Bookshop.org Challenges Amazon: Future Plans & Sales Growth

The Resurgence of Reading and Bookshop.org's Role

Were Johannes Gutenberg to observe the current market, he would likely find opportunities as an active angel investor.

Book sales experienced a significant surge during the COVID-19 lockdowns of the previous year, bringing renewed attention to the written word from venture capitalists and entrepreneurs. This has led to the emergence of numerous new ventures and funding rounds, including algorithmic book recommendation services like BingeBooks, book club startups such as Literati and BookClub, and the streaming platform Litnerd. Exits and potential acquisitions are also occurring for companies like Glose, LitCharts, and Epic.

Bookshop.org: A Platform for Independent Bookstores

However, it is Bookshop.org that has particularly resonated with readers, establishing itself as the primary platform for independent bookstores to establish an online presence and effectively compete with Amazon's dominance.

Launched in January 2020, coinciding with the onset of the COVID-19 pandemic, the company quickly gained recognition, with founder Andy Hunter – a dedicated publisher with a strong commitment to the literary world – frequently featured in news reports.

Evaluating Bookshop.org's Progress

After a year and a half of operation, the company continues to thrive. Despite the return of customers to brick-and-mortar retail locations, including bookstores, Bookshop has not experienced a decline in sales.

Hunter reported that August sales exceeded July's figures by 10%, and the company anticipates similar sales volumes in 2021 as in 2020. He further noted a 130% year-over-year increase in bookstore sales in May, emphasizing that Bookshop’s sales are contributing to this overall growth.

Growth and Community

Currently, Bookshop hosts 1,100 bookstores on its platform and boasts a network of over 30,000 affiliates who create curated book recommendations. These lists have become a defining feature of Bookshop’s service.

“The platform offers recommendations from bookstores, literary magazines, organizations, book enthusiasts, and librarians,” Hunter explained.

As a public-benefit corporation, Bookshop generates revenue through inventory management, similar to other e-commerce businesses. However, it distinguishes itself through its generous affiliate and bookstore compensation model.

Affiliates receive 10% of each sale, while bookstores participating in the Platform Seller program earn 30% of the cover price for sales generated through their platform. Additionally, 10% of affiliate and direct sales are allocated to a profit-sharing pool distributed among member bookstores. To date, Bookshop has distributed $15.8 million to bookstores.

Future Strategy and Product Development

Looking ahead, Hunter’s primary focus is on developing a product that consistently engages both customers and bookstores in a straightforward manner.

“We adhere to Occam’s razor in our product philosophy,” he stated, meaning that each new feature should enhance the user experience without causing confusion.

Achieving this is a continuous challenge. Hunter emphasized the need to create a platform that is both appealing to customers and supportive of booksellers’ objectives, ultimately delivering the best possible online book buying and selling experience.

This often involves replicating the “human” element of traditional bookstores while simultaneously empowering booksellers to leverage online advantages.

SEO and Online Visibility

For example, Bookshop is actively assisting bookstores in optimizing their recommendation lists for search engine visibility. Recognizing that Search Engine Optimization (SEO) is a critical skill for online competitiveness, the company is providing support in this area.

“Stores are now ranking number one in Google for book recommendations from their lists, a feat that was previously dominated by Amazon links,” Hunter noted. The company is also integrating best practices for email marketing, customer communication, and conversion rate optimization.

Human Curation vs. Algorithmic Recommendations

A key priority for Bookshop is to prioritize human curation over the algorithmic recommendation systems favored by many Silicon Valley companies.

With a network of tens of thousands of affiliates, Hunter describes the platform as a “buzzing hive of institutions and retailers” that comprise the diverse book ecosystem, each with its unique personality.

“We want to allow those personalities to shine through,” he added.

Challenges and Competition

Despite the positive momentum, challenges remain.

Amazon represents the most significant competitive threat. Hunter highlighted the popularity of Amazon’s Kindle devices, which provide the e-commerce giant with a strong advantage that is difficult to replicate with physical book sales.

“Due to DRM and publisher agreements, it’s challenging to sell an e-book that can be read on a Kindle,” he explained, drawing a parallel to Microsoft’s bundling of Internet Explorer with Windows. “A legal challenge will likely be necessary.” He acknowledged the appeal of Kindles but emphasized that “even if you love Amazon… you have to acknowledge that it is not healthy.”

The Rise of Book-Focused Startups

Hunter addressed concerns about the increasing number of funded startups in the book space, suggesting that their success will ultimately benefit Bookshop as well.

“Book club startups will succeed by introducing books – and conversations about books – to a wider audience, which will benefit everyone,” he believes. However, he expressed hope that these startups will collaborate with independent bookstores and existing community members rather than seeking to disrupt the established ecosystem.

Addressing the "Midlist Problem"

Hunter’s overarching strategic concern centers on the current publishing landscape, which often favors a small number of blockbuster titles. This phenomenon, known as “the midlist problem,” worries him, as it can lead to innovative works by emerging or diverse authors being overlooked.

“One book will often dominate attention and conversation, while great innovative works don’t receive the recognition they deserve,” he said. Bookshop hopes that human curation through its lists can foster a more vibrant book ecosystem than algorithmic recommendations, which tend to prioritize bestsellers.

Looking Forward

As Bookshop enters its third year of operation, Hunter remains committed to prioritizing human connection and replicating the immersive experience of browsing in a physical bookstore online.

Ultimately, he believes that conscious decision-making regarding shopping habits is crucial. “We are creating the future we live in with every small decision about where and how we shop, and we should be mindful of those choices,” he said. “I want Bookshop to be enjoyable to shop at, not just a place to fulfill a civic duty.”