is that you are innocent until proven guilty. We are going to believe you are coming on board as a professional seller until you show us otherwise. At that point, we'll give you counseling and warnings, and if all else fails, we'll ask you to leave. We like to have a positive view of the people coming to us, hoping that they are coming with knowledge and a true desire to do well. That being said, when we were a commission-only structure, that seemed to encourage a lot more people with less of a commitment to bookselling to join our ranks. That was a problem. It certainly wasn't the only reason we moved to a fee + commission model, but it certainly was one that we took into account in that we had a lot of sellers who just weren't committed enough, who would abandon accounts - and, if they got a sale, they just weren't there. It was affecting not only those specific sellers but, by association, everyone in our seller network. It was something that we were not going to continue to support. At one point we also had a rule about 500 books or more - you had to have 500 books. We got rid of that. Essentially what it came down to was that there are some small publishers who do sell through Alibris, and at times they don't have 500 titles in their stock. That seemed punitive for folks who might have great depth of inventory but not breadth of inventory. BOOKTHINK: Although I think even when your minimum inventory number was at 500, Alibris had a qualifier that said you were willing to look at smaller inventories and base this decision on quality. KOHN: At the end of the day, the sellers and publishers are more knowledgeable about their own inventory than we are. Sellers and publishers are the experts; we are the conduit for them. Granted, we have a lot of booksellers on staff, we have a lot of knowledge, we certainly could go in and say let's look at your inventory and question whether you are really a good seller, but we've decided it's better to allow the fees to be there, and our message to sellers to be: If you are serious about selling then Alibris is the place for you, if you're trying to sell the 12 books on your shelf that you want to get rid of, we are probably not the place for you. I think that message comes through pretty clearly now. If you are running a true business as a bookseller, we are a great venue for you. If you're just trying to liquidate some books, we're probably not the right place. BOOKTHINK: There are serious concerns about many aspects of some seller listings, not just on Alibris but across the board. There are listings coming up that are flat-out misleading and wrong. It's not always that someone is being deliberately dishonest, but they are making claims that are untrue. It's scary to be involved in a business where there are people selling books to customers who are eventually going to find out that they've been taken. They are going to be angry and they aren't going to come back - to anybody. KOHN: Right, they may be turned off to the online buying experience overall. You know, we do our best. We have some filters in place that catch some things. Clearly, we do keep track of customer interactions based on sellers. In some ways it's a reactive measure. We will definitely see if there are a large number of returns based on "item not as described." We can track that back to a seller pretty quickly and notice a trend, then pick up the phone and say, "Something is going on here. We need to put your inventory on hold or we need you to take a look at your inventory and see what's going on." We do that pretty regularly and keep track of those types of instances. It's like catching speeders - we aren't going to catch everybody. When one whizzes by and we catch it, we can grab him. Or if someone emails us and says, "Look at this listing. This is just crazy." If someone brings it to our attention, we will investigate to see if something is wrong. It's difficult for us because out of the thousands of sellers that upload to us, we can't look at everything and make sure it's correct. We have to rely on the fact that we have some processes in place that will move dishonest or incompetent people out of the system and that with due diligence we will get the right people. And a positive thing is that our referral program has really been picking up in that we have a lot of sellers referring other sellers. It's far better for us to have sellers identify us as a good place to sell and bring the right type of people to us rather than for us to reach out and grab anybody and everybody to try and expand our selection. BOOKTHINK: Would it be unreasonable to have to supply a reference to list on a bookselling site? Or would that be getting more into the ABAA/ILAB type of screening? KOHN: Well actually we are talking with the ABAA right now. Alibris has had a rocky history. I don't think we've always had the best reputation with sellers. I think oftentimes we've been misunderstood; sometimes in the past we have not had the right approach with sellers; at times we've been arrogant with sellers. That's certainly changed, and I hope that comes through. Repairing relationships and building relationships with folks like the ABAA is a big priority for us because I think the ABAA has great ethics, and we'd like to do more with them. We already know that about 35% of their membership lists with us, but we'd like to have more listing with us and to have them gain from what we can provide to them. BOOKTHINK: How many booksellers are currently selling on Alibris? KOHN: We have approximately 8,000 booksellers right now. That is actually a decrease. If you were to look at active sellers, that number has probably gone up. What we've done, really, is cut out the folks who weren't serious or active. That was done over the last year and a half, starting with the introduction of monthly fees, then getting rid of the buck a book program which essentially gave sellers the ability to not pay a monthly fee, and then requiring sellers to have a credit card on file, which was not great for everybody but does allow us another benchmark to say, "If you're serious about your business, this is part of it," and if the seller is not willing to do that, it raises a red flag for us. We have gotten caught with sellers who come in, particularly during textbook season, and get a lot of orders for books - then after a while we hear from people asking, "Where's my book?" We want more sellers, but we want quality sellers. We're not looking to just bring on sellers for the sake of having more sellers. We want sellers who will contribute positively to our network. And within this time frame, even though we've decreased the number of total sellers, the number of active sellers has probably increased, and the breadth of inventory has increased dramatically. The people we are bringing on board are bringing unique inventory to us. BOOKTHINK: Alibris recently announced that sales had risen 30% in May. This is unusual for a month that is generally not the hottest bookselling month. What do you attribute this to? Well, it's partially due to what we just discussed - increasing our number of active sellers and decreasing the number of inactive sellers. It's two sides of the coin. We rely on sellers to have great inventory and to provide good professional service to customers. And what sellers rely on us for is to bring customers to the door for them. It's a cyclical sort of synergistic thing. We get smarter and smarter about how to market to this audience and to bring people to Alibris - and to build partnerships with our other businesses such as Barnes & Noble, Borders, Chapters Indigo, etc. You know, we could drive a lot of customers to the site, but we're going to get more of them to buy if we have better inventory. Conversely, from a seller's perspective, if there are more people coming to the site to buy, they will be getting more sales and want to stay with Alibris. >>>>> Article continues on next page >>>>>