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Publishers Weekly Bookselling

Harte Attacks with BookSite
Judith Rosen -- 6/12/00
After four years, BookSite has turned 200 booksellers into Internet retailers

"You gotta have Harte" is a refrain that more and more independent booksellers have been singing. Over the past year Dick Harte, owner of the eight-year-old Rutherford Book Shoppe, Delaware, Ohio, has doubled the number of booksellers--200 and counting--who have signed on for BookSite.com, the turnkey system that he founded in 1996 to provide booksellers with a customizable Web storefront.
The real heart of BookSite.com is its e-commerce component, which for a $350 subscription fee plus $110 a month operating fee includes a shopping cart, e-mail confirmations and secure customer registration. Booksellers can get started on the Web with Book Site's $500 StarterKit, which includes the initial startup, three months of Web hosting and 12 hours of Web design. There is an additional $70 fee to secure a domain name.

BookSite offers a choice of searchable databases: either 1.2 million titles from Ingram or 620,000 from Baker & Taylor for $50 a month. Harte is currently negotiating with Baker & Taylor for either their 2.5 million-title database (that BookSense.com will use when it g s live this summer) or B&T's almost-completed 1.3 million-title database (which will contain fewer titles that are actually out of print).

Harte, who is more proselytizer than bookseller when it comes to converting traditional independents to click-and-mortar retailers, taught corporate and international finance at Ohio State's business school and had a 25-year corporate and investment banking career with RCA, Borden and McDonald & Co. before going into the book business. Two years after opening his store in 1992, at a time when many smaller bookstores were already feeling the heat from chain superstores, Harte began designing BookSite, or Nautilus, as it was originally called.

Today, Nautilus serves as the parent company for BookSite.com, as well as a host of related products and services, such as DropDemon.com, which allows booksellers to have online orders drop-shipped from Ingram, Baker & Taylor and K n, and CardDemon.com, an automated credit card processing system. Other optional BookSite features include a listserv, an associates program and the ability to add up to 3,000 items not on the BookSite database. BookSite is also in the midst of beta testing a system that will enable stores to upload a database of their entire inventory.

Plagued by a few setbacks of its own, Nautilus is about a year behind on ThisTown.net, which is intended to create business communities on the Web. Other projects in the works include echieve.com, which, according to Harte, is built and ready to go. For $50 a month, it will enable bookstores to add sidelines more easily to their sites. Conversely, nontraditional booksellers, like cookware stores, will be able to add books to their Web product mix.

Nautilus's most ambitious project to date is PubLink.net, which went live in September, a joint venture with Publishers Weekly, Library Journal, School Library Journal, the Authors Guild, Ingram and Foreword Magazine. Harte described it as "a Yahoo! for books, a really high-quality, high-caliber reference and referral site." It has a searchable book database with lots of reviews and links to author pages, bookstores and publishers.

Going There--Setting up an Online Store
Should every bookseller go online? Despite his evangelistic streak when it comes to bookstores and the Web, Harte's answer is no. "If people are afraid of the Internet," he told PW, "they have no business doing it." He also sets a minimum of $250,000 in sales as the benchmark for e-retailing. "Because the Internet leverages off your existing customer base, less than that is not enough to justify the cost and the time," he noted. "My personal belief is you're not going to have the economies of scale."

What Harte d s advocate without qualification is strength in numbers. "What independents need to do is stick together," he commented at a recent New England Booksellers Association talk in Cambridge, Mass. "And it's not easy for us. Working together grates against our spirit of independence. If we don't stick together on some kind of level--the regional level, the ABA level, the BookSite level--we'll be buried."

Although he views BookSense.com as a direct competitor--or, as he terms it, "a BookSite wannabe"--he's set his sights on vanquishing their common enemy, Amazon.com. "Two years from now," he predicted, "the book business will be click-and-mortar. People don't like to buy on the Internet. Internet stores offer super discounts, and they're still only 5% of the sales. The biggest part of your business is your store. Amazon loses twice as much money as the rest of the industry combined. They lose 50¢ on every dollar."

Harte sees significant reduction in the value of co-op and handselling for indies and large e-retailers alike, even though more co-op tops the bookseller wish list. (See box.) "Publishers are going to be promoting the books, and independent booksellers are going to have the same benefits as Barnes & Noble," he predicted. "Everybody's going to benefit. Co-op dollars are going to be less and less a factor."

For those who question how they can afford to go online and join the click-and-mortar revolution, Harte responded that putting up a Web site d sn't need to be expensive. "It can be about as much as you spend on lighting your store," he said. "The easier you make it for the customer to take care of themselves, the cheaper it will be. It costs less to have a functional site that the customer wants, than a pretty site that the owner wants. Think of it as spending 40¢ an hour to keep your store open on the Internet."

Tom Bowler, v-p, marketing, at WordStock, who designed the WordStock and NEBA sites and will be handling upcoming start-up designs for BookSite, agrees. "Booksellers can learn from the big sites to keep it simple, self-evident and painless. If it isn't, the customers are gone." As he warned, if a bookseller overloads a site with so many bells and whistles that it crashes the customer's computer, that customer will never return.

It sounds good in theory, but how d s Web retailing really work for BookSite stores? What could publishers do to ease the transition to online bookselling?

BookSite in Action
One of BookSite's first associates, Rainy Day Books in Fairway, Kans., which joined in 1996, has gradually become a true click-and-mortar store. A strawberry-colored iMac, which matches the store's burgundy and gray logo and interior, sits by the front door so customers can access www.RainyDayBooks.com easily. Operations and systems administrator Roger D. D ren said, "Some customers shop our Web site and call us up on the phone to personally ask us questions. Some customers shop our Web site and walk in our door, while others walk in our door and go to our iMac and log on to our Web site." He estimates that, whichever way they choose, the Web accounts for about 10% of sales.
"Technology has always been our leading edge," said business manager Robert Moore of the 10-year-old, family-owned Book Depot, Grants Pass, Ore. (www.OregonBooks.com) a 4,000-square-foot new and used bookstore. "We have nine computers in the store that are accessible as work stations for five employees," he noted. In addition, the store remodeled four months ago and added three computer kiosks for customers, installed 17-inch monitors and side chairs in the special orders section so that customers can learn how to place their own orders and removed the walls between the backroom areas and the front.
"Everything's emerging so quickly," said Moore. "We sat down and rethought the whole bookstore concept and decided the bookstore of the future is going to have the best of both worlds."

"My biggest competitor is Amazon, and they're also one of my biggest customers," reported Moore. "We felt we had to be on by last Christmas, and that's why we jumped to BookSite. We feel, if you're not actively pushing online, in a couple years you're going to be up a creek." He spends no money on e-mail newsletters--"we did a little study and hardly anybody reads them"--but instead pours everything into marketing. Later this month, for example, Moore will give away 2,000 mouse pads with the OregonBooks.com logo and will set up two free computer kiosks at a local technology fair co-sponsored by the community college.

A Wish List for Online Booksellers

* More co-op. This was the most frequently mentioned request. Moore at the Book Depot voiced the objection of many that "publishers are very reluctant to give you co-op money for anything you do online."
* More links. "Publishers could promote the links to our Web site and track author tours better," responded Rainy Day's D ren.
*Up-to-date book and author information on publishers' sites. BookPeople's Burns is not alone at cutting and pasting information from publishers' Web sites for his own. He asks that "publishers pay more attention to their sites and keep them updated so that we can use them to provide content. It's murder to try to find some of those covers." Others wanted more reviews, too.
*More innovative downloadable material on books and authors. Sable of Harvard Book Store would like more interesting content for her site. "Nobody's posting anything innovative. I'd like to see more animated stuff. I'd like to see audio clips with the author reading the book."
* More online promotions. Jacobson of Brookline Booksmith would like to see more publishers like HarperCollins: "Harper Collins is unmatched. They create contests and material, such as electronic greeting cards, that we could use on our site."
* Funnel book buyers to bookstores. Burski of Chinook Bookstore suggested, "If people contact publishers directly, it would be nice if there were a pop-up window to redirect business back to the stores."

For Paul Burns, a former Barnes & Noble regional buyer and currently Web master at BookPeople, Austin, Tex. (www. BookPeople.com), "The thing that finally convinced me that BookSite was the one for us was the ability to build your own test site. The instant you log onto your test site at BookSite, you are actually using the same database and the same basic tools as Book Passage or Vroman's. In fact, your test site is actually your real site. This really impressed me. With BookSite, I feel we have a fighting chance. We have one Web site for one store. The biggies have one Web site for hundreds of stores."

At BookPeople, the Web site turns a profit, or at the very least breaks even. In April, for example, it charged out $2,500 in online co-op, which more than made up for its $1,700 monthly site-related expenses. While a recent online promotion with O'Reilly that month did not increase Web sales for the publisher's books, it did double in-store sales for O'Reilly titles, which can also be accessed by customers via a computer kiosk in the store.

Others who haven't gone the click-and-mortar route are still satisfied. Frank Kramer, owner of the 68-year-old Harvard Book Store, Cambridge, Mass., acknowledged that if Dick Harte hadn't set up BookSite, "we wouldn't even have a leg up. Being online is about keeping your customers for mature stores." Harvard.com, which has been on BookSite for three years, caters to general book buyers as well as academicians. A significant part of Harvard Book Store's Web site is devoted to scholarly books and includes suggested reading from teachers and professors at nearby universities.

Similarly, Barb Wieser at the feminist Amazon Bookstore, Minneapolis, Minn., found that her customers were looking for Web access, especially with so little parking at her current location. "It has made a pretty big difference," said Wieser. "We get a lot more orders. It's taken a while, but gradually we're getting more customers, and more repeat customers. We definitely recoup the cost." Still, she told PW, "It's a pretty big challenge to make it work for a store our size. We have someone who comes in every other day and all she d s is respond to e-mail and get the orders off." The rest of the staff picks up the slack on the other days, so that orders can be shipped out daily.

At Chapter 11 the Discount Bookstore, headquartered in Atlanta, Brian Lapidus, director of communications, dubs the company's www.Chapter11Books.com site, "our 14th store." Like the other 13, this one is screaming yellow and discounts every book in stock, 11% and up. "We're at least breaking even on the Web," said Lapidus, "because we're trying to give as good a value as possible to our customers. They can pick up the book they order online in the store. They'll say, 'I'm going to pick it up tomorrow or in a couple days.'" The Chapter 11 chain is event oriented and uses its listserv to send out reminders about author signings. "Customers can get an online newsletter and an updated list of events. We encourage people to do that," said Lapidus, rattling off a list of summer readings that includes Sidney Poitier, Janet Fitch and Terry Kay.

For stores that are, in effect, two stores in one like Olsson's Books & Records, Washington, D.C. (www.olssons.com), going online has special problems. "It's not really ideal for us. We have to have two parallel shopping carts and shipping for music and books," marketing manager Alicia Greene told PW. For her, the store's Web site is just one more service, like the Olsson's frequent buyers card. "It's a customer service, not a profit center," she said.

At Brookline Booksmith and Wellesley Booksmith, Brookline and Wellesley, Mass. (www.brooklinebooksmith.com), Web manager Kip Jacobson tries to add unusual nonbook items to the store's Web site to make it stand out. Among those featured last month were metal hand-shaped bookends and a plastic accordion. "We try and keep a certain personality in everything we do," noted Jacobson. Like Chapter 11, Booksmith encourages customers to order online and pick up their purchases in the store. "Because we can't compete with the major retailers on price, our major thrust with the Web site is, our customers can save on the cost of shipping and the time of shipping," he said.

Chinook Bookstore, Colorado Springs, Colo. (www.chinookbook.com), is one of the few BookSite customers that's losing money on the Web. "We signed on with a local service that promised lots of traffic and lots of advertising on their coattails," explained Mark Burski, operations manager. "That in itself ended up being expensive. We will probably change our affiliation, and then our costs will plummet." Burski conceded that "most stores of any size have to have some Web presence," but he still finds it time-consuming. "People want to know what we have in stock today. Our stock changes so drastically every day, we'd have to change it every few hours. Amazon and Barnes & Noble don't necessarily have that book in stock, either. We say on every page, 'Call us.' We'd rather they call than send e-mail messages."

Despite the wrinkles, none of the booksellers PW talked with would consider giving up their Web site. It has become an integral part of who they are and what they provide for their customers. Rather, the biggest choice they face in the months ahead is whether to switch from BookSite to BookSense.com. As Burski pointed out, "I don't think we would be able to have both."

For longtime BookSite users like D ren at Rainy Day Books, it's not really a question. He said simply, "We are loyal to Dick Harte." Others are not so sure what they will do once BookSense.com is launched. Brookline Booksmith's Jacobson said that phase one of BookSense.com would require too much of a sacrifice--giving up discounting particular items and the gift room. But, he added, "phase two is something we could consider." Similarly, Harvard Book Store marketing director Sheri Sable took a pragmatic approach. "We will work with whatever vendors are out there who will give us access to the most appropriate books that our customers want," she said. For now, at any rate, BookSite is an independent necessity.
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