Bloomington, Ind.-based 1stBooks Library has named Thomas Grech to the newly created position of senior v-p of business development. Grech, who will report to 1stBooks chief operating officer Robert McCormack, had been v-p of operations at Xlibris.
Grech is joining a company whose revenues have grown from $118,000 in 1997 to $4.7 million in 2000 and that is projecting revenues to reach the $10-million level this year. 1stBooks was founded by Tim Jacobs and David Hilliard in April 1996, when each invested $150,000 to launch what was at first mainly an e-book company. The company entered the print-on-demand field in 1999 when it hooked up with Lightning Source. The move into POD proved to be a turning point for 1stBooks, which posted a profit in the summer of that year, when revenues jumped from $453,000 to $2 million. Today "the vast majority" of 1stBooks' revenues come from POD, McCormack told PW.
According to McCormack, 1stBooks' profitability is the result of a "pragmatic" business approach that encompasses low overhead and a focus on its core business of providing author services. The company charges authors $359 to publish an e-book and $199 for the POD edition, a charge that includes cover design and layout. Authors receive 100% of royalties up to $300, and then 40% on e-book sales and 30% on POD titles. For an additional fee, 1stBooks provides authors with a variety of promotional services, including writing press releases and arranging book signings. McCormack said that nearly 50% of the company's revenues are derived from book sales, with the remaining half generated by author fees. Approximately two-thirds of its book sales come from its Web site and author purchases, with one-third generated by bookstores.
In 2000, 1stBooks released about 2,500 titles and printed more than 150,000 books; it issued $150,000 in author royalties in last year's fourth quarter and slightly more than that in the first quarter of 2001. 1stBooks is on track to issue 6,000 titles this year, and McCormack estimates it will print about 500,000 books. Its biggest hit to date has been Buddy Ebsen's Kelly's Quest, which is currently on the Los Angeles Times paperback bestseller list and has several thousand copies in print. "Our sales are measured in thousands, not tens of thousands," McCormack said, although he added that this could begin to change as its authors develop more of a following.
At present, Jacobs, who is CEO, and Hilliard, who is vice-president, are the company's only investors, but that also could change. "We wanted to prove our business model could work" before looking for more investors, McCormack said, noting that 1stBooks may begin to raise additional capital within the next 12 months.
