Rare Book Monthly
Abe Increases Rates;<br>Alibris is Going Public.<br>What’s Next for the Book Sites?
none
So, why does Abe need this extra money anyway? Why charge commissions at all? With 10,000 plus dealers, paying on average $25 to $50 a month simply to list their books, a little quick math will reveal what you and I consider a healthy amount of income. The problem is that what is for us a healthy amount of monthly income is probably only a few hours worth of cash for sites like Amazon and Ebay. Ultimately, Abe is not competing with all of those other runner-ups behind Alibris in the book listing site wars. There are dozens of them, but most lost the war to Abe a long time ago. Abe doesn’t need more money to compete with them. But, evidently it feels, and it is hard to argue with this, that they will need more money to compete with their next generation of competitors, who will likely be companies substantially larger and more financially powerful than are they. Abe must battle with the big sharks now, not little minnows helplessly nipping at their tails.
The question is will this increase, and the additional revenue which it will presumably (but not certainly) bring, help or hinder Abe in the battles ahead. More money will certainly help. However, booksellers are businesspeople too. While few Abe dealers will be lost to pique over a price increase, their loyalty to Abe is measured by whether Abe makes money for them. They will move en masse to an alternate supplier the moment such an entity appears which they believe better serves their bottom lines. The risk in the price increase for Abe is that someone else will be able to undercut them. And, undercut doesn’t necessarily mean undercut their price. It simply means making the bookseller comparatively more profitable. Some dealers already sell more books on Amazon, but commissions were three times as high. Now they are only double. If that reduction in difference makes Amazon a more profitable alternative for them, they could shift more listings to this site. This is the risk Abe faces in raising prices.
Right now, Abe, and Alibris too, are in cooperative arrangements with Amazon. They also have relationships with Barnes and Noble, online runner-up to Amazon, and the bricks and mortar leader. Abe’s sales through these partners aren’t known to us, but according to Alibris’ SEC filing, 18% of their sales come through Barnes and Noble, and 14% through Amazon. Who believes these marriages are forever? These are more likely marriages of convenience, and it’s hard to imagine that Amazon and B&N won’t one day want to control all of their used book sales themselves. Companies their size usually do. And when this happens, Amazon and B&N will become rivals, rather than partners, with Abe and Alibris. Those rivals will possess far more funding than Abe, Alibris, and the other used book selling sites, even after Abe’s price increase and Alibris’ public offering. Competition figures to get more intense.
