Can A Startup Compete With Amazon For Online Book Sales?

A startup with a plan to take on Amazon in the world of digital book sales might at first seem, well, a little crazy. Books were where Amazon got its first toehold into American consumers’ lives, and the idea that an upstart could step onto their home field and snag a win is tough to believe. It sounds a bit like a decision to go win a fight with Jaws in the ocean – theoretically possible, but not probable.

But eCommerce startup Bookshop has decided to do exactly that – despite the fact that Amazon is the biggest force in book sales in the U.S. market today, accounting for over 90 percent of eBooks and audiobooks, and around 42 to 45 percent of print sales. Because while many people like to buy their books from Amazon – and enjoy the easy point and click delivery option – other customers decidedly don’t shop with Amazon.

Since independent bookstores were pushed cleanly out of the market by the likes of Barnes & Noble and Borders, Amazon has bankrupted one and all but killed the other – and now, the indie stores have been making a comeback in the U.S. Their sales rose nearly 5 percent in 2018, with average annual growth of 7.5 percent over the past five years, according to the American Booksellers Association.

At base, Bookshop is trying to help those independent bookstores expand their range with an easier on-ramp to digital sales.

According to CEO Andy Hunter, the company is not so much trying to disrupt bookselling as working to counterbalance the disruptive force Amazon has become. If anything, he noted, they see themselves as reinforcing the industry.

For the average shopper, the Bookshop experience will be similar to buying a book on Amazon – they pick, click and buy what they want to read. But on the back end, the situation is very different, particularly when it comes to profits. Ten percent of Bookshop’s revenue will be divided among the independent bookstores on the platform every six months. In return for that cash infusion, the independent bookshops will promote Bookshop to their in-store customers.

Or if they don’t want to be bothered with an eCommerce program at all, sellers can also sign up for the company’s affiliate program, which allows them to outsource their eCommerce function to Bookshop in return for a 25 percent commission to stores. The affiliate program is also available to media and content producers of all sizes, with a 10 percent commission when customers purchase the content via Bookshop.

The offers are generous, Hunter noted, because they have to be able to break Amazon’s formidable hold on the publishing world. Booksellers are often wary of digital channels and eCommerce partners, “for good reason,” Hunter noted. The great hope is that when the money starts coming in, they will become more enthusiastic.

As for the large affiliate commission for content creators, Bookshop’s strategy is pretty simple: bring bloggers, media firms and other products to their platform simply by making them a much better compensation offer than Amazon.

“You have all these book blogs and major magazines and websites that are linking to Amazon, because Amazon is giving them a 4.5 percent affiliate fee for every book they sell,” Hunter told Wired. “We needed to have a solution that would break that cycle, and create something to benefit the indies that mimics it.”

Breaking that cycle, however, will be harder than simply building the platform and hoping bookshops and content products come. Though independent books have seen their revenue tick up in recent years, many people credit that to rebuilding their shops into community hubs where people don’t just come to buy books, but also to interact with other book lovers. And many of those independent bookstore patrons still also shop on Amazon. According to a 2019 study cited by Wired, two-thirds of independent bookstore shoppers also buy from Amazon an average of five times a month. Even among bibliophiles – perhaps especially among them –shopping on Amazon is a very ingrained habit.

Similarly, competing with Amazon on the affiliates battlefield is hard work, given the volume of firms that have signed on with them. Bookshop faces the challenge of drawing eyeballs to its site, since a high affiliate payout doesn’t mean much if readers don’t click links.

But as Hunter pointed out, the firm is likely to sign The New York Times to its platform soon, and expects other major (and minor) partnerships to follow. And while Bookshop is still in beta mode, he believes it has at least a chance of offering some competition to Amazon when it is in full launch.