B-corps for Booksellers? New structure has some obvious and not so obvious advantages
- by Susan Halas
The B corp is a relatively new business structure.
While some see this as a good thing, others have a different reaction. Charles Elson, who teaches corporate governance at the University of Delaware, is quoted by the WSJ as saying, “If the management makes a bad decision, there’s very little you can do about it as a shareholder,”
The costs to become a B corp are quite moderate. The fee is $30 to incorporate as a benefit corporation, not including the cost of outside lawyers.
Most recent coverage of the trend points out that “benefit corporations” are not to be confused with “B corp certification” which is presently available in all 50 states.
B corp certification can be obtained in any state for fees ranging from $500 to $25,000 annually depending on revenue, according to B Lab, the non-profit Pennsylvania based organization that developed the benefit corporation legislation and oversees the certification process.
B Labs (www.bcorporation.net) counts 517 B corps with $2.9 billion in revenues spread across 60 industries.
The site is quite comprehensive. It offers a great deal of detailed information on the legislation, the structure, the goals and how to get started. It also provides a directory of companies that have already adopted this form. There is even a calendar of events where would-be Bs can mix and mingle in Georgia, NYC, Colorado, San Diego, LA, and Vancouver, to name a few.
What makes this relevant to booksellers is that more and more of them find that they are in head-to-head competition with non-profit organizations like Goodwill Industries at home or Oxfam abroad. These are organizations that acquire inventory through outright donation.
Companies like Better World have used the “social good” model to enable them to similarly acquire books at little or no cost, but to then market them in a for-profit context, provided that some portion of the proceeds go to a larger social agenda.
In the same vein BWB solicits donations of books from libraries and currently has existing relations with over 2,000 institutions in the US, Canada and the UK. These donations are most often received as outright gifts; however the company promises to remit a varying percentage of the proceeds from the sales back to the library and also donates money as well as usable, but not commercially viable, titles to literacy causes.
Practices like these have been very successful for Better World. It not only gives them high visibility and do-good credibility, it removes some of the upfront costs of doing business.
Though most small booksellers probably wouldn’t have the sophisticated software, marketing and PR smarts of Better World, it’s still an idea that lends itself to other bookselling applications.
As a number of firms interviewed by the WSJ noted, that ‘good guy’ designation is more important than you might think.
“You’d be surprised how much people care about these issues,” says the owner of one small New York firm. “It earns points with the customers.”