That's a pretty good track record and quite unusual--and, with that in mind, it's worth taking a look at how they've pulled it off.
It started when founders and Notre Dame classmates Xavier Helgesen, Kreece Fuchs and Jeff Kurtzman tried to sell their used textbooks back to the campus book store, to no avail. It was a time when third-party online marketplaces were making a splash. So, they decided to try a new idea, selling them online. They got about $50 a book and realized they were onto something.
What they did was to start holding book drives. They approached Robinson Community Learning Center, a literacy group associated with Notre Dame in South Bend, Ind., with a proposition: They would use the Robinson name to run a book drive on campus and, in return, the center would get part of the proceeds. That generated over $20,000 from about 2,000 books, with half going to literacy initiatives at Robinson.
From that, the idea for Better World Books was born. The concept: Develop a unique supply chain by collecting used books, saving them from being thrown in landfills, and then contribute part of each sale to what they called a "literacy partner"--a nonprofit aimed at addressing and improving literacy in various parts of the world. That could be one of Better World Books' four official partners or anyone else. The upshot: They would make their social purpose front and center, so that students would be more likely to donate books or buy from them than from a more traditional source.
Just so you know, the primary literacy partners include:
- Books for Africa, which collects, sorts, ships and distributes books to children in Africa, more than 20 million since 1988.
- The National Center for Family Literacy which focuses on underprivileged families and trains thousands of teachers and volunteers.
- Room to Read, which builds schools, establishes bilingual libraries and computer labs, publishes books in local languages and funds
scholarships. - Worldfund focuses on improving education in Latin America through investment in schools, gifted student programs and
teacher training.
The fact that the social mission is part and parcel of the brand has the nice benefit that, should the company be bought, the acquirer would have to be suicidal if it wanted to dilute that mission. (Think the opposite of Ben & Jerry's and Unilever). Along with Good Capital, a social venture fund that has invested in the company, they also introduced something that Good Capital's Kevin Jones has called "mission insurance." The founders would put aside a certain percentage of their stock into a special option pool for nonprofit partners. One result: In a potential sale, the interests of the nonprofits would have to be taken into account.
A few years after starting the company, the founders realized there was another promising supply source they'd ignored: libraries. Turned out, libraries got rid of hundreds of books every year, but weren't allowed to recycle them. So they just dumped them. Better World Books proposed they collect those books. Today, the company works with over 1,800 public library systems and close to 1,600 academic libraries.
Also, they have 1,300 drop boxes in 17 states where people can donate books.
To date, they sell about 1 million books a month and they've raised over $14 million for library and literacy initiatives. There are two
fulfillment centers, one in Indiana and the other in Scotland.
Now, according to CEO Andrew Perlmutter, who joined the company in 2011, replacing David Murphy, the previous CEO---the founders realized early on they needed adult supervision. Murphy was a judge at a Notre Dame business plan competition where the founders won $7,000--the company is moving into other items that can be repurposed. "The future is now in surplus goods," he says. That means car seats and the like, other goods that are "perfectly usable."
A smart supply chain, an effective social mission, the smarts to bring on experienced management early on, the ability to look for new supply sources--they've all contributed to Better World Books' success. Happy Birthday.
